[Federal Register Volume 88, Number 175 (Tuesday, September 12, 2023)]
[Notices]
[Pages 62524-62526]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-19584]


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 Notices
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  Federal Register / Vol. 88, No. 175 / Tuesday, September 12, 2023 / 
Notices  

[[Page 62524]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Risk Management Agency

[Docket ID FCIC-23-0001]


Request for Information on Prevented Planting

AGENCY: Federal Crop Insurance Corporation and Risk Management Agency, 
Department of Agriculture (USDA).

ACTION: Notice of request for information; reopening of comment period.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) is reopening the 
comment period for 30 days to allow the public additional time to 
provide comments on the prevented planting provisions of the Common 
Crop Insurance Policy (CCIP), Basic Provisions published on May 23, 
2023. Prevented planting is a feature of many crop insurance plans that 
provides a payment to cover certain pre-plant costs for a crop that was 
prevented from being planted due to an insurable cause of loss. FCIC is 
interested in public input on the following: additional prevented 
planting coverage based on harvest prices in situations when harvest 
prices are higher than established prices initially set by FCIC prior 
to planting; the requirement that acreage must have been planted to a 
crop, insured, and harvested, in at least 1 of the 4 most recent crop 
years; additional levels of prevented planting coverage; prevented 
planting coverage on contracted crops; and other general prevented 
planting questions.

DATES: The comment period for the Request for Information on Prevented 
Planting published on May 23, 2023, (at 88 FR 33081) is reopened. We 
will consider comments that we receive by October 12, 2023.

ADDRESSES: We invite you to submit comments in response to this notice. 
Send your comments through the method below:
     Federal eRulemaking Portal: Go to https://www.regulations.gov and search for Docket ID FCIC-23-0001. Follow the 
instructions for submitting comments.
    All comments will be posted without change and will be publicly 
available on www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Francie Tolle; telephone (816) 926-
7829; or email [email protected]. Persons with disabilities who 
require alternative means for communication should contact the USDA 
Target Center at (202) 720-2600 (voice).

SUPPLEMENTARY INFORMATION: 

Background

    FCIC is reopening the comment period for the Request for 
Information on Prevented Planting that was published on May 23, 2023, 
(at 88 FR 33081-33084). The comment period for the original notice 
closed on September 1, 2023. Based on requests received during the 
initial comment period, FCIC is reopening the comment period for an 
additional 30 days to allow the public to comment on the prevented 
planting provisions.
    FCIC serves America's agricultural producers through effective, 
market-based risk management tools to strengthen the economic stability 
of agricultural producers and rural communities. FCIC is committed to 
increasing the availability and effectiveness of Federal crop insurance 
as a risk management tool. The Risk Management Agency (RMA) administers 
the FCIC regulations. The Approved Insurance Providers (AIP) sell and 
service Federal crop insurance policies in every state through a 
public-private partnership. FCIC reinsures the AIPs who share the risk 
associated with losses due to natural causes. FCIC's vision is to 
secure the future of agriculture by providing world class risk 
management tools to rural America.
    Prevented planting coverage pays when a producer is unable to plant 
an insured crop due to an insured cause of loss. The payment is 
intended to assist in covering the normal costs associated with 
preparing the land up to the point of the seed going in the ground 
(pre-plant costs). These pre-plant costs can include seed, purchase of 
machinery, land rent, fertilizer, actions taken to ready the field, 
pesticide, labor, and repairs. Coverage is calculated as a percent of 
the producer's insurance guarantee (for example, 60 percent for 
soybeans).
    FCIC is interested in all general prevented planting comments but 
requests public input from stakeholders on the following specific 
topics:

Prevented Planting Coverage Based on Harvest Prices for Revenue 
Protection Insurance

