Area Risk Protection Insurance Regulations; Common Crop Insurance Policy Basic Provisions; and Common Crop Insurance Regulations, Coarse Grains Crop Insurance Provisions
| Published date | 29 June 2020 |
| Record Number | 2020-13831 |
| Section | Rules and Regulations |
| Court | Federal Crop Insurance Corporation |
Federal Register, Volume 85 Issue 125 (Monday, June 29, 2020)
[Federal Register Volume 85, Number 125 (Monday, June 29, 2020)]
[Rules and Regulations]
[Pages 38749-38760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13831]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 85, No. 125 / Monday, June 29, 2020 / Rules
and Regulations
[[Page 38749]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 407 and 457
RIN 0563-AC69
[Docket ID FCIC-20-0005]
Area Risk Protection Insurance Regulations; Common Crop Insurance
Policy Basic Provisions; and Common Crop Insurance Regulations, Coarse
Grains Crop Insurance Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule with request for comments.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) amends the Area
Risk Protection Insurance (ARPI) Regulations; Common Crop Insurance
Policy (CCIP) Basic Provisions; and the Common Crop Insurance
Regulations, Coarse Grains Crop Insurance Provisions. The intended
effect of this action is to implement the changes contained in the
Agriculture Improvement Act of 2018 (commonly referred to as the 2018
Farm Bill). Section 11122 of the 2018 Farm Bill required that FCIC
research and develop methods of adjusting for quality losses. In
addition to the 2018 Farm Bill required changes, FCIC is updating
provisions regarding premium offsets, Administrator reinstatement,
notice of loss, double cropping requirements, prevented planting, and
units. The changes to the policy made in this rule are applicable for
the 2021 crop year for crops with a contract change date on or after
June 30, 2020. For all crops the changes to the policy made in this
rule are applicable for the 2022 and succeeding crop years.
DATES:
Effective Date: This final rule is effective June 30, 2020.
Comment Date: FCIC will accept comments on this rule until close of
business August 28, 2020. FCIC may consider the comments received and
may conduct additional rulemaking based on the comments.
ADDRESSES: We invite you to submit comments on this rule. In your
comments, include the date, volume, and page number of this issue of
the Federal Register, and the title of rule. You may submit comments by
any of the following methods, although FCIC prefers that you submit
comments electronically through the Federal eRulemaking Portal:
Federal eRulemaking Portal: Go to http://www.regulations.gov and search for Docket ID FCIC-20-0005. Follow the
online instructions for submitting comments.
Mail: Director, Product Administration and Standards
Division, Risk Management Agency, U.S. Department of Agriculture, P.O.
Box 419205, Kansas City, MO 64133-6205.
All comments received, including those received by mail, will be
posted without change and publicly available on http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Francie Tolle; telephone (816) 926-
7829, email [email protected].
SUPPLEMENTARY INFORMATION:
Background
FCIC serves America's agricultural producers through effective,
market-based risk management tools to strengthen the economic stability
of agricultural producers and rural communities. The Risk Management
Agency (RMA) manages FCIC. FCIC is committed to increasing the
availability and effectiveness of Federal crop insurance as a risk
management tool. Approved Insurance Providers (AIPs) sell and service
Federal crop insurance policies in every state and in Puerto Rico
through a public-private partnership. FCIC reinsures the AIPs who share
the risks associated with catastrophic losses due to major weather
events. FCIC's vision is to secure the future of agriculture by
providing world class risk management tools to rural America.
Federal crop insurance policies typically consist of the Basic
Provisions, the Crop Provisions, the Special Provisions, the Commodity
Exchange Price Provisions, if applicable, other applicable endorsements
or options, the actuarial documents for the insured agricultural
commodity, the Catastrophic Risk Protection Endorsement, if applicable,
and the applicable regulations published in 7 CFR chapter IV.
FCIC amends the ARPI Basic Provisions, the CCIP Basic Provisions,
and the Coarse Grains Crop Insurance Provisions (Coarse Grains Crop
Provisions). The changes to the policy made in this rule are applicable
for the 2021 crop year for crops with a contract change date on or
after June 30, 2020. For all other crops the changes to the policy made
in this rule are applicable for the 2022 and succeeding crop years.
ARPI Basic Provisions
The changes to the ARPI Basic Provisions (7 CFR part 407) are as
follows:
FCIC is revising the definition of ``second crop'' to clarify what
is considered a second crop. FCIC removed references of a cover crop
that is hayed or grazed to provide flexibility to producers to use a
cover crop for forage while considering a cover crop otherwise
harvested as grain to be a second crop. For example, now a cover crop
will not be considered a second crop unless it is planted for harvest
as grain or seed. A cover crop is used for soil erosion and
conservation purposes and not for harvest as grain or seed. For
example, barley planted at a reduced seeding rate approved for cover
crop use and used for forage would not be considered a second crop.
However, barley planted at a full seeding rate for harvest as grain
would be considered a second crop.
FCIC is revising section 2(j) to clarify when AIPs must apply
premium credits when paying a claim on a policy. AIPs must apply
premium credits when paying a claim on a policy. There has been some
confusion regarding when an AIP must offset premium and administrative
fees owed to them when an indemnity or prevented planting payment is
simultaneously owed to the producer. This has led to situations where
the producer incorrectly assumed their premium had been deducted from
their indemnity payment and did not pay their premium when their
premium statement came in the mail. Consequently, because the producer
did not pay the full amount owed, as shown on the premium statement,
they became ineligible for future insurance.
[[Page 38750]]
There has also been confusion on whether the AIP is required to
apply an offset for any other crop policy insured with the AIP and
whether the loss payment was being issued before or after the premium
billing date. Producers may have multiple policies with an AIP
(policies are issued on a crop and county basis), and each policy may
have its own premium billing date. FCIC is revising this section to
clarify for a crop policy with an indemnity due, the producer's premium
and administrative fees for that same crop policy will be offset from
any indemnity or prevented planting payment due to the producer even if
it is prior to the premium billing date (will be applied
automatically). For any other crop policy insured with the AIP, if the
claim is to be paid:
(1) Prior to the premium billing date, and the producer agrees,
their premium and administrative fees will be offset from any indemnity
or prevented planting payment due them (will not be applied
automatically); or
(2) On or after the premium billing date, the producer's premium
and administrative fees will be offset from any indemnity or prevented
planting payment due to the producer (will be applied automatically).
For example, a producer in Allen County, Kansas, insures both
winter wheat and corn. Winter wheat has a premium billing date of July
1 and corn has a premium billing date of August 15. The producer was
prevented from planting corn in April. The AIP must take the amount
owed for premium and administrative fees for corn from the prevented
planting payment. Because it is before the premium billing date for
winter wheat, the AIP may take the amount owed for premium and
administrative fees for winter wheat with the producer's consent.
FCIC is revising section 2(k)(2)(iii) and adding new section
2(k)(2)(iii)(C)(1)(iv) to broaden the authority given to the RMA's
Administrator to reinstate producers that inadvertently failed to pay a
debt timely. In addition, FCIC is authorizing the AIPs to allow
reinstatement up to 15 calendar days after a due date for payment
received during a previously executed payment agreement. This includes
clarifying that in order to be reinstated, when a producer has a
previously executed a written payment agreement to pay a debt, they are
required to pay the amount due specified in the payment agreement,
rather than the full amount owed. The remaining portion of the payment
agreement is not yet due.
FCIC is adding a new section 13(c)(5) to allow the allocation of
comingled first and second crop production to the associated crop
acreage in proportion to the liability for the acreage that was and was
not double cropped. Producers had found challenges keeping separate
records of acreage and production that was and was not double cropped
because often the acreage is in the very same field and they harvest
both first and second crop production at the same time. For example, a
producer has two fields in the same unit which are next to each other
(contiguous). On one field they plant wheat, harvest the wheat, and
then plant double crop soybeans. The other field was a single crop of
soybeans only. The producer may harvest both soybean fields at the same
time making it difficult to keep the production separate. This
provision is currently contained in the CCIP Basic Provisions and it is
also appropriate in the ARPI Basic Provisions.
