Enclosure Page 2

FCIC Interpretation of Procedure

Risk Management Agency Interpretation of FCIC Provisions:

Subject: Request dated September 25, 2020, to the Risk Management Agency for an interpretation 

regarding whether sections 49(a), (b), & (c) of the 2018 Whole-Farm Revenue Protection (WFRP) 

Pilot Policy and subparagraph 71(3)(a) & (b) of the 2018 WFRP Pilot Handbook allows for 

consideration of documentation that was not timely provided by an insured to the Approved Insurance 

Provider (AIP) per the deadlines in the policy.

The relevant policy provisions provided by the requestor are sections 49(a), (b), & (c):

49. Expanded Operations

(a) If you can show us your farm operation has physically expanded during the insurance 

period or lag year by adding production capacity to your farm operation (e.g., by adding 

land or an addition of a greenhouse), increasing use of existing production capacity (e.g., 

by double-cropping existing land or beginning production on high density orchards), or 

making physical alterations to existing production capacity (e.g., by adding irrigation to 

existing land or beginning production on certified organic acreage) we may at our

discretion approve your farm operation as an expanding operation (we will not consider 

crop rotation or planting a higher value commodity without changes to your existing 

production capacity to be physical expansion. For example; if you planted more of your

existing land to a high value commodity during the insurance period than in previous 

years, but did not otherwise change the production capacity of your farm operation, we 

will not approve your farm operation as an expanding operation). If so:

(1) You must provide verifiable records that we agree are sufficient to determine the 

amount of revenue an expansion can be expected to generate during the insurance 

period;

(2) We will determine the amount of revenue from the expansion approved for the 

purpose of determining your expanding operation factor; and

(3) If more than one expansion is applicable to your farm operation, we will determine 

the amount of revenue approved for each expansion separately.

(b) If your farm operation is expanding during the current insurance period you must provide 

all required records no later than the date you are required to submit your Revised Farm 

Operation Report.

(c) If an expansion of your farm operation occurred in your lag year:

(1) You must provide all required records by the later of the sales closing date or the first 

day of your insurance period; and

(2) We will determine the amount of revenue from the expansion based on information 

applicable to the insurance period. For example, the expected value for each 

commodity will be based on the price in the current year, regardless of the price of 

the commodity at the time the expansion occurred.
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FCIC Interpretation of Procedure

The relevant handbook procedures provided by the requestor are subparagraphs 71(3)(a) & (b):

71 Revenue

...

(3) Expanded operation average revenue will be calculated for all applicants/insureds when 

the insured provides documentation indicating their operation is physically expanding 

either by adding production capacity to their farm operation (i.e., by adding land or an

addition of a greenhouse), increasing the use of existing production capacity (e.g., by 

double-cropping existing land or beginning production on high density orchards), or 

making physical alterations to existing production capacity (e.g., by adding irrigation to 

existing land or beginning production on certified organic acreage) and is approved by the 

AIP. If so:

(a) The insured must provide verifiable records that the AIP agrees are sufficient to 

determine the amount of revenue an expansion can be expected to generate:

(i) For a farm operation that is expanding during the current insurance period, by 

the date on which the insured is required to submit their Revised Farm 

Operation; or

(ii) For a farm operation where the expansion occurred during the lag year, by the 

later of the SCD or the first days [sic] of their insurance period.

(b) The AIP will determine the amount of revenue from the expansion, using information 

applicable to the current insurance period (i.e., expected value), approved for the

purpose of determining the expanding operation factor;

Interpretation Submitted by Requestor(s)

The requestors’ interpretation is that an expanding operation may not be approved by the AIP unless, 

by the applicable deadline set forth in section 49(b) or (c) of the WFRP Policy, the insured provides 

verifiable documentation that: (1) supports a physical expansion of the farm operation; and (2) is 

sufficient to determine the amount of revenue the expansion can be expected to generate. For an 

expansion occurring during the current insurance period, the deadline for the submission of such 

documentation is the date on which the insured is required to submit its Revised Farm Operation 

Report (i.e., the Acreage Reporting Date set forth in the Special Provisions of Insurance). For an 

expansion that occurred during the lag year, the deadline for the submission of such documentation is 

the later of the sales closing date (as set forth in the Special Provisions of Insurance) or the first day of 

the insurance period (as defined in the WFRP Policy).

In the same vein, the AIP cannot approve an expanding operation based on documentation provided 

after the applicable deadline. That is, if an operation expands during the current insurance year but the 

insured fails to provide verifiable documentation to support the expansion by the date on which the 

Revised Farm Operation Report is due, an expanding operation based on the current year’s expansion 

cannot be approved. Likewise, if an expansion occurred during the lag year but the insured fails to 

provide verifiable documentation to support the same by the later of the sales closing date or the first 

day of the insurance period, an expanding operation based on the lag year expansion cannot be 

approved. Moreover, if an expanding operation is approved for the current year and/or lag year based 

on timely-provided documentation but, after the expiration of the deadline, the insured provides 

documentation to ostensibly support an additional expansion, an expanding operation based on the 
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FCIC Interpretation of Procedure

additional expansion cannot be approved. (None of this would preclude the AIP from revising the 

expanding operation factor based on a determination that information or documentation originally 

provided was not verifiable.)

Based on the above, documentation provided for the first time after a claim for indemnity has been 

submitted or during the dispute resolution process will not support an expanding operation and cannot 

be considered by the AIP in determining whether to approve an expanding operation or (if an 

expanding operation has been approved on the basis of timely documentation) an additional expanding 

operation. Where an insured initiates arbitration to challenge the AIP’s determinations regarding an 

expanding operation, the arbitrator must consider only such documentation and information that was 

timely provided by the insured to the AIP.

Federal Crop Insurance Corporation Determination

FCIC agrees with the requestors’ interpretation that an insured must provide verifiable documentation 

supporting their farm operation expansion by the dates specified in sections 49(b) and (c) of the 2018 

WFRP Pilot Policy and subparagraph 71(3)(a) of the 2018 WFRP Pilot Handbook. As stated, for a 

current year expansion, it is the date in which the Revised Farm Operation Report must be submitted 

and, for a lag year expansion, it is the later of the sales closing date or the insured’s first day of 

insurance. Documentation submitted after either date specified may not be accepted. Likewise, an 

expanding operation may not be considered for which verifiable documentation is not provided by the 

date specified.

In accordance with section 33(a)(1) of the WFRP Pilot Policy, this FCIC interpretation is generally 

applicable and binding in any mediation or arbitration. In accordance with section 33(a)(1), any 

appeal of this interpretation must be in accordance with 7 C.F.R. part 11.