United States Department of Agriculture Farm and Foreign Agricultural Services Risk Management Agency 1400 Independence Avenue, SW Stop 0801 Washington, DC 20250-0801 BULLETIN NO.: MGR-15-007 TO: All Approved Insurance Providers All Risk Management Agency Field Offices All Other Interested Parties FROM: Brandon C. Willis /s/ Brandon Willis 10/30/2015 Administrator SUBJECT: BACKGROUND: Request for Comments - Double Crop and Replant Policy Provisions The Risk Management Agency (RMA) has received inquiries from producers, crop insurance agents, and others suggesting revisions to policy provisions related to qualifying for double cropping as contained in the Common Crop Insurance Policy Basic Provisions (Basic Provisions). The suggestions include: providing greater flexibility in determining double crop eligibility; providing full coverage on both crops in a double cropping situation if an independent agricultural expert certifies that a particular crop combination is a recognized good farming practice in a given county; and the basis for double cropping qualification should be the percentage of acreage the producer has historically double cropped. RMA has also received a request to revise the definition of practical to replant to provide a specific deadline for which replanting of the crop is considered practical, while providing necessary flexibility and allowances for adverse weather conditions. Double cropping insurance rules are guided by section 508A(d) the Federal Crop Insurance Act (Act) specifying that a producer may receive full indemnity payments on two or more crops planted for harvest in the same crop year if each of the following conditions are met: 1) There is an established practice of planting two or more crops for harvest in the same crop year in the area, as determined by the Corporation. 2) An additional coverage policy or plan of insurance is offered with respect to the agricultural commodities planted on the same acreage for harvest in the same crop year in the area. 3) The producer has a history of planting two or more crops for harvest in the same crop year or the applicable acreage has historically had two or more crops planted for harvest in the same crop year. 4) The second or more crops are customarily planted after the first crop for harvest on the same acreage in the same year in the area. In accordance with section 508(A)(d)(3) and (4) of the Act, policy provisions contained in section 15(h)(4) of the Basic Provisions require the producer to provide records acceptable USDA is an Equal Opportunity Employer and Provider
BULLETIN NO.: MGR-[15]-007 Page 2 to the approved insurance provider of acreage and production that show the producer has double cropped acreage. In addition, producers are regarded to have history of planting two or more crops for harvest in at least two of the last four crops years in which the first insured crop was planted, or that show the applicable acreage was double cropped in at least two of the last four crop years in which the first insured crop was planted on the acreage. The difference of the two is either the producer has a history or the acreage has a history of double cropping. There are two ways producers can prove a history of double cropping in two of the last four crop years in which the first insured crop was planted. First, the producer can provide their own records of acreage and actual production history to demonstrate the producer double cropped acreage of the first insured crop in two of the last four crop years in which the first insured crop was planted. Second, if the acreage was double cropped for two of the last four crop years in which the first insured crop was planted, and a new producer acquires the acreage, the previous producer's records of acreage and production can be used. The provisions contained in section 15(i) of the Basic Provisions limit the number of acres on which two full indemnities can be paid to the number of acres for which the producer provides records of double cropping history. This provision protects program integrity by not allowing a producer to simply have a history of double cropping a small amount of acreage (e.g. 1 acre), but then in a given year, claiming double cropping on an entire operation (e.g. 1,000 acres). RMA seeks comment from stakeholders in the Federal crop insurance program regarding the following issues and proposed alternatives related to the definition of practical to replant and double cropping eligibility and related provisions. Issues and Proposed Alternatives Double Cropping Issue 1: Current double cropping requirements do not recognize changes in growing farm operations or for added land. Proposed Alternative: Consider a policy change to allow eligible double cropping acres to be based on either the greatest number of acres, or percentage of acres historically double cropped, rather than the greatest number of acres double cropped in two of the last four crop years in which the first insured crop was planted. This will address both when land is added to an operation and account for multiple crop rotations. (For example, if a producer has a 100-acre farm and has historically double cropped 50 acres planted to wheat followed by soybeans, when the producer purchases an additional 100 acres and plants wheat, the number of acres eligible for double cropping would be based on 50 percent, or 100 acres.) If the producer has historically double cropped wheat followed by soybeans on all acreage where wheat was planted, there is a reasonable presumption they may continue to do so in the future. Is it appropriate to modify the double cropping requirements, for added acreage to the farm operation and multiple crop rotations, to determine qualifying double cropping acres based on either 1) the greatest number of acres, or 2) a percentage of acres historically double cropped for two years?
