Final Agency Determination: FAD-131

FAD-131

Subject: Request dated September 18, 2010, resubmitted to the Risk Management Agency on October 5, 2010, and again on October 28, 2010, requesting a Final Agency Determination for the 2010 crop year regarding the interpretation of subparagraph (7) of the definition of "citrus fruit crop" in section 1 of the Florida Citrus Fruit Crop Insurance Provisions, published at 7 C.F.R. part 457.107. This request is pursuant to 7 C.F.R. part 400, subpart X.

Section 1 of the Florida Citrus Fruit Crop Insurance Provisions states, in relevant part:

1. Definitions

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Citrus fruit crop - Except as otherwise provided in section 6, any of the following:

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(7) Citrus VII - Grapefruit for which freeze damage will be adjusted on a fresh fruit basis, and late oranges fresh;

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A statement on the 2010 Florida Citrus Fruit Special Provisions for Polk County states:

If the grower selects type (071) Grapefruit-Fresh or (072) Late Oranges-Fresh, fresh fruit marketing records must be provided from at least one of the previous three years on the plot to be insured.

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The requester interprets the foregoing policy provisions as such that a fresh fruit sales contract, for the current or previous three years, binding the fruit produced on the plot to be insured to fresh fruit marketing as an acceptable marketing record.

The Federal Crop Insurance Corporation (FCIC) disagrees with the requestor's interpretation. A fresh fruit "sales contract" is not considered an acceptable "marketing record" for fresh fruit under Citrus VII of the Florida Citrus Fruit Crop Insurance Provisions. A "sales contract" only expresses agreement between two parties for the potential sale/purchase of the commodity, but is not documentation of a sales transaction of the commodity. In accordance with the provisions of the Crop Insurance Handbook, "marketing records" are records that indicate production produced and sold, such as settlement sheets, certified weight tags, broker sales summaries or load receipts, pool statements, pool summary statements, pack statements or year-end settlement sheets. Marketing records may also include sales receipts or any other document that shows the amount of production sold.

Such "marketing records" must pertain to sold fruit produced during one of the previous three crop years on the plot to be insured. Therefore, a fresh fruit "sales contract" for the 2010 crop year cannot be considered an acceptable "marketing record."

In accordance with 7 C.F.R. part 400.765 (c), this Final Agency Determination is binding on all participants in the Federal crop insurance program for the 2010 crop year. Any appeal of this decision must be in accordance with 7 C.F.R. part 400.768(g).

Date of Issue: December 15, 2010