Notice2023-19584
Request for Information on Prevented Planting
Primary source
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Published
September 12, 2023
Issuing agencies
Agriculture DepartmentFederal Crop Insurance CorporationRisk Management Agency
Abstract
The Federal Crop Insurance Corporation (FCIC) is reopening the comment period for 30 days to allow the public additional time to provide comments on the prevented planting provisions of the Common Crop Insurance Policy (CCIP), Basic Provisions published on May 23, 2023. Prevented planting is a feature of many crop insurance plans that provides a payment to cover certain pre-plant costs for a crop that was prevented from being planted due to an insurable cause of loss. FCIC is interested in public input on the following: additional prevented planting coverage based on harvest prices in situations when harvest prices are higher than established prices initially set by FCIC prior to planting; the requirement that acreage must have been planted to a crop, insured, and harvested, in at least 1 of the 4 most recent crop years; additional levels of prevented planting coverage; prevented planting coverage on contracted crops; and other general prevented planting questions.
Full Text
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<title>Federal Register, Volume 88 Issue 175 (Tuesday, September 12, 2023)</title>
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[Federal Register Volume 88, Number 175 (Tuesday, September 12, 2023)]
[Notices]
[Pages 62524-62526]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-19584]
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Federal Register / Vol. 88, No. 175 / Tuesday, September 12, 2023 /
Notices
[[Page 62524]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Risk Management Agency
[Docket ID FCIC-23-0001]
Request for Information on Prevented Planting
AGENCY: Federal Crop Insurance Corporation and Risk Management Agency,
Department of Agriculture (USDA).
ACTION: Notice of request for information; reopening of comment period.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) is reopening the
comment period for 30 days to allow the public additional time to
provide comments on the prevented planting provisions of the Common
Crop Insurance Policy (CCIP), Basic Provisions published on May 23,
2023. Prevented planting is a feature of many crop insurance plans that
provides a payment to cover certain pre-plant costs for a crop that was
prevented from being planted due to an insurable cause of loss. FCIC is
interested in public input on the following: additional prevented
planting coverage based on harvest prices in situations when harvest
prices are higher than established prices initially set by FCIC prior
to planting; the requirement that acreage must have been planted to a
crop, insured, and harvested, in at least 1 of the 4 most recent crop
years; additional levels of prevented planting coverage; prevented
planting coverage on contracted crops; and other general prevented
planting questions.
DATES: The comment period for the Request for Information on Prevented
Planting published on May 23, 2023, (at 88 FR 33081) is reopened. We
will consider comments that we receive by October 12, 2023.
ADDRESSES: We invite you to submit comments in response to this notice.
Send your comments through the method below:
<bullet> Federal eRulemaking Portal: Go to <a href="https://www.regulations.gov">https://www.regulations.gov</a> and search for Docket ID FCIC-23-0001. Follow the
instructions for submitting comments.
All comments will be posted without change and will be publicly
available on <a href="http://www.regulations.gov">www.regulations.gov</a>.
FOR FURTHER INFORMATION CONTACT: Francie Tolle; telephone (816) 926-
7829; or email <a href="/cdn-cgi/l/email-protection#731501121d101a165d071c1f1f1633060017125d141c05"><span class="__cf_email__" data-cfemail="d8beaab9b6bbb1bdf6acb7b4b4bd98adabbcb9f6bfb7ae">[email protected]</span></a>. Persons with disabilities who
require alternative means for communication should contact the USDA
Target Center at (202) 720-2600 (voice).
SUPPLEMENTARY INFORMATION:
Background
FCIC is reopening the comment period for the Request for
Information on Prevented Planting that was published on May 23, 2023,
(at 88 FR 33081-33084). The comment period for the original notice
closed on September 1, 2023. Based on requests received during the
initial comment period, FCIC is reopening the comment period for an
additional 30 days to allow the public to comment on the prevented
planting provisions.
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. The Risk Management Agency (RMA) administers
the FCIC regulations. The Approved Insurance Providers (AIP) sell and
service Federal crop insurance policies in every state through a
public-private partnership. FCIC reinsures the AIPs who share the risk
associated with losses due to natural causes. FCIC's vision is to
secure the future of agriculture by providing world class risk
management tools to rural America.
