Stage 2 payment calculation for NAP-covered yield-based crops without an approved NAP application for payment.

(a) Stage 2 payments for eligible NAP-covered yield-based crops and units without an approved NAP application for payment will be calculated according to this section. (b) For the purpose of calculating payments under this section: (1) FSA will adjust the amount of production if necessary to reflect the amount substantiated by the producer's documentation; and (2) The SDRP liability is equal to the eligible acres, multiplied by the producer's approved yield, multiplied by the average market price, multiplied by the SDRP factor; and (3) Because NAP service fees and premiums are not calculated individually by crop and unit, the service fee and premium amount used to calculate a payment under this section will be zero if the producer has already received a payment for a NAP-covered crop under Stage 1. (c) To calculate the Stage 2 payment, FSA will: (1) Determine the calculated loss by: (i) Converting the quality loss percentage to a decimal and subtracting the amount from 1; (ii) Multiplying the result of paragraph (c)(1)(i) of this section by the production, and then by the average market price; (iii) Subtracting the result of paragraph (c)(1)(ii) of this section from the SDRP liability; (iv) Multiplying the result of paragraph (c)(1)(iii) of this section by the unharvested payment factor, if applicable, and then subtracting the salvage value from the result; and (v) Multiplying the result of paragraph (c)(1)(iv) of this section by the producer's share; (2) Determine the potential NAP payment by: (i) Dividing the SDRP liability by the SDRP factor, and multiplying the result by the producer's coverage level under NAP; (ii) Multiplying the production by the average market price, and then subtracting that amount from the result of paragraph (c)(2)(i) of this section; (iii) Subtracting the salvage value from the result of paragraph (c)(2)(ii) of this section and multiplying the result by the producer's share; (iv) Multiplying the result of paragraph (c)(2)(iii) of this section by the price election under NAP, and then by the unharvested payment factor; and (v) Multiplying the result of paragraph (c)(2)(iv) of this section by the producer's share; (3) If the calculated loss minus the potential NAP payment is greater than zero, determine the factored gross Stage 2 payment by: (i) Subtracting the potential NAP payment from the calculated loss, and adding the NAP administrative fees and premiums; and (ii) Multiplying the result of paragraph (c)(3)(i) of this section by 35 percent to stay within available funding; and (4) If the amount of the calculated loss minus the potential NAP payment is equal to or less than zero, determine that the payment amount is zero. [90 FR 51984, Nov. 18, 2025, as amended at 91 FR 11131, Mar. 9, 2026]