LOANS, PAYMENTS, AND ACREAGE REDUCTION PROGRAMS FOR THE 1991 THROUGH 1995 CROPS OF UPLAND COTTON.

SEC. 501. LOANS, PAYMENTS, AND ACREAGE REDUCTION PROGRAMS FOR THE 1991 THROUGH 1995 CROPS OF UPLAND COTTON. The Agricultural Act of 1949 is amended by inserting after section 103A (7 U.S.C. 1444–1) the following new section: “SEC. 103B. LOANS, PAYMENTS. AND ACREAGE REDUCTION PROGRAMS FOR THE 1991 THROUGH 1995 CROPS OF UPLAND COTTON. “(a) Loans.— “(1) In general.— Except as otherwise provided in this subsection, the Secretary shall, on presentation of warehouse receipts or other acceptable evidence of title, as determined by104 STAT. 3422 the Secretary, reflecting accrued storage charges of not more than 60 days, make available for the 1991 through 1995 crops of upland cotton to producers on a farm nonrecourse loans for upland cotton produced on the farm for a term of 10 months from the first day of the month in which the loan is made at such loan level, per pound, as will reflect for the base quality of upland cotton, as determined by the Secretary, at average location in the United States a level that is not less than the smaller of— “(A) 85 percent of the average price (weighted by market and month) of the base quality of cotton as quoted in the designated United States spot markets during 3 years of the 5-year period ending July 31 in the year in which the loan level is announced, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; or “(B) 90 percent of the average, for the 15-week period beginning July 1 of the year in which the loan level is announced, of the 5 lowest-priced growths of the growths quoted for Middling one and three-thirty-seconds inch cotton C.I.F. Northern Europe (adjusted downward by the average difference during the period April 15 through October 15 of the year in which the loan is announced between the average Northern European price quotation of such quality of cotton and the market quotations in the designated United States spot markets for the base quality of upland cotton, as determined by the Secretary. “(2) Adjustments to loan level.— “(A) Limitation on decrease in loan level.— The loan level for any crop determined under paragraph (1) may not be reduced by more than 5 percent from the level determined for the preceding crop, and may not be reduced below 50 cents per pound. “(B) Limitation on increase in loan level.— If for any crop the average Northern European price determined under paragraph (1)(B) is less than the average United States spot market price determined under paragraph (1)(A), the Secretary may increase the loan level to such level as the Secretary may consider appropriate, not in excess of the average United States spot market price determined under paragraph (1)(A). “(3) Announcement of loan level.— The loan level for any crop of upland cotton shall be determined and announced by the Secretary not later than November 1 of the calendar year preceding the marketing year for which the loan is to be effective or, in the case of the 1991 crop, as soon as is practicable after the date of enactment of this Act. The loan level shall not thereafter be changed. “(4) Extension of loan period.— “(A) In general.— Except as provided in subparagraph (B), nonrecourse loans provided for in this section shall, on request of the producer during the 10th month of the loan period for the cotton, be made available for an additional term of 8 months. “(B) Limitation.— A request to extend the loan period shall not be approved in any month in which the average price of the base quality of upland cotton, as determined by 104 STAT. 3423 the Secretary, in the designated spot markets for the preceding month exceeded 130 percent of the average price of such base quality of cotton in the designated United States spot markets for the preceding 36-month period. “(5) Marketing loan provisions.— “(A) In general.— If the Secretary determines that the prevailing world market price for upland cotton (adjusted to United States quality and location) is below the loan level determined under the foregoing provisions of this subsection, in order to make United States upland cotton competitive in world markets, the Secretary shall permit a producer to repay a loan made for any crop at— “(i) a level that is the lesser of— “(I) the loan level determined for the crop; or “(II) the higher of— “(aa) the loan level determined for the crop multiplied by 70 percent; or “(bb) the prevailing world market price for upland cotton (adjusted to United States quality and location), as determined by the Secretary; or “(ii) such other level (not in excess of the loan level determined for the crop nor less than 70 percent of such loan level) that the Secretary determines will— “(I) minimize potential loan forfeitures; “(II) minimize the accumulation of cotton stocks by the Federal Government; “(III) minimize the cost incurred by the Federal Government in storing cotton; and “(IV) allow cotton produced in the United States to be marketed freely and competitively, both domestically and internationally. “(B) First handler marketing certificates.— “(i) In general.— During the period beginning August 1, 1991, and ending July 31, 1996, if a program carried out under subparagraph (A) or subsection (b) fails to make United States upland cotton fully competitive in world markets and the prevailing world market price of upland cotton (adjusted to United States quality and location), as determined by the Secretary, is below the current loan repayment rate for upland cotton determined under subparagraph (A), to make United States upland cotton competitive in world markets and to maintain and expand domestic consumption and exports of upland cotton produced in the United States, the Secretary shall provide for the issuance of marketing certificates in accordance with this subparagraph. “(ii) Payments.— The Commodity Credit Corporation, under such regulations as the Secretary may prescribe, shall make payments, through the issuance of marketing certificates, to first handlers of cotton (persons regularly engaged in buying or selling upland cotton) who have entered into an agreement with the Commodity Credit Corporation to participate in the program established under this subparagraph. The payments shall be made in such monetary amounts and subject to104 STAT. 3424 such terms and conditions as the Secretary determines will make upland cotton produced in the United States available at competitive prices, consistent with the purposes of this subparagraph. “(iii) Value.