(a) Payments for indemnified insured crops in Puerto Rico will be calculated according to this section.

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

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

(2) The production is the share-adjusted production that was used by RMA to calculate the indemnity and is pre-filled on the FSA-504;

(3) The price is the price provided by RMA used to calculate the liability and indemnity; and

(4) The SDRP liability is the share-adjusted amount provided by RMA based on data already on file for Federal crop insurance purposes, which is equal to the expected crop value multiplied by the SDRP factor.

(c) To calculate a Stage 2 payment for an eligible crop and unit that was insured under a production-based plan in Puerto Rico and indemnified for a loss under that 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 paragraph (c)(1)(i) of this section, and then by the price; and

(iii) Subtracting the result of paragraph (c)(1)(ii) of this section from the SDRP liability;

(2) If the calculated loss in paragraph (c)(1)(iii) of this section minus the Federal crop insurance indemnity is greater than zero, determine the factored gross Stage 2 payment by:

(i) Subtracting the indemnity from the calculated loss, and adding the premium and administrative fees;

(ii) Multiplying the result of paragraph (c)(3)(i) of this section by 35 percent to stay within available funding; and

(3) If the calculated loss in paragraph (c)(1) of this section minus the Federal crop insurance indemnity is equal to or less than zero, determine that the 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.