BULLETIN NO.: MGR-[15]-007 Page 3 Issue 2: There seems to be confusion regarding the two of the last four crop years language and double cropping requirements. To qualify for double cropping coverage, the producer is required to provide double cropping history in two of the last four crop years in which the first insured crop was planted, or that show the applicable acreage was double cropped in at least two of the last four crop years in which the first insured crop was grown. For instance, if a producer has a history of planting wheat and soybeans on the same acreage in the same crop year, in order to qualify for double cropping, the producer must show records that the same practice was carried out at least twice in a four-year period in which the first insured crop was planted. This is not the same as two of the four most recent crop years. A current producer can prove a double cropping history for rotations; however, the records may be several years old where there are multiple crop rotations. (For example, a producer plants wheat followed by soybeans every five years, and then plants other crops following wheat on the acreage in the interim years). Proposed Alternative: Some have suggested that RMA consider a policy change to require that for the first year a producer qualifies for double cropping, the producer must be able to provide records of acreage and production showing that they planted and harvested two crops on the same acreage in the same crop year in one of the four, or one of the three crop years instead of the current two of the last four crop years requirement. Considering the proposed alternative in Issue 1, is the two of the last four crop years requirement appropriate and reasonable, or is a change in the requirement necessary, and if so why? Issue 3: Some producers have found challenges keeping separate records of acreage that was and was not double cropped because they harvest both first/second crop production at the same time. (For example, if a producer has two fields next to each other and on one field they plant wheat, harvest the wheat, and plant soybeans while the other field was a single crop of soybeans only, they may harvest both soybean fields at the same time making it difficult to keep the production separate). MGR-11-003 addressed the issue regarding the allocation of comingled first/second crop production to the acreage in proportion to the liability for the acreage that was and was not double cropped. Proposed Alternative: Consider a policy change to incorporate the clarification from MGR-11-003 that has been done administratively. Is the policy language clear regarding allocation of comingled first/second crop production to the acreage in proportion to the liability for the acreage that was and was not double cropped appropriate?
BULLETIN NO.: MGR-[15]-007 Page 4 Issue and Proposed Alternative Practical to Replant Issue: Concerns have been raised regarding the definition of practical to replant and the difficulty and inconsistency that can occur in the administration of the practical to replant provisions of the crop insurance policy. RMA plans to revise the last sentence of the definition to provide a clear, known deadline for which the replanting of the crop is considered to be practical and if not replanted, coverage will not be provided for the initial crop. This also provides necessary allowances for adverse weather conditions that would either prohibit the physical replanting of the crop, or impact the viability of the crop seed germinating, emerging and forming a healthy plant. Is the proposed definition of practical to replant appropriate, as shown on the attached Track Changes document? ACTION: RMA requests comment, including potential impacts, additional considerations, or alternative suggestions to those outlined within this Bulletin. To visualize the potential changes and enhancements, RMA is providing the attached policy with Track Changes reflecting potential policy language revisions to assist with your review. See the attachment for additional information. Please submit comments by [45 days from date listed on this memo] to Sarah Kliethermes at sarah.kliethermes@rma.usda.gov and Erin Albright at erin.albright@rma.usda.gov or by mail to: Office of the Deputy Administrator for Product Management Product Administration and Standards Division USDA-Risk Management Agency Beacon Facility Mail Stop 0812 P.O. Box 419205 Kansas City, Missouri 64141-6205 DISPOSAL DATE: December 31, 2015