FCIC is adding a new section 13(c)(6) to address double cropping
requirements when another plan of insurance does not require records of
production. FCIC is adding a new paragraph to state that each insured
crop must follow its own Basic Provisions, Crop Provisions, and Special
Provisions to determine if the double cropping requirements have been
met. If the double cropping requirements in the applicable Basic
Provisions, Crop Provisions, or Special Provisions have not been met
for each insured crop, the Basic Provisions for that crop policy apply
regarding payment reductions when the double cropping requirements are
not met. For example, a producer may have both a policy under the
Rainfall and Vegetation Index plan of insurance (RIVI provisions) and
CCIP Basic Provisions. If a crop insured under the Annual Forage Crop
Provisions (an insurance policy that uses the RIVI provisions) is
involved in a scenario where the AIP is determining if the acreage
meets the double cropping requirements or if the first crop and second
crop rules apply, the Annual Forage Crop Provisions and RIVI provisions
should be followed not the CCIP Basic Provisions.
FCIC is revising section 13(d) to explain how to determine a
producer's double cropping acreage eligibility. To qualify for double
cropping, a producer must have records that show the acreage was double
cropped in at least 2 of the last 4 crop years in which the first
insured crop was grown or have records that show the applicable acreage
meets this requirement. The producer's double cropping acreage
eligibility is then limited to the highest number of acres double
cropped within the applicable 4-year period.
FCIC is also adding a new section 13(d)(3) to allow eligible double
cropping acres to be based on either:
(1) The greatest number of acres double cropped in 2 of the last 4
crop years in which the first insured crop was grown; or
(2) The percentage of acres historically double cropped in 2 of the
last 4 crop years in which the first insured crop was grown.
For example, if a producer has a 100-acre farm and has historically
double cropped 50 acres planted to wheat followed by soybeans (50
percent of acres historically double cropped), and the producer
purchases and plants an additional 200 acres of wheat for a total of
300 acres of planted wheat, the number of acres eligible for double
cropping would be based on 50 percent, or 150 acres. If the producer
has historically double cropped wheat followed by soybeans on some or
even all of the acreage, there is a reasonable presumption they may
continue to do so in the future. This change is currently contained in
the CCIP Basic Provisions and it is appropriate in the ARPI Basic
Provisions.
CCIP Basic Provisions
The changes to the CCIP Basic Provisions (7 CFR part 457.8) are as
follows:
FCIC is revising the definition of ``basic unit'' to clarify and
exclude a portion of the crop in the county acreage that was reported
as an enterprise unit. A basic unit is all insurable acreage of the
insured crop in the county on the date coverage begins for the crop
year in which the insured has 100 percent crop share, or which is owned
by one person and operated by another person on a share basis. For
example, if an insured owns land and rents land from two landlords on a
share basis, they would have three basic units for the insured crop in
the county. FCIC is revising the definition to clarify and exclude a
portion of the crop in the county acreage that was reported as an
enterprise unit. As written, the definition of the basic unit includes
all insurable acreage of the crop in the county; however, some of the
acreage can be reported as an enterprise unit, which has a separate
definition. Therefore, FCIC is updating the definition of ``basic
unit'' to correctly reflect the acreage interactions with enterprise
units and optional units. An enterprise unit is all insurable acreage
of a crop or all insurable irrigated or non-irrigated acreage of the
crop in the county in which the insured has a share. An enterprise unit
can be
[[Page 38751]]
comprised of multiple basic units. An optional unit is a subdivision of
a basic unit. A basic unit can be comprised of multiple optional units.
FCIC is revising the definition of ``second crop'' to clarify what
is considered a second crop. FCIC removed references of a cover crop
that is hayed or grazed to provide flexibility to producers to utilize
a cover crop for forage while considering a cover crop otherwise
harvested as grain to be a second crop. For example, now a cover crop
will not be considered a second crop unless it is planted for harvest
as grain or seed. For example, barley planted at a reduced seeding rate
approved for cover crop use and used for forage would not be considered
a second crop. However, barley planted at a full seeding rate for
harvest as grain would be considered a second crop. FCIC is adding
corresponding changes to section 15(g)(3) of the Basic Provisions to
allow silage, haylage, and baleage to be treated the same as haying and
grazing in regard to cover and volunteer crops when it comes to payment
reductions when a crop is prevented from being planted and a volunteer
crop or cover crop is hayed, or grazed, or cut for silage, haylage, or
baleage from the same acreage during the crop year.
FCIC is revising the definition of ``veteran farmer or rancher'' by
replacing the word ``and'' with ``or'' after the phrase, ``Air
Force,''. FCIC is also revising the definition to use semicolons to
separate the items of the list in this definition because one of the
items in the list contains commas and a semicolon will avoid potential
confusion.
FCIC is revising section 2(e) to clarify when AIPs must apply
premium credits when paying a claim on a policy. AIPs must apply
premium credits when paying a claim on a policy. There has been some
confusion regarding when an AIP must offset premium and administrative
fees owed to them when an indemnity or prevented planting payment is
simultaneously owed to the producer. This has led to situations where
the producer incorrectly assumed their premium had been deducted from
their indemnity payment and did not pay their premium when their
premium statement came in the mail. Consequently, because the producer
did not pay the full amount owed, as shown on the premium statement,
they became ineligible for future insurance.
There has also been confusion on whether the AIP is required to
apply an offset for any other crop policy insured with the AIP and
whether the loss payment was being issued before or after the premium
billing date. Producers may have multiple policies with an AIP
(policies are issued on a crop and county basis), and each policy may
have its own premium billing date. FCIC is revising this section to
clarify for a crop policy with an indemnity due, the producer's premium
and administrative fees for that same crop policy will be offset from
any indemnity or prevented planting payment due to the producer even if
it is prior to the premium billing date (will be applied
automatically). For any other crop policy insured with the AIP, if the
claim is to be paid:
(1) Prior to the premium billing date, and the producer agrees,
their premium and administrative fees will be offset from any indemnity
or prevented planting payment due them (will not be applied
automatically); or
(2) On or after the premium billing date, the producer's premium
and administrative fees will be offset from any indemnity or prevented
planting payment due to the producer (will be applied automatically).
For example, a producer in Allen County, Kansas insures both winter
wheat and corn. Winter wheat has a premium billing date of July 1 and
corn has a premium billing date of August 15. The producer was
prevented from planting corn in April. The AIP must take the amount
owed for premium and administrative fees for corn from the prevented
planting payment. Because it is before the premium billing date for
winter wheat, the AIP may take the amount owed for premium and
administrative fees for winter wheat with the producer's consent.
FCIC is revising section 2(f)(2)(iii) and adding new section
2(f)(2)(iii)(C)(1)(iv) to broaden the authority given to the RMA's
Administrator to reinstate producers that inadvertently failed to pay a
debt timely. In addition, FCIC is authorizing the AIPs to allow
reinstatement up to 15 calendar days after a due date for payment
received during a previously executed payment agreement. This includes
clarifying that in order to be reinstated, when a producer has a
previously executed written payment agreement to pay a debt, they are
required to pay the amount due specified in the payment agreement,
rather than the full amount owed. The remaining portion of the payment
agreement is not yet due.
FCIC is revising section 4(c) and adding paragraph (d). Changes to
section 4 were made in the Catastrophic Risk Protection Endorsement;
Area Risk Protection Insurance Regulations; and Common Crop Insurance
Policy Basic Provisions Final rule with request for comments, published
in the Federal Register on June 28, 2019 (84 FR 30857). The change made
in that rule provided that AIPs will send the changes electronically,
unless the policyholder requested a hard copy. The changes described in
that rule were not made in the Code of Federal Regulations. This rule
is making the required technical corrections to make that change now.
FCIC is revising section 14(b)(5) to clarify a notice of loss must
be filed, by the producer, for an AIP to consider whether the delayed
notice impacts their ability to adjust losses as provided by section
14(b)(5). This was in response to agents filing a blanket notice of
loss on behalf of producers and producers not being aware a loss was
filed on their behalf. For example, starting in 2016, 85 percent of
burley tobacco claims were filed on July 1 and listed that date of
damage. These claims were being filed on the first of the month with
anticipation of a loss later. Large claims were investigated by RMA and
discussed with the producer that at the time, the producer did not
expect a loss.
FCIC is revising section 15(g)(3)(i) to state the reduction in
prevented planting payment will apply if a volunteer crop or cover crop
is hayed, grazed, or cut for silage, haylage, or baleage from the same
acreage, after the late planting period (or after the final planting
date if a late planting period is not applicable) for the first insured
crop in the same crop year. Prior to this final rule, the provisions in
the regulation did not treat cutting a volunteer crop or cover crop for
silage, haylage, or baleage the same as it does for haying and grazing.
