Vol. 79 Monday, 

No. 240 December 15, 2014 

Part VI 

Department of Agriculture 

Farm Service Agency 

7 CFR Part 718 

Commodity Credit Corporation 

7 CFR Parts 1412, 1416, and 1437 

Noninsured Crop Disaster Assistance Program; Interim Rule 


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74562 Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Rules and Regulations 

DEPARTMENT OF AGRICULTURE 

Farm Service Agency 

7 CFR Part 718 

Commodity Credit Corporation 

7 CFR Parts 1412, 1416, and 1437 

RIN 0560–AI20 

Noninsured Crop Disaster Assistance 

Program 

AGENCY: Commodity Credit Corporation 

and Farm Service Agency, USDA. 

ACTION: Interim rule. 

SUMMARY: This rule implements changes 

to the Noninsured Crop Disaster 

Assistance Program (NAP) as required 

by the Agricultural Act of 2014 (the 

2014 Farm Bill), including changes to 

eligible crops, provisions governing 

eligibility of native sod acreage, 

additional coverage levels, and waivers 

of service fees and premium reductions 

for beginning, limited resource, and 

socially disadvantaged producers. This 

rule also clarifies requirements for 

eligible types and causes of loss and 

expands coverage for eligible mollusk 

and other aquaculture losses. This rule 

clarifies that the Farm Service Agency 

(FSA) may set separate market prices for 

organic crops and for direct to consumer 

sales. The changes are relatively minor 

and do not change the core purpose of 

NAP, which is to provide financial 

assistance to producers of non-insurable 

crops when low yield, loss of inventory, 

or prevented planting occurs due to a 

natural disaster. 

DATES: Effective Date: December 15, 

2014. 

Comment Date: We will consider 

comments that we receive by February 

13, 2015. 

ADDRESSES: We invite you to submit 

comments on this interim rule. In your 

comment, include the Regulation 

Identifier Number (RIN) and the 

volume, date, and page number of this 

issue of the Federal Register. You may 

submit comments by any of the 

following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

online instructions for submitting 

comments. 

• Mail, hand delivery, or courier: 

Steve Peterson, Production, 

Emergencies and Compliance Division, 

Farm Service Agency (FSA), United 

States Department of Agriculture 

(USDA), Stop 0517, 1400 Independence 

Avenue SW., Washington, DC 20250– 

0517. 

Comments will be available online at 

http://www.regulations.gov. In addition, 

comments will be available for public 

inspection at the above address during 

business hours from 8 a.m. to 5 p.m., 

Monday through Friday, except 

holidays. A copy of this interim rule is 

available through the FSA home page at 

http://www.fsa.usda.gov/. 

FOR FURTHER INFORMATION CONTACT: 

Steve Peterson, telephone: (202) 720– 

7641. Persons with disabilities who 

require alternative means for 

communication (Braille, large print, 

audiotape, etc.) should contact the 

USDA Target Center at (202) 720–2600 

(voice). 

SUPPLEMENTARY INFORMATION: 

Background 

FSA administers NAP for the 

Commodity Credit Corporation (CCC) as 

authorized by section 196 of the Federal 

Agriculture Improvement and Reform 

Act of 1996, as amended (7 U.S.C. 

7333). The NAP regulations are in 7 CFR 

part 1437. NAP is administered under 

the general supervision of the FSA 

Administrator (who also serves as the 

CCC Executive Vice-President) and is 

carried out by FSA State and county 

committees. NAP coverage is limited to 

crops other than livestock that are 

commercially produced for food and 

fiber, and to other specific crops for 

which catastrophic coverage under 

section 508(b) or additional coverage 

under sections 508(c) or 508(h) under 

the Federal Crop Insurance Act (7 U.S.C. 

1508(b), (c), and (h)) is not available. 

Qualifying losses to eligible NAP crops 

must be due to an eligible cause of loss 

as specified in 7 CFR part 1437, which 

includes damaging weather (drought, 

hurricane, freeze, etc.) or adverse 

natural occurrence (volcanic eruption, 

flood, etc.). NAP coverage is not 

automatic; producers must first apply 

for NAP coverage by an application 

closing date. That application is not 

filed unless it is accompanied by the 

service fee. The producer must file the 

application for coverage accompanied 

by the appropriate service fee (or service 

fee waiver) at their FSA county office in 

order to be eligible for NAP coverage. It 

is important producers understand that 

the law specifies that an application for 

coverage must be accompanied by the 

service fee and be filed no later than 30 

days before the beginning of any 

coverage period. Therefore, the NAP 

application for coverage and payment of 

the service fee must be completed before 

any coverage can begin or attach. In 

addition, in the event a loss claim is 

filed for which premium fees are due 

premium fees will be first deducted 

from the NAP payment earned. Losses 

occurring outside a coverage period are 

not eligible for NAP coverage. Producers 

who choose not to obtain NAP coverage 

for a crop or commodity are not eligible 

for NAP assistance on the crop or 

commodity. The core provisions of NAP 

are not changing with this rule. 

