Final Agency Determination: FAD-016
Subject: Interpretation of section 9 of the
Common Crop Insurance Policy Basic Provisions in the Federal Code of Regulations
(C.F.R.) at 7 C.F.R. 457.8
In a letter dated February 20, 2003, the Risk Management Agency was asked to make a Final
Agency Determination for the 2001 crop year, regarding section 9 of the Basic Provisions,
which state, in part:
- 9. Insurable Acreage
- (a) Acreage planted to the insured crop in which you have a share is
insurable except acreage:
- (1) That has not been planted and harvested within one of the 3 previous crop years, unless:
- (i) Such acreage was not planted . . .
- (C) Due to an insurable cause of loss that prevented planting; or . . . .
The interpretation submitted is that crop acreage would be insurable under a 2001 policy if
that land and crop were prevented from being planted due to an insurable cause of loss in crop
year 1998, 1999, or 2000, irrespective of whether or not it was insured in one or more of those
years. This interpretation assumes that the acreage in question was planted in 1997 to the same
crop that was insured in 2001. The provision is interpreted as applying to "insurable" causes of
loss as opposed to "insured" causes of loss. Consequently, the provision is not interpreted
to require that the prevented planting contemplated by section 9(a)(1)(i)(C) occur while covered
under a policy in order for that acreage and crop to be insurable in 2001.
Final Agency Determination
The Federal Crop Insurance Corporation disagrees with the submitted interpretation. Under that
interpretation, the use of the term "insurable" instead of "insured" cause of loss means that
the acreage that was prevented from being planted did not need to be insured in 1 or more of
the previous 3 crop years. The interpretation is contrary to the definition of "prevented
Section 1 of the Basic Provisions defines "prevented planting" as "Failure to plant the
insured crop with proper equipment by the final planting date designated in the Special
Provisions for the insured crop in the county. You [the producer] may also be eligible
for a prevented planting payment if you failed to plant the insured crop with the
proper equipment within the late planting period. You must have been prevented from
planting the insured crop due to an insured cause of loss that is general in the surrounding
area and prevents other producers from planting acreage with similar characteristics."
There is no ambiguity with respect to this definition. Only an insured crop can qualify for
prevented planting. Therefore, in the example presented, acreage in the 2001 crop year would
only be insurable if it was not planted but was insured and prevented from being planted in
at least one of the 1998, 1999, or 2000 crop years.
There is no practical way to determine whether or not the acreage was genuinely prevented from
being planted if the acreage was not insured. The submitted interpretation would allow a person
to simply state he or she was prevented from planting in 1 of the last 3 years to qualify for
insurance. This would allow insurance on acreage never previously eligible to be insured and
would increase program vulnerabilities and increase premium rates.
In accordance with 7 C.F.R. section 400.765(c), this constitutes the Final Agency Determination
and is binding on all participants in the Federal crop insurance program for the 2001 crop year.
Date of Issue: May 16, 2003
Slight Typographical Modification: May 30, 2003