Final Agency Determination: FAD-129

FAD-130

Subject: The Risk Management Agency (RMA) received two requests, one dated September 13, 2010, and one dated September 27, 2010, for a Final Agency Determination for the 2009 crop year requesting an interpretation of section 6(d)(2) and (3) of the Common Crop Insurance Policy Basic Provisions (Basic Provisions), published at 7 CFR 457.8, and the related loss adjustment procedures.

Policy Provisions:

Section 6(d)(2) and (3) of the Basic Provisions, states:

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

* * * * *

(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;

Referenced procedures in request:

Paragraph 29 of the 2009 Loss Adjustment Manual (LAM) Standards Handbook, FCIC-25010, states, in part:

29 REVISED ACREAGE REPORTS AFTER THE ARD

A AIP Approval

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(2) Prevented Planting. Acreage reports cannot be revised after the ARD to add PP acres, switch PP acres from one crop to another crop, add crops that were not initially reported as having PP acres, or change practices, types, or varieties for the PP crop. However, if the insured provides clear evidence that the information reported was transposed or the AIP or someone from USDA committed an error that resulted in the incorrect information, the acreage report can be revised to correct the information (e.g., if FSA transposed the number of acres they measured in a field, this was the only field the insured had in this unit, and the insured reported the FSA-determined acres as PP when reporting his/her PP acres for the unit, the acreage could be revised to the correct number of acres). AIPs will revise acreage reports to remove acreage ineligible for PP payments as stated in Section 7 I of the Prevented Planting Handbook.

Section 7H(1), (2), and (3) of the Prevented Planting Loss Adjustment Standards Handbook (LASH), FCIC-25370, states:

H. Misreported PP Information on the Acreage Report or Failure to Report Any PP Acreage for a Crop on the Acreage Report

(1) If PP acreage was initially reported on the acreage report, the insured cannot revise any information pertaining to the PP acreage after the report is initially submitted to the AIP without the AIP’s consent. (Consent can only be provided by the AIP when there is a correctable acreage report error as stated in the LAM; e.g., transposed 96.0 acres for 69.0 acres. Refer to the section about revised acreage reports in the LAM for what the correctable errors are.)

(2) For PP acreage not reported on the acreage report, insureds cannot revise the acreage report to add prevented planting acreage.

(3) Filing a Notice of Loss prior to the acreage reporting date, even if the number of PP acres is reported on the Notice of Loss, does not constitute the required reporting of PP acres on the acreage report.

Section 7I(1)(b) of the Prevented Planting LASH, FCIC-25370, states:

I. REVISED ACREAGE REPORTS

(1) WHEN INSUREDS CAN AND CANNOT REVISE PP ACREAGE REPORT INFORMATION

*.*.*.*

(b) AFTER THE ACREAGE REPORTING DATE - PP acres for a crop that were not reported by the acreage reporting date cannot be added after the acreage reporting date. This would apply if the insured reported “0” acres or if the insured reported the incorrect acres. However, with the AIP's approval, PP acreage information can be revised by the AIP after the acreage reporting date if the insured can provide adequate evidence that that the AIP, agent or someone from the USDA committed an error regarding the acreage information the insured reported. Refer to the LAM for correctable errors.

Submitters Interpretation

As stated above, RMA received two requests for a Final Agency Determination for the 2009 crop year regarding interpretation of section 6(d)(2) and (3) of the Basic Provisions. Both parties submitted their interpretation of the provisions as follows:

The first requestor interprets section 6(d)(2) and (3) of the Basic Provisions to mean that the AIP cannot revise any information pertaining to the prevented planting acreage report initially submitted to the AIP without the AIP’s consent and consent may only be given when the information on the acreage report is clearly transposed or the insured provides adequate evidence that the AIP or someone from the USDA have committed an error regarding the information on the acreage report. The AIP cannot revise the acreage report to add prevented planting acres that were not reported on the acreage report.

The first requestor interprets this to mean that if prevented planting acres were not reported on the acreage report, the acreage report cannot be revised to add the prevented planting acres. Filing a notice of loss does not meet the requirement for reporting the prevented planting acres on a timely submitted acreage report. The first requestor also interprets this to mean that when “0” prevented planting acres or the incorrect prevented planting acres are listed on an acreage report, the unreported prevented planting acres cannot be added to the acreage report unless adequate evidence is provided to the AIP that the AIP, agent, or someone from USDA committed an error regarding the information the insured reported, as provided in the LAM.