This change will allow silage, haylage, and baleage to be treated the
same as haying and grazing regarding cover and volunteer crops.
FCIC is removing the provisions from section 15(h)(5)(i) and moving
the provisions to a new section 15(i)(3). The provisions provide
instructions to determine the amount of historical double cropping
acres that are available to use for insurance in the current crop year.
FCIC is adding a new section 15(h)(7) to address double cropping
requirements when another plan of insurance does not require records of
production. FCIC is adding a new section to provide that each insured
crop must follow its own Basic Provisions, Crop Provisions, and Special
Provisions to determine if the double cropping requirements have been
met. If the double cropping requirements in the applicable Basic
Provisions, Crop Provisions, or Special Provisions have not been met
for each insured crop, the
[[Page 38752]]
Basic Provisions for that crop policy apply regarding payment
reductions when the double cropping requirements. For example, a
producer may have both a policy under the RIVI provisions and CCIP
Basic Provisions. If the Annual Forage Crop Provisions (an insurance
policy that uses the RIVI provisions) is one of the crops involved in a
scenario where the AIP is determining if the acreage meets the double
cropping requirements or if the first crop and second crop rules apply,
the Annual Forage Crop Provisions and RIVI provisions should be
followed not the CCIP Basic Provisions.
FCIC is revising the language in 15(i) to explain how to determine
a producer's double cropping acreage eligibility. To qualify for double
cropping a producer must have records that show the acreage was double
cropped in at least 2 of the last 4 crop years in which the first
insured crop was grown or have records that show the applicable acreage
meets this requirement. The producer's double cropping acreage
eligibility is then limited to the highest number of acres double
cropped within the applicable 4-year period.
FCIC is adding a new section 17(e)(1)(iii)(C) to clarify how
eligible acres are determined for crops that require a processor
contract to be insured. FCIC has been asked to address situations where
some producers had reduced contracted acreage, which was not reduced
solely due to prevented planting, or have no contracted acres for the
current crop year. Some producers in this reduced or no contracted
acres scenario have exhausted all eligible prevented planting acreage
and are not eligible to provide prevented planting coverage to
remaining cropland acres. Therefore, FCIC is adding new section
17(e)(iii)(C) to allow a producer who has exhausted eligible acres to
provide prevented planting coverage for all insured cropland acres in
the farming operation due to a reduced contract in the current crop
year, to use the previous crop year's contract for the remaining acres.
This is to incorporate changes issued under Manager's Bulletin: MGR-19-
029 (Prevented Planting Eligible Acre History when Contracted Crop
Acres are Reduced), published on RMA's website on December 23, 2019.
FCIC has also added a reference to the new section 17(e)(1)(iii)(C) in
section 17(h)(4).
For example, a producer has always grown 1,000 acres of contracted
sugar beets, 1,000 acres of soybeans, and 1,000 acres of corn. For the
2020 crop year, the producer's sugar beet contract was reduced to 500
acres. The producer still has 3,000 cropland acres available to plant.
Therefore, the producer plans to plant 500 acres of sugar beets, 1,250
acres of soybeans, and 1,250 acres of corn. With a wet spring, the
producer is only able to plant 1,000 acres of corn, 1,000 acres of
soybeans, and 500 acres of contracted sugar beets. Under the provisions
prior to this regulation, the producer would not have qualified for
prevented planting on the remaining 500 acres in the farming operation
(despite that they have planted and insured 3,000 cropland acres in the
past 5 years) because section 17(e)(1)(iii) stated that the number of
eligible acres for any crop that must be contracted with a processor to
be insured will be the number of acres specified in the processor
contract. However, under the provisions prior to this rule, if there
was no contract in place, the producer could use their history of the
contracted crop. Under the revised provisions, if the producer has
exhausted eligible acres to provide prevented planting coverage for all
insured cropland acres in the farming operation due to a reduced
contract in the current crop year, the previous crop year's contract
may be used for the remaining acres. In this example, the producer
would be eligible for 3,000 acres of prevented planting paid in
accordance with section 17(h) of the CCIP Basic Provisions.
FCIC is revising section 17(f)(4)(ii) regarding how to determine a
producer's double cropping acreage eligibility. Consistent with section
15(i), to qualify for double cropping a producer must have records that
show the acreage was double cropped in at least 2 of the last 4 crop
years in which the insured crop that is prevented from being planted
was grown or have records that show the applicable acreage meets this
requirement. The producer's double cropping acreage eligibility is then
limited to the highest number of acres double cropped within the
applicable 4-year period.
FCIC is revising section 17(f)(5) to revise prevented planting and
cover crops provisions. FCIC is clarifying that haying or grazing a
cover crop will not impact eligibility for a prevented planting payment
provided such action did not contribute to the acreage being prevented
from planting. This incorporates allowances from a Special Provisions
statement and in result, the Special Provisions statement is removed.
FCIC is revising section 34(a)(4)(viii)(C) to clarify current unit
structure options and add an additional unit option when enterprise
units for both irrigated and non-irrigated practices are elected, but
the producer doesn't qualify. If discovery for not qualifying is on or
before the acreage reporting date, the producer has an additional
option to elect an enterprise unit on one practice and a basic or
optional unit on the other practice. Previously, a producer's options
were either one enterprise unit containing both practices or basic or
optional units for both practices, whichever the producer reported on
the acreage report and qualified for.
FCIC is adding provisions to section 36 to provide another risk
management option to producers that will allow a producer to replace
post-quality production amounts in the APH databases with their pre-
quality production amounts, therefore increasing their APH database
yield for individual crop years with a Notice of Loss. This quality
loss option's overall impact is to prevent an insured producer's
guarantee from declining due to low quality when this option is
elected.
Section 11122 of the 2018 Farm Bill required that FCIC research and
develop methods of adjusting for quality losses that:
(1) Do not impact the actual production history of a producer;
(2) Allow producers to exclude a quality loss from their actual
production history when the quality loss is insufficient to trigger an
indemnity payment;
(3) Is optional for a producer to use; and
(4) Is offered at an actuarially sound premium rate.
Over the past year, RMA has conducted research and development
efforts as required by the 2018 Farm Bill, including extensive
stakeholder outreach, for implementing this option.
Coarse Grains Crop Insurance Provisions
The changes to the Coarse Grains Crop Insurance Provisions (7 CFR
457.113) are:
FCIC is revising section 2(c)(1) to replace the phrase, ``or
separate enterprise units for both,'' with ``or separate enterprise
units for one or both practices,'' to clarify what options for
enterprise unit elections are available. As previously written, the
intended meaning may not have been clear and the change will make it
clear that if enterprise unit elections are made, an enterprise unit
must be elected by both FAC and NFAC practices, rather than the option
of electing an enterprise unit for one practice, and basic or optional
units on the other practice; or enterprise units for both practices.
[[Page 38753]]
FCIC is revising section 2(a)(i)(4) to clarify current unit
structure options and add an additional unit option when enterprise
units for both FAC (Following Another Crop) and NFAC (Not Following
Another Crop) cropping practices are elected, but the producer doesn't
qualify. If discovery for not qualifying is on or before the acreage
reporting date, the producer has an additional option to elect an
enterprise unit on one cropping practice and a basic or optional unit
on the other cropping practice. Previously, a producer's options were
either one enterprise unit containing both cropping practices or basic
or optional units for both cropping practices, whichever the producer
reported on the acreage report and qualified for. This is consistent
with similar changes made to the CCIP Basic Provisions for enterprise
units by separate irrigation practices.
Miscellaneous Changes
In addition to the changes discussed above, FCIC is making non-
substantive changes in the regulations. Examples of these changes
include making references consistent, updating the website address,
making grammatical corrections, and clarifying word changes.
FCIC is revising references throughout the regulations in
Sec. Sec. 407.9 and 457.8 to consistently refer to ``FCIC
procedures.'' FCIC refers to these documents inconsistently throughout
the ARPI and the CCIP regulations. For example, the same documents are
referred to as ``procedures issued by FCIC'' and ``FCIC issued
procedures.''
FCIC is revising the ARPI definition of ``actuarial documents'' to
remove the reference to ``http://www.rma.usda.gov/ gov/.'' The definition
refers to RMA's website which refers to this URL, therefore the URL is
not needed in the definition of ``actuarial documents.''
