Final Agency Determination: FAD-139
Subject: By request dated February 8, 2011, the Risk Management Agency was asked for an interpretation for the 2010 crop year regarding section 9(b)(3) of the Fresh Market Pepper Crop Provisions, published at 7 C.F.R. Section 457.148. This request is pursuant to 7 C.F.R. part 400 subpart X.
Section 9(b)(3) of the Fresh Market Pepper Crop Provisions states:
9. Insurable Acreage.
(b) In addition to the provisions of section 9 (Insurable Acreage) of the Basic Provisions (457.8):
(3) We will not insure any acreage on which peppers (except for replanted peppers in accordance with sections 9(b)(1) and (2)), tomatoes, eggplants, or tobacco have been grown and the soil was not fumigated or otherwise properly treated before planting peppers.
Section 1 definition of "agricultural experts" in the Common Crop Insurance Policy Basic Provisions (05-BR) states:
Agricultural experts - Persons who are employed by the Cooperative State Research, Education and Extension Service or the agricultural departments of universities, or other persons approved by FCIC, whose research or occupation is related to the specific crop or practice for which such expertise is sought.
For purposes of this request, the requester assumes that all conditions of insurability in the Fresh Market Pepper Crop Provisions other than those in section 9(b)(3) have been met.
The requester understands the purpose of section 9(b)(3) is to reduce the risk of loss to peppers grown on the acreage that section 9(b)(3) describes, by requiring that a producer must take reasonable and adequate steps to mitigate the presence and impact of pests in the soil, which include weeds, insects and disease, before the peppers are planted.
On its face, section 9(b)(3) seems to suggest that a producer has at least two options when planting (as opposed to replanting) peppers on acreage where peppers, tomatoes, eggplants, or tobacco previously grew.
The first option is to fumigate the soil before planting. The policy does not condition a producer's following that procedure upon anyone's subjective interpretation about whether it constitutes "proper" treatment. Fumigation is always an appropriate pre-planting treatment, since the policy explicitly allows it.
The apparent second option is to elect not to fumigate, and to "otherwise properly treat" that acreage instead. The word "otherwise" suggests that what follows it in the policy is an alternative to fumigation. But the policy terms do not specify what constitutes "otherwise proper" treatment, which means that someone must determine what is proper and what is not. RMA explained in FAD-123 (interpreting a virtually-identical provision in the Fresh Market Tomato (Dollar Plan) Crop Provisions) that a producer who acts "in compliance with and pursuant to the recommendations of" local agricultural experts in determining how to treat the soil has "otherwise properly treated" the acreage.
Since the decision about what method of treatment is "otherwise proper" lies in the hands of agricultural experts and is not pre-defined in the policy, it follows that what is considered "otherwise properly treatment" in one geographic region might not be considered proper by agricultural experts in another geographic region. It also follows that, in certain locales, agricultural experts might determine and recommend that there is no alternative to fumigation at all, such that fumigation is the only proper pre-planting treatment for peppers grown on acreage where peppers, tomatoes, eggplants, or tobacco previously grew. There is no contradiction or conflict in the terms to interpret section 9(b)(3) as sometimes requiring fumigation under all circumstances if agricultural experts say it is required.
The requester therefore interprets section 9(b)(3) as including circumstances in which there is no other method of pre-planting soil treatment besides fumigation that is proper. The requester interprets section 9(b)(3) to mean that if agricultural experts opine that, in a particular geographic area, fumigation is the only method of treating the soil before planting peppers that adequately protects pepper plants against damage from weeds, soil pests (including, but not limited to, nematodes), and disease, then there is no way in that geographic area to "otherwise properly treat" the soil. Under those circumstances, the producer must fumigate the soil before planting in order for the peppers to be insurable under section 9(b)(3).
Final Agency Determination
The Federal Crop Insurance Corporation (FCIC) agrees with the requester's interpretation of section 9(b)(3) of the Fresh Market Pepper Crop Provision for initially planted peppers (non-replanted). For the pepper acreage to be insurable, the policy allows for two options. One option is to fumigate the acreage and this option is always available. The other option is to properly treat the acreage. However, there is an issue of what is the proper treatment. The requestor is correct that local agricultural experts establish the proper treatment. The requestor is correct that it is possible that the agricultural experts in one area may require a treatment that is different than what agricultural experts recommend for another area. FCIC also agrees, if fumigation is the only effective way to treat the soil before planting the fresh market peppers in a certain geographical location that is generally recognized by agricultural experts, then this is the only acceptable method allowable under section 9(b)(3) of the Fresh Market Pepper Crop Provisions.
Although the requester references in their FAD letter the Fresh Market Pepper Crop Provisions with a policy number of "98-010" for the 2010 crop year, the correct policy number is "99-083" for the 2010 crop year.
In accordance with the 7 C.F.R 400.765(c), this constitutes the final agency determination and is binding on all participants in the Federal crop insurance program for the 2010 crop year.
Date of Issue: April 29, 2011