On October 23, 2020, the Risk Management Agency (RMA) published Final Agency Determination FAD-300, Section 6(d)(1) of the Common Crop Insurance Policy Basic Provisions (Basic Provisions). https://www.rma.usda.gov/en/Policy-and-Procedure/Final-Agency-Determinations/Basic-Provisions-6d-FAD-300. Section 6(d)(1) of the Basic Provisions involves the conditions under which a producer may revise an acreage report that has been submitted. For planted acreage, consent is required except when there are unreported units (see section 6(f)); the information on the acreage report is clearly transposed; you provide adequate evidence that we or someone from USDA have committed an error regarding the information on your acreage report; or if expressly permitted by the policy.
The requestor interprets section 6(d)(1) to mean that failure of a Farm Service Agency (FSA) employee to provide the policyholder or agent with all FSA-578 forms qualifies as a “USDA error” for purposes of section 6(d)(1) of the Basic Provisions. The requestor states that there is “no difference in an FSA-578 that includes an erroneous figure (e.g., a transposed number) and an FSA-578 that omits entire line items, acreage, or even entire farm numbers.”
The requestor also cites previously issued FADs, in addition to the Basic Provisions, as the basis for their interpretation. For example, the requestor states that the FCIC, under FAD-046, 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. The requestor also contends that the FCIC 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 consent to an acreage report revision cannot be based on “a reporting error made by the insured.”
RMA disagreed with the requestors interpretation. RMA stated the Basic Provisions do not require that an FSA-578 must be used to report acreage for a policy. RMA states that it cannot be a “USDA error” if an FSA-578 is not provided by the FSA. RMA states that if an FSA-578 is used, then any adequate evidence that an FSA employee made mistakes, miscalculations, and/or other inaccuracies in the preparation of forms, may be considered an error. RMA states that it does not consider an omitted FSA-578 form as a USDA error. RMA states that absent adequate evidence that an FSA or other USDA employee committed an error regarding the information on the acreage report, consent cannot be given to revise the acreage report due to USDA error.
RMA states that it is ultimately the insured’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 Common Crop Insurance Policy Basic Provisions.
ANALYSIS – RMA’s analysis is correct. There is no requirement in the policy that FSA provide the producer’s FSA-578 forms or that a FSA-578 provided by FSA be used in the creation of the crop insurance acreage report. If there is no requirement that FSA-578’s be provided by FSA, there can be no error when they are not provided. FSA-578’s are provided as a courtesy by FSA but RMA’s position has always been that if they are provided, they can be relied upon to fill out the crop insurance acreage report. Therefore, if they contain an error committed by an FSA employee, such error can be corrected on the acreage report.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.