Final Agency Determination: FAD-037

FAD: 037

Subject: Request dated September 13, 2004, requesting a Final Agency Determination (FAD) for the 2005 and succeeding crop years (for crops with a contract change date of August 31, 2004 or later), regarding the interpretation of section 17(e)(1) of the Common Crop Insurance Policy Basic Provisions (Basic Provisions), published at 7 C.F.R. 457.8. This request is pursuant to 7 C.F.R. part 400, subpart X.

Section 17(e) of the Basic Provisions states, as here pertinent:

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.

(i) The crop is not required to be contracted with a processor to be insured:



(A) The maximum number of acres certified for APH purposes, or insured acres reported, 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)). The number of acres determined above for a crop may be increased by multiplying it by the ratio of the total cropland acres that you are farming this year (if greater) to the total cropland acres that you farmed in the previous year . . .

The requestor stated that FAD-031, issued by the Risk Management Agency (RMA) on June 14, 2004, provided an interpretation of section 17(e)(1)(i)(A) of the Basic Provisions that is binding for the 2004 and subsequent crop years, unless such provisions are revised. The requestor further stated the Federal Crop Insurance Corporation (FCIC) subsequently revised a portion of section 17(e)(1)(i)(A), effective for the 2005 crop year for all crops with a contract change date of August 31, 2004, or later, and that accordingly, FAD-031 does not apply to any crop that has an August 31, 2004 or later contract change date.

This request specifically pertains to the meaning of the revised phrase contained in section 17(e)(1)(i)(A) of the Basic Provisions for the 2005 crop year (italicized above) that reads “or insured acres reported” as it pertains to determining the maximum eligible acres for prevented planting. For the 2004 and prior crop years, the phrase stated the acres “reported for insurance.” The requestor asked if the interpretation provided in FAD-031 still applies.

The requestor interprets the revised provisions contained in section 17(e)(1)(i)(A) of the Basic Provisions in effect for the 2005 crop year to have the same meaning and effect as the interpretation provided in FAD-031. The requestor stated that it’s his understanding that the above-described revision was intended to incorporate FAD-031 in the Basic Provisions. The requestor asked that RMA issue a FAD confirming that the interpretation of section 17(e)(1)(i)(A) set forth in FAD-031 also applies for the 2005 crop year, notwithstanding the subtle revision of the subsection’s first sentence.

The Federal Crop Insurance Corporation (FCIC) agrees with the interpretation of section 17(e)(1)(i)(A) that reported acreage must be insured and that the interpretation provided by RMA in FAD-031 also applies for the 2005 and succeeding crop years.

In accordance with 7 C.F.R. 400.765(c), this Final Agency Determination is binding on all participants in the Federal crop insurance program for the 2005 and succeeding crop years (for crops with a contract change date of August 31, 2004 or later). Any appeal of this decision must be in accordance with 7 C.F.R. 400.768(g).

Date of Issue: December 1, 2004