FCIC is revising the definition of ``veteran farmer or rancher'' in
ARPI and CCIP to make minor, non-substantive grammatical corrections.
FCIC is revising ARPI section 3(d) to revise the word ``provided''
to ``notified'' for clarity.
FCIC is revising ARPI section 20(b)(3) and CCIP section 33(b)(3) to
change the beginning of the paragraph from ``Will be conclusively'' to
``Conclusively'' because the lead-in contained in the introductory
paragraph of each of those sections already contains the term ``will
be.''
FCIC is revising the ARPI and CCIP definition of ``RMA website'' to
replace the URL with the current URL www.rma.usda.gov.
Effective Date and Notice and Comment
The Administrative Procedure Act (APA, 5 U.S.C. 553) provides that
the notice and comment and 30-day delay in the effective date
provisions do not apply when the rule involves specified actions,
including matters relating to contracts. This rule governs contracts
for crop insurance policies and therefore falls within that exemption.
For major rules, the Congressional Review Act requires a delay the
effective date of 60 days after publication to allow for Congressional
review. This rule is not a major rule under the Congressional Review
Act, as defined by 5 U.S.C. 804(2). Therefore, this final rule is
effective June 30, 2020. Although not required by APA or any other law,
FCIC has chosen to request comments on this rule.
Executive Orders 12866, 13563, 13771 and 13777
Executive Order 12866, ``Regulatory Planning and Review,'' and
Executive Order 13563, ``Improving Regulation and Regulatory Review,''
direct agencies to assess all costs and benefits of available
regulatory alternatives, and if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). Executive Order 13563 emphasized the importance
of quantifying both costs and benefits, of reducing costs, of
harmonizing rules, and of promoting flexibility. The requirements in
Executive Orders 12866 and 13563 for the analysis of costs and benefits
apply to rules that are determined to be significant. Executive Order
13777, ``Enforcing the Regulatory Reform Agenda,'' established a
Federal policy to alleviate unnecessary regulatory burdens on the
American people.
The Office of Management and Budget (OMB) designated this rule as
not significant under Executive Order 12866, ``Regulatory Planning and
Review,'' and therefore, OMB has not reviewed this rule and analysis of
the costs and benefits is not required under either Executive Order
12866 or 13563.
Executive Order 13771, ``Reducing Regulation and Controlling
Regulatory Costs,'' requires that in order to manage the private costs
required to comply with Federal regulations that for every new
significant or economically significant regulation issued, the new
costs must be offset by savings from deregulatory actions. As this rule
is designated as not significant, it is not subject to Executive Order
13771. In a general response to the requirements of Executive Order
13777, USDA created a Regulatory Reform Task Force, and USDA agencies
were directed to remove barriers, reduce burdens, and provide better
customer service both as part of the regulatory reform of existing
regulations and as an ongoing approach. FCIC reviewed this regulation
and made changes to improve any provision that was determined to be
outdated, unnecessary, or ineffective.
Clarity of the Regulation
Executive Order 12866, as supplemented by Executive Order 13563,
requires each agency to write all rules in plain language. In addition
to your substantive comments on this rule, we invite your comments on
how to make the rule easier to understand. For example:
Are the requirements in the rule clearly stated? Are the
scope and intent of the rule clear?
Does the rule contain technical language or jargon that is
not clear?
Is the material logically organized?
Would changing the grouping or order of sections or adding
headings make the rule easier to understand?
Could we improve clarity by adding tables, lists, or
diagrams?
Would more, but shorter, sections be better? Are there
specific sections that are too long or confusing?
What else could we do to make the rule easier to
understand?
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by
SBREFA, generally requires an agency to prepare a regulatory analysis
of any rule whenever an agency is required by APA or any other law to
publish a proposed rule, unless the agency certifies that the rule will
not have a significant economic impact on a substantial number of small
entities. This rule is not subject to the Regulatory Flexibility Act
because as noted above, this rule is exempt from APA and no other law
requires that a proposed rule be published for this rulemaking
initiative.
Environmental Review
In general, the environmental impacts of rules are to be considered
in a manner consistent with the provisions of the National
Environmental Policy Act (NEPA, 42 U.S.C. 4321-4347) and the
regulations of the Council on Environmental Quality (40 CFR parts 1500-
1508). FCIC conducts programs and activities that have been determined
to have no individual or cumulative effect on the human environment. As
[[Page 38754]]
specified in 7 CFR 1b.4, FCIC is categorically excluded from the
preparation of an Environmental Analysis or Environmental Impact
Statement unless the FCIC Manager (agency head) determines that an
action may have a significant environmental effect. The FCIC Manager
has determined this rule will not have a significant environmental
effect. Therefore, FCIC will not prepare an environmental assessment or
environmental impact statement for this action and this rule serves as
documentation of the programmatic environmental compliance decision.
Executive Order 12372
Executive Order 12372, ``Intergovernmental Review of Federal
Programs,'' requires consultation with State and local officials that
would be directly affected by proposed Federal financial assistance.
The objectives of the Executive Order are to foster an
intergovernmental partnership and a strengthened federalism, by relying
on State and local processes for State and local government
coordination and review of proposed Federal financial assistance and
direct Federal development. For reasons specified in the final rule
related notice regarding 7 CFR part 3015, subpart V (48 FR 29115, June
24, 1983), the programs and activities in this rule are excluded from
the scope of Executive Order 12372.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, ``Civil
Justice Reform.'' This rule will not preempt State or local laws,
regulations, or policies unless they represent an irreconcilable
conflict with this rule. Before any judicial actions may be brought
regarding the provisions of this rule, the administrative appeal
provisions of 7 CFR part 11 are to be exhausted.
Executive Order 13132
This rule has been reviewed under Executive Order 13132,
``Federalism.'' The policies contained in this rule do not have any
substantial direct effect on States, on the relationship between the
Federal Government and the States, or on the distribution of power and
responsibilities among the various levels of government, except as
required by law. Nor does this rule impose substantial direct
compliance costs on State and local governments. Therefore,
consultation with the States is not required.
Executive Order 13175
This rule has been reviewed in accordance with the requirements of
Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments.'' Executive Order 13175 requires Federal agencies
to consult and coordinate with Tribes on a government-to-government
basis on policies that have Tribal implications, including regulations,
legislative comments or proposed legislation, and other policy
statements or actions that have substantial direct effects on one or
more Indian Tribes, on the relationship between the Federal Government
and Indian Tribes or on the distribution of power and responsibilities
between the Federal Government and Indian Tribes.
RMA has assessed the impact of this rule on Indian Tribes and
determined that this rule does not, to our knowledge, have Tribal
implications that require Tribal consultation under E.O. 13175. The
regulation changes do not have Tribal implications that preempt Tribal
law and are not expected have a substantial direct effect on one or
more Indian Tribes. If a Tribe requests consultation, RMA will work
with the USDA Office of Tribal Relations to ensure meaningful
consultation is provided where changes, additions, and modifications
identified in this rule are not expressly mandated by Congress.
The Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L.
104-4) requires Federal agencies to assess the effects of their
regulatory actions of State, local, and Tribal governments or the
private sector. Agencies generally must prepare a written statement,
including cost benefits analysis, for proposed and final rules with
Federal mandates that may result in expenditures of $100 million or
more in any 1 year for State, local or Tribal governments, in the
aggregate, or to the private sector. UMRA generally requires agencies
to consider alternatives and adopt the more cost effective or least
burdensome alternative that achieves the objectives of the rule. This
rule contains no Federal mandates, as defined in Title II of UMRA, for
State, local, and Tribal governments or the private sector. Therefore,
this rule is not subject to the requirements of sections 202 and 205 of
UMRA.
Federal Assistance Program
The title and number of the Federal Domestic Assistance Program
listed in the Catalog of Federal Domestic Assistance to which this rule
applies is No. 10.450--Crop Insurance.
Paperwork Reduction Act of 1995
In accordance with the provisions of the Paperwork Reduction Act of
1995 (44 U.S.C. chapter 35, subchapter I), the rule does not change the
information collection approved by OMB under control numbers 0563-0053.
E-Government Act Compliance
FCIC is committed to complying with the E-Government Act, to
promote the use of the internet and other information technologies to
provide increased opportunities for citizen access to Government
information and services, and for other purposes.
List of Subjects
7 CFR Part 407
Acreage allotments, Administrative practice and procedure, Barley,
Corn, Cotton, Crop insurance, Peanuts, Reporting and recordkeeping
requirements, Sorghum, Soybeans, Wheat.