— The value of each certificate issued under clause (ii) shall be based on the difference between— “(I) the loan repayment rate for upland cotton; and “(II) the prevailing world market price of upland cotton (adjusted to United States quality and location), as determined by the Secretary. “(iv) Redemption, marketing, or exchange.— The Commodity Credit Corporation, under regulations prescribed by the Secretary, may assist any person receiving marketing certificates under this subparagraph in the redemption of certificates for cash, or marketing or exchange of the certificates for agricultural commodities or products owned by the Commodity Credit Corporation, at such times, in such manner, and at such price levels as the Secretary determines will best effectuate the purposes of the program established under this subparagraph. Any price restrictions that may otherwise apply to the disposition of agricultural commodities by the Commodity Credit Corporation shall not apply to the redemption of certificates under this subparagraph. “(v) Designation of commodities and products; charges.— Insofar as practicable, the Secretary shall permit owners of certificates to designate the commodities and the products thereof, including storage sites thereof, the owners would prefer to receive in exchange for certificates. If any certificate is not presented for redemption, marketing, or exchange within a reasonable number of days after the issuance of the certificate (as determined by the Secretary), reasonable costs of storage and other carrying charges, as determined by the Secretary, shall be deducted from the value of the certificate for the period beginning after the reasonable number of days and ending with the date of the presentation of the certificate to the Commodity Credit Corporation. “(vi) Displacement.— The Secretary shall take such measures as may be necessary to prevent the marketing or exchange of agricultural commodities and products for certificates under this subsection from adversely affecting the income of producers of the commodities or products. “(vii) Transfers.— Under regulations prescribed by the Secretary, certificates issued to cotton handlers under this subparagraph may be transferred to other handlers and persons approved by the Secretary. “(C) Prevailing world market price.— “(i) In general.— The Secretary shall prescribe by regulation— 104 STAT. 3425 “(I) a formula to define the prevailing world market price for upland cotton (adjusted to United States quality and location); and “(II) a mechanism by which the Secretary shall announce periodically the prevailing world market price for upland cotton (adjusted to United States quality and location). “(ii) Use.— The prevailing world market price for upland cotton (adjusted to United States quality and location) established under this subparagraph shall be used under subparagraphs (A) and (B). “(D) Adjustment of prevailing world market price.— “(i) In general.— During the period beginning August 1, 1991, and ending July 31, 1996, the prevailing world market price for upland cotton (adjusted to United States quality and location) established under subparagraph (C) shall be further adjusted if— “(I) the adjusted prevailing world market price is less than 115 percent of the current crop year loan level for the base quality of upland cotton, as determined by the Secretary; and “(II) the Friday through Thursday average price quotation for the lowest-priced United States growth as quoted for Middling (M) one and three-thirty seconds inch cotton delivered C.I.F. Northern Europe is greater than the Friday through Thursday average price of the five lowest-priced growths of upland cotton, as quoted for Middling (M) one and three-thirty seconds inch cotton, delivered C.I.F. Northern Europe (hereafter in this subsection referred to as the ‘Northern Europe price’). “(ii) Further adjustment.— Except as provided in clause (iii), the adjusted prevailing world market price shall be further adjusted on the basis of some or all of the following data, as available: “(I) The United States share of world exports. “(II) The current level of cotton export sales and cotton export shipments. “(III) Other data determined by the Secretary to be relevant in establishing an accurate prevailing world market price for upland cotton (adjusted to United States quality and location). “(iii) Limitation on further adjustment.— The adjustment under clause (ii) may not exceed the difference between— “(I) the Friday through Thursday average price for the lowest-priced United States growth as quoted for Middling one and three-thirty seconds inch cotton delivered C.I.F. Northern Europe; and “(II) the Northern Europe price. “(E) Cotton user marketing certificates.— “(i) Issuance.— During the period beginning August 1, 1991, and ending July 31, 1996, if for any consecutive 4-week period, the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) one and three-thirty104 STAT. 3426 seconds inch cotton, delivered C.I.F. Northern Europe exceeds the Northern Europe price by more than 1.25 cents per pound, the Secretary shall issue marketing certificates to domestic users or exporters for documented sales made in the week following such consecutive 4-week period. “(ii) Value.— The value of the marketing certificates shall be based on the amount of the difference (reduced by 1.25 cents per pound) in such prices during the 4th week of the consecutive 4-week period multiplied by the quantity of upland cotton included in the documented sales. “(iii) Administration.— Clauses (iv) through (vii) of subparagraph (B) shall apply to marketing certificates issued under this subparagraph. Any such certificates may be transferred to other persons in accordance with regulations issued by the Secretary. “(F) Special import quota.— “(i) Establishment.— The President shall, within 180 days after the date of enactment of this section, establish an import quota program which shall provide that, during the period beginning August 1991 and ending July 31, 1996, whenever the Secretary determines and announces that for any consecutive 10-week period, the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) one and three-thirty seconds inch cotton, delivered C.I.F. Northern Europe, adjusted for the value of any certificates issued under subparagraph (E), exceeds the Northern Europe price by more than 1.25 cents per pound, there shall immediately be in effect a special limited global import quota. “(ii) Quantity.