USDA Rule: Crop Insurance Reporting & Other Changes

WASHINGTON, July 1 -- The U.S. Department of Agriculture's Federal Crop Insurance Corporation has issued a rule (7 CFR Part 407, 457), published in the Federal Register on June 30, 2022, entitled "Crop Insurance Reporting and Other Changes".

The rule was issued by Manager Marcia Bunger.

DATES: Effective date: This final rule is effective June 30, 2022. Comment date: We will consider comments that we receive by the close of business August 29, 2022. FCIC may consider the comments received and may conduct additional rulemaking based on the comments.

FOR FURTHER INFORMATION CONTACT: Francie Tolle; telephone (816) 926-7829; or email [email protected]. Persons with disabilities who require alternative means for communication should contact the USDA Target Center at (202) 720-2600 (voice) or (844) 433-2774 (toll-free nationwide).

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The Federal Crop Insurance Corporation (FCIC) is amending its regulations to enhance production reporting terminology and assist producers with production reporting requirements.

The amendments will provide alternative production reporting options to producers who are unable to provide disinterested third-party verifiable records to support their production report because the producer or a related person generates the supporting records (acceptable production records).

FCIC is also clarifying the good farming practice appeal deadline (appeals and arbitration) and clarifying and correcting portions of the policy (clarifications and corrections).

The changes to the crop insurance policies resulting from the amendments in this rule are applicable for the 2023 and succeeding crop years for crops with a contract change date on or after June 30, 2022.

For all other crops, the changes to the policies made in this rule are applicable for the 2024 and succeeding crop years.

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. 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 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. Throughout this rule, the terms "Crop Provisions," "Special Provisions," and "policy" are used as defined in the Common Crop Insurance Policy (CCIP) Basic Provisions in 7 CFR 457.8. Additional information and definitions related to Federal crop insurance policies are in 7 CFR 457.8.

Through this rule, FCIC amends the Area Risk Protection Insurance (ARPI) Basic Provisions (7 CFR part 407), CCIP Basic Provisions (7 CFR 457.8), in addition to specific crop insurance policies that are in the regulations. Throughout this rule, as the changes are explained and the specific crop insurance policies are mentioned for the specific changes, they are listed in alphabetical order by crop insurance policy name, which is also the section title in the regulations. Typically, in a rule, the sections of the regulations would be addressed in numerical order; however, due to the extensive range of crop insurance policies that this rule includes, for readers to find the information of relevance, the alphabetical order will be helpful. The range of crop insurance policies and the order in which they are listed is as follows:

* Arizona-California Citrus Fruit Crop Insurance Provisions (7 CFR 457.121);

* Blueberry Crop Insurance Provisions (7 CFR 457.166);

* Cabbage Crop Insurance Provisions (7 CFR 457.171);

* California Avocado Crop Insurance Provisions (7 CFR 457.175);

* Cranberry Crop Insurance Provisions (7 CFR 457.132);

* Florida Avocado Crop Insurance Provisions (7 CFR 457.173);

* Forage Production Crop Insurance Provisions (7 CFR 457.117);

* Fresh Market Pepper Crop Insurance Provisions (7 CFR 457.148);

* Fresh Market Sweet Corn Crop Insurance Provisions (7 CFR 457.129);

* Fresh Market Tomato Dollar Plan Crop Insurance Provisions (7 CFR 457.139);

* Guaranteed Production Plan of Fresh Market Tomato (7 CFR 457.128);

* Macadamia Nut Crop Insurance Provisions (7 CFR 457.131);

* Onion Crop Insurance Provisions (7 CFR 457.135);

* Peach Crop Insurance Provisions (7 CFR 457.153);

* Pear Crop Insurance Provisions (7 CFR 457.111);

* Pecan Revenue Crop Insurance Provisions (7 CFR 457.167);

* Prune Crop Insurance Provisions (7 CFR 457.133);

* Stonefruit Crop Insurance Provisions (7 CFR 457.159);

- Table Grape Crop Insurance Provisions (7 CFR 457.149); and

* Texas Citrus Crop Insurance Provisions (7 CFR 457.119).

The changes to the crop insurance policies resulting from the amendments in this rule are applicable for the 2023 and succeeding crop years for crops with a contract change date on or after June 30, 2022. For all other crops, the changes to the crop insurance policies resulting from the amendments in this rule are applicable for the 2024 and succeeding crop years.

Acceptable Production Records

FCIC is increasing flexibility for acceptable production records to make it easier for producers whose production records are not available from a disinterested third party to provide the supporting records needed to obtain insurance, report their annual production, and file a claim. FCIC is amending the Area Risk Protection Regulations (7 CFR 407.9), Common Crop Insurance Regulations (7 CFR 457.8), and 20 Crop Provisions to implement these changes.

Prior to this rule, FCIC generally required records from disinterested third parties (for example, sales record to an unrelated entity), or AIPs conducted preharvest appraisals as a supporting production record. However, some producers do not have disinterested third-party records which includes producers who sell their production directly to consumers (direct marketing) and producers who do not have disinterested third-party records because they, or a person related to them, generate the supporting records (for example, vertically integrated). In response to these issues, FCIC is amending production reporting terminology to simplify recordkeeping requirements and procedures for those producers who do not have disinterested third-party records available to them. These changes will also make the terminology and procedures consistent across policies.

The producer will self-identify that they will not have disinterested third-party records available, which will encourage a discussion with the AIP as to what records the producer does have that will meet production reporting requirements. The producer may be permitted to use their own records, or, in limited situations, request a pre-harvest appraisal. Generally, producers are required to use their actual production records. However, if their records are not at an acceptable level of detail needed for production reporting (for example, traceable back to the unit), RMA procedures outline criteria that would allow the producer to request an appraisal to supplement the producers' records. For example, producers who direct market their crop may request a pre-harvest appraisal, to use in conjunction with their acceptable production records, to allocate production to the applicable APH database or when the AIP determines the producer's final disposition records do not contain all information required for production reporting by APH database.

