Final Agency Determination: FAD-155

FAD-155

Subject: Request dated January 20, 2012, requesting a Final Agency Determination for the 2011 crop year for all crops with a 2011 crop year contract change date on or after April 30, 2010, regarding the interpretation of section 17(e)(1) 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.

Background:

Section 17(e)(1) of the Basic Provisions states, in relevant part:

17. Prevented Planting

(e) The maximum number of acres that may be eligible for a prevented planting payment for any crop will be determined as follows:

(1) The total number of acres eligible for prevented planting coverage for all crops cannot exceed the number of acres of cropland in your farming operation for the crop year, unless you are eligible for prevented planting coverage on double cropped acreage in accordance with section 17(f)(4). The eligible acres for each insured crop will be determined as follows:

(i) If you have planted any crop in the county for which prevented planting insurance was available (you will be considered to have planted if your APH database contains actual planted acres) or have received a prevented planting insurance guarantee in any one or more of the four most recent crop years, and the insured crop is not required to be contracted with a processor to be insured:

(A) The number of eligible acres will be the maximum number of acres certified for APH purposes, or insured acres reported, for the crop in any one of the four most recent crop years (not including reported prevented planting acreage that was planted to a second crop unless you meet the double cropping requirements in section 17(f)(4)).

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(ii) If you have not planted any crop in the county for which prevented planting insurance was available (you will be considered to have planted if your APH database contains actual planted acres) or have not received a prevented planting insurance guarantee in all of the four most recent crop years, and the insured crop is not required to be contracted with a processor to be insured:

(A) The number of eligible acres will be:

(1) The number of acres specified on your intended acreage report, which must be submitted to us by the sales closing date for all crops you insure for the crop year and that is accepted by us; or

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Section 4 of the 2011 Prevented Planting Loss Adjustment Standards Handbook (PP LASH) states, in relevant part:

4. PP COVERAGE AND ELIGIBLE ACREAGE

F. ELIGIBLE ACRES

(1) Acreage eligible for PP must:

(a) Be insurable.

(b) Be 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:

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(c) Not be Uninsurable. The adjuster (and/or other contractor or AIP employee designated by the AIP) must verify that the acreage claimed as PP is NOT uninsurable acreage.

Uninsurable acreage includes, but is not limited to, acreage:

1 That has not been planted and harvested or insured (grazing is not considered harvested for the purpose of insurable acres) in any one of the three previous crop years UNLESS:

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(2) The Maximum eligible acreage for all insured crops eligible for PP payments.

The TOTAL number of acres eligible for PP coverage for ALL crops CANNOT exceed the number of cropland acres in the insured's farming operation for the crop year, unless the insured has provided proof that acreage was double cropped and at least one crop qualified for PP coverage. Refer to Section G (4) and Section 5 C.

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Section 7 of the 2011 Prevented Planting Loss Adjustment Standards Handbook (PP LASH) states, in relevant part:

7. ACREAGE REPORTING

D. INTENDED ACREAGE REPORT

(1) WHEN, IN THE FOUR MOST RECENT CROP YEARS, AN INSURED DID NOT PLANT ANY CROP IN THE COUNTY FOR WHICH PP INSURANCE WAS AVAILABLE OR HAS NOT RECEIVED A PP INSURANCE GUARANTEE, the insured must do the following:

Complete and submit an intended acreage report to the AIP for the purpose of establishing the potential maximum number of eligible PP acre:

(a) Prior to or on the SCD for the purpose of establishing the potential maximum number of eligible PP acres, or

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H. MISREPORTED PP INFORMATION ON THE ACREAGE REPORT OR FAILURE TO REPORT ANY PP ACREAGE FOR A CROP ON THE ACREAGE REPORT

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(2) If no PP acreage is reported on the acreage report by the acreage reporting date, no revisions can be made to the acreage report to add PP acreage. Refer to section 7 I also.

I. REVISED ACREAGE REPORTS

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(3) If all the PP acres reported for the unit are found to be ineligible for PP coverage, the acreage report must be revised. However, if there is a combination of planted and PP acres, revised acreage reports to delete ineligible PP acres do not have to be made by the adjuster/AIP at the time the PP claim is worked, unless the AIP's claim processing system will not automatically:

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Interpretation Submitted

The requestor interprets section 17(e)(1)(i)(A) and 17(e)(1)(ii)(A)(1) to mean that a policyholder's eligible acres for a prevented planting claim (payment) shall be zero if the policyholder did not plant any acres in the county in the last four years, if the policyholder has not reported any acres for insurance or received a prevented planting guarantee in any of the last four years for the crop in the county, or if the insured fails to submit an intended acreage report to the approved insurance provider (AIP) on or before the sales closing date for the crop in the county. Moreover, under these circumstances, no other provisions of the Basic Provisions or any other laws, regulations, rules, and/or publications of the United States Department of Agriculture (USDA) would supersede the determination that the policyholder had zero eligible acres in the county for a prevented planting claim under section 17 of the Basic Provisions. The requestor states the citation for the procedure for which this interpretation is requested is also included in the PP LASH.

The requestor interprets the PP LASH section 4 F and sections 7 D, H, and I to mean that a policyholder must file an intended acreage report in order to establish eligible acres for a prevented planting claim (payment) if the policyholder did not plant any acres in the county in the last four years. The requestor also interprets this provision to mean that the acreage that has not been planted and harvested or insured in any one of the three previous crop years is uninsurable and ineligible for a prevented planting claim (payment). The requestor also interprets this provision to mean that a policyholder's failure to report any prevented planting acres on the acreage report will prohibit the AIP from revising the acreage report unless the prevented planting acres reported on the acreage report are ineligible for prevented planting coverage, in which case the acreage report must be revised. In the case the prevented planting acreage reported is ineligible for insurance, the acreage report must be revised therefore, removing any ineligible prevented planting acreage from the report.

Final Agency Determination

The Federal Crop Insurance Corporation (FCIC) agrees with the requestor's interpretation that if a producer has not planted any acreage in the county in the previous four years or the producer has not received a prevented planting insurance guarantee in all of the four most recent crop years, the producer is required to have filed an intended acreage report by the sales closing date to have any acreage in the county eligible for prevented planting. Further, after the sales closing date, the acreage report cannot be revised to create eligible prevented planting acreage.

To illustrate the interpretation FCIC provides the following example:

A policyholder claimed 100 acres of prevented planting potatoes for the 2011 crop year. The policyholder did not plant any potatoes in the county or receive a prevented planting payment in any one of the last four crop years. Additionally, no intended acreage report was submitted for potatoes by the policyholder by the sales closing date for the 2011 crop year. Therefore, in accordance with cited policy provisions, the policyholder has no eligible prevented planting acres for potatoes.

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 2011 and succeeding crop years the policy provisions are in effect. Any appeal of this decision must be in accordance with 7 C.F.R. 400.768(g).

Date of Issue: April 4, 2012