Final Agency Determination: FAD-68
Subject: On October 6, 2006, the Risk Management Agency received a request for a Final Agency
Determination for the 2006 crop year, regarding the interpretation of section 28 of the Common Crop Insurance Policy
Basic Provisions (Basic Provisions), published at 7 C.F.R. 457.8, as it applies to the applicable crop and crop
year. This request is pursuant to 7 C.F.R. part 400, subpart X.
The Basic Provisions (7 C.F.R. 457.8) states:
Section 1. Definitions
* * *
Actuarial documents - The material for the crop year which is available for public inspection in your agent's
office and published on RMA's website at http://www.rma.usda.gov/ or a successor website, and which shows available
coverage levels, information needed to determine amounts of insurance, premium rates, premium adjustment percentages,
practices, particular type or varieties of the insurable crop, insurable acreage, and other related information
regarding crop insurance in the county.
* * *
Crop Year - The period within which the insured crop is normally grown, regardless of whether or not it is actually grown, and designated by the calendar year in which the insured crop is
normally harvested, unless otherwise specified in the Crop Provisions.
Section 28. Transfer of Coverage and Right to Indemnity
If you transfer any part of your share during the crop year, you may transfer your coverage rights, if the
transferee is eligible for crop insurance. We will not be liable for any more than the liability determined in
accordance with your policy that existed before the transfer occurred. The transfer of coverage rights must be
on our form and will not be effective until approved by us in writing. Both you and the transferee are jointly
and severally liable for the payment of the premium and administrative fees. The transferee has all rights and
responsibilities under this policy consistent with the transferee’s interest.
The requestor indicates the key word contained in section 28 of the Basic Provisions is crop year as it applies to
the specific cabbage crop year for which the interpretation is sought. Specifically, in the requestor’s opinion there
are the two distinct planting periods for cabbage in a calendar year in which the insured crop is normally grown in
Colquitt County, Georgia. Therefore, there are two distinct crop years for cabbage in a calendar year in Colquitt
County, Georgia. For each planting period or crop year: the type of cabbage and the number of acres of each type of
cabbage vary; the liability coverage, and the premium charged therefore, are calculated based upon the type of
cabbage planted and the number of acres of each type of cabbage planted; and a Summary of Coverage is then issued
reflecting the type of cabbage, the acreage for each type, the liability coverage and the premiums charged
therefore. Thus, there is a spring cabbage crop year for which liability coverage is provided for the specific
type, and number of acres for each type, of cabbage planted during the spring cabbage crop year; likewise, for a
fall cabbage crop year.
The requestor also noted that if a producer would transfer any part of the producer's share during the spring
cabbage crop Year, no coverage would be provided in excess of the liability coverage listed in the policy in effect
for the spring cabbage crop year. The same would hold true for transfers made during the fall cabbage crop year.
Any transfers made subsequent to the harvesting of a cabbage crop year and prior to the planting of the following
cabbage crop year, do not occur during either cabbage crop year, and as a result, are not subject to limitation under
Section 28 of the Terms and Conditions Basic Provisions.
In the requestor's opinion as section 28 reads and applies to cabbage planted in Colquitt County, Georgia;
it refers to a Transfer of Right to Indemnity which occurs during a cabbage crop year only not before the cabbage
crop year or after the cabbage crop year. For the limitation referenced in section 28 to apply, the transfer would
have to occur after cabbage is planted and before the same crop of cabbage is harvested.
Final Agency Determination
The Federal Crop Insurance Corporation does not agree with the requestor's interpretation of crop year in that
fall planted cabbage and spring planted cabbage are two distinct crop years.
Crop year is defined in the Basic Provisions as the period in which the insured crop is normally produced and
is designated by the year in which it is harvested. This means that there is only one crop year for each insured
crop. Therefore, the issue is whether each planting of cabbage is considered a separate insured crop that can have
separate crop years.
Section 6 of the Cabbage Pilot Crop Provisions provides “the insured crop will be all the cabbage types in the
county that are listed in the Special Provisions, for which a premium rate is provided by the actuarial documents,
in which you have a share , and that are . . . (c) Planted within the planting periods designated in the Special
Provisions." Therefore, there is only one cabbage crop, which includes cabbage planted during both the spring and
fall planting period. This means there is only one crop year that encompasses both the spring and fall planting
This is supported by the other policy provisions. Section 2 of the Cabbage Crop Provisions states that optional
units may be established for each type and planting period if all other conditions in section 34 of the Basic
Provisions are met. Under section 34 of the Basic Provisions, optional units are smaller units made from the basic
unit. The Basic Provisions define the basic unit as all insurable acreage of the insured crop in the county.
Therefore, optional units are still comprised of all acreage of the same insured crop.
Further, section 3(b) of the Cabbage Crop Provisions states that the producer can only select one coverage level
for the insured crop unless the Crop Provisions allow separate insurance for an individual type or variety. In such
case the producer is charged separate administrative fees. The Cabbage Crop Provisions does not allow separate
insurance for each planting of cabbage and only one administrative fee is charged that covers both plantings of
The Summary of Coverage may contain separate premiums, guarantees and indemnities for each planting only because
insurance is provided on an optional unit basis by type and planting period. Each optional unit is still comprised of
all the acreage of the same insured cabbage crop. The fact that there are separate insurance periods for each planting
of cabbage does not mean each planting can be considered a separate crop. The insurance period is the time frame
during which the crop is at risk and losses occurring during that time frame are covered. If the crop is planted and
harvested more than once, each would require a separate insurance period because there will be time after cabbage has
been harvested and before the next planting is planted where no coverage is provided. This does not affect the unit
structure or the fact that all acreage of cabbage in the county, as long as it is planted within the two planting
periods, is the insured crop.
FCIC does not agree with the requester's interpretation as to how crop year applies to the provisions contained
in section 28 of the Basic Provisions. Since both the fall planted and spring planted cabbage are part of the same
insured crop, they both fall within the same crop year. This means that any transfer of an insured share or right
to an indemnity that occurs after insurance attaches to the first planting of cabbage and before the completion of
harvest or the end of the insurance period, whichever is applicable, for the last planting of cabbage would fall
within the same crop year and be subject to the limitations contained in section 28 of the Basic Provisions.
In accordance with 7 C.F.R. 400.765(c), this Final Agency Determination is binding on all participants in the
Federal crop insurance program for the 2004 and succeeding crop years.
Date of Issue: December 20, 2006