Final Agency Determination: FAD-031

FAD: 031

Subject: Request dated April 15, 2004, for Final Agency Determination for the 2004 crop year, regarding the interpretation of section 17(e)(1)(i)(A) of the Common Crop Insurance Policy Basic Provisions (Basic Provisions) (7 C.F.R. 457.8) pursuant to 7 C.F.R. part 400, subpart X.

Section 17(e)(1)(i)(A) of the Basic Provisions states, in part:

17. Prevented Planting.

(e) The maximum number of acres that may be eligible for a prevented planting payment for any crop will be determined as follows:

(1) The total number of acres eligible for prevented planting coverage for all crops cannot exceed the number of acres of cropland in your farming operation for the crop year, unless you are eligible for prevented planting coverage on double cropped acreage in accordance with section 17(f)(4). The eligible acres for each insured crop will be determined in accordance with the following table.

(A) The maximum number of acres certified for APH purposes or reported for insurance for the crop in any one of the 4 most recent crop years (not including reported prevented planting acreage that was planted to a second crop unless you meet the double cropping requirements in section 17(f)(4)).

1. The requestor interpreted the phrase “reported for insurance” in section 17(e)(1)(i)(A) as meaning only the reported acres that are determined to be insurable eligible acres in the applicable crop year, and not the number of acres identified by the insured on the acreage report. The requestor provided an example in which an insured reported 300 acres of onions and claimed prevented planting on all acreage. However, the maximum acres of onions in the insured’s four-year Actual Production History (APH) database was 200 acres. Accordingly, in 2003, the insured received a prevented planting payment for only 200 acres of onions. The remaining 100-acre balance rolled to another crop that had remaining eligibility for prevented planting, and the insured received a prevented planting payment on that other crop. Subsequently, in 2004, the insured submitted an acreage report that again reported 300 acres of onions and again claimed prevented planting on all 300 acres.



2. In the above scenario you interpret section 17(e)(1)(i)(A) to provide that 200 acres is the maximum number of onion acres eligible for prevented planting coverage in 2004. You also state that although the insured reported 300 acres of onions for insurance purposes, the insured’s APH database shows a maximum of only 200 acres of onions, and, in this case, the APH database takes precedence over the total acres reported on the acreage report. Further, you state that any onion acres that exceed 200 acres are to be allocated to other crops in accordance with applicable RMA procedures.

The Federal Crop Insurance Corporation (FCIC) agrees, in the scenario presented above, that a prevented planting payment for onions could only be made for 200 acres in 2004. Section 6 (Report of Acreage) of the Basic Provisions requires the producer to report insured acreage. Under the example provided, for the 2003 crop year, the policy requires the 300 acres of prevented planting onions to be reduced to 200 acres and the 200 acres would be considered to be the number of acres reported for insurance purposes. Therefore, for the 2004 crop year, the maximum number of acres certified for APH purposes or reported for insurance for the crop in the most recent 4 years would be unchanged for the 2003 crop year or 200 acres in the example. The amount of acres reported on the acreage report would have to be reduced to this amount. FCIC agrees any qualifying acreage in excess of the 200 eligible onion acres would be allocated to other crops with remaining eligible prevented planting acreage in accordance with section 17(h) of the Basic Provisions.

In accordance with 7 CFR 400.765 (c) this constitutes the Final Agency Determination and is binding on all participants in the Federal crop insurance program for the 2004 and subsequent crop years, unless such provisions are revised.

Date of Issue: June 14, 2004