— The quota shall be equal to 1 week’s consumption of upland cotton by domestic mills at the seasonally adjusted average rate of the most recent 3 months for which data are available. “(iii) Application.— The quota shall apply to upland cotton purchased not later than 90 days after the date of the Secretary’s announcement under clause (i) and entered into the United States not later than 180 days after such date. “(iv) Overlap.— A special quota period may be established that overlaps any existing quota period if required by clause (i), except that a special quota period may not be established under this paragraph if a special quota period has been established under subsection (n). “(6) Recourse loans for seed cotton.— In order to encourage and assist producers in the orderly ginning and marketing of their production of upland cotton, the Secretary shall make recourse loans available to such producers on seed cotton in accordance with authority vested in the Secretary under the Commodity Credit Corporation Charter Act (15 U.S.C. 714 et seq.). “(b) Loan Deficiency Payments.— “(1) In general.— The Secretary shall, for each of the 1991 through 1995 crops of upland cotton, make payments (hereafter104 STAT. 3427 in this section referred to as ‘loan deficiency payments’) available to producers who, although eligible to obtain a loan under subsection (a), agree to forgo obtaining the loan in return for payments under this subsection. “(2) Computation.— A payment under this subsection shall be computed by multiplying— “(A) the loan payment rate; by “(B) the quantity of upland cotton the producer is eligible to place under loan but for which the producer forgoes obtaining the loan in return for payments under this subsection. “(3) Loan payment rate.— For purposes of this subsection, the loan payment rate shall be the amount by which— “(A) the loan level determined for the crop under subsection (a); exceeds “(B) the level at which a loan may be repaid under subsection (a). “(4) Marketing certificates.— The Secretary may make up to one-half the amount of a payment under this subsection available in the form of marketing certificates, subject to the terms and conditions provided in subsection (a)(5)(B). “(c) Payments.— “(1) Deficiency payments.— “(A) In general.— The Secretary shall make available to producers payments (hereafter in this section referred to as ‘deficiency payments’) for each of the 1991 through 1995 crops of upland cotton in an amount computed by multiplying— “(i) the payment rate; by “(ii) the payment acres for the crop; by “(iii) the farm program payment yield established for the crop for the farm. “(B) Payment rate.— “(i) In general.— The payment rate for upland cotton shall be the amount by which the established price for the crop of upland cotton exceeds the higher of— “(I) the national average market price received by producers during the calendar year that includes the first 5 months of the marketing year for the crop, as determined by the Secretary; or “(II) the loan level determined for the crop. “(ii) Minimum established price.— The established price for upland cotton shall not be less than $0,729 per pound for each of the 1991 through 1995 crops. “(C) Payment acres.— Payment acres for a crop shall be the lesser of— “(i) the number of acres planted to the crop for harvest within the permitted acreage; or “(ii) 100 percent of the crop acreage base for the crop for the farm less the quantity of reduced acreage (as determined under subsection (e)(2)(D)). “(D) 50/92 program.— “(i) In general.— If an acreage limitation program under subsection (e)(2) is in effect for a crop of upland cotton and the producers on a farm devote a portion of the maximum payment acres for upland cotton as cal-104 STAT. 3428 culated under subparagraph (C)(ii) of the farm equal to more than 8 percent of such upland cotton acreage of the farm for the crop to conservation uses (except as provided in subparagraph (E))— “(I) such portion of the maximum payment acres in excess of 8 percent of such acreage devoted to conservation uses (except as provided in subparagraph (E)) shall be considered to be planted to upland cotton for the purpose of determining the acreage on the farm required to be devoted to conservation uses in accordance with subsection (e)(2)(D); and “(II) the producers shall be eligible for payments under this paragraph with respect to such acreage, subject to the compliance of the producers with clause (ii). “(ii) Minimum planting requirement.— To be eligible for payments under clause (i), except as provided in clauses (iv) and (v), the producers on a farm must actually plant upland cotton for harvest on at least 50 percent of the maximum payment acres for cotton for the farm. “(iii) Deficiency payments.— Notwithstanding any other provision of this section, any producer who devotes a portion of the maximum payment acres for upland cotton for the farm to conservation uses (or other uses as provided in subparagraph (E)) under this subparagraph shall receive deficiency payments on the acreage that is considered to be planted to upland cotton and eligible for payments under this subparagraph for the crop at a per-pound rate established by the Secretary, except that the rate may not be established at less than the projected deficiency payment rate for the crop, as determined by the Secretary. Such E rejected payment rate for the crop shall be announced by the Secretary prior to the period during which upland cotton producers may agree to participate in the program for the crop. “(iv) Quarantines.— If a State or local agency has imposed in an area of a State or county a quarantine on the planting of upland cotton for harvest on farms in the area, the State committee established under section 8(b) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)) may recommend to the Secretary that payments be made under this paragraph, without regard to the requirement imposed under clause (ii), to producers in the area who were required to forgo the planting of upland cotton for harvest on acreage to alleviate or eliminate the condition requiring the quarantine. If the Secretary determines that the condition exists, the Secretary may make payments under this paragraph to the producers. To be eligible for payments under this clause, the producers must devote the acreage to conservation uses (except as provided in subparagraph (E)). “(v) Prevented planting.