INFORMATIONAL MEMORANDUM: R&D-95-033 TO: All Reinsured Companies All Risk Management Field Offices CFSA Headquarters, Program Delivery and Field Operations FROM: Tim B. Witt Acting Director Research and Development Division SUBJECT: 1995 Crop Year Prevented Planting Provisions - Operational Instructions for Implementing BULLETIN: MGR-95-028 ISSUE: This bulletin provides operational instructions for acreage reports and claims under the recently announced changes to prevented planting (PP) provisions. ACTION: Prevented planting provisions provided in the crop provisions, FCIC 30010 (LAM), and M-901 (LAM) remain applicable unless modified by subsequent bulletins. For example, corn intended to be planted on failed or harvested wheat acreage in the same crop year is not eligible for a prevented planting production guarantee (see applicable crop provisions). Eligible Prevented Planting Acreage Determine maximum acreage eligible for planting to the insured crop by adding together (1) all eligible acreage of all non-participating farms, and (2) permitted acres from participating farms. See the applicable FCIC 30010 (LAM), M-901 (LAM) and MGR-95-028 regarding maximum eligible acreage. Acreage Reporting Record on the acreage report planted (insured & uninsured) and eligible prevented planting acreage, by unit, based on the insured's intentions. The sum of planted and eligible prevented planting acreage cannot exceed the maximum eligible acreage on a contract basis. Identify prevented planting acreage, by line, with the appropriate codes for each intended use category. The Data Acceptance System (DAS) codes are shown below. Other codes identifying the appropriate acreage use (therefore proper production guarantee) may be used on the acreage report by the insurance provider but data must be transmitted utilizing these codes, in accordance with R&D-95-031. In the planting date column of the acreage report, based on the insured's certified subsequent use, enter: P1 - For acreage planted to a subsequent crop (including ghost) for harvest (that is any crop except the crop which was prevented from being planted or except an approved 0/92 cover crop. The prevented planting guarantee is 25% of the production guarantee for all crops except cotton and rice (17.5%) and hybrid seed corn (20%). P2 - For acreage planted to an approved 0/92 cover crop (including acreage enrolled in 0/92 or 50/92) which the producer plans to hay or graze. The prevented planting guarantee is 50% of the production guarantee for all crops except cotton and rice (35%) and hybrid seed corn (40%). P3 - For acreage planted to the insured crop after the end of the late planting period. The prevented planting guarantee is 50% of the production guarantee for all crops except cotton and rice (35%) and hybrid seed corn (40%). P4 - For acreage not planted to any crop or planted to an approved 0/92 cover crop (including acreage enrolled in 0/92 or 50/92) that will not be harvested, hayed or grazed. The prevented planting guarantee is 75% of the production guarantee for all crops except cotton and rice (52.5%) and hybrid seed corn (60%). The insured's signature on the completed acreage report constitutes his/her certification of intended use of prevented planting acreage. If a use other than the intended use is determined at the time a field inspection is made, the claim will reflect the actual use. The acreage report may be revised if needed to reflect the actual use of the prevented planting acreage. Increases in liability are allowed only for changes in prevented planting use (e.g., an insured initially intended to plant a cover crop for haying or grazing (50% of the production guarantee); however, the insured decided to leave the cover crop undisturbed (the liability can be increased to 75% of the production guarantee).) The liability can be increased no later than the earlier of final settlement of a claim or the end of the insured crop insurance period. Claims will be reopened for cases of misrepresentation. Claims Preparation Claims can be finalized based on the use designated on the acreage report. Cover crops planted should be subject to an increased level of quality control. Insureds must be advised of consequences of any changes after claim finalization. No PP payment will be made until all appraised/harvested production is accounted for within the unit. Production from all insurable planted acreage (timely, late planted, planted after the final planting date, and acreage planted after the end of the late planting period) will be counted against the unit guarantee. Identify prevented planting acreage, by line, with the appropriate code from the acreage report, entered in the stage column of the claim form. The codes as shown for the acreage report above will be acceptable by the Data Acceptance System (DAS), in accordance with R&D-95-031. Other codes may be used on the claim form by the insurance provider but data must be transmitted utilizing the above codes. Fall Crops Insurance providers are authorized to revise acreage reports and prepare corrected claims, as needed for fall seeded crops, in line with the provisions of MGR-95-028. Examples include: A fall crop was prevented from being planted, and "zero acres" were reported. (Fall wheat was prevented from being planted and intended to be planted to a spring crop). Some acreage was planted and some acreage was prevented from being planted. Only the planted acres were reported. Prevented planted acreage that was pro-rated. Increases in liability/potential indemnities are allowed to accommodate these changes. In all cases, prevented planting is available for the fall-planted crop (e.g., wheat) and not the spring crop following a fall-planted crop. Spring Crops Insurance providers are authorized to revise acreage reports and correct claims as needed, in line with the provisions of MGR-95-028. Increases in liability/potential indemnities are allowed to accommodate these changes. If the acreage was initially planted to a spring crop and that crop fails, prevented planting does not apply to any subsequent crop (see applicable crop provisions).