In certain situations, appraisals may be used, in lieu of harvested production, to adjust a claim, as outlined in the CCIP Basic Provisions, paragraph 15(b)(3). If the producer's harvested production is less than the appraised production, and they harvest the crop after the end of the insurance period, their appraised production will be used unless they can prove that no additional causes of loss or deterioration of the crop occurred after the end of the insurance period.

However, if they harvest the crop before the end of the insurance period, their harvested production will be used (1) unless the applicable Crop Provisions require an appraisal prior to harvest and they are unable to prove that additional insured causes of loss occurred after the appraisal or deterioration of the crop can be attributed to an insurable cause of loss after the appraisal was completed; then the producer's appraised production will be used; or (2) if the producer intends to direct market their crop or their production records will not be from a disinterested third party and the AIP determines an appraisal prior to harvest was necessary and they are unable to prove that additional insured causes of loss occurred after the appraisal or deterioration of the crop can be attributed to an insurable cause of loss after the appraisal was completed; then their appraised production will be used.

The changes in this rule are intended to assist producers with production reporting requirements when producers do not have disinterested third-party records available and to reduce the need for AIPs to conduct pre-harvest appraisals, which were previously used in lieu of disinterested third-party records. Several terms that were defined in various Crop Provisions, procedures, or administrative regulations, will now be defined in the ARPI Basic Provisions and CCIP Basic Provisions.

The changes to the Crop Provisions are as follows:

FCIC is removing the definition of "direct marketing" from individual Crop Provisions. As a result of this change, there will be only one definition of "direct marketing" in the Basic Provisions. This will reduce redundancy and eliminate potential conflicts between the CCIP Basic Provisions and the individual Crop Provisions. This change occurs in the following Crop Provisions:

* Arizona-California Citrus Fruit Crop Insurance Provisions (7 CFR 457.121);

* Blueberry Crop Insurance Provisions (7 CFR 457.166);

* Cabbage Crop Insurance Provisions (7 CFR 457.171);

* California Avocado Crop Insurance Provisions (7 CFR 457.175);

* Florida Avocado Crop Insurance Provisions (7 CFR 457.173);

* Forage Production Crop Insurance Provisions (7 CFR 457.117);

* Fresh Market Pepper Crop Insurance Provisions (7 CFR 457.148);

* Fresh Market Sweet Corn Crop Insurance Provisions (7 CFR 457.129);

* Guaranteed Production Plan of Fresh Market Tomato Crop Insurance Provisions (7 CFR 457.128);

* Macadamia Nut Crop Insurance Provisions (7 CFR 457.131);

* Onion Crop Insurance Provisions (7 CFR 457.135);

* Peach Crop Insurance Provisions (7 CFR 457.153);

* Pear Crop Insurance Provisions (7 CFR 457.111);

* Prune Crop Insurance Provisions (7 CFR 457.133);

* Stonefruit Crop Insurance Provisions (7 CFR 457.159);

* Table Grape Crop Insurance Provisions (7 CFR 457.149); and

* Texas Citrus Crop Insurance Provisions (7 CFR 457.119).

Two Crop Provisions will retain the definition of "direct marketing" with the clarifying statement "In addition to the definition contained in section 1 of the Basic Provisions," added. This change clarifies that the definition in the Crop Provisions does not override the definition in the Basic Provisions, but rather is intended to be used together. The change appears in:

* Fresh Market Tomato Dollar Plan Crop Insurance Provisions (7 CFR 457.139); and

*Pecan Revenue Crop Insurance Provisions (7 CFR 457.167).

FCIC is correcting the producer's notification requirement for any production intended for direct marketing to apply 15 days prior to harvest, rather than 15 days prior to the sale. Currently, the deadline for notification attaches to the date of sale, which may not allow an AIP an opportunity to conduct an in-field (pre-harvest) appraisal. This change will require the producer to notify the AIP at least 15 calendar days before the crop is harvested, which allows for the AIPs to conduct pre-harvest appraisals. This change is being made in the following Crop Provisions:

*Arizona-California Citrus Fruit Crop Insurance Provisions (7 CFR 457.121);

*Blueberry Crop Insurance Provisions (7 CFR 457.166);

*California Avocado Crop Insurance Provisions (7 CFR 457.175);

*Florida Avocado Crop Insurance Provisions (7 CFR 457.173);

*Forage Production Crop Insurance Provisions (7 CFR 457.117);

*Fresh Market Sweet Corn Crop Insurance Provisions (7 CFR 457.129);

*Macadamia Nut Crop Insurance Provisions (7 CFR 457.131);

*Onion Crop Insurance Provisions (7 CFR 457.135);

*Peach Crop Insurance Provisions (7 CFR 457.153);

*Pear Crop Insurance Provisions (7 CFR 457.111);

*Pecan Revenue Crop Insurance Provisions (7 CFR 457.167);

*Prune Crop Insurance Provisions (7 CFR 457.133);

*Stonefruit Crop Insurance Provisions (7 CFR 457.159);

*Table Frape Crop Insurance Provisions (7 CFR 457.149); and

*Texas Citrus Crop Insurance Provisions (7 CFR 457.119).

Marcia Bunger,

Manager, Federal Crop Insurance Corporation.

Footnotes

1. See https://sam.gov/content/assistance-listings.

[FR Doc. 2022-13411 Filed 6-29-22; 8:45 am]

BILLING CODE 3410-08-P

The document was published in the Federal Register: https://www.federalregister.gov/documents/2022/06/30/2022-13411/crop-insurance-reporting-and-other-changes-ciroc

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