7 CFR Part 457
Acreage allotments, Crop insurance, Reporting and recordkeeping
requirements.
For the reasons discussed above, FCIC amends 7 CFR parts 407 and
457, effective for the 2021 crop year for crops with a contract change
date on or after June 30, 2020, and for the 2022 and succeeding crop
years for all other crops, as follows:
PART 407--AREA RISK PROTECTION INSURANCE REGULATIONS
0
1. The authority citation for 7 CFR part 407 continues to read as
follows:
Authority: 7 U.S.C. 1506(l) and 1506(o).
0
2. Amend Sec. 407.9 as follows:
0
a. In the introductory text, remove the year ``2017'' and add ``2021''
in its place;
0
b. Under the second heading for ``[FCIC Policies]'', revise the second
and third paragraphs;
0
c Under the second heading for ``[Reinsured Policies]'', revise the
second and fourth paragraphs;
0
d. In section 1:
0
i. In the definition of ``actuarial documents'', remove the phrase
``RMA's website, http://www.rma.usda.gov/,'' and add ``RMA's website''
in its place;
0
ii. In the definition of ``production report'', remove the words ``FCIC
approved procedures'' and add ``FCIC procedures'' in their place;
0
iii. In the definition of ``RMA's website'', remove the website address
[[Page 38755]]
``http://www.rma.usda.gov/'' and add ``www.rma.usda.gov'' in its place;
and
0
iv. Revise the definitions of ``second crop'' and ``veteran farmer or
rancher;''
0
e. In section 2:
0
i. Add paragraphs (j)(3) and (4);
0
ii. Revise paragraph (k)(2)(iii)(B)(1);
0
iii. In paragraph (k)(2)(iii)(C) introductory text, remove the words
``FCIC issued procedures'' and add ``FCIC procedures'' in their place;
0
iv. In paragraph (k)(2)(iii)(C)(1)(ii), remove the word ``or'' at the
end of the paragraph;
0
v. In paragraph (k)(2)(iii)(C)(1)(iii), add the word ``or'' at the end
of the paragraph; and
0
vi. Add paragraph (k)(2)(iii)(C)(1)(iv);
0
f. In section 3, in paragraph (d), remove the word ``provided'' and add
``notified'' in its place;
0
g. In section 7, in paragraph (i)(2)(i)(A), remove the words ``FCIC
approved procedures'' and add ``FCIC procedures'' in their place;
0
h. In section 13:
0
i. In paragraph (c)(4), remove the period at the end of the paragraph
and add a semicolon in its place;
0
ii. Add paragraphs (c)(5) and (6);
0
iii. Revise paragraph (d) introductory text; and
0
iv. Add paragraph (d)(3);
0
i. In section 20, in paragraph (b)(3), remove the words ``Will be
conclusively'' and add ``Conclusively'' in their place.
The revisions and additions read as follows:
Sec. 407.9 Area risk protection insurance policy.
This insurance is available for the 2021 and succeeding years.
* * * * *
[FCIC Policies]
* * * * *
This is an insurance policy issued by FCIC, under the provisions of
the Federal Crop Insurance Act (7 U.S.C. 1501-1524) (Act). All
provisions of the policy and rights and responsibilities of the parties
are specifically subject to the Act. The provisions of the policy may
not be waived or modified in any way by us, your insurance agent, or
any employee of USDA. FCIC procedures (handbooks, underwriting rules,
manuals, memoranda, and bulletins), and published on the Risk
Management Agency's (RMA) website at www.rma.usda.gov or a successor
website, will be used in the administration of this policy, including
the adjustment of any loss or claim submitted under this policy.
Throughout this policy, ``you'' and ``your'' refer to the insured shown
on the accepted application and ``we,'' ``us,'' and ``our'' refer to
FCIC. Unless the context indicates otherwise, the use of the plural
form of a word includes the singular and the singular form of the word
includes the plural.
AGREEMENT TO INSURE: In return for the commitment to pay a premium,
and subject to all of the provisions of this policy, we agree with you
to provide the insurance as stated in this policy. If there is a
conflict between the Act, the regulations in 7 CFR chapter IV, and FCIC
procedures, the order of precedence is: (1) The Act; (2) the
regulations; and (3) FCIC procedures. If there is a conflict between
the policy provisions in 7 CFR part 407 and the administrative
regulations in 7 CFR part 400, the policy provisions published at 7 CFR
part 407 apply. The order of precedence for the policy is: (1) The
Catastrophic Risk Protection Endorsement, as applicable; (2) Special
Provisions; (3) actuarial documents; (4) the applicable Commodity
Exchange Price Provisions; (5) the Crop Provisions; and (6) these Basic
Provisions.
[Reinsured Policies]
* * * * *
This insurance policy is reinsured by FCIC under the provisions of
Subtitle A of the Federal Crop Insurance Act (7 U.S.C. 1501-1524)
(Act). All provisions of the policy and rights and responsibilities of
the parties are specifically subject to the Act. The provisions of the
policy may not be waived or varied in any way by us, our insurance
agent or any other contractor or employee of ours, or any employee of
USDA. We will use FCIC procedures (handbooks, underwriting rules,
manuals, memoranda, and bulletins), published on the Risk Management
Agency (RMA's) website at www.rma.usda.gov or a successor website, in
the administration of this policy, including the adjustment of any loss
or claim submitted under this policy. In the event that we cannot pay
your loss because we are insolvent or are otherwise unable to perform
our duties under our reinsurance agreement with FCIC, FCIC will become
your insurer, make all decisions in accordance with the provisions of
this policy, including any loss payments, and be responsible for any
amounts owed. No state guarantee fund will be liable for your loss.
* * * * *
AGREEMENT TO INSURE: In return for the commitment to pay a premium,
and subject to all of the provisions of this policy, we agree with you
to provide the insurance as stated in this policy. If there is a
conflict between the Act, the regulations in 7 CFR chapter IV, and FCIC
procedures, the order of precedence is: (1) The Act; (2) the
regulations; and (3) FCIC procedures. If there is a conflict between
the policy provisions in 7 CFR part 407 and the administrative
regulations in 7 CFR part 400, the policy provisions in 7 CFR part 407
apply. The order of precedence among the policy is: (1) The
Catastrophic Risk Protection Endorsement, as applicable; (2) Special
Provisions; (3) actuarial documents; (4) Commodity Exchange Price
Provisions; (5) the Crop Provisions; and (6) these Basic Provisions.
* * * * *
1. Definitions
* * * * *
Second crop. With respect to a single crop year, the next
occurrence of planting any commodity for harvest following a first
insured crop on the same acreage. The second crop may be the same or a
different agricultural commodity as the first insured crop, except the
term does not include a replanted crop. If following a first insured
crop, a cover crop is planted on the same acreage and harvested for
grain or seed, it is considered to be a second crop. A cover crop that
is covered by FSA's noninsured crop disaster assistance program (NAP)
or receives other USDA benefits associated with forage crops will be
considered a second crop. A crop meeting the conditions in this
definition is considered to be a second crop regardless of whether or
not it is insured.
* * * * *
Veteran farmer or rancher. (1) An individual who has served active
duty in the United States Army, Navy, Marine Corps, Air Force, or Coast
Guard, including the reserve components; was discharged or released
under conditions other than dishonorable; and:
(i) Has not operated a farm or ranch;
(ii) Has operated a farm or ranch for not more than 5 years; or
(iii) First obtained status as a veteran during the most recent 5-
year period.
(2) A person, other than an individual, may be eligible for veteran
farmer or rancher benefits if all substantial beneficial interest
holders qualify individually as a veteran farmer or rancher in
accordance with paragraph (1) of this definition. A spouse's veteran
status does not impact whether an individual is considered a veteran
farmer or rancher.
* * * * *
[[Page 38756]]
2. Life of Policy, Cancellation, and Termination
* * * * *
(j) * * *
(3) For this agricultural commodity policy, your premium and
administrative fees will be offset from any indemnity payment due to
you even if it is prior to the premium billing date.
(4) For any other agricultural commodity policy insured with us and
it is:
(i) Prior to the premium billing date, and you agree, your premium
and administrative fees will be offset from any indemnity payment due
to you; or
(ii) On or after the premium billing date, your premium and
administrative fees will be offset from any indemnity payment due to
you.