Draft Policy Language 1. Definitions ***** Practical to replant - Our determination, after loss or damage to the insured crop, based on all factors, including, but not limited to moisture availability, marketing window, condition of the field, and time to crop maturity, that replanting the insured crop will allow the crop to attain maturity prior to the calendar date for the end of the insurance period. It will be considered to be practical to replant through the final planting date or late planting period, unless we determine it is mechanically impossible to replant acreage or there is no chance of seed emergence.regardless of availability of seed or plants, or the input costs necessary to produce the insured crop such as those that would be incurred for seed or plants, irrigation water, etc. ***** 15. Production Included in Determining an Indemnity and Payment Reductions. ***** (h) You may receive a full indemnity, or a full prevented planting payment for a first insured crop when a second crop is planted on the same acreage in the same crop year, regardless of whether or not the second crop is insured or sustains an insurable loss, if each of the following conditions are met: (1) It is a practice that is generally recognized by agricultural experts or organic agricultural experts for the area to plant two or more crops for harvest in the same crop year; (2) The second or more crops are customarily planted after the first insured crop for harvest on the same acreage in the same crop year in the area; (3) Additional coverage insurance offered under the authority of the Act is available in the county on the two or more crops that are double cropped; (4) You provide records acceptable to us of acreage and production that show: (i) show yyou have double cropped acreage in at least two of the last four crop years in which the first insured crop was planted, or that show the applicable acreage was double cropped in at least two of the last four crop years in which the first insured crop was grown on it; or (ii) The number of acres of the first insured crop that were planted in at least two of the last four crop years and the number of these acres that were double cropped; and (5) If you do not have records of production to qualify for double cropping as specified in section 15(h)(4) and your records of production from double cropped acreage was not kept separate from non-double cropped acreage, we may allocate such first and second crop production to the acreage in proportion to the liability for the acreage that was and was not double cropped; and (56) In the case of prevented planting, the second crop is not planted on or prior to the final planting date or, if applicable, prior to the end of the late planting period for the first insured crop. (i) If you provided records in accordance with section 15(h)(4)(i), tthe receipt of a full indemnity or prevented planting payment on both crops that are double cropped is limited of the number of acres for which you can demonstrate you have double cropped or that have been historically double cropped as specified in section 15(h): (1) If the records you provided are from acreage you double cropped in at least two of the last four crop years, you may apply your history of double cropping to any acreage of the insured crop in the county (e.g., if you have double cropped 100 acres of wheat and soybeans in the county and you acquire an additional 100 acres in the county, you can apply that history of double cropped acreage to any of the 200 acres in the county as long as it does not exceed 100 acres); or (2) If the records you provided are from acreage that another producer double cropped in at least two of the last four crop years, you may only use the history of double cropping for the same physical acres from which double cropping records were provided (e.g., if a neighbor has double cropped 100 acres of wheat and soybeans in the county and you acquire your neighbor s 100 double cropped acres and an additional 100 acres in the county, you can only apply your neighbor s history of double cropped acreage to the same 100 acres that your neighbor double cropped); or (j) If you provided records in accordance with section 15(h)(4)(ii), the receipt of a full indemnity or prevented planting payment on both crops that are double cropped is limited to the percentage of
the first insured crop acres you can demonstrate you double cropped or that have been historically double cropped. The number of acres qualifying acres is calculated as follows: (1) Determine the number of acres of the first insured crop that were double cropped in each of the years for which records are provided in accordance with section 15(h)(4)(ii); (2) Divide each result of section 15(j)(1) by the number of acres of the first insured crop that were planted in each respective year; (3) Add the results of section 15(j)(2) and divide by two; and (4) Multiply the result of 15(j)(3) by the number of insured acres of the first insured crop (e.g., records are provided showing: 100 acres of wheat planted in 2014, 50 of which were double cropped with soybeans; and 100 acres of wheat planted in 2015, 70 of which were double cropped with soybeans. In this case, 50 percent of the first insured crop acres were double cropped in 2014 and 70 percent were double cropped in 2015 which is an average of 60 percent. Therefore, 60 percent of the wheat acres insured in 2016 would be eligible for a full indemnity or prevented planting payment on both crops).