(a) Payments for eligible insured crops in Puerto Rico that were not indemnified for a loss under the Federal crop insurance plan 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) and is subject to any adjustment by FSA based on the documentation submitted by the producer;

(2) The production is the share-adjusted producer-certified production entered on FSA-504, subject to any adjustment by FSA based on the documentation submitted by the producer;

(3) The price is the price provided by RMA used to calculate the liability; 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 expected crop value multiplied by the SDRP factor.

(c) To calculate a Stage 2 payment for an eligible insured crop in Puerto Rico that was not indemnified for a loss under the Federal crop insurance 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) Determine the potential insured indemnity by:

(i) Dividing the SDRP liability by the SDRP factor, and multiplying the result by the crop's insurance coverage level;

(ii) Multiplying the production by the price, multiplied by the producer's price election under the insurance plan; and

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

(3) If 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 premium and administrative fees;

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

(4) If the calculated loss in paragraph (c)(1) of this section minus the potential insured indemnity in paragraph (c)(2) of this section is equal to or less than zero, determine that the payment amount is zero.