— If an acreage limitation program under subsection (e) is in effect for any crop of104 STAT. 3429 upland cotton and if the Secretary determines that producers on a farm are prevented from planting the acreage intended for upland cotton to upland cotton because of drought, flood, or other natural disaster, or other condition beyond the control of the producers, the Secretary shall make available to such producers payments under this subparagraph without regard to the requirement imposed under clause (ii). To be eligible for payments under this clause, the producers must devote the acreage to conservation uses (except as provided in subparagraph (E)). Any such acreage shall be considered to be planted to upland cotton. “(vi) Crop acreage and payment yield.— The upland cotton crop acreage base and upland cotton farm program payment yield of the farm shall not be reduced due to the fact that a portion of the permitted cotton acreage of the farm was devoted to conserving uses (except as provided in subparagraph (E)) under this subparagraph. “(vii) Limitation.— Other than as provided in clauses (i) through (vi), payments may not be made under this paragraph for any crop on a greater acreage than the acreage actually planted to upland cotton. “(viii) Conservation use acreage under other programs.— Any acreage considered to be planted to upland cotton in accordance with clauses (i) and (vi) may not also be designated as conservation use acreage for the purpose of fulfilling any provisions under any acreage limitation or land diversion program requiring that the producers devote a specified acreage to conservation uses. “(E) Alternative crops.— The Secretary may permit, subject to such terms and conditions as the Secretary may prescribe, all or any part of acreage otherwise required to be devoted to conservation uses as a condition of qualifying for payments under subparagraph (D) to be devoted to sweet sorghum, guar, sesame, castor beans, crambe, plantago ovato, triticale, rye, mung beans, commodities for which no substantial domestic production or market exists but that could yield industrial raw material being imported, or likely to be imported, into the United States, or commodities grown for experimental purposes (including kenaf and milkweed), subject to the following sentence. The Secretary may permit the acreage to be devoted to the production only if the Secretary determines that— “(i) the production is not likely to increase the cost of the price support program and will not affect farm income adversely; and “(ii) the production is needed to provide an adequate supply of the commodity, or, in the case of commodities for which no substantial domestic production or market exists but that could yield industrial raw materials, the production is needed to encourage domestic manufacture of the raw material and could lead to increased industrial use of the raw material to the long-term benefit of United States industry. 104 STAT. 3430 “(F) Reduction for disaster payments.— The total quantity of upland cotton on which payments would otherwise be payable to a producer on a farm for any crop under this paragraph shall be reduced by the quantity on which any disaster payment is made to the producer for the crop under paragraph (2). “(2) Disaster payments.— “(A) Prevented planting.— Except as provided in subparagraph (C), if the Secretary determines that the producers on a farm are prevented from planting any portion of the acreage intended for upland cotton to upland cotton or other nonconserving crops because of drought, flood, or other natural disaster, or other condition beyond the control of the producers, the Secretary shall make a prevented planting disaster payment to the producers in an amount equal to the product obtained by multiplying— “(i) the number of acres so affected but not to exceed the acreage planted to upland cotton for harvest (including any acreage that the producers were prevented from planting to upland cotton or other nonconserving crops in lieu of upland cotton because of drought, flood, or other natural disaster, or other condition beyond the control of the producers) in the immediately preceding year; by “(ii) 75 percent of the farm program payment yield established for the farm by the Secretary; by “(iii) a payment rate equal to 33 1/3 percent of the established price for the crop. “(B) Reduced yields.— Except as provided in subparagraph (C), if the Secretary determines that because of drought, flood, or other natural disaster, or other condition beyond the control of the producers, the total quantity of upland cotton that the producers are able to harvest on any farm is less than the result of multiplying 75 percent of the farm program payment yield established by the Secretary for the crop by the acreage planted for harvest for the crop, the Secretary shall make a reduced yield disaster payment to the producers at a rate equal to 33 ⅓ percent of the established price for the crop for the deficiency in production below 75 percent for the crop. “(C) Crop insurance.— Producers on a farm shall not be eligible for— “(i) prevented planting disaster payments under subparagraph (A), if prevented planting crop insurance is available to the producers under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) with respect to the upland cotton acreage of the producers; or “(ii) reduced yield disaster payments under subparagraph (B), if reduced yield crop insurance is available to the producers under such Act with respect to the upland cotton acreage of the producers. “(D) Administration.— “(i) Economic emergencies.— Notwithstanding subparagraph (C), the Secretary may make a disaster payment to the producers on a farm under this paragraph if the Secretary determines that— 104 STAT. 3431 “(I) as the result of drought, flood, or other natural disaster, or other condition beyond the control of the producers, the producers have suffered substantial losses of production either from being prevented from planting upland cotton or other nonconserving crops or from reduced yields; “(II) the losses have created an economic emergency for the producers; “(III) crop insurance indemnity payments under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) and other forms of assistance made available by the Federal Government to the producers for the losses are insufficient to alleviate the economic emergency; and “(IV) additional assistance must be made available to the producers to alleviate the economic emergency. “(ii) Adjustments.