On June 26, 2020, the Risk Management Agency (RMA) issued Product Management Bulletin: PM-20-041 announcing the changes made to the Dry Pea Crop Provisions for the 2021 and succeeding crop years and the Dry Pea Crop Provisions. https://www.rma.usda.gov/en/Policy-and-Procedure/Bulletins-and-Memos/2020/PM-20-041; https://www.rma.usda.gov/-/media/RMAweb/Policies/Dry-Pea/2021/Dry-Pea-Crop-Provisions-21-0067.ashx.
In PM-20-041, RMA states it made the following changes: 1) allow insurance on Fava/Faba beans; 2) add program dates for Arizona and California; 3) add a moisture adjustment to gross production; 4) update the policy for consistency with other crops with coverage on both fall and spring-planted acreage in the same county; and 5) clarify policy provisions.
PM-20-041 also references the Final Rule, published on June 26, 2020, that makes the above stated changes to the Dry Pea Crop Provisions found at 7 CFR 457.140.
ANALYSIS – The Final Rule contains the explanations for the changes made. The changes made and the basis for the changes can be found at https://www.govinfo.gov/content/pkg/FR-2020-06-26/pdf/2020-13457.pdf. With respect to the changes listed in PM-20-041, in regards to the addition of Fava and Faba beans, the Final Rule states that currently, Fava or Faba beans are insured by written agreement under the Dry Bean Crop Provisions. The Final Rule allows insurance of Fava/Faba beans under the Dry Pea Crop Provisions because:
- Fava or Faba beans are a cool season crop, which more closely matches dry peas, whereas dry beans are a warm season crop; and
- The cultural and agronomic practices to grow Fava or Faba beans are more similar to dry peas than dry beans.
With respect to adding program dates in California and Arizona, the Final Rule states such change is being made to allow an expansion into California and some counties in Arizona.
With respect to the moisture adjustment, the Final Rule states that producers requested the change to add a moisture adjustment to gross production; similar to other crops (for example, Dry Beans; Coarse Grains, Small Grains). The Final Rule states that dry peas are sometimes harvested with moisture content above 14 percent. The Final Rule states that most processors will apply a discount to either production or price due to excess moisture and that the current Dry Pea policy does not allow for such reduction causing insureds to believe they are not being treated fairly. The Final Rule states that applying moisture adjustment to gross production is:
- Is proactive and consistent with other similar crop provisions;
- Will lead to more accurate loss determinations; and
- Should have no significant impacts to producers’ rates or indemnities.
With respect to crops with coverage on both fall and spring-planted acreage in the county, the Final Rule made a number of changes consistent with other crops that have both fall and spring-plantings.
None of the changes seem out of line with other similar crops and do provide clarity to certain ambiguous provisions.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.