Final Agency Determination: FAD-119

FAD-119

Subject: Request dated April 9, 2010, requesting a Final Agency Determination for the 2009 crop year regarding the interpretation of section 17(f) 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(f)(8) of the Basic Provisions states:

17. Prevented Planting.

*****
(f) Regardless of the number of eligible acres determined in section 17(e), prevented planting coverage will not be provided for any acreage:

(8) That exceeds the number of eligible acres physically available for planting;

*****

The Risk Management Agency is requested to provide an interpretation of the phrase “acres physically available for planting.”

Section 4F of the 2008 Prevented Planting Loss Adjustment Standards Handbook (PP LASH) states, in relevant part:

F. ELIGIBLE ACRES

(b) Available for planting. Available for planting means land is free of trees, rocky outcroppings, or other factors that would prevent proper and timely preparation of the seedbed for planting and harvest of the crop for the crop year. Acreage not considered available for planting includes, but is not limited to, the following:

1 acreage enrolled in CRP;
2 perennial crop acreage; i.e., trees or vines still on the acreage or not removed in time to plant;
3 pasture or forage acreage is in place (established). Refer to section 4 I and 4 K (2) (a) for what constitutes established pasture or forage acreage that is in place; and
4 Acreage that in normal weather patterns is normally wet throughout the final and late planting period and that would only be available to plant in abnormally dry conditions. Because of the normally wet conditions from year to year on such acreage, this acreage is likely to have well established cattails, perennial weeds, and perennial grasses that increase the likelihood of the acreage being unavailable for planting even in the driest year. Unavailability of such land increases in this situation because of the time, expense, and labor needed to remove the well-established cattails, weeds, and grasses in time to plant the insured crop.

The requestor states because the regulation does not define “acres physically available for planting,“ the requestor believes the term must be interpreted in accordance with section 4 of the Prevented Planting Loss Adjustment Standards Handbook (PP LASH). Section 4 defines eligible acres for prevented planting as being “available for planting“ as follows: “land free of trees, rocky outcroppings, or other factors that would prevent proper and timely preparation of the seedbed for planting and harvest of the crop for the crop year.“

Section 4F(1)(b) of the PP LASH goes on to give examples of acreage not considered available for planting, including in subsection (4) “Acreage that in normal weather patterns is normally wet throughout the final and late planting period and that would only be available to plant in abnormally dry conditions. Because of the normally wet conditions from year to year on such acreage, this acreage is likely to have well established cattails, perennial weeds, and perennial grasses that increase the likelihood of the acreage being unavailable for planting even in the driest year. Unavailability of such land increases in this situation because of the time, expense, and labor needed to remove the well-established cattails, weeds, and grasses in time to plant the insured crop.“

The requestor interprets the phrase “acres available for planting“ in section 17(f), to mean the land must be “crop land acres“ as defined by the Farm Service Agency (FSA) as well as meeting the definition of available for planting in section 4F(1)(b) of the PP LASH. This requires the land be “currently being tilled to produce a harvest“ or if not currently tilled, “has been tilled in a prior year and is suitable to be tilled for crop production.“

The requestor interprets section 17(f), as clarified through section 4 of the PP LASH, as providing that acreage would not be considered to be available for planting if in normal weather patterns the acreage is not available to plant because precipitation fills the low-lying areas and potholes, and the acreage is wet throughout the final and late planting periods, and as a result the acreage would only be available to plant in abnormally dry years. The requestor further interprets this section as requiring that before a decision is made that the acreage is not available for planting due to the clarification in section 4F(1)(b)4 of the PP LASH, an inspection of the acreage would need to be made to determine the conditions in that section actually exist. Further, the requestor believes the condition of the acreage in “normal weather patterns“ would need to be documented by the approved insurance provider (AIP), prior to reaching a determination that any specific acreage is not available for planting due to these circumstances.

The requestor believes it would be improper to interpret the term “acreage unavailable for planting“ to allow for a determination that specific acreage is unavailable based solely on that acreage’s qualifying for prevented planting payments for a set number of prior years. If the acreage qualified for prevented planting payments in each of the prior years, the requestor believes that such qualifying cannot be used as the sole basis for determining the acreage is now “unavailable for planting“ and therefore does not qualify as eligible acres for prevented planting.

The requestor further believes a review of the normal weather patterns needs to be made based on a thirty-year average data for the particular area where the prevented planting claims are made and cannot be based on statewide normal weather for a brief period of time. Likewise, the determination of whether the acreage has been planted or available for planting must be based on the use of FSA maps showing plantings over the same thirty-year time span.

FCIC agrees the phrase “acres physically available for planting“ in section 17(f)(8) of the Basic Provisions must be interpreted in accordance with section 4 of the 2008 PP LASH. RMA posted FAD-110 on its website on February 25, 2010, which states section 17(f)(8) of the Basic Provisions does not define acres “physically available for planting.“ Therefore, clarification was necessary and section 4F(1)(b) of the PP LASH provides a basic definition and examples regarding when acreage is not considered physically available for planting.

