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FCIC Interpretation of Procedure

Risk Management Agency Interpretation of FCIC Provisions:

Subject: Request dated December 3, 2020, to the Risk Management Agency for an interpretation of 

the 2017 Whole-Farm Revenue Protection (WFRP) Pilot Handbook regarding whether subparagraph 

49(4) allows an insured to establish an expected yield for a commodity based solely on the highest 

annual yield(s) of an underlying FCIC plan of insurance.

The relevent handbook procedure provided by the requestor is subparagraph 49(4):

49. Revised Farm Operation Report

(4) When a commodity is insured under WFRP and another FCIC plan of insurance, the 

acreage and expected yield reported on the Farm Operation Report should generally be the 

same as the acreage and yield for the commodity covered under the other FCIC plan of 

insurance. Any difference of acreage and yield between the two plans of insurance must be 

justified, reasonable, and documented. If any difference is not justified, reasonable, and 

documented, refer to section 15 in the WFRP policy.

Interpretation Submitted by Requestor(s)

The requestor’s interpretation of subparagraph 49(4) of the 2017 WFRP Pilot Handbook is that an 

insured cannot simply pick and choose among yields from particular years and/or units to justify a 

WFRP expected yield that exceeds the average Actual Production History (APH) approved yield for 

all units. Section 17(a)(1) of the WFRP Pilot Policy provides that the expected yield reported by the 

insured “should reflect what your farm can reasonably produce given changes in your farm operation, 

availability of irrigation water supply, or any other changes that may affect your farm in the insured 

year compared to previous years.” Consequently, a documented change in production practices may 

justify excluding, or placing less emphasis on, yields realized prior to the change in production 

practices. However, an expected yield for a commodity that is based on nothing more than the best 

years and/or units in the APH database is neither reasonable nor realistic.

The requester states paragraph 49(4) of the 2017 WFRP Pilot Handbook provide that a commodity’s 

expected WFRP yield should “generally be the same” as the approved yield under the other plan of 

insurance and further require that any difference between the two be “justified, reasonable, and 

documented.” The yield is utilized to establish guarantees and liability. The yield used to establish 

the guarantee and liability for purposes of the underlying FCIC policy is an approved APH yield 

established pursuant to federal regulations published at 7 C.F.R. Part 400, Subpart G. Per these 

regulations, the APH approved yield is not based on the single highest yield in the APH database(s) or 

an average of only higher yields from the APH database(s). Therefore, a WFRP expected yield based 

on nothing more than the highest single annual yield or combination of single annual higher yields 

shown in the APH database(s) is not “generally the same” as the approved APH yield under the other 

plan of insurance.

In addition, the requester continues that the mere presence of a yield in an APH database does not, in 

and of itself, constitute “justification, reasonableness, or documentation” of that yield. Neither AIPs 

nor agents are necessarily in possession of the actual production records needed to substantiate a yield 

found in an APH database. In many cases, such yields are based solely on the insured’s annual 

production report, certified by the insured but without any other documentation provided by the 

insured or verification by the agent or AIP.
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FCIC Interpretation of Procedure

The 2017 WFRP Handbook requires that any difference between the WFRP expected yield and the 

approved yield used in the other plan of insurance be “justified, reasonable, and documented.” Simply 

pointing to a single annual yield in a database is not an explanation of a difference between the WFRP 

expected yield and the APH approved yield. Without the provision of other documentation (by the 

deadlines established in the WFRP policy for providing such information) that justifies the difference 

between the yields with such difference being reasonable, a WFRP expected yield that differs from the 

APH approved yield cannot stand.

The requester provides as further evidence that the above are the appropriate interpretations of the 

referenced procedures, the FCIC incorporated explicit language to this effect as part of the handbooks 

effective for the 2018 and succeeding crop years. In subparagraph 48(2)(d) of the 2018 WFRP Pilot 

Handbook, the FCIC declared that, when a commodity is insured under another FCIC plan of 

insurance, the expected yield reported on the Farm Operation Report “should be compared to the 

approved yield(s) used to determine the guarantee under the other FCIC plan of insurance to determine 

if the yield reported by the insured is reasonable.” Additionally, the FCIC included a specific 

requirement in subparagraph 48(2)(e) of the updated handbook that expected yields “be realistic and 

consistent with available information and not be established using ... [t]he highest yield or 

combination of higher yields.”

In Exhibit 18 of the 2019 and 2020 WFRP Pilot Handbooks, the FCIC provided further clarification. 

According to those handbooks, when a commodity is insured under another FCIC plan of insurance 

and the insured “cannot provide detailed documentation based on their past production practices and 

any changes to the production practices during the insurance period the AIP agrees demonstrates a 

higher or lower expected yield,” the expected yield for that commodity will be the “average approved 

yield for all units on the farm’s policy offered under the Act that provides individual yield coverage.” 

Although not in effect during crop year 2017, these later-adopted procedures offer guidance as to the 

relationship between yields under other plans of insurance and those proposed as acceptable WFRP 

expected yields.

As expressed above, the requester submits that, under both the plain meaning of the terminology used 

in the 2017 WFRP Pilot Policy and Handbook and subsequent clarifications in the 2018 and 2019 

Handbooks, it is not appropriate for an insured to support an expected WFRP yield by simply showing 

the yield exists somewhere in an APH database of the underlying policy. Likewise, absent further 

justification or explanation, an insured cannot base the WFRP yield on only the best yields from 

certain years and/or units. In determining what is “reasonable, justified, and documented,” the AIP 

may consider detailed documentation that sets forth past production practices and any changes in 

production practices that would justify a disparity between the WFRP expected yield and the approved 

yield under the other plan of insurance. In the absence of such documentation, the fact a producer has 

obtained a certain yield only in particular units and/or years is not sufficient to establish that such a 

differential is reasonable and justified.

Federal Crop Insurance Corporation Determination

FCIC agrees with the requester’s interpretation that subparagraph 49(4) of the 2017 WFRP Pilot 

Handbook to mean that an insured cannot simply pick and choose among yields from particular years 

and/or units to justify a WFRP expected yield that exceeds the average Actual Production History 

(APH) approved yield for all units. FCIC interprets subparagraph 49(4) to mean the expected yield of 

a commodity should be the same as the approved yield of the underlying FCIC policy, if applicable,

unless an insured provides documentation justifying a difference in expected yield from the FCIC 
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FCIC Interpretation of Procedure

policy. FCIC agrees the existence of a higher yield(s) within the APH database, alone, is not 

considered justification that the WFRP expected yield should differ from the approved yield of the 

underlying FCIC plan of insurance.

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.