The second requestor interprets section 6(d)(2) and (3) to mean that if there is adequate evidence that the AIP, agent, or someone from the USDA committed an error in failing to report prevented planting acres on the initial acreage report, then the acreage report may be revised to correct that error and include those acres.

FCIC agrees with the first requester’s interpretation of section 6(d)(2) and (3) of the Basic Provisions. Under section 6(d)(2), when prevented planting acreage is reported on the acreage report initially submitted to the AIP, it cannot be revised without the AIP’s consent, and consent may only be given when the information on the acreage report is clearly transposed or the insured provides adequate evidence that the AIP or someone from the USDA have committed an error regarding the information on the acreage report. This is supported by section 7H(1) of the Prevented Planting LASH, which states that initially reported prevented planting acres cannot be revised by the AIP unless a correctable error (e.g., a transposition type error) has been made.

FCIC agrees that if prevented planting acreage is not reported on the acreage report, section 6(d)(3) of the Basic Provisions is clear that the acreage report cannot be revised to add prevented planting acres. This is supported by paragraph 29A(2) of the LAM, which states the insured cannot revise an acreage report after the acreage reporting date to add prevented planting acres unless the insured can provide adequate evidence that the AIP or someone from USDA committed an error that results in incorrect information being reported on the acreage report.

FCIC agrees with the first requestor that when “0” prevented planting acres are listed on an acreage report, prevented planting acres cannot be added to the acreage report unless the insured provides adequate evidence to the AIP that the AIP, agent, or someone from USDA committed an error regarding the information the insured reported. This is supported by section 7I(1)(b) of the Prevented Planting LASH, which states: “PP acres for a crop that were not reported by the acreage reporting date cannot be added after the acreage reporting date. This would apply if the insured reported “0” acres or if the insured reported the incorrect acres.”

FCIC also agrees with the first requestor’s interpretation that filing a notice of loss does not meet the requirement for timely reporting the prevented planting acreage on the acreage report. Section 17(a) of the Basic Provisions makes it clear that to receive a prevented planting payment the prevented planting acreage must be reported on the acreage report. If the prevented planted acreage is not reported on the acreage report, then section 6(d)(3) of the Basic Provisions applies and the producer is precluded from adding prevented planting acreage. This is supported by section 7H(3) of the Prevented Planting LASH, which states “Filing a Notice of Loss prior to the acreage reporting date, even if the number of PP acres is reported on the Notice of Loss, does not constitute the required reporting of PP acres on the acreage report.” Therefore, if the policyholder failed to report the prevented planting acreage on the acreage report by the acreage reporting date, even if the policyholder had reported a notice of loss prior to the acreage reporting date, the acreage report cannot be revised to add prevented planting acreage that the policyholder failed to initially report by the acreage reporting date.

FCIC disagrees with the second requestor’s interpretation of section 6(d)(2) and (3) of the Basic Provisions to mean if there is adequate evidence that the AIP, agent, or someone from the USDA committed an error in failing to report prevented planting acres on the initial acreage report, then the acreage report may be revised to correct that error and include those acres. It is not the AIP, agents or someone from the USDA’s responsibility to report the preventing planting acres on the initial acreage report. It is the insured’s responsibility to report the acres to the AIP on their form. Section 6(d) of the Basic Provisions specifically refers to the “acreage report you have submitted to us.” Section 6(f) of the Basic Provisions specifically states “If you do not submit an acreage report . . . ” and “if you fail to report all units. . .” Section 6(g)(1) of the Basic Provisions states “If you submit information on any report. . . “ As specified in the preamble to the Basic Provisions, the “you” referred to is the producer. In addition, section 17(a)(2) of the Basic Provisions which states, “(a) Unless limited by the policy provisions, a prevented planting payment may be made to you for eligible acreage if: . . . (2) You include any acreage of the insured crop that was prevented from being planted on your acreage report; and . . .” This is also supported by section 7A(1) of the Prevented Planting LASH, which clarifies it is the policyholder’s responsibility to report all timely planted, late planted, and prevented planting acreage along with any information required to complete an accurate initial acreage report.

Identical language is set forth in the Crop Revenue Coverage (CRC) Basic Provisions. Accordingly, this Final Agency Determination explicitly is applicable to CRC policies. 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 CRC policies have not yet been codified in the C.F.R., to the extent these provisions are 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 and succeeding crop years the interpreted language remains in effect. Any appeal of this determination must be made in accordance with 7 C.F.R. 400.768(g).

Date of Issue: Dec 1, 2010