Final Agency Determination: FAD-048

Subject: Request dated February 7, 2005, requesting a Final Agency Determination for the 2005 crop year (for crops with a contract change date of August 31, 2004, or later) and subsequent crop years, regarding the interpretation of sections 6(d)(2) and (3) 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.

Sections 6(d)(2) and (3) of the Basic Provisions state, as here pertinent:

6. Report of Acreage.

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(d) Regarding the ability to revise an acreage report you have submitted to us:

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(2) For prevented planting acreage reported on the acreage report, you cannot revise any information pertaining to the prevented planting acreage after the report is initially submitted to us without our consent (Consent may only be provided when information on the acreage report is clearly transposed or you provide adequate evidence that we or someone from USDA have committed an error regarding the information on your acreage report);

(3) For prevented planting acreage not reported on the acreage report, you cannot revise your acreage report to add prevented planting acreage;

The requestor stated that the term “consent” and the accompanying parenthetical apply to section 6(d)(2) and not to section 6(d)(3). The requestor stated this means an approved insurance provider may, under certain circumstances, consent to a revision of the acreage report after it is initially submitted by the insured. However, because of the absence of the “consent” language in section 6(d)(3), an approved insurance provider may not consent to a revision to the acreage report that “adds prevented planting acreage.” When read in conjunction with one another, section 6(d)(2) and (3) permit an approved insurance provider to consent only to revisions of the acreage report that decrease the number of prevented planting acres.

The requestor also included the following example. An insured farms 100 acres, 50 acres that are low-lying and 50 acres that are slightly elevated. The insured submits an acreage report that identifies only 50 acres of prevented planting (the low-lying acreage), as the insured still intends to plant the other 50 acres that are slightly elevated. However, it is too wet to plant the other 50 acres and, before the acreage reporting date, the insured submits a revised acreage report showing all 100 acres as prevented planting.

The requestor stated that, under this scenario, they interpret section 6(d)(3) to preclude an approved insurance provider from accepting the revised acreage report because it increases the prevented planting acreage, even though the insured submitted such revision prior to the acreage reporting date. They believe that section 6(d)(3) is an absolute prohibition against revising an acreage report to add prevented planting acres.

The Federal Crop Insurance Corporation (FCIC) disagrees with the interpretations of sections 6(d)(2) and (3).

The requestor is correct that provisions contained in section 6(d)(2) mean that once an insured initially submits any prevented planting acreage on the acreage report, the insured cannot revise that acreage without the approved insurance provider’s consent, even if such revision is requested by the insured on or before the acreage reporting date. For example, if an insured initially submitted an acreage report listing 25 acres of prevented planting wheat and later discovered that another crop would have given him or her a greater prevented planting payment amount, the insured cannot not revise the 25 acres that were initially reported as prevented planting wheat and change them to another crop that would provide a greater prevented planting payment amount.

However, FCIC disagrees with the requestor’s interpretation that, when read in conjunction with one another, sections 6(d)(2) and (3) permit the approved insurance provider to consent only to revisions of the acreage report that decrease the number of prevented planting acres. If the producer reports prevented planting acres but, because of a transposition error or error by a USDA employee, the number of prevented planting acres was misreported on the acreage report, section 6(d)(3) is not applicable. If there is a transposition or error by a USDA employee, the prevented planting acreage must be considered to have been reported on the acreage report. Therefore, under this scenario, section 6(d)(2) would permit consent to increase the prevented planting acreage.

Further, just as the consent provisions are only applicable to section 6(d)(2) because similar language was not included in section 6(d)(3), the phrase “initially submitted” only applies to section 6(d)(2) because similar language is not included in section 6(d)(3). This means for the purposes of section 6(d)(2), it does not matter when the acreage report was filed, no revision can be made after it was initially filed without consent. This also means that under section 6(d)(3) and under section 6(a), which allows prevented planting acreage to be reported on or prior to the acreage reporting date, the insured is not prohibited from revising the acreage report to add prevented planting acreage up until the acreage reporting date. Therefore, in the scenario presented by the requestor, the insured would be allowed to revise the acreage report up until the acreage reporting date to add the 50 acres that were not reported on the initial acreage report submitted.

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

Date of Issue: May 3, 2005