Final Agency Determination: FAD-218

Subject: A request for a Final Agency Determination, dated April 7, 2014, to the Risk Management Agency (RMA) requesting a Final Agency Determination for the 2012 crop year of section 17(f)(4) of the Common Crop Insurance 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 17(f) 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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(4) On which the insured crop is prevented from being planted, if you or any other person receives a prevented planting payment for any crop for the same acreage in the same crop year excluding share arrangements, unless:
(i) It is a practice that is generally recognized by agricultural experts or organic agricultural experts in the area to plant the insured crop for harvest following harvest of the first insured crop, and additional coverage insurance offered under the authority of the Act is available in the county for both crops in the same crop year;
(ii) For the insured crop that is prevented from being planted, you provide records acceptable to us of acreage and production that show, in at least two of the last four crop years:
(A) You have double cropped acreage on which the insured crop that is prevented from being planted in the current crop year was grown (You may apply your history of double cropping to any acreage of the insured crop in the county (e.g., if you have double cropped 100 acres of wheat and soybeans in the county and you acquire an additional 100 acres in the county, you can apply that history of double cropped acreage to any of the 200 acres in the county as long as it does not exceed 100 acres)); or
(B) The acreage you are prevented from planting in the current crop year was double cropped with the insured crop that is prevented from being planted (You may only use the history of double cropping for the same physical acres from which double cropping records were provided (e .g., if a neighbor has double cropped 100 acres of wheat and soybeans in the county and you acquire your neighbor's 100 double cropped acres and an additional 100 acres in the county, you can only apply your neighbor's history of double cropped acreage to the same 100 acres that your neighbor double cropped)); and(iii) The amount of acreage you are double cropping in the current crop year does not exceed the number of acres for which you provided the records required in section 17(f)(4)(ii)

(5) On which the insured crop is prevented from being planted, if:
(i) Any crop is planted within or prior to the late planting period or on or prior to the final planting date if no late planting period is applicable, unless:
(A) You meet the double cropping requirements in section 17(f)(4);

Section 6 of the Small Grains Crop Provisions states, in pertinent part:
6. Insured Crop
(a) The crop insured will be each small grain you elect to insure, that is grown in the county on insurable acreage, and for which premium rates are provided by the actuarial documents:
(1) In which you have a share;
(2) That is planted for harvest as grain (a grain mixture in which barley or oats is the predominate grain may also be insured if allowed by the Barley or Oat Special Provisions, or if a written agreement allows insurance for such mixture. The production from such mixture will be considered as the predominate grain on a weight basis); and
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Section 5 C of the 2012 Prevented Planting Loss Adjustment Handbook states, in pertinent part:

C. PP Payment As It Relates To Double-Cropping History
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(2) Double Cropping Criteria
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(b) Additional coverage insurance offered under the authority of the Act is available in the county for the two or more crops that are double cropped (insured is not required to have additional coverage to qualify 1);
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1: The two crops claimed as qualifying double-cropped acreage must both be “insurable” in the current crop year in order to qualify as double-cropped acreage for PP; i.e., insurance offered under the authority of the ACT is AVAILABLE in the county for both crops. Available means that a Federal crop insurance program is offered for the insured crop in the county by either having:
(1) actuarial documents on file for the crop in the county (crop not required to be insured), or (2) if no actuarial documents are on file for the crop in the county, the crop is insured via a written agreement.

Interpretation Submitted

The requestor interprets section 17(f)(4) of the Basic Provisions that in the event a policyholder should decide to engage in double cropping and seek a prevented planting payment under the policy, that the first crop that was planted must also be a crop that is insured under the Act; and that furthermore should a policyholder plant a first crop that is ultimately harvested and marketed that was not insured under the Act as first crop means that the insured has failed to meet the prevented planting coverage eligibility requirements of section 17(f)(4).

The requestor bases their interpretation off of the specific language in section 17(f)(4)(i) which provides that additional coverage insurance must be available for both crops in the same crop year. The requestor also bases their interpretation off of section 6 of the Small Grains Crop Provisions. The Crop Provisions provide under section 6(a) that an insured crop as meaning any small grain elected to be insured, and that is grown in a county on insurable acreage, and for which premium rates are provided by the county actuarial documents. Section 6(a)(2) further explains that small grains insured under the policy must be planted for harvest as grain.

The requestor states the language in summary indicates that in the event a policyholder were to engage in a double cropping practice where the first insured crop planted is a small grain planted for harvest as anything other than grain would result in a failure to satisfy the requirements of section 17(f)(4) of the Basic Provisions.

Final Agency Determination:

The Federal Crop Insurance Corporation (FCIC) disagrees with the requestor’s interpretation that in the event a policyholder should decide to engage in double cropping and seek a prevented planting payment under the policy, that the first crop that was planted must also be a crop that is insured under the Act. The double cropping requirements contained in section 17(f)(4)(i) include the requirement that additional coverage insurance offered under the authority of the Federal Crop Insurance Act must be available in the county for both crops in the same crop year. The provision does not state that the first crop must have been insured. For example, if a small grain crop was planted on the same acreage which was subsequently planted with an insured crop and claimed as prevented planting, a prevented planting payment may be paid on the subsequent insured crop even if the small grain crop was uninsured for the crop year, provided additional coverage insurance for the small grain crop was “available” in the county either on the actuarial documents or insurable through a written agreement, and the policyholder meets all the double cropping requirements. As stated in section 5 C (2)(b) of the 2012 Prevented Planting Loss Adjustment Standards Handbook; “Available” means a Federal crop insurance program is offered in the county by either having actuarial documents on file for the crop in the county, or the small grain crop can be insured via a written agreement.

FCIC agrees in part with the requestor’s interpretation that in the event a policyholder were to engage in a double cropping practice where a first insured small grain crop planted for harvest as anything other than grain, would result in a failure to satisfy the requirements of section 17(f)(4) of the Basic Provisions if the policy only offers insurance for a small grain harvested as a grain. Section 17(f)(4) of the Basic Provisions states only one prevented planting payment can be made for any acreage in the same crop year unless all of the double cropping qualifications are met. The double cropping provisions require that insurance be available for both crops and if insurance offered under the Act is not available for a small grain grown for harvest as anything other than grain, the double-cropping requirements are not met.

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 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: July 1, 2014