— The Secretary may make such adjustments in the amount of payments made available under this paragraph with respect to an individual farm as necessary to ensure the equitable allotment of the payments among producers, taking into account other forms of Federal disaster assistance provided to the producers for the crop involved. “(d) Payment Yields.— The farm program payment yields for farms for each crop of upland cotton shall be determined under title V. “(e) Acreage Reduction Programs.— “(1) In general.— “(A) Establishment.— Notwithstanding any other provision of this Act, if the Secretary determines that the total supply of upland cotton, in the absence of an acreage limitation program, will be excessive taking into account the need for an adequate carry-over to maintain reasonable and stable supplies and prices and to meet a national emergency, the Secretary may provide for any crop of upland cotton an acreage limitation program as described in paragraph (2). “(B) Agricultural resources conservation program.— In making a determination under subparagraph (A), the Secretary shall take into consideration the number of acres placed in the agricultural resources conservation program established under subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3831 et seq.). “(C) Announcements.— “(i) Preliminary announcement.— If the Secretary elects to implement an acreage limitation program for any crop year, the Secretary shall make a preliminary announcement of any such program not later than November 1 of the calendar year preceding the year in which the crop is harvested, except that in the case of the 1991 crop, the Secretary shall announce the program as soon as practicable after the date of enactment of this section. The announcement shall include, among other information determined necessary by the Secretary, an announcement of the uniform percentage104 STAT. 3432 reduction in the upland cotton crop acreage base described in paragraph (2)(A). “(ii) Final announcement.— Not later than January 1 of the calendar year in which the crop is harvested, the Secretary shall make a final announcement of the program. The announcement shall include, among other information determined necessary by the Secretary, an announcement of the uniform percentage reduction in the upland cotton crop described in paragraph (2)(A). “(iii) Optional programs in early planting areas.— The Secretary shall allow producers in early planting areas to elect to participate in the program on the terms of the acreage limitation program— “(I) first announced for the crop under clause (i); or “(II) as subsequently revised under clause (ii), if the Secretary determines that the producers may be unfairly disadvantaged by the revision. “(D) Desired carry-over.— The Secretary shall carry out an acreage limitation program described in paragraph (2) for a crop of upland cotton in a manner that will result in a ratio of carry-over to total disappearance of 30 percent, based on the Secretary’s most recent projection of carry-over and total disappearance at the time of announcement of the acreage limitation program. For the purpose of this subparagraph, the term ‘total disappearance’ means all upland cotton utilization, including total domestic, total export, and total residual disappearance. “(2) Acreage limitation program.— “(A) Uniform percentage reduction.— Except as provided in paragraph (3), if an upland cotton acreage limitation program is announced under paragraph (1), the limitation shall be achieved by applying a uniform percentage reduction (from 0 to 25 percent) to the upland cotton crop acreage base for the crop for each upland cotton-producing farm. “(B) Compliance.— Except as provided in section 504, producers who knowingly produce upland cotton in excess of the permitted upland cotton acreage for the farm, as established in accordance with subparagraph (A), shall be ineligible for upland cotton loans and payments with respect to that farm. “(C) Crop acreage bases.— Upland cotton crop acreage bases for each crop of upland cotton shall be determined under title V. “(D) Acreage devoted to conservation uses.— A number of acres on the farm shall be devoted to conservation uses, in accordance with regulations issued by the Secretary. Such number shall be determined by multiplying the upland cotton crop acreage base by the percentage reduction required by the Secretary. The number of acres so determined is hereafter in this subsection referred to as ‘reduced acreage’. The remaining acreage is hereafter in this subsection referred to as permitted acreage’. Permitted acreage may be adjusted by the Secretary as provided in paragraph (3) and in section 504. 104 STAT. 3433 “(E) Individual farm program acreage.— Except as otherwise provided in subsection (c), the individual farm program acreage shall be the acreage planted on the farm to upland cotton for harvest within the permitted upland cotton acreage for the farm as established under this paragraph. “(F) Planting designated crops on reduced acreage.— “(i) Definition of designated crop.— As used in this subparagraph, the term ‘designated crop’ means a crop defined in section 504(b)(1), excluding any program crop as defined in section 502(3). “(ii) In general.— Subject to clause (iii), the Secretary may permit producers on a farm to plant a designated crop on no more than one-half of the reduced acreage on the farm. “(iii) Limitations.— If the producers on a farm elect to plant a designated crop on reduced acreage under this subparagraph— “(I) the amount of the deficiency payment that the producers are otherwise eligible to receive under subsection (c) shall be reduced, for each acre (or portion thereof) that is planted to the designated crop, by an amount equal to the deficiency payment that would be made with respect to a number of acres of the crop that the Secretary considers appropriate, except that if the producers on the farm are participating in a program established for more than one program crop, the amount of the reduction shall be determined by prorating the reduction based on the acreage planted or considered planted on the farm to all of such program crops; and “(II) the Secretary shall ensure that reductions in deficiency payments under subclause (I) are sufficient to ensure that this subparagraph will result in no additional cost to the Commodity Credit Corporation. “(3) Targeted option payments.