    Revenue protection is a plan of insurance that provides protection 
against loss of revenue due to a production loss, price decline or 
increase, or a combination of both. Under the revenue protection plan 
of insurance, yield losses are compensated using the harvest-time price 
if it is higher than the price FCIC projected prior to planting. This 
compensates producers for the replacement value of lost bushels. This 
type of coverage was intended to help producers mitigate the risk of 
having to buy out of delivery contracts they are unable to fulfill due 
to production losses. Currently, the prevented planting calculation for 
revenue protection is based on the projected price and does not 
increase with the harvest price.
    Revenue protection is the most popular insurance coverage in the 
crop insurance program. Under revenue protection, producers may elect a 
harvest price exclusion option which removes the protection against 
loss of revenue due to harvest price increase. Over 99 percent of 
revenue protection policies maintain harvest price coverage.
    Following the volume of prevented planting payments for 2019 and 
2020, a consistent suggestion emerged to allow prevented planting 
payments to increase with the harvest price, as is currently done for 
lost production. Allowing the harvest price for prevented planting 
payments would not impact most years as there needs to be both an 
increase in the harvest price and a prevented planting claim. 
Historical data suggests the additional coverage would increase 
prevented planting payments by approximately 6 percent on average for 
those policies with harvest price revenue coverage. Consequently, there 
would need to be a corresponding increase in premium for these 
policies.

[[Page 62525]]

    The following are questions for input regarding prevented planting 
coverage based on the harvest price:
    1. Should prevented planting payments be based on the harvest price 
or the price used to establish the insurance guarantee (projected 
price)?
    2. What specific advantages or disadvantages do you see for 
allowing prevented planting coverage to be based on the harvest price?
    3. When a producer is prevented from planting, what additional loss 
does a producer suffer when the harvest price increases and what should 
be considered to estimate the value of the loss?
    4. Do you have any concerns about allowing prevented planting 
coverage to be based on the harvest price?

Prevented Planting ``1 in 4'' Requirement

    Beginning with the 2021 crop year, FCIC revised the prevented 
planting provisions to implement the ``1 in 4'' requirement nationwide. 
The ``1 in 4'' requirement states that acreage must have been planted 
to a crop, insured, and harvested (or if not harvested, adjusted for 
claim purposes due to an insurable cause of loss) in at least 1 out of 
the previous 4 crop years. This was meant to reduce prevented planting 
payments on land that is not generally available to plant, thus 
lowering insurance costs for all producers. Prior to the 2021 crop 
year, the ``1 in 4'' requirement was only applicable to the Prairie 
Pothole National Priority Area and required that the acreage must be 
physically available for planting.
    In late 2022, FCIC announced the ``1 in 4'' requirement would be 
removed from western states that have experienced significant ongoing 
drought in recent years. The purpose of removing the requirement in 
these states was to give FCIC more time to better understand the unique 
needs of western producers and to also ensure all parties can provide 
input on the change.
    The following are questions regarding the prevented planting ``1 in 
4'' requirement:
    1. Since the nationwide implementation of the ``1 in 4'' 
requirement, what situations have created challenges due to this 
requirement for producers that have been prevented from planting?
    2. Do you have recommendations that would make the requirement more 
flexible for producers while protecting the integrity of the Federal 
Crop Insurance Program?
    3. Are there specific situations that should exempt land from the 
``1 in 4'' requirement and why?
    4. Should the requirement be removed from specific areas and why?
    5. A portion of the ``1 in 4'' requirement allows crops that have 
been adjusted for claims purposes due to an insured cause of loss to be 
considered harvested. However, this allowance excludes claims adjusted 
due to the following causes of loss: flood, excess moisture, and 
drought. Should the requirement exclude specific causes of loss 
adjusted for claims purposes and why?
    6. Are you aware of additional program integrity measures or 
safeguards that should be considered beyond what is in place today?
    7. Do you believe there should be a limit on the number of 
consecutive years that a producer is eligible to receive a prevented 
planting payment on the same acreage? If so, what do you believe the 
limit should be?

