On May 28, 2020, the Risk Management Agency (RMA) issued Product Management Bulletin: PM-20-033, published a Final rule with request for comments, and published a copy of the Canola and Rapeseed Crop Provisions effective for the 2021 crop year. https://www.rma.usda.gov/en/Policy-and-Procedure/Bulletins-and-Memos/2020/PM-20-033; https://www.govinfo.gov/content/pkg/FR-2020-05-28/pdf/2020-10240.pdf; https://www.rma.usda.gov/-/media/RMAweb/Policies/Canola-and-Rapeseed/2021/Canola-and-Rapeseed-Crop-Provisions-21-0015.ashx.
RMA revised the definition of “harvest” and added definitions of “latest final planting date,” “prevented planting,” and “pushed.” “Harvest” is revised to include a provision that crops that are pushed are not considered harvested. “Latest final planting date” means (a) The final planting date for spring-planted acreage in all counties for which the Special Provisions designate a final planting date for spring-planted acreage only; (b) The final planting date for fall-planted acreage in all counties for which the Special Provisions designate a final planting date for fall-planted acreage only; or (c) The final planting date for spring-planted acreage in all counties for which the Special Provisions designate final planting dates for both spring-planted and fall-planted acreage. “Prevented Planting” means “As defined in the Basic Provisions, except that the references to “final planting date” contained in the definition in the Basic Provisions are replaced with the “latest final planting date.” “Pushed” means “Mechanical bending of the stem prior to maturity that leaves the stems and pods intact to ripen naturally while being protected from weather events.” In the Final Rule, RMA states that pushed is a method by which the stems of the canola are mechanically bent prior to maturity. When the stems are pushed, the stems and pods remain intact to ripen naturally while being protected from weather events. This process is not harmful to the canola and is completed prior to harvest.
With respect to Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities, RMA replaced the phrase “insured fall planted acreage” with “insurable fall planted acreage.” In its Final Rule, RMA states this subsection provides guidance regarding the date by which producers can make changes to their insurance coverage depending on whether they have insured fall planted acreage. The previous provisions stated that if producers have insured fall planted acreage, no changes can be made after the fall sales closing date. If producers do not have insured fall planted acreage, then they can make changes up until the spring sales closing. According to section 6 of the Crop Provisions, all the producer’s acreage of the crop in the county must be insured. Therefore, if the producer plants fall planted acreage and it is insurable, then it must be insured. RMA stated that it received input from approved insurance providers (AIPs) that the phrase ‘‘insured fall planted acreage’’ indicates that if producers planted fall planted acreage but did not insure it, then they have until the spring sales closing date to make changes to the insurance coverage on the spring-planted acreage. That is not the intent of the provisions. Therefore, FCIC is revising the language to indicate that if there is insurable fall planted acreage, then no changes may be made after the fall sales closing date.
With respect to cancellation and termination dates, RMA revised the table to list states rather than the availability of certain types. In the Final Rule, RMA states the wording of this table caused confusion when insured producers and their AIPs were seeking written agreements in counties where canola and rapeseed crop insurance is not available (because the county does not appear in the actuarial documents). Section 18(e)(2)(ii) of the Common Crop Insurance Policy, Basic Provisions (Basic Provisions) had specified that written agreements must be provided on or before the cancellation date to insure a crop in a county that does not have actuarial documents for the crop. According to the Canola and Rapeseed Crop Provisions and section 18 of the Basic Provisions, the written agreement must be submitted by March 15 for counties without fall-planted types on the actuarial documents and August 31 for counties with fall-planted types on the actuarial documents. If a producer planted fall canola in a county for which there is no canola and rapeseed crop insurance coverage, the deadline to submit the written agreement would be the March 15th cancellation date. However, the producer planted the crop months prior to the deadline and may be able to adversely select against insurance due to information the insured has about their crop prior to the attachment of insurance. With the revised changes to the table, the deadline for the written agreement in this county would default to the provisions in section 18(e)(2)(ii) of the Basic Provisions. In this example, according to section 18 of the Basic Provisions, the cancellation date would have been more appropriately aligned with the counties in the states with an August 31st cancellation date.
With respect to replanting provisions, RMA revised the provisions to address prevented planting situations to be consistent with other crops that have both fall and spring planted acreage. In the Final Rule, RMA states the provisions state that the production guarantee, premium, projected and harvest prices and replant payments will be based on the crop type that is replanted and insured. The provisions do not address situations when a damaged winter crop type is replanted to a spring crop type, but retains insurance based on the winter crop type; and when the replanted acreage is planted at a reduced seeding rate into a partially-damaged stand of the insured crop. These situations are addressed in other Crop Provisions that have both fall and spring planted acreage and they have been added to these Crop Provisions for consistency.
With respect to prevented planting, RMA clarified that counties for which the Special Provisions designate spring final planting dates, the prevented planting guarantee will be based on the approved yield for spring-planted acreage. In the Final Rule, RMA states this change is consistent with other Crop Provisions that have both fall and spring planted acreage
ANALYSIS – The changes seem reasonable and do not adversely affect program integrity. It would have been helpful of PM-20-033 had stated that the changes to the policy were made through the rulemaking process and revisions to the Canola and Rapeseed Crop Provisions published at 7 C.F.R. 457.161. It is the Final Rule that explains the basis for the changes and their effects.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.