Final Agency Determination: FAD-94

FAD-94

Subject: Request dated September 8, 2008, requesting a Final Agency Determination for the 2008 and succeeding crop years regarding the interpretation of section 8 of the Nursery Crop Insurance Provisions, published at 7 C.F.R. §457.162. This request is pursuant to 7 C.F.R. part 400, subpart X.

Background

Section 8 of the Nursery Crop Insurance Provisions states, as here pertinent:

8. Insured Crop and Plants. 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 Price List, in which you have a share, that you elect to insure, and that:

(a) Are shown on the Eligible Plant List and meet all the requirements for insurability.

***;

***

(i) Are not stock plants or plants being grown solely for harvest of buds, flowers, or greenery;

(j) May produce edible fruits or nuts provided the plants are made available for sale (Harvest of the edible fruit or nuts does not affect insurability);

and

***

The Eligible Plant List and Plant Price Schedule (EPLPPS) for California categorizes strawberries in the Small Fruit plant type and identifies numerous species of strawberry plants. Moreover, the EPLPPS provides that strawberry plants are insurable once they meet the high/wide measurement of six inches.

Interpretation Submitted

By way of background, a strawberry nursery uses mother plants to propagate daughter plants. More specifically, strawberry plants reproduce asexually. A mother plant will produce vegetative shoots, called runners or stolons, which are planted while still attached to the mother plant. The runners take root and produce a daughter plant, which is a separate strawberry plant with an established and independent root system. The nursery will harvest the mother and daughter plants, clip the runner, discard the mother plant, and sell the daughter plants on a wholesale basis to commercial strawberry producers. The nursery could cut the runner prior to harvest but it is not economical to do so.

The requestor recognizes the mother plant is used solely to propagate other plants and, therefore, is not insurable under section 8(i). However, the requestor believes the daughter plants are insurable in accordance with section 8(a), even if still attached to the mother plant, provided the strawberry plants meet the other requirements for insurability.

The Nursery Loss Adjustment Standards Handbook (LASH) provides additional guidance regarding insurability. More specifically, section 7J(3) of the Nursery LASH states:

Nursery plants are not considered insurable until they become established, even if they are not otherwise insurable. A plant will be determined to be established when it has a viable root and foliage system capable of supporting its growth without input from the food reserves of seeds, cuttings, etc.

Even when attached to a mother plant, a daughter plant has a viable root and foliage system and grows independently of the mother plant.

The requestor believes a daughter plant, even when attached to the mother plant, is established and, therefore, insurable under section 8 of the Nursery Crop Insurance Provisions.

Final Agency Determination

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

FCIC agrees the mother plant is used solely to propagate other plants and, therefore, is not insurable in accordance with section 8(i) of the Nursery Crop Insurance Provisions.

FCIC disagrees the daughter plants, even when attached to the mother plant, are established and, therefore, insurable under section 8 of the Nursery Crop Insurance Provisions. The daughter plants continue to rely on the mother plant for inputs until the runners have been cut. Once the runners have been cut and the daughter plants are no longer attached to the mother plant, the daughter plant is capable of supporting its own growth without the inputs from the mother plant and, therefore, according to section 7J(3) of the Nursery LASH, determined to be established. It is at this point the daughter plant may be eligible for insurance.

FCIC also disagrees the reference to section 7J(3) above has been taken directly from the Nursery LASH. Section 7J(3) of the Nursery LASH states the following:

Nursery plants are not considered insurable until they become established, even if they are otherwise insurable. A plant will be determined to be established when it has a viable root and foliage system capable of supporting its growth without input from the food reserves of seeds, cuttings, etc.

The reference, as quoted by the requestor, included the word “not” before the word “otherwise,” which is incorrect.

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 2008 crop year.

Date of Issue: October 30, 2008