Final Agency Determination: FAD-212

Subject: Request dated January 23, 2014, to the Risk Management Agency (RMA) requesting a Final Agency Determination for the 2011 and 2012 crop years regarding the interpretation of Section 2(b) of the Forage Production Crop Provisions (Crop Provisions) published at 7 C.F.R. § 457.117. This request is pursuant to 7 C.F.R. part 400, subpart X.

Background:

Section 2(b) of the Crop Provisions states, in relevant part:

2. Insurance Guarantees, Coverage Levels, and Prices for Determining Cover Levels, and Prices for Determining Indemnities.

In addition to the requirements of section 3 of the Basic Provisions:

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(b) You must report total production harvested from insurable acreage for all cuttings for each unit by the production reporting date.

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Section 3(g) of the Common Crop Insurance Policy Basic Provisions (Basic Provisions (7 C.F.R. § 457.8)) states, in relevant part:

(g) It is your responsibility to accurately report all information that is used to determine your approved yield.

(1) You must certify to the accuracy of this information on your production report.

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The requestor states that under Section 2(b) of the Forage Production Crop Provisions, the insured must certify to the accuracy of the information contained on the Production Acreage and Underwriting Report by signing the Production Acreage and Underwriting Report. It is the requestor’s position that the insured must certify to the accuracy of the information contained on the Production Acreage and Underwriting Report by signing the Production Acreage and Underwriting Report.

The requestor believes this interpretation is consistent with the plain language of Section 2(b) of the Forage Production Crop Provisions which, as noted above, incorporates by reference the certification requirement set forth in Section 3(g) of the Basic Provisions. Additionally, the requestor states this interpretation is consistent with the Forage Production Underwriting Report set forth in Exhibit 36 of the 2011 Document and Supplemental Standards Handbook which identifies the certification statement and the insured's signature as two separate and distinct "substantive" items that must be included on the report. The Document and Supplemental Standards Handbook defines the term "substantive" as follows:

R. Substantive - A term used by RMA informing the AIP that the item(s) must be included on a form.

The requestor interprets these procedures to clearly require an insured's signature on the Production Acreage and Underwriting Report. Therefore, an unsigned document does not satisfy the production reporting requirements of the Forage Production Crop Provisions.

The Federal Crop Insurance Corporation (FCIC) agrees with the requestor’s interpretation. However, RMA has two form requirements, which an AIP at their discretion may combine, that include the “production report” and the Forage Production Underwriting Report. Section 2(b) of the Forage Production Crop Provisions requires the insured to report total production harvested from insurable acreage for all cuttings for each unit. Additionally, Section 6(b) of the Forage Crop Provisions, provides that insurance will not be provided for any forage that: (1) Does not have an adequate stand at the beginning of the insurance period; (2) Is grown with a non-forage crop; or (3) Exceeds the age limitations for forage stands contained in the Special Provisions. The insured is required to complete a Forage Production Underwriting Report yearly which identifies the insurability of the crop consistent with these crop provisions. The Forage Production Underwriting Report contains a requirement for the insured’s signature as outlined in the Document and Supplemental Standards Handbook issued by the FCIC for use by Approved Insurance Providers.

Section 3(g) of the Basic Provisions is clear that it is the insureds responsibility to accurately report all information that is used to determine the approved yield and that they must certify to the accuracy of this information on the production report. That would include all information on the production report, Forage Production Underwriting report, or combined form. There is no other way for the insured to certify to the accuracy of reported information except by a signature to the certification statement contained on the production report, Forage Production Underwriting report, or combined form. If a production report, Forage Production Underwriting report, or combined form is unsigned by the producer, it would not be in compliance with section 3(g) of the Basic 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 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: March 24, 2014