(a) Stage 2 payments for eligible crops and units that were insured under a dollar plan or other revenue plans but were not indemnified for a loss will be calculated according to this section.

(b) For the purpose of calculating payments under this section:

(1) FSA will adjust the production if necessary to reflect the amount substantiated by the producer's documentation;

(2) The SDRP liability is equal to the eligible acres, multiplied by the county expected yield, multiplied by the average market price, and multiplied by the applicable SDRP factor; and

(3) The quality loss percentage is the percentage determined according to § 760.2209(b) and (c), subject to any adjustment by FSA based on documentation submitted by the producer.

(c) To calculate a Stage 2 payment for an eligible crop and unit that was insured under a dollar plan or other revenue plan, FSA will:

(1) Determine the calculated loss by:

(i) Converting the quality loss percentage to a decimal and subtracting from 1;

(ii) Multiplying the production by the result of the paragraph (c)(1)(i) of this section and then by the average market price;

(iii) Multiplying the result of paragraph (c)(1)(ii) of this section by the unharvested payment factor;

(iv) Multiplying the result of paragraph (c)(1)(iii) of this section by the producer's share; and

(v) Subtracting the result of paragraph (c)(1)(iv) of this section from the SDRP liability;

(2) Determine the potential insured indemnity by:

(i) Dividing the SDRP liability by the SDRP factor, and multiplying the result by the producer's coverage level under the dollar based or other revenue insurance plan;

(ii) Multiplying the production by the average market price;

(iii) Multiplying the result from paragraph (c)(2)(ii) of this section by the producer's price election under the dollar based or other revenue insurance plan;

(iv) Multiplying the result from paragraph (c)(2)(iii) of this section by the producer's share; and

(v) Subtracting the result of paragraph (c)(2)(iv) of this section from the insured liability, which is specified in paragraph (c)(2)(i) of this section;

(3) If the amount of the calculated loss minus the potential insured indemnity is greater than zero, determine the factored gross Stage 2 payment by:

(i) Subtracting the potential insured indemnity from the calculated loss, and adding the premiums and administrative fees for the crop and unit; 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 calculated loss minus the potential insured indemnity is equal to or less than zero, determine that the Stage 2 payment amount is zero.

(d) If an applicant designates shares for SBIs on FSA-504, the payment amounts for the primary policy holder and SBIs will be multiplied by the applicable share.