Prevented Planting 10 Percent Additional Coverage

    Insureds with additional coverage, a coverage level greater than 
catastrophic risk protection, may elect an additional level of 
prevented planting coverage, commonly referred to as buy-up coverage, 
on or before the sales closing date. The additional coverage level 
allows producers to better tailor their coverage to match their actual 
prevented planting costs. The additional level of prevented planting 
coverage also requires the producer pay additional premium. Prior to 
the 2018 crop year, two additional prevented planting coverage levels 
were available, 5 percent (+5) and 10 percent (+10). FCIC removed the 
+10 additional coverage option beginning in the 2018 crop year. 
Removing the +10 additional coverage option maintained the balance 
between providing coverage to producers and the cost to taxpayers. 
While FCIC has removed the +10 additional coverage option, the +5 
additional coverage option is still available.
    RMA is considering reinstating the +10 additional coverage option. 
The following are questions regarding the +10 additional coverage 
option:
    1. What specific advantages or disadvantages do you see regarding 
reinstating the +10 additional coverage option?
    2. If you believe reinstating the +10 additional coverage option 
will provide needed protection for producers, why is it needed in 
addition to the current +5 additional coverage option?
    3. Do you have any concerns about reinstating the +10 additional 
coverage option?

Prevented Planting Coverage on Contracted Crops

    For several crops, crop types, or specific practices grown under a 
contract with a processor, a contract price option allows a producer to 
use their contract price to determine the insurance guarantee. For 
example, the Contract Price Addendum allows organic certified and 
transitional producers of many crops to use the price contained in 
their organic contract for insurance. Currently, when the contract 
price option is elected, the prevented planting coverage is based on 
the contract price. However, it has been suggested that prevented 
planting costs may be the same regardless of whether the producer had a 
contract. FCIC is requesting input on whether the prevented planting 
guarantee should use the RMA established price (price election or 
projected price), regardless of if the contract price option has been 
elected.
    The price election is the amount contained in the actuarial 
documents that is the value per pound, bushel, ton, carton, or other 
applicable unit of measure for the purposes of determining premium and 
indemnity under the policy. The projected price is the price for each 
crop determined in accordance with the Commodity Exchange Price 
Provisions.\1\ The applicable projected price is used for each crop for 
which revenue protection is available, regardless of whether you elect 
to obtain revenue protection or yield protection for the crop.
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    \1\ The Commodity Exchange Price Provisions (CEPP) are used in 
conjunction with either the Common Crop Insurance Policy Basic 
Provisions or the Area Risk Protection Insurance Basic Provisions, 
along with Crop Provisions for the following crops: barley, canola 
or rapeseed, corn, cotton, grain sorghum, rice, soybeans, 
sunflowers, and wheat. CEPP specifies how and when the projected and 
harvest price components will be determined. Updated CEPP documents 
are on the RMA website at www.rma.usda.gov/Policy-and-Procedure/Insurance-Plans/Commodity-Exchange-Price-Provisions-CEPP.
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    The following are questions regarding prevented planting coverage 
on contracted crops that can elect the contract price option:
    1. Are pre-planting costs higher for contracted crops? If so, 
explain.
    2. Should prevented planting payments be based on the contract 
price or RMA's established price (price election or projected price)? 
Please explain why.
    3. If a contract price is used for prevented planting guarantee 
purposes, should there be any limitations as to when the contract is 
secured, specifically when a cause of loss is present that may prevent 
planting?

[[Page 62526]]

Other General Prevented Planting Questions

    1. Do you believe all producers will support paying higher premiums 
to cover the costs of expanded prevented planting benefits?
    2. Are pre-planting costs the same for all causes of loss? For 
example: Does a multi-year drought leading to failure of irrigation 
supply have the same pre-planting costs as unexpected flooding prior to 
planting?

Marcia Bunger,
Manager, Federal Crop Insurance Corporation; and Administrator, Risk 
Management Agency.
[FR Doc. 2023-19584 Filed 9-11-23; 8:45 am]
BILLING CODE 3410-08-P