Final Agency Determination: FAD-201

Subject: Two requests dated November 15, 2013, and November 22, 2013, to the Risk Management Agency (RMA) requesting a Final Agency Determination for the 2012 and succeeding crop years on the interpretation of section 17(f)(8) of the Common Crop Insurance Basic Provisions (Basic Provisions), published at 7 C.F.R. 457.8, and a 2012 Special Provisions statement in the Prairie Pothole National Priority Area regarding prevented planting and acreage that is physically available for planting. This request is pursuant to 7 C.F.R. § 400, subpart X.

Background:

Section 17(f)(8) of the Basic Provisions states, in relevant part:

17. Prevented Planting.

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

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

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Special Provisions statement for counties in the Prairie Pothole National Priority Area states, in relevant part:

In accordance with section 17(f)(8) of the Basic Provisions, “physically 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. Additionally, acreage not considered physically available for planting includes, but is not limited to, the following:

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5. Any acreage not planted to a crop that is insured under the authority of the Federal Crop Insurance Act, that is grown in the county on insurable acreage, and harvested in at least one of the four most recent crop years, using recognized good farming practices, unless such acreage was planted to an insured crop that was damaged by an insured cause of loss and adjusted for purposes of a claim under the Federal crop insurance program; or

6. Acreage that has any other condition, as determined by us, that would prevent the proper and timely planting of the crop when weather and other conditions are normal for the area in which the acreage is located. For example, acreage that is normally too wet to plant in the spring may be dry enough to till or plant and even insure a crop in the fall. Such acreage would not be available for planting a spring crop even though such acreage may have been tilled, planted and/or insured the previous fall.

Two interpretations were submitted in this joint FAD request.

First requestor’s interpretation:

The first requestor interprets the Special Provisions to require item 5 to be read in conjunction with item 6 of the statement. When read in conjunction, the first requestor interprets items 5 and 6 to mean that planting, harvesting, and insuring a crop in a particular crop year, as indicated in item 5, does not in and of itself qualify the acreage as meeting the 1 in 4 rule contained in the Special Provisions for prevented planting eligibility. Moreover, when read in conjunction, the first requestor interprets items 5 and 6 to mean that acreage on which a crop is claimed to be prevented from planting due to excessive moisture or cold wet weather in years with normal and/or average precipitation (e.g. rainfall), would be considered as not physically available for planting. In other words, during years with normal and/or average precipitation (e.g. rainfall) the acreage should be physically available for planting.

Second requestor’s interpretation:

In accordance with FAD-179 and Informational Memorandum IS-12-004 published on RMA’s website on August 7, 2012, the second requestor interprets the Special Provisions to require that each of the six criteria must be evaluated separately, and that the approved insurance provider (AIP) must determine eligibility for prevented planting coverage on a case-by-case basis. The second requestor also interprets item 6 of the Special Provisions statement to require consideration of not only “normal precipitation” for the crop year, but also weather-related conditions such as temperature, humidity, wind, barometric pressure and other conditions which affect the soil and planting conditions, such as timing and intensity of precipitation, before a determination that acreage is not physically available for planting for a given year merely on the basis that such year experienced “normal or average precipitation.”

FCIC agrees with the first requestor that planting, harvesting, and insuring a crop in a particular crop year, as indicated in item 5 of the Special Provisions statement, does not in and of itself qualify the acreage as meeting the 1 in 4 rule contained in the Special Provisions for prevented planting eligibility. Item 5 must also be read in conjunction with item 6 of the Special Provisions statement. FCIC provided guidance in Informational Memorandum IS-12-004 published on RMA’s website on August 7, 2012. As stated therein, if the approved insurance provider establishes that the only time the acreage is available for planting is when the area is abnormally dry then the acreage is not eligible for prevented planting.

FCIC agrees with the second requestor that eligibility for a prevented planting payment must be determined on a case-by-case basis. FCIC agrees that all conditions must be examined in determining whether the weather and other conditions are normal for the area in which the acreage is located. However, those conditions used to establish whether the acreage is available for planting have to be such that they would affect the ability to plant or produce a crop on the acreage. In the example in item 6, acreage that is generally too wet to plant in the spring but may be dry enough to till or plant, and even insure a crop in the fall, would not be available for planting a spring crop because of conditions the AIP determines makes it generally too wet to plant from year to year.

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: January 8, 2014