— “(A) In general.— Notwithstanding any other provision of this section, if the Secretary implements an acreage limitation program with respect to any of the 1991 through 1995 crops of upland cotton, the Secretary may make available to producers on a farm who do not receive payments under subsection (c)(1)(D) for such crop on the farm, adjustments in the level of deficiency payments that would otherwise be made available to the producers if the producers exercise the payment options provided in this paragraph. “(B) Payment options.— If the Secretary elects to carry out this paragraph, the Secretary shall make the payment options specified in subparagraphs (C) and (D) available to producers who agree to make adjustments in the quantity of acreage diverted from the production of upland cotton under an acreage limitation program in accordance with this paragraph. “(C) Increased acreage limitation option.— “(i) Increase in established price.— If the Secretary elects to carry out this paragraph, a producer shall be104 STAT. 3434 eligible to receive an increase in the established price for upland cotton under clause (ii) if the producer agrees to an increase in the acreage limitation percentage to be applied to the producers’ upland cotton acreage base above the acreage limitation percentage announced by the Secretary. “(ii) Method of calculation.— For the purposes of calculating deficiency payments to be made available to producers who participate in the program under this paragraph, the Secretary shall increase the established price for upland cotton by an amount determined by the Secretary, but not less than 0.5 percent, nor more than 1 percent, for each 1 percentage point increase in the acreage limitation percentage applied to the producers’ upland cotton acreage base. “(iii) Limitation.— The acreage limitation percentage to be applied to the producers’ upland cotton acreage base shall not be increased by more than 10 percentage points above the acreage limitation percentage announced by the Secretary for the crop or above 25 percent total for the crop. “(iv) Adjustment for underplantings.— In determining the increased acreage limitation percentage that is applied to the producer’s upland cotton base under this paragraph, the Secretary shall exclude an amount of acreage equal to the average difference between the producer’s permitted upland cotton acreage and the acreage actually planted (including acreage devoted to conserving uses under subsection (c)(1)(D)) to upland cotton for harvest during the previous 2 years. “(D) Decreased acreage limitation option.— “(i) Decrease in acreage limitation requirement.— If the Secretary elects to carry out this paragraph, a producer shall be eligible to decrease the acreage limitation percentage applicable to the producers’ upland cotton acreage base (as announced by the Secretary) if the producer agrees to a decrease in the established price for upland cotton under clause (ii) for the purpose of calculating deficiency payments to be made available to the producer. “(ii) Method of calculation.— For the purposes of calculating deficiency payments to be made available to producers who choose the option set forth in this subparagraph, the Secretary shall decrease the established price for upland cotton by an amount to be determined by the Secretary, but not less than 0.5 percent, nor more than 1 percent, for each 1 percentage point decrease in the acreage limitation percentage applied to the producers’ upland cotton acreage base. “(iii) Limitation.— A producer may not choose to decrease the acreage limitation percentage applicable to the producers’ upland cotton acreage base under this paragraph by more than one-half of the announced acreage limitation percentage. “(E) Participation and production effects.— Notwithstanding any other provision of this paragraph, the Secretary shall, to the extent practicable, ensure that the 104 STAT. 3435program provided for in this paragraph does not have a significant effect on program participation or total production and shall be offered in such a manner that the Secretary determines will result in no additional budget outlays. The Secretary shall provide an analysis of the Secretary’s determination to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate. “(4) Administration.— “(A) Protection from weeds and erosion.— The regulations issued by the Secretary under paragraph (2) with respect to acreage required to be devoted to conservation uses shall assure protection of the acreage from weeds and wind and water erosion. “(B) Annual or perennial cover.— “(i) In general.— Except as provided in paragraph (2), a producer who participates in an acreage reduction program established for a crop of upland cotton under this subsection shall be required to plant to an annual or perennial cover 50 percent (or more, at the option of the producer) of the acreage that is required to be removed from the production of upland cotton, but not to exceed 5 percent (or more, at the option of the producer) of the crop acreage base established for the crop. This requirement shall not apply with respect to arid areas (including summer fallow areas), as determined by the Secretary. “(ii) Multiyear program.— “(I) Cost-share assistance.— If a producer elects to establish a perennial cover capable of improving water quality or wildlife habitat on the acreage, the Commodity Credit Corporation shall make available cost-share assistance for 25 percent of the approved cost of establishing the cover on not more than 50 percent of the acreage that is required to be diverted from production, but not to exceed 5 percent (or more, at the option of the producer) of the crop acreage base established for a crop. “(II) Agreement of producer.— If a producer elects to establish a perennial cover on the acreage under this subparagraph and receives cost-share assistance from the Corporation with respect to the cover, the producer, under such terms and conditions as may be prescribed by the Secretary, taking into consideration guidelines established by the State technical committees established in subtitle G of title XII of the Food Security Act of 1985, shall agree to maintain the perennial cover for a minimum of 3 years. “(iii) Conserving crops.