Prevented planting coverage pays when a producer is unable to plant
an insured crop due to an insured cause of loss. The payment is
intended to assist in covering the normal costs associated with
preparing the land up to the point of the seed going in the ground
(pre-plant costs). These pre-plant costs can include seed, purchase of
machinery, land rent, fertilizer, actions taken to ready the field,
pesticide, labor, and repairs. Coverage is calculated as a percent of
the producer's insurance guarantee (for example, 60 percent for
soybeans).
FCIC is interested in all general prevented planting comments but
requests public input from stakeholders on the following specific
topics:
Prevented Planting Coverage Based on Harvest Prices for Revenue
Protection Insurance
Revenue protection is a plan of insurance that provides protection
against loss of revenue due to a production loss, price decline or
increase, or a combination of both. Under the revenue protection plan
of insurance, yield losses are compensated using the harvest-time price
if it is higher than the price FCIC projected prior to planting. This
compensates producers for the replacement value of lost bushels. This
type of coverage was intended to help producers mitigate the risk of
having to buy out of delivery contracts they are unable to fulfill due
to production losses. Currently, the prevented planting calculation for
revenue protection is based on the projected price and does not
increase with the harvest price.
Revenue protection is the most popular insurance coverage in the
crop insurance program. Under revenue protection, producers may elect a
harvest price exclusion option which removes the protection against
loss of revenue due to harvest price increase. Over 99 percent of
revenue protection policies maintain harvest price coverage.
Following the volume of prevented planting payments for 2019 and
2020, a consistent suggestion emerged to allow prevented planting
payments to increase with the harvest price, as is currently done for
lost production. Allowing the harvest price for prevented planting
payments would not impact most years as there needs to be both an
increase in the harvest price and a prevented planting claim.
Historical data suggests the additional coverage would increase
prevented planting payments by approximately 6 percent on average for
those policies with harvest price revenue coverage. Consequently, there
would need to be a corresponding increase in premium for these
policies.
[[Page 62525]]
The following are questions for input regarding prevented planting
coverage based on the harvest price:
1. Should prevented planting payments be based on the harvest price
or the price used to establish the insurance guarantee (projected
price)?
2. What specific advantages or disadvantages do you see for
allowing prevented planting coverage to be based on the harvest price?
3. When a producer is prevented from planting, what additional loss
does a producer suffer when the harvest price increases and what should
be considered to estimate the value of the loss?
4. Do you have any concerns about allowing prevented planting
coverage to be based on the harvest price?
Prevented Planting ``1 in 4'' Requirement
Beginning with the 2021 crop year, FCIC revised the prevented
planting provisions to implement the ``1 in 4'' requirement nationwide.
The ``1 in 4'' requirement states that acreage must have been planted
to a crop, insured, and harvested (or if not harvested, adjusted for
claim purposes due to an insurable cause of loss) in at least 1 out of
the previous 4 crop years. This was meant to reduce prevented planting
payments on land that is not generally available to plant, thus
lowering insurance costs for all producers. Prior to the 2021 crop
year, the ``1 in 4'' requirement was only applicable to the Prairie
Pothole National Priority Area and required that the acreage must be
physically available for planting.
In late 2022, FCIC announced the ``1 in 4'' requirement would be
removed from western states that have experienced significant ongoing
drought in recent years. The purpose of removing the requirement in
these states was to give FCIC more time to better understand the unique
needs of western producers and to also ensure all parties can provide
input on the change.
The following are questions regarding the prevented planting ``1 in
4'' requirement:
1. Since the nationwide implementation of the ``1 in 4''
requirement, what situations have created challenges due to this
requirement for producers that have been prevented from planting?
2. Do you have recommendations that would make the requirement more
flexible for producers while protecting the integrity of the Federal
Crop Insurance Program?
3. Are there specific situations that should exempt land from the
``1 in 4'' requirement and why?
4. Should the requirement be removed from specific areas and why?
5. A portion of the ``1 in 4'' requirement allows crops that have
been adjusted for claims purposes due to an insured cause of loss to be
considered harvested. However, this allowance excludes claims adjusted
due to the following causes of loss: flood, excess moisture, and
drought. Should the requirement exclude specific causes of loss
adjusted for claims purposes and why?
