Final Agency Determination: FAD-191

Subject: Request dated August 5, 2013, to the Risk Management Agency (RMA) requesting a Final Agency Determination for the 2011 and successive crop years regarding the interpretation of section 13(a) 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. § 400, subpart X.

Background:

Section 13(a) of the Basic Provisions states:

13. Replanting Payment.

(a) If allowed by the Crop Provisions, a replanting payment may be made on an insured crop replanted after we have given consent and the acreage replanted is at least the lesser of 20 acres or 20 percent of the insured planted acreage for the unit (as determined on the final planting date or within the late planting period if a late planting period is applicable). If the crops to be replanted are in a whole-farm unit, the 20 acres or 20 percent requirement is to be applied separately to each crop to be replanted in the whole-farm unit.

Section 1 of the Basic Provisions provides the following definitions:

Consent - Approval in writing by us allowing you to take a specific action.

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Practical to replant - Our determination, after loss or damage to the insured crop, based on all factors, including, but not limited to moisture availability, marketing window, condition of the field, and time to crop maturity, that replanting the insured crop will allow the crop to attain maturity prior to the calendar date for the end of the insurance period. It will be considered to be practical to replant regardless of availability of seed or plants, or the input costs necessary to produce the insured crop such as those that would be incurred for seed or plants, irrigation water, etc.

Interpretation Submitted

The requestor states section 13(a) of the Basic Provisions states that replanting payments “may be made on an insured crop replanted after we have given consent.” Conversely, a replanting payment MAY NOT be made if replanting has occurred prior to the approved insurance provider (AIP) giving consent. The policy does not make any exceptions regarding the notice requirement that would permit a replanting payment when replanting occurs prior to the AIP’s consent. The policy only provides authority for a replanting payment when a specific sequence of events occurs: first, damage must occur; second, the AIP must be timely notified by the policyholder; third, the AIP must provide consent for replanting the damaged crop; and forth, the replanting must occur. The AIP must provide consent in advance of replanting and exceptions may not be made even when the original stand remained intact because the insured inter-seeded, replanted alongside the original damaged rows, or left representative sample areas at their own discretion.

In summary, eligibility to receive a replanting payment is dependent upon first receiving consent from the AIP and the policy does not provide any exceptions. If replanting occurs prior to the insured receiving consent from the AIP, the insured is not eligible for a replanting payment.

Final Agency Determination

FCIC agrees with the requestor’s interpretation. Section 13(a) is very specific that a replant payment may be made after the AIP has provided consent. Failure to obtain the consent for replanting renders the insured ineligible for a replanting payment.

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 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: August 26, 2013