The 2014 Farm Bill (Pub. L. 113–79) 

made a number of changes to NAP. This 

rule amends the NAP regulations to be 

consistent with those changes made by 

the 2014 Farm Bill. The changes include 

revised NAP eligibility requirements for 

tilled native sod, added coverage 

eligibility for sweet sorghum and 

biomass sorghum, and modified 

coverage for industrial crops. Beginning, 

limited resource, and socially 

disadvantaged farmers and ranchers will 

be eligible for service fee waivers. New 

‘‘buy up’’ provisions will allow 

producers to buy additional NAP 

coverage for a premium, resulting in a 

risk management product that has 

equivalent coverage levels to some types 

of crop insurance offered by the Risk 

Management Agency (RMA). 

This rule makes discretionary changes 

to clarify eligible losses, and to redefine 

coverage for mollusks. Another 

discretionary change adds a requirement 

for NAP participants to notify FSA of 

losses within 72 hours for certain crops, 

including hand-harvested crops, which 

require a timely assessment of loss 

before the damaged crop deteriorates. 

This rule clarifies that FSA may set 

separate market prices for the same crop 

in a state based on farming practices 

(conventional or organic) or sales to 

different markets (wholesale or direct to 

consumer). 

NAP Assistance for 2012 Fruit Crop 

Losses 

The 2014 Farm Bill requires USDA to 

provide retroactive 2012 NAP assistance 

for losses to fruit crops grown on trees 

or bushes in counties that had 

Secretarial disaster designations due to 

frost or freeze. The eligibility provisions 

for that assistance were previously 

announced in a Notice of Funds 

Availability (79 FR 42493–42499) and 

are not addressed in this rule. 

Definitions Added or Revised in This 

Rule 

The changes required by the 2014 

Farm Bill and the clarifying 

discretionary changes require new 

definitions. This rule adds the following 

definitions to 7 CFR 1437.3, 

‘‘Definitions:’’ ‘‘acres devoted to the 

crop,’’ ‘‘agricultural experts,’’ 

‘‘application for coverage,’’ ‘‘bypass 

year,’’ ‘‘buffer zone,’’ ‘‘buy-up 

coverage,’’ ‘‘buy-up coverage yield,’’ 


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Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Rules and Regulations 74563 

‘‘certified organic acreage,’’ ‘‘certifying 

agent,’’ ‘‘conventional farming 

practice,’’ ‘‘feedstock,’’ ‘‘generally 

recognized,’’ ‘‘guarantee,’’ ‘‘maximum 

dollar value for coverage sought,’’ 

‘‘organic agricultural experts,’’ ‘‘organic 

crop,’’ ‘‘organic system plan,’’ ‘‘organic 

standards,’’ ‘‘prohibited substance,’’ 

‘‘short rotation woody crops,’’ and 

‘‘transitional acreage.’’ This rule revises 

the definitions for ‘‘application closing 

date,’’ ‘‘catastrophic coverage,’’ ‘‘crop 

year,’’ ‘‘good farming practices,’’ 

‘‘industrial crop,’’ and ‘‘native sod.’’ 

These new and revised terms are needed 

to clarify the new provisions of this 

rule. For example, the definitions for 

‘‘feedstock,’’ ‘‘industrial crop,’’ and 

‘‘short rotation woody crops’’ are 

needed to implement the changes 

required by the 2014 Farm Bill to add 

certain biomass feedstocks as eligible 

crops and to clarify the existing 

provisions for industrial crops. 

Definitions of ‘‘agricultural experts’’ and 

‘‘organic agricultural experts’’ are 

needed because those terms are used in 

the context of determining appropriate 

farming practices for specific crops and 

locations. The new provisions 

concerning specific market prices and 

practices for organic crops requires 

adding definitions for ‘‘buffer zone,’’ 

‘‘certified organic acreage,’’ ‘‘certifying 

agent,’’ ‘‘organic crop,’’ ‘‘organic system 

plan,’’ ‘‘organic standards,’’ ‘‘prohibited 

substance,’’ and ‘‘transitional acreage.’’ 

The new ‘‘buy-up coverage’’ required 

several additional terms to clarify the 

provision on premium calculations. 

NAP Eligibility for Crops and Practices 

Not Covered by Federal Crop Insurance 

This rule implements changes 

required by the 2014 Farm Bill with 

regard to NAP crop eligibility. Before 

the 2014 Farm Bill, NAP coverage was 

available on certain eligible crops for 

which a catastrophic risk protection 

plan of insurance (CAT) was 

unavailable from RMA. (A CAT-level of 

Federal crop insurance offered by RMA 

pays 55 percent of the price of the 

commodity established by RMA on crop 

losses in excess of 50 percent.) NAP was 

offered at CAT-levels only on those 

crops. Prior to the required changes 

made by the 2014 Farm Bill, in some 

cases, NAP could be made available to 

certain eligible crops that had other 

forms of insurance (additional coverage 

under sections 508(c) or 508(h)) 

available under the Federal Crop 

Insurance Act. The 2014 Farm Bill 

amends NAP crop eligibility. As 

amended, NAP is not available for crops 

for which CAT under section 508(b) or 

additional coverage under sections 

508(c) or 508(h) of the Federal Crop 

Insurance Act are available. Therefore, if 

either CAT or additional coverage 

(excluding pilot policies or plans of 

insurance) is available for a crop, NAP 

is not available. 