FCIC does not agree the phrase “acres available for planting“ in section 17(f) means the land must be “cropland acres“ as defined by FSA. FSA’s classification of cropland is used for FSA program purposes and is not used for crop insurance purposes. The Basic Provisions do not define “cropland.“ However, section 12C of the 2008 PP LASH contains examples of the maximum number of eligible acres for prevented planting coverage and clarifies the term “cropland“ for crop insurance purposes. Footnote 1/ under the first example states the following:

1/The term “cropland“ as used in this example (and for crop insurance purposes) includes ONLY cropland that is available for planting. (Including the CRP acres in the example, there are 1100 total acres. Although FSA or others might consider this farmland/cropland, it would not be considered cropland for insurance purposes since it is not available for planting.)

Therefore, it is possible that acreage considered as “cropland“ by FSA may not be considered as “cropland” acres for the purposes of insurance. The key is whether the acreage is available for planting.

FCIC also does not agree the phrase “acres available for planting“ requires the land to be “currently being tilled to produce a harvest“ or if not currently tilled, “has been tilled in a prior year and is suitable to be tilled for crop production.“ Just because a producer could till the land does not mean it is available for planting. For example, acreage that in normal weather patterns is too wet to plant in the spring may be dry enough to till the previous summer or fall. Such acreage would not be available for planting a spring crop even though such acreage may have been tilled the previous summer or fall.

As stated in FAD-110, one reason acreage may not be considered to be available for planting is “acreage that in normal weather patterns is normally wet throughout the final and late planting period and that would only be available to plant in abnormally dry conditions.“ Therefore, prevented planting coverage is not provided because the reason the acreage could not be planted was due to normal amounts of precipitation, which is not an insured cause of loss.

FCIC agrees an inspection may be made to determine acreage is not available for planting. However, FCIC does not agree the procedure in section 4F(1)(b)4 of the PP LASH means an inspection of the acreage must be made prior to making the determination that the conditions in section 4F(1)(b)4 actually exist and the acreage is not available for planting. AIPs may use other information available, such as the Natural Resources Conservation Service (NRCS) Web Soil Survey maps, FSA information, and weather data, as verification that such acreage is only planted in abnormally dry years and, therefore, in accordance with section 4F(1)(b)4 of the PP LASH, not available for planting. In accordance with section 14(e) of the Basic Provisions, it is the policyholder’s responsibility to prove the loss was due to an insured cause of loss. Approved loss adjustment procedures require the AIP to verify that an insured cause of loss prevented planting. Therefore, FCIC agrees the documentation provided by the policyholder and verified by the AIP used in the determination of eligible acreage must be maintained in the policyholder’s file.

FCIC agrees it would be improper to interpret the term “acreage unavailable for planting“ to allow for a determination that specific acreage is not available for planting based solely on the acreage qualifying for prevented planting payments for a set number of prior years. There may be legitimate circumstances where there is excess moisture at or before planting that would prevent planting for a number of years in a row. To deny prevented planting because the acreage is not available for planting, it must be established that the inability to plant was not due to an insured cause of loss and that the only time the acreage is available for planting is when the area is abnormally dry.

FCIC does not agree a review of the normal weather patterns needs to be made based on a thirty year average data for the particular area where prevented planting claims are made. As stated above, other information such as NRCS Web Soil Survey maps could be used, or other information such as FSA information and weather data could be used to document the acreage was only planted in abnormally dry years. Further, acreage that may have been planted in years past may no longer be available for planting because weather patterns can change from one decade to the next. There have been increased moisture levels in some areas of the United States that has left acreage that was once planted in a perpetual state of inundation (Class V Permanent Ponds and Lakes), and other land in a cyclic state of inundation (Class IV Semi-Permanent Wetland). Consistent with the Federal Crop Insurance Act, the prevented planting provisions contained in the crop insurance policy, section 4F(1)(b)4 of the PP LASH, Informational Memorandums IS-07-007 and IS-10-002.1 and FAD-110, such acreage is not available for planting. Therefore, such acreage is not eligible for prevented planting coverage.

FCIC does not agree the determination of whether the acreage has been planted or is available for planting must be based on the use of FSA maps showing plantings over the same thirty-year time span. As stated above, weather patterns are changing and what was available to plant in the past may not be available to plant today. AIPs must independently determine eligible acreage and prevented planting eligibility based on each policyholder’s individual circumstances and FCIC issued crop insurance policies, procedures, information provided by the policyholder, and other generally available supporting evidence such as weather records, FSA information and aerial photographs, and NRCS maps, as outlined above.

The requestor stated identical or nearly identical language is set forth in the Revenue Assurance policy. Accordingly, they request this Final Agency Determination explicitly be made applicable to the Revenue Assurance policy. Even though 7 C.F.R. part 400, subpart X is only applicable to provisions of the Federal Crop Insurance Act and the regulations promulgated thereunder, and the Crop Revenue Coverage and Revenue Assurance policies have not yet been codified in the C.F.R., to the extent these provisions are identical or nearly identical, the Final Agency Determination applies accordingly to assure consistent, uniform, and equitable treatment to all producers insured under the same policy provisions.

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 2009 crop year. Any appeal of this decision must be in accordance with 7 C.F.R. 400.768(g).

Date of Issue: Jul 15, 2010