Final Agency Determination: FAD-70

FAD-70

Subject: Request dated December 22, 2006, requesting a Final Agency Determination for the 2006 crop year regarding the scope of the definition of “Liners” in section 1 of the Nursery Crop Insurance Provisions, published at 7 C.F.R. 457.162, along with the accompanying Nursery Loss Adjustment Handbook. This request is pursuant to section 506(r) of the Federal Crop Insurance Act, 7 U.S.C. 1501(s) and 7 C.F.R. part 400, subpart X.

Section 1 of the Nursery Crop Insurance Provisions defines “Liners” as:

Plants produced in standard nursery containers that are equal to or greater than 1 inch in diameter (including trays containing 200 or fewer individual cells, unless specifically provided by the Special Provisions) but less than 3 inches in diameter at the widest point of the container or cell interior, have an established root system reaching the sides of the containers, are able to maintain a firm root ball when lifted from the containers, and meet all other conditions specified in the Special Provisions.

Section 11 of the Nursery Loss Adjustment Handbook states, in part:

Liner Plants in cells larger than maximum size listed in the chart are insurable as shown on the EPL/PPS.

The requestor interprets the above-quoted provisions to mean that a plant grown in a container which is three inches or greater in diameter at the widest point of the container or cell interior is not insurable as a liner.

The Federal Crop Insurance Corporation (FCIC) agrees with the interpretation submitted.

Prior to the 2006 crop year, some nursery plants were excluded from insurance because they did not meet the minimum container size requirement. The Nursery Crop Insurance Provisions defined “standard nursery containers” as rigid containers less than three inches in diameter at the widest point of the container interior. Beginning with the 2006 crop year, FCIC revised the definition to provide coverage for liners, which are containers that are at least one inch in diameter at the widest point of the container or cell interior and less than three inches in diameter. Therefore, by definition, plants grown in containers that are three inches or greater in diameter at the widest point of the container or cell interior do not qualify as liners and cannot be insured as such. Plants in containers that are three inches or greater in diameter may be insured as shown on the Eligible Plant List and Plant Price Schedule.

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