Final Agency Determination: FAD-69
FAD-69
Subject: Request dated December 22, 2006, requesting a Final Agency Determination for the 2006 crop
year regarding the scope of section 8 of the Nursery Crop Insurance Provisions, published at 7 C.F.R. 457.162, along
with the accompanying Nursery Loss Adjustment Handbook, and Special Provisions statement. This request is pursuant to
section 506(s)
of the Federal Crop Insurance Act, 7 U.S.C. 1501(s) and 7 C.F.R. part 400, subpart X.
Background
Section 8 of the Nursery Crop Insurance Provisions states, in part:
In lieu of the provisions of sections 8 and 9 of the Basic Provisions, the crop insured will be all nursery plants and plant types in each practice, contained on the Eligible
Plant List, in which you have a share, that you elect to insure, and that: …
(f) Are grown in accordance with the production practices and for which premium rates have been established;
(g) Are grown in an appropriate medium.
The Special Provisions statement states “Plants smaller than the smallest listed size for that plant on the Eligible Plant List and Plant Price Schedule are not insurable.”
Section 3A of the Nursery Loss Adjustment Handbook states, in part:
A. INSURABILITY
…
(9) Insurable plants within the practice(s) insured will be all nursery plants and all plant types grown in the county
for which a premium rate is provided by the actuarial documents and that: …
(g) Are grown in an appropriate medium;
(i) Are grown in accordance with the production practices for which premium rates have been established…
Section 7E(1) of the Nursery Loss Adjustment Handbook also states, “Plants smaller
than the smallest EPL/PPS sizes listed for the plants are not insurable.”
Interpretation Submitted
The requestor interprets the above-quoted provisions to mean that if it is determined that a container grown nursery
plant is grown in a container that is smaller than the smallest size listed for that plant on the Eligible Price List and
Plant Price Schedule, the plant would not be insurable. For example, a plant that is grown in a “pot” in which the
container size does not equal a 0.08 gallon measurement or an 18-cubic inch equivalent measurement would not be insurable.
Final Agency Determination
The Federal Crop Insurance Corporation (FCIC) agrees with the interpretation submitted. The Special Provisions state
that plant sizes smaller than the size for the plant specified on the Eligible Price List and Plant Price Schedule is not
insurable. The Eligible Price List and Plant Price Schedule specify the size of plants in terms of the volumetric size of
the pot, such as gallon measurements and cubic inch measurements. This means that plants grown in containers that have a
volume less than the volumetric size listed in the Eligible Price List and Plant Price Schedule for the plant are
not insurable.
However, beginning with the 2006 crop year, liners were added as an additional container size. As stated in section 1
of the Nursery Crop Insurance Provisions, liners are plants produced in standard nursery containers that are equal to or
greater than 1 inch in diameter but less than 3 inches in diameter at the widest point of the cell interior. Liners are
inclusive of all insurable plant types. Using the example submitted, a nursery plant grown in a container smaller than
the minimum size listed in the Special Provisions (0.08 gallons or 18-cubic inches) could be insurable
if it meets the requirements of a liner as stated in the Nursery Crop Insurance Provisions and actuarial documents.
In accordance with the 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 2006 crop year.
Date of Issue: March 6, 2007
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