(k) * * *
(2) * * *
(iii) * * *
(B) * * *
(1) In accordance with 7 CFR part 400, subpart U, and FCIC
procedures, you provide documentation that your inadvertent failure to
pay your debt is due to an unforeseen or unavoidable event or other
extenuating circumstances that created the inadvertent failure for you
to make timely payment;
* * * * *
(iv) For previously executed written payment agreements, you made
the full payment of the scheduled payment amount owed within 15
calendar days after the missed payment date.
* * * * *
13. Indemnity and Premium Limitations
* * * * *
(c) * * *
(5) If you do not have records of acreage and production specific
to the double cropped acreage, as required in section 13(h)(4), but
instead have records that combine production from acreage you double
cropped with records of production from acreage you did not double
crop, we will allocate the first and second crop production to the
specific acreage in proportion to the liability for the acreage that
was and was not double cropped; and
(6) With respect to double cropped acreage for which one of the
crops you have double cropped is insured under a plan of insurance not
covered under these Basic Provisions, each insured crop must follow its
own Basic Provisions, Crop Provisions, and Special Provisions to
determine if the double cropping requirements have been met. If the
double cropping requirements in the applicable Basic Provisions, Crop
Provisions, or Special Provisions have not been met for each insured
crop, section 13(a) of these Basic Provisions apply.
(d) If you provided acceptable records in accordance with section
13(c), your double cropping history is limited to the highest number of
acres double cropped within the applicable four-year period as
determined in section 13(c)(4).
* * * * *
(3) If you acquired additional land for the current crop year and
the following calculation results in a greater number of double
cropping acres than determined in section 13(c), you may apply the
percentage of acres that you have previously double cropped to the
total cropland acres that you are farming this year (if greater):
(i) Determine the number of acres of the first insured crop that
were double cropped in each of the years for which double cropping
records are provided (for example, records are provided showing: 100
acres of wheat planted in 2019 and 50 of those acres were double
cropped with soybeans; and 100 acres of wheat planted in 2020 and 70 of
those acres were double cropped with soybeans);
(ii) Divide each result of section 13(d)(3)(i) by the number of
acres of the first insured crop that were planted in each respective
year (in the example in section 13(d)(3)(i), 50 divided by 100 equals
50 percent of the first insured crop acres that were double cropped in
2019 and 70 divided by 100 equals 70 percent of the first insured crop
acres that were double cropped in 2020);
(iii) Add the results of section 13(d)(3)(ii) and divide by the
number of years the first insured crop was double cropped (in the
example in section 13(d)(3)(i), 50 plus 70 equals 120 divided by 2
equals 60 percent); and
(iv) Multiply the result of section 13(d)(3)(iii) by the number of
insured acres of the first insured crop (in the example in section
13(d)(3)(i), 60 percent multiplied by the number of wheat acres insured
in 2021);
* * * * *
PART 457--COMMON CROP INSURANCE REGULATIONS
0
3. The authority citation for part 457 continues to read as follows:
Authority: 7 U.S.C. 1506(l) and 1506(o).
0
4. Amend Sec. 457.8 as follows:
0
a. Under the heading ``FCIC Policies'', revise the first and third
paragraphs;
0
b Under the heading ``Reinsured Policies'', revise the first and third
paragraphs;
0
c. In section 1:
0
i. In the definition of ``approved yield'', in the last sentence,
remove the words ``FCIC approved procedures'' and add ``FCIC
procedures'' in their place;
0
ii. Revise the definition of ``basic unit'';
0
iii. In the definition of ``claim for indemnity'', remove the words
``FCIC issued procedures'' and add ``FCIC procedures'' in their place;
0
iv. In the definition of ``production report'', in the last sentence,
remove the words ``FCIC approved procedures'' and add ``FCIC
procedures'' in their place;
0
v. In the definition of ``RMA's website'', remove the website address
``http://www.rma.usda.gov/'' and add ``www.rma.usda.gov'' in its place;
and
0
vii. Revise the definitions of ``second crop'' and ``veteran farmer or
rancher''.
0
d. In section 2:
0
i. Add paragraphs (e)(3) and (4);
0
ii. In paragraph (f)(2)(i)(D), remove the ``; or'' at the end of the
paragraph and add a period in its place;
0
iii. Revise paragraph (f)(2)(iii)(B)(1);
0
iv. In paragraph (f)(2)(iii)(C) introductory text, remove the words
``FCIC issued procedures'' and add ``FCIC procedures'' in their place;
0
v. In paragraph (f)(2)(iii)(C)(1)(ii), remove the word ``or'' at the
end of the paragraph;
0
vi. In paragraph (f)(2)(iii)(C)(1)(iii), remove the period at the end
of the paragraph and add ``; or'' in its place; and
0
vii. Add paragraph (f)(2)(iii)(C)(1)(iv);
0
e. In section 3, in paragraph (l) introductory text, add a comma
following the phrase ``or veteran farmer or rancher'';
0
f. In section 4:
0
i. Revise paragraph (c); and
0
ii. Add paragraph (d);
0
g. In section 6, in paragraph (a)(3)(ii)(C), add the word ``and'' at
the end of the paragraph;
0
h. In section 7, in paragraph (h)(2)(i)(A), remove the words ``FCIC
approved procedures'' and add ``FCIC procedures'' in their place;
0
i. In section 14:
0
i. Revise paragraphs (b) introductory text and (b)(5) introductory
text; and
0
ii. In paragraph (e)(1)(i), remove the words ``can not'' and add
``cannot'' in their place;
0
j. In section 15:
0
i. In paragraph (c), remove the words ``fire and hail'' and add ``hail
and fire'' in their place;
0
ii. Revise paragraph (g)(3)(i);
0
iii. Revise paragraph (h)(5)(i);
0
iii. Add paragraph (h)(7);
0
iv. Revise paragraph (i) introductory text; and
0
v. Add paragraph (i)(3);
0
k. In section 17:
0
i. In paragraph (e)(1)(i)(B)(3), remove the word ``lease'' and add
``leased'' in its place;
[[Page 38757]]
0
ii. Add paragraph (e)(1)(iii)(C);
0
iii. In paragraph (f)(1)(iii), remove the word ``contact'' and add
``contract'' in its place;
0
iv. Revise paragraph (f)(4)(ii);
0
v. In paragraph (f)(5)(ii), remove the words ``or cover''; and
0
vi. Revise paragraph (h)(4);
0
l. In section 33, in paragraph (b)(3), remove the words ``Will be
conclusively'' and add ``Conclusively'' in their place;
0
m. In section 34:
0
i. In paragraph (a)(4)(i)(B), remove the words ``FCIC issued
procedures'' and add ``FCIC procedures'' in their place;
0
ii. Revise paragraph (a)(4)(viii)(C);
0
iii. In paragraph (c)(1)(i), remove the words ``FCIC issued
procedures'' and add ``FCIC procedures'' in their place; and
0
iv. In paragraph (c)(1)(ii), remove the words ``FCIC issued procedure''
and add ``FCIC procedures'' in their place; and
0
n. Revise section 36.
The revisions and additions read as follows:
Sec. 457.8 The application and policy.
* * * * *
FCIC Policies
This is an insurance policy issued by the Federal Crop Insurance
Corporation (FCIC). The provisions of the policy may not be waived or
modified in any way by us, your insurance agent or any employee of USDA
unless the policy specifically authorizes a waiver or modification by
written agreement. FCIC procedures (handbooks, manuals, memoranda, and
bulletins), published on the RMA's website at www.rma.usda.gov or a
successor website will be used in the administration of this policy,
including the adjustment of any loss or claim submitted under this
policy.
* * * * *
AGREEMENT TO INSURE: In return for the payment of the premium, and
subject to all of the provisions of this policy, we agree with you to
provide the insurance as stated in this policy. If there is a conflict
between the Act, the regulations in 7 CFR chapter IV, and FCIC
procedures, the order of precedence is: (1) The Act; (2) the
regulations; and (3) FCIC procedures. If there is a conflict between
the policy provisions in 7 CFR part 457 and the administrative
regulations in 7 CFR part 400, the policy provisions in 7 CFR part 457
control. If a conflict exists among the policy provisions, the order of
precedence is: (1) The Catastrophic Risk Protection Endorsement, as
applicable; (2) the Special Provisions; (3) the Commodity Exchange
Price Provisions, as applicable; (4) the Crop Provisions; and (5) these
Basic Provisions.