— The Secretary may permit, subject to such terms and conditions as the Secretary may prescribe, all or any part of the acreage to be devoted to sweet sorghum, guar, sesame, castor beans, crambe, plantago ovato, triticale, rye, mung beans, milkweed, or other commodity, if the Secretary determines that the production is needed to provide an adequate supply of the commodities, is not likely to104 STAT. 3436 increase the cost of the price support program, and will not affect farm income adversely. “(C) Haying and grazing.— “(i) In general.— Except as provided in clause (ii), haying and grazing of reduced acreage, acreage devoted to a conservation use under subsection (c)(1)(D), and acreage diverted from production under a land diversion program established under this section shall be permitted, except during any consecutive 5-month period that is established by the State committee established under section 8(b) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)) for a State. The 5-month period shall be established during the period beginning April 1, and ending October 31, of a year. “(ii) Natural disasters.— In the case of a natural disaster, the Secretary may permit unlimited haying and grazing on the acreage. The Secretary may not exclude irrigated or irrigable acreage not planted in alfalfa when exercising the authority under this clause. “(D) Water storage uses.— “(i) In general.— The regulations issued by the Secretary under paragraph (2) with respect to acreage required to be devoted to conservation uses shall provide that land that has been converted to water storage uses shall be considered to be devoted to conservation uses if the land was devoted to wheat, feed grains, cotton, rice, or oilseeds in at least 3 of the immediately preceding 5 years. The land shall be considered to be devoted to conservation uses for the period that the land remains in water storage uses, but not to exceed 5 years subsequent to its conversion to water storage uses. “(ii) Limitations.— Land converted to water storage uses for the purposes of this subparagraph may not be devoted to any commercial use, including commercial fish production. The water stored on the land may not be ground water. The farm on which the land is located must have been irrigated with ground water during at least 1 of the preceding 5 crop years. “(5) Land diversion program.— “(A) Payments.— “(i) In general.— The Secretary may make land diversion payments to producers of upland cotton, whether or not an acreage limitation program for upland cotton is in effect, if the Secretary determines that the land diversion payments are necessary to assist in adjusting the total national acreage of upland cotton to desirable goals. The land diversion payments shall be made to producers who, to the extent prescribed by the Secretary, devote to approved conservation uses an acreage of cropland on the farm in accordance with land diversion contracts entered into by the Secretary with the producers. “(ii) Excess carry-over.— If, at the time of final announcement of the acreage limitation program established under this subsection, the projected carry-over of104 STAT. 3437 upland cotton for the crop year is equal to or greater than 8 million bales, the Secretary shall offer a paid land diversion program to producers of upland cotton. Payments to producers under such a program shall be determined by multiplying— “(I) the payment rate, of not less than 35 cents per pound of cotton, established by the Secretary; by “(II) the program payment yield established for the crop for the farm; by “(III) the number of permitted upland cotton acres diverted on the farm. “(B) Bids for contracts.— The amounts payable to producers under land diversion contracts may be determined through the submission of bids for the contracts by producers in such manner as the Secretary may prescribe or through such other means as the Secretary determines appropriate. In determining the acceptability of contract offers, the Secretary shall take into consideration the extent of the diversion to be undertaken by the producers and the productivity of the acreage diverted. “(C) Limitations on diverted acreage.— “(i) Maximum acreage per farm, county, or community.— The Secretary shall limit the total acreage to be diverted under this paragraph— “(I) to not more than 15 percent of the upland cotton crop acreage base for a farm; and “(II) under agreements in any county or local community so as not to affect adversely the economy of the county or local community. “(ii) Lower participation levels.— The Secretary may allow producers to participate in a land diversion program under this paragraph at a level lower than the maximum level announced by the Secretary, at the option of the producer, if the Secretary determines that it will increase participation in the program. “(6) Conservation practices.— “(A) Wildlife food plots or habitat.— The reduced acreage and additional diverted acreage may be devoted to wildlife food plots or wildlife habitat in conformity with standards established by the Secretary in consultation with wildlife agencies. The Secretary may pay an appropriate share of the cost of practices designed to carry out the purposes of this subparagraph. “(B) Public access.— The Secretary may provide for an additional payment on the acreage in an amount determined by the Secretary to be appropriate in relation to the benefit to the general public if the producer agrees to permit, without other compensation, access to all or such portion of the farm, as the Secretary may prescribe, by the general public, for hunting, trapping, fishing, and hiking, subject to applicable State and Federal regulations. “(7) Participation agreements.— “(A) In general.— Producers on a farm desiring to participate in the program conducted under this subsection shall execute an agreement with the Secretary providing104 STAT. 3438 for the participation not later than such date as the Secretary may prescribe. “(B) Modification or termination.— The Secretary may, by mutual agreement with producers on a farm, modify or terminate any such agreement if the Secretary determines the action necessary because of an emergency created by drought or other disaster or to prevent or alleviate a shortage in the supply of agricultural commodities. The Secretary may modify the agreement under this subparagraph for the purpose of alleviating a shortage in the supply of agricultural commodities only if there has been a significant change in the estimated stocks of the commodity since the Secretary announced the final terms and conditions of the program for the crop of upland cotton. “(f) Inventory Reduction Payments.