6. Are you aware of additional program integrity measures or
safeguards that should be considered beyond what is in place today?
7. Do you believe there should be a limit on the number of
consecutive years that a producer is eligible to receive a prevented
planting payment on the same acreage? If so, what do you believe the
limit should be?
Prevented Planting 10 Percent Additional Coverage
Insureds with additional coverage, a coverage level greater than
catastrophic risk protection, may elect an additional level of
prevented planting coverage, commonly referred to as buy-up coverage,
on or before the sales closing date. The additional coverage level
allows producers to better tailor their coverage to match their actual
prevented planting costs. The additional level of prevented planting
coverage also requires the producer pay additional premium. Prior to
the 2018 crop year, two additional prevented planting coverage levels
were available, 5 percent (+5) and 10 percent (+10). FCIC removed the
+10 additional coverage option beginning in the 2018 crop year.
Removing the +10 additional coverage option maintained the balance
between providing coverage to producers and the cost to taxpayers.
While FCIC has removed the +10 additional coverage option, the +5
additional coverage option is still available.
RMA is considering reinstating the +10 additional coverage option.
The following are questions regarding the +10 additional coverage
option:
1. What specific advantages or disadvantages do you see regarding
reinstating the +10 additional coverage option?
2. If you believe reinstating the +10 additional coverage option
will provide needed protection for producers, why is it needed in
addition to the current +5 additional coverage option?
3. Do you have any concerns about reinstating the +10 additional
coverage option?
Prevented Planting Coverage on Contracted Crops
For several crops, crop types, or specific practices grown under a
contract with a processor, a contract price option allows a producer to
use their contract price to determine the insurance guarantee. For
example, the Contract Price Addendum allows organic certified and
transitional producers of many crops to use the price contained in
their organic contract for insurance. Currently, when the contract
price option is elected, the prevented planting coverage is based on
the contract price. However, it has been suggested that prevented
planting costs may be the same regardless of whether the producer had a
contract. FCIC is requesting input on whether the prevented planting
guarantee should use the RMA established price (price election or
projected price), regardless of if the contract price option has been
elected.
The price election is the amount contained in the actuarial
documents that is the value per pound, bushel, ton, carton, or other
applicable unit of measure for the purposes of determining premium and
indemnity under the policy. The projected price is the price for each
crop determined in accordance with the Commodity Exchange Price
Provisions.\1\ The applicable projected price is used for each crop for
which revenue protection is available, regardless of whether you elect
to obtain revenue protection or yield protection for the crop.
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\1\ The Commodity Exchange Price Provisions (CEPP) are used in
conjunction with either the Common Crop Insurance Policy Basic
Provisions or the Area Risk Protection Insurance Basic Provisions,
along with Crop Provisions for the following crops: barley, canola
or rapeseed, corn, cotton, grain sorghum, rice, soybeans,
sunflowers, and wheat. CEPP specifies how and when the projected and
harvest price components will be determined. Updated CEPP documents
are on the RMA website at <a href="http://www.rma.usda.gov/Policy-and-Procedure/Insurance-Plans/Commodity-Exchange-Price-Provisions-CEPP">www.rma.usda.gov/Policy-and-Procedure/Insurance-Plans/Commodity-Exchange-Price-Provisions-CEPP</a>.
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The following are questions regarding prevented planting coverage
on contracted crops that can elect the contract price option:
1. Are pre-planting costs higher for contracted crops? If so,
explain.
2. Should prevented planting payments be based on the contract
price or RMA's established price (price election or projected price)?
Please explain why.
3. If a contract price is used for prevented planting guarantee
purposes, should there be any limitations as to when the contract is
secured, specifically when a cause of loss is present that may prevent
planting?
[[Page 62526]]
Other General Prevented Planting Questions
1. Do you believe all producers will support paying higher premiums
to cover the costs of expanded prevented planting benefits?
2. Are pre-planting costs the same for all causes of loss? For
example: Does a multi-year drought leading to failure of irrigation
supply have the same pre-planting costs as unexpected flooding prior to
planting?
Marcia Bunger,
Manager, Federal Crop Insurance Corporation; and Administrator, Risk
Management Agency.
[FR Doc. 2023-19584 Filed 9-11-23; 8:45 am]
BILLING CODE 3410-08-P
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