Reinsured Policies
This insurance policy is reinsured by the Federal Crop Insurance
Corporation (FCIC) under the provisions of the Federal Crop Insurance
Act (Act) (7 U.S.C. 1501-1524). All provisions of the policy and rights
and responsibilities of the parties are specifically subject to the
Act. The provisions of the policy may not be waived or varied in any
way by us, our insurance agent or any other contractor or employee of
ours, or any employee of USDA unless the policy specifically authorizes
a waiver or modification by written agreement. We will use FCIC
procedures (handbooks, manuals, memoranda and bulletins) published on
the RMA's website at www.rma.usda.gov or a successor website, in the
administration of this policy, including the adjustment of any loss or
claim submitted under this policy. In the event that we cannot pay your
loss because we are insolvent or are otherwise unable to perform our
duties under our reinsurance agreement with FCIC, your claim will be
settled in accordance with the provisions of this policy and FCIC will
be responsible for any amounts owed. No state guarantee fund will be
liable for your loss.
* * * * *
AGREEMENT TO INSURE: In return for the payment of the premium, and
subject to all of the provisions of this policy, we agree with you to
provide the insurance as stated in this policy. If there is a conflict
between the Act, the regulations in 7 CFR chapter IV, and FCIC
procedures, the order of precedence is: (1) The Act; (2) the
regulations; and (3) FCIC procedures. If there is a conflict between
the policy provisions in 7 CFR part 457 and the administrative
regulations in 7 CFR part 400, the policy provisions in 7 CFR part 457
apply. If a conflict exists among the policy, the order of precedence
is: (1) The Catastrophic Risk Protection Endorsement, as applicable;
(2) the Special Provisions; (3) the actuarial documents; (4) the
Commodity Exchange Price Provisions, as applicable; (5) the Crop
Provisions; and (6) these Basic Provisions.
* * * * *
1. Definitions
* * * * *
Basic unit. All insurable acreage of the insured crop in the county
on the date coverage begins for the crop year excluding acreage
reported and insured as an enterprise unit in which the remaining
insurable acreage is reported and insured as a basic or optional unit:
(1) In which you have 100 percent crop share; or
(2) That is owned by one person and operated by another person on a
share basis. (Example: If, in addition to the land you own, you rent
land from five landlords, three on a crop share basis and two on a cash
basis, you would be entitled to four units; one for each crop share
lease and one that combines the two cash leases and the land you own.)
Land that would otherwise be one unit may, in certain instances, be
divided according to guidelines contained in section 34 of these Basic
Provisions and in the applicable Crop Provisions.
* * * * *
Second crop. With respect to a single crop year, the next
occurrence of planting any agricultural commodity for harvest following
a first insured crop on the same acreage. The second crop may be the
same or a different agricultural commodity as the first insured crop,
except the term does not include a replanted crop. If following a first
insured crop, a cover crop is planted on the same acreage and harvested
for grain or seed it is considered to be a second crop. A cover crop
that is covered by FSA's noninsured crop disaster assistance program
(NAP) or receives other USDA benefits associated with forage crops will
be considered a second crop. A crop meeting the conditions stated in
this definition will be considered to be a second crop regardless of
whether or not it is insured.
* * * * *
Veteran farmer or rancher. (1) An individual who has served active
duty in the United States Army, Navy, Marine Corps, Air Force, or Coast
Guard, including the reserve components; was discharged or released
under conditions other than dishonorable; and:
(i) Has not operated a farm or ranch;
(ii) Has operated a farm or ranch for not more than 5 years; or
(iii) First obtained status as a veteran during the most recent 5-
year period.
(2) A person, other than an individual, may be eligible for veteran
farmer or rancher benefits if all substantial beneficial interest
holders qualify individually as a veteran farmer or rancher in
accordance with paragraph (1) of this definition. A spouse's veteran
status does not impact whether an individual is considered a veteran
farmer or rancher.
* * * * *
[[Page 38758]]
2. Life of Policy, Cancellation, and Termination
* * * * *
(e) * * *
(3) For this agricultural commodity policy, your premium and
administrative fees will be offset from any indemnity or prevented
planting payment due to you even if it is prior to the premium billing
date.
(4) For any other agricultural commodity policy insured with us and
it is:
(i) Prior to the premium billing date, and you agree, your premium
and administrative fees will be offset from any indemnity or prevented
planting payment due to you; or
(ii) On or after the premium billing date, your premium and
administrative fees will be offset from any indemnity or prevented
planting payment due to you.
(f) * * *
(2) * * *
(iii) * * *
(B) * * *
(1) In accordance with 7 CFR part 400, subpart U, and FCIC
procedures, you provide documentation that your inadvertent failure to
pay your debt is due to an unforeseen or unavoidable event or other
extenuating circumstances that created the inadvertent failure for you
to make timely payment;
* * * * *
(C) * * *
(1) * * *
(iv) For previously executed written payment agreements, you made
the full payment of the scheduled payment amount owed within 15
calendar days after the missed payment date.
* * * * *
4. Contract Changes
* * * * *
(c) After the contract change date, all changes specified in
section 4(b) will also be available upon request from your crop
insurance agent.
(d) Not later than 30 days prior to the cancellation date for the
insured crop you will be notified, in accordance with section 33, a
copy of the changes to the Basic Provisions, Crop Provisions, Commodity
Exchange Price Provisions, if applicable, and Special Provisions.
* * * * *
14. Duties in the Event of Damage, Loss, Abandonment, Destruction, or
Alternative Use of Crop or Acreage
* * * * *
(b) You must provide a notice of loss in accordance with this
section. Notice provisions:
* * * * *
(5) If you fail to submit a notice of loss in accordance with these
notice provisions, any loss or prevented planting claim will be
considered solely due to an uninsured cause of loss for the acreage for
which such failure occurred, unless we determine that we have the
ability to accurately adjust the loss. If we determine that we do not
have the ability to accurately adjust the loss:
* * * * *
15. Production Included in Determining an Indemnity and Payment
Reductions
* * * * *
(g) * * *
(3) * * *
(i) If a volunteer crop or cover crop is hayed, grazed, or cut for
silage, haylage, or baleage from the same acreage, after the late
planting period (or after the final planting date if a late planting
period is not applicable) for the first insured crop in the same crop
year, or is otherwise harvested any time after the late planting period
(or after the final planting date if a late planting period is not
applicable); or
* * * * *
(h) * * *
(5) * * *
(i) You have double cropped acreage in at least 2 of the last 4
crop years in which the first insured crop was grown; or
* * * * *
(7) With respect to double cropped acreage for which one of the
crops you have double cropped is insured under a plan of insurance not
covered under these Basic Provisions, each insured crop must follow its
own Basic Provisions, Crop Provisions, and Special Provisions to
determine if the double cropping requirements have been met. If the
double cropping requirements in the applicable Basic Provisions, Crop
Provisions, or Special Provisions have not been met for each insured
crop, section 15(e) of these Basic Provisions applies.
(i) If you provided acceptable records in accordance with section
15(h), your double cropping history is limited to the highest number of
acres double cropped within the applicable 4-year period as determined
in section 15(h)(5):
* * * * *
(3) If you acquired additional land for the current crop year and
the following calculation results in a greater number of double
cropping acres than determined in 15(i), you may apply the percentage
of acres that you have previously double cropped to the total cropland
acres that you are farming this year (if greater):
(i) Determine the number of acres of the first insured crop that
were double cropped in each of the years for which double cropping
records are provided (for example, records are provided showing: 100
acres of wheat planted in 2019 and 50 of those acres were double
cropped with soybeans; and 100 acres of wheat planted in 2020 and 70 of
those acres were double cropped with soybeans);
(ii) Divide each result of section 15(i)(3)(i) by the number of
acres of the first insured crop that were planted in each respective
year (in the example in section 15(i)(3)(i), 50 divided by 100 equals
50 percent of the first insured crop acres that were double cropped in
2019 and 70 divided by 100 equals 70 percent of the first insured crop
acres that were double cropped in 2020);
(iii) Add the results of section 15(i)(3)(ii) and divide by the
number of years the first insured crop was double cropped (in the
example in section 15(i)(3)(i), 50 plus 70 equals 120 divided by 2
equals 60 percent); and
(iv) Multiply the result of section 15(i)(3)(iii) by the number of
insured acres of the first insured crop (in the example in section
15(i)(3)(i), 60 percent multiplied by the number of wheat acres insured
in 2021);
* * * * *
17. Prevented Planting
* * * * *
(e) * * *
(1) * * *
(iii) * * *
(C) In the event that your contracted acreage or production for the
current crop year is reduced, for a reason not solely due to the
acreage being prevented from being planted, or you have no contracted
acreage for the current crop year, and the reduction or lack of
contract results in no remaining eligible acres to use on your total
cropland acres in the county:
(1) You must first exhaust all other eligible acres;
(2) The number of eligible acres for the contracted crop will be
determined based on the number of acres or amount of production you
contracted in the county in the previous crop year, less the current
year's contracted acreage or production, if applicable;
(3) The prevented planting payment and premium will be calculated
in accordance with section 17(h)(2);
(4) If you did not have a processor contract in place for the
previous crop year, no eligible contracted acreage exists for this
purpose.