— “(1) In general.— The Secretary may, for each of the 1991 through 1995 crops of upland cotton, make payments available to producers who meet the requirements of this subsection. “(2) Form.— The payments may be made in the form of marketing certificates. “(3) Payments.— “(A) In general.— Payments under this subsection shall be determined in the same manner as provided in subsection (b). “(B) Quantity of cotton made available.— The quantity of upland cotton to be made available to a producer under this subsection shall be equal in value to the payments so determined under this subsection. “(4) Eligibility.— A producer shall be eligible to receive a payment under this subsection for a crop if the producer— “(A) agrees to forgo obtaining a loan under subsection (a); “(B) agrees to forgo receiving payments under subsection (c); “(C) does not plant upland cotton for harvest in excess of the crop acreage base reduced by one-half of any acreage required to be diverted from production under subsection (e); and “(D) otherwise complies with this section. “(g) Equitable Relief.— “(1) Loans and payments.— If the failure of a producer to comply fully with the terms and conditions of the program conducted under this section precludes the making of loans and payments, the Secretary may, nevertheless, make such loans and payments in such amounts as the Secretary determines are equitable in relation to the seriousness of the failure. The Secretary may consider whether the producer made a good faith effort to comply fully with the terms and conditions of the program in determining whether equitable relief is warranted under this paragraph. “(2) Deadlines and program requirements.— The Secretary may authorize the county and State committees established under section 8(b) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)) to waive or modify deadlines and other program requirements in cases in which lateness or failure to meet such other requirements does not affect adversely the operation of the program. 104 STAT. 3439 “(h) Regulations.— The Secretary may issue such regulations as the Secretary determines necessary to carry out this section. “(i) Commodity Credit Corporation.— The Secretary shall carry out the program authorized by this section through the Commodity Credit Corporation. “(j) Assignment of Payments.— The provisions of section 8(g) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(g)) (relating to assignment of payments) shall apply to payments under this section. “(k) Sharing of Payments.— The Secretary shall provide for the sharing of payments made under this section for any farm among the producers on the farm on a fair and equitable basis. “(l) Tenants and Sharecroppers.— The Secretary shall provide adequate safeguards to protect the interests of tenants and share-croppers. “(m) Cross-Compliance.— “(1) In general.— Compliance on a farm with the terms and conditions of any other commodity program, or compliance with crop acreage base requirements for any other commodity, may not be required as a condition of eligibility for loans or payments under this section. “(2) Compliance on other farms.— The Secretary may not require producers on a farm, as a condition of eligibility for loans or payments under this section for the farm, to comply with the terms and conditions of the upland cotton program with respect to any other farm operated by the producers. “(n) Special Limited Global Import Quota.— “(1) In general.— The President shall, within 180 days after the date of enactment of this section, establish an import quota program which shall provide that whenever the Secretary determines and announces that the average price of the base quality of upland cotton, as determined by the Secretary, in the designated spot markets for a month exceeded 130 percent of the average price of such quality of cotton in such markets for the preceding 36 months, notwithstanding any other provision of law, there shall immediately be in effect a special limited global import quota subject to the following conditions: “(A) Quantity.— The quantity of the special quota shall be equal to 21 days of domestic mill consumption of upland cotton at the seasonally adjusted average rate of the most recent 3 months for which data are available. “(B) Quantity if prior quota.— If a special quota has been established under this subsection during the preceding 12 months, the quantity of the quota next established under this subsection shall be the smaller of 21 days of domestic mill consumption calculated as set forth in subparagraph (A) or the quantity required to increase the supply to 130 percent of the demand. “(C) Definitions.— As used in subparagraph (B): “(i) Supply.— The term ‘supply’ means, using the latest official data of the Bureau of the Census, the Department of Agriculture, and the Department of the Treasury— “(I) the carry-over of upland cotton at the beginning of the marketing year (adjusted to 480-pound bales) in which the special quota is established; plus 104 STAT. 3440 “(II) production of the current crop; plus “(III) imports to the latest date available during the marketing year. “(ii) Demand.— The term ‘demand’ means— “(I) the average seasonally adjusted annual rate of domestic mill consumption in the most recent 3 months for which data are available; plus “(II) the larger of— “(aa) average exports of upland cotton during the preceding 6 marketing years; or “(bb) cumulative exports of upland cotton plus outstanding export sales for the marketing year in which the special quota is established. “(D) Quota entry period.— When a special quota is established under this subsection, cotton may be entered under the quota during the 90-day period beginning on the effective date of the proclamation. “(2) No overlap.— Notwithstanding paragraph (1), a special quota period may not be established that overlaps an existing quota period or a special quota period established under subsection (a)(5)(F). “(o) Crops.— Notwithstanding any other provision of law, this section shall be effective only for the 1991 through 1995 crops of upland cotton.”.