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    Crop Insurance News and Analysis – July 27, 2020 – Final Agency Determination: FAD-297

    August 16, 2020 By //  by Kim Arrigo

    On July 27, 2020, the Risk Management Agency (RMA) published FAD-297, interpreting section 6(d)(1) of the Common Crop Insurance Policy Basic Provisions (Basic Provisions) involving the ability to revise an acreage report. https://www.rma.usda.gov/en/Policy-and-Procedure/Final-Agency-Determinations/Basic-Provisions-6d-FAD-297. RMA states that the requestors interpretation of section 6(d)(1) of the Basic Provisions is that that the failure of a Farm Service Agency (FSA) employee to provide the producer or agent with all FSA-578 forms does not qualify as a “USDA error” for purposes of section 6(d)(1) of the Basic Provisions. RMA states that the requestor interprets section 6(g) of the Basic Provisions to mean that the producer is the party responsible for compiling all FSA-578 forms and for the accuracy of the information submitted in the acreage report.

    RMA also states that the requestor cites previously issued FADs, in addition to the Basic Provisions, as the basis for their interpretation. For example, the requestor states that, under FAD-046, RMA agreed the phrase from section 6(d)(1), “we or someone from the USDA have committed an error” includes mistakes, miscalculations or other inaccuracies made by a USDA or their representative in the preparation of an FSA-578 (among other forms) that an insured or agent may rely on in the preparation of the acreage report. RMA states the requestor also contends that the RMA differentiated in FAD-046 between preparation errors on the part of the FSA and acreage reporting errors made by a policyholder, where the FCIC determined that an approved insurance provider’s (AIP) consent to an acreage report revision cannot be based on “a reporting error made by the insured.”

    RMA states it agrees with the requestor’s interpretation. RMA states that the Basic Provisions have no requirement that an FSA-578 must be used to report acreage for a policy so it cannot be a “USDA error” if an FSA-578 is not provided by FSA. RMA states that if an FSA-578 is used, then any evidence that the FSA employee made mistakes, miscalculations, and/or other inaccuracies in the preparation of forms, could be considered an error. RMA also states that it is the producer’s responsibility to provide all required reports, ensure the accuracy of all information, and verify the information on all such reports prior to submitting them pursuant to section 6(g) of the Basic Provisions.

    ANALYSIS – RMA is correct in its interpretation that failure of FSA to provide a FSA-578 acreage report form does not constitute an error that would allow an AIP to consent to correct the acreage report. The Basic Provisions do not require FSA to provide the FSA-578 so it cannot be an error when it fails to do so. RMA is also correct that if the FSA-578 is provided and it contains errors, mistakes or other inaccuracies then those would be considered errors of USDA and provide grounds for consent by the AIP to correct the acreage report. Further, RMA is correct that section 6(g) places the burden on the producer to ensure the accuracy of all information provided on the acreage report it submits and certifies.

    All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.

    Filed Under: Blog

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