* * * * *
(f) * * *
[[Page 38759]]
(4) * * *
(ii) For the insured crop that is prevented from being planted, you
provide records acceptable to us of acreage and production that show
(your double cropping history is limited to the highest number of acres
double cropped within the applicable four-year period):
(A) You have double cropped acreage in at least 2 of the last 4
crop years in 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
(for example, 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 applicable acreage you are prevented from planting in the
current crop year was double cropped for at least 2 of the last 4 crop
years in which the insured crop that is prevented from being planted
was grown. You may only use the history of double cropping for the same
physical acres from which double cropping records were provided from
one or more other producers (for example, 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
* * * * *
(h) * * *
(4) Prevented planting coverage will be allowed as specified in
section 17(h) only if the crop that was prevented from being planted
meets all policy provisions, except for having an adequate base of
eligible prevented planting acreage. Payment may be made based on crops
other than those that were prevented from being planted even though
other policy provisions, including but not limited to, processor
contract and rotation requirements, have not been met for the crop
whose eligible acres are being used. When you have exhausted eligible
acres to provide prevented planting coverage for all insured cropland
acres in your farming operation, you may use remaining eligible acres
as established in section 17(e)(1)(iii)(C).
* * * * *
34. Units
(a) * * *
(4) * * *
(viii) * * *
(C) If you elected separate enterprise units for both irrigated and
non-irrigated practices and we discover you do not qualify for an
enterprise unit for the irrigated or non-irrigated practice and such
discovery is made:
(1) On or before the acreage reporting date, you may elect to
insure:
(i) One enterprise unit for all irrigated or non-irrigated
practices provided you meet the requirements in section 34(a)(4), and
basic or optional units for the other practice, whichever you report on
your acreage report and qualify for;
(ii) One enterprise unit for all acreage of the crop in the county
provided you meet the requirements in section 34(a)(4); or
(iii) Basic or optional units for all acreage of the crop in the
county, whichever you report on your acreage report and qualify for; or
(2) At any time after the acreage reporting date, your unit
structure will be one enterprise unit for all acreage of the crop in
the county provided you meet the requirements in section 34(a)(4).
Otherwise, we will assign the basic unit structure.
* * * * *
36. Yield Options
If provided in the actuarial documents, you may elect the following
measures to increase your approved yield:
(a) Adjustments to actual yields within a database:
(1) You may exclude and replace one or more actual yields, on an
individual actual yield basis, that due to an insurable cause of loss,
are less than 60 percent of the applicable transitional yield.
(i) Each election made in section 36(a)(1) must be made on or
before the production reporting date for the insured crop and each such
election will remain in effect for succeeding crop years unless
canceled by the production reporting date for the succeeding crop year.
If you cancel an election, the actual yield will be used in the
database. For example, if you elected to substitute yields in your
database for the 2020 and 2021 crop year, for any subsequent crop year,
you can elect to cancel the substitution for either or both crop years.
(ii) Each excluded actual yield will be replaced with a yield equal
to 60 percent of the applicable transitional yield for the crop year in
which the yield is being replaced, unless you qualify as a beginning
farmer or rancher, or veteran farmer or rancher, in which case the
excluded actual yield will be replaced with a yield equal to 80 percent
of the applicable transitional yield for the crop year in which the
yield is being replaced. (For example, if you elect to exclude a 2020
crop year actual yield, the transitional yield in effect for the 2020
crop year in the county will be used. If you also elect to exclude a
2021 crop year actual yield, the transitional yield in effect for the
2021 crop year in the county will be used). The replacement yields will
be used in the same manner as actual yields for the purpose of
calculating the approved yield.
(iii) Once you have elected to exclude an actual yield from the
database, the replacement yield will remain in effect until such time
as that crop year is no longer included in the database unless this
election is canceled in accordance with section 36(a)(1)(i).
(iv) Although your approved yield will be used to determine your
amount of premium owed, the premium rate will be increased to cover the
additional risk associated with the substitution of higher yields.
(2) You may exclude any actual yield for any crop year when FCIC
determines for a county, or its contiguous counties, the per planted
acre yield was at least 50 percent below the simple average of the per
planted acre yield for the crop in the county for the previous 10
consecutive crop years.
(3) You may replace actual yields determined using your post-
quality production amounts with actual yields determined using your
pre-quality production amounts for previous crop years on an individual
actual yield basis.
(i) Each election made in section 36(a)(3) must be made on or
before the sales closing date for the insured crop and will remain in
effect, unless canceled by the sales closing date for the succeeding
crop year.
(ii) In order to replace post-quality actual yields for previous
crop years, you must have filed a notice of loss due to an insured
cause of loss for the crop year to be eligible.
(iii) Once the pre-quality actual yield replaces the post-quality
actual yield, the pre-quality actual yield will remain in effect until
such time as that crop year is no longer included in the database,
unless this election is canceled in accordance with section
36(a)(3)(i).
(iv) Although your approved yield will be used to determine your
amount of premium owed, the premium rate will be increased to cover the
additional risk associated with the replacement of higher pre-quality
reduction based actual yields.
[[Page 38760]]
(b) You may make adjustments to your approved yield by limiting a
reduction to the approved APH yield to a maximum decline of 10 percent
of the previous crop year's approved APH yield when such reduction is
due to a decline in production resulting from a natural disaster or
other insurable loss, as provided in FCIC procedures.
* * * * *
0
5. Amend Sec. 457.113 as follows:
0
a. In the introductory text, remove the year ``2020'' and add ``2021''
in its place;
0
b. In section 1 in the definition of ``Not following another crop
(NFAC)'', remove the words ``a crop'' and add ``another crop.'' in
their place;
0
c. In section 2, revise paragraphs (a)(1) and (a)(4)(i) and (ii);
0
d. In section 8, revise the introductory text;
0
e. In section 12, in paragraph (d)(4), remove the cross reference
``12(d) (2)'' and add ``12(d)(2)'' in its place.
The revisions read as follows:
Sec. 457.113 Coarse grains crop insurance provisions.
* * * * *
2. Unit Division
(a) * * *
(1) You may elect one enterprise unit for all FAC cropping
practices or one enterprise unit for all NFAC cropping practices, or
separate enterprise units for both practices, unless otherwise
specified in the Special Provisions. For example: You may choose an
enterprise unit for all FAC acreage (soybeans irrigated practice and
non-irrigated practice) and an enterprise unit for all NFAC acreage
(soybeans irrigated practice and non-irrigated practice).
* * * * *
(4) * * *
(i) On or before the acreage reporting date, you may elect to
insure:
(A) One enterprise unit for all FAC or NFAC cropping practices
provided you meet the requirements in section 34(a)(4), and basic or
optional units for the other cropping practice, whichever you report on
your acreage report and qualify for; or
(B) One enterprise unit for all acreage of the crop in the county
provided you meet the requirements in section 34(a)(4); or
(C) Basic or optional units for all acreage of the crop in the
county, whichever you report on your acreage report and qualify for; or
(ii) At any time after the acreage reporting date, your unit
structure will be one enterprise unit for all acreage of the crop in
the county provided you meet the requirements in section 34(a)(4).
Otherwise, we will assign the basic unit structure.
* * * * *
8. Insurance Period
In accordance with the provisions of section 11 of the Basic
Provisions, unless otherwise specified in the actuarial documents, the
calendar date for the end of the insurance period is the date
immediately following planting as follows:
* * * * *
Martin Barbre,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2020-13831 Filed 6-26-20; 8:45 am]
BILLING CODE 3410-08-P