In addition to the mandatory change 

just described, FSA is making a 

discretionary clarification that NAP 

coverage may be made available for 

certain eligible crops for certain 

practices not covered under CAT or 

additional coverage under sections 

508(c) or (h). An example of this could 

be where CAT or additional coverage is 

available for irrigated corn grain crop 

acreage in a county but CAT and 

additional coverage is unavailable for 

non-irrigated corn crop acreage. In this 

example, if FSA determines that 

producing non-irrigated corn in the 

county is a good farming practice and 

that Federal crop insurance is 

unavailable because of a lack of 

actuarial data, NAP can be made 

available to non-irrigated corn acreage 

in the county. This discretionary 

decision to make NAP available to corn 

that is not irrigated will provide 

producers with risk management 

protection. Coverage under NAP under 

this exception will be limited to 

situations when the unavailability of 

CAT coverage is due to a lack of 

actuarial data and not due to an absence 

of good farming practices or due to 

hardiness zones. 

Native Sod 

This rule makes mandatory changes to 

the eligibility of producers who grow 

crops on native sod as required by 

section 11014 of the 2014 Farm Bill. 

Prior to this rule, the regulations 

allowed that the Governor of a State in 

the Prairie Pothole National Priority 

Area (specific counties within the States 

of Iowa, Minnesota, Montana, North 

Dakota, and South Dakota) could elect 

that producers newly tilling native sod 

(specifically, that was tilled for the 

production of an annual crop) would 

have been ineligible for Federal crop 

insurance and for NAP benefits during 

the first 5 crop years of planting that 

annual crop. However, the governors 

were not required to make that decision 

and the producers of tilled native sod 

would have continued to be eligible for 

both Federal crop insurance and NAP in 

those States, as such decision was 

discretionary. The 2014 Farm Bill 

requires a reduction of benefits for 

native sod acreage in Iowa, Minnesota, 

Montana, Nebraska, North Dakota, and 

South Dakota. There is no longer any 

discretion given to governors of those 

States. The reduced eligibility period is 

now the first four crop years of planting. 

Under the 2014 Farm Bill and this 

rule, for the first four years of planting 

on native sod acreage, the NAP service 

fee and premiums for crops planted on 

that acreage will be 200 percent of the 

amount calculated according to 7 CFR 

1437.6, although the premium cannot 

exceed the maximum premium amount 

of 5.25 percent times the payment 

limitation. The payment limit is 

$125,000, so the maximum premium 

amount is $6,562.50. In addition, the 

approved yield will be equal to 65 

percent of the T-yield for the crop. (The 

T-yield, as specified in 7 CFR 1437.3, is 

the estimated county yield that is used 

when a producer does not have 4 years 

of actual production history.) This rule 

also amends the definition of ‘‘native 

sod’’ to conform to the amended 

definition established by the 2014 Farm 

Bill to specify that it includes land that 

a producer cannot substantiate has ever 

been tilled as of February 7, 2014. The 

2014 Farm Bill does not change the de 

minimis acreage exemption, which 

applies to areas of 5 acres or less and is 

clarified in this rule to be consistent 

with the RMA provisions. 

Eligible NAP Crops 

Eligible NAP crops currently include 

commercial crops: Crops grown for food 

(excluding livestock and their byproducts); crops planted and grown for 

livestock consumption; crops grown for 

fiber (excluding trees grown for wood, 

paper, or pulp products); aquaculture 

species crops (including ornamental 

fish); floriculture; ornamental nursery; 

Christmas tree crops; turf grass sod; 

industrial crops; seed crops; and sea 

grass and sea oats. As required by the 

2014 Farm Bill, this rule adds sweet 

sorghum and biomass sorghum as 

eligible crops. 

The 2014 Farm Bill and this rule 

clarify that ‘‘industrial crops’’ include 

crops grown expressly for the purpose 

of producing a feedstock for renewable 

biofuel, renewable electricity, or 

biobased products. For the purpose of 

implementing this clarification to 

‘‘industrial crops,’’ this rule also adds a 

definition of ‘‘feedstock’’ in § 1437.3 to 

include only crops grown expressly for 

biofuel; residues and by-products of 

crops grown for a purpose other than 

biofuel are not eligible for NAP 

coverage. This rule excludes crops that 

are invasive or noxious plants from 

‘‘industrial crops’’ to be consistent with 

Executive Order 13112, which prohibits 

Federal agencies from funding or 

carrying out actions that ‘‘are likely to 

cause or promote the introduction or 

spread of invasive species in the United 

States.’’ The determination of whether a 

species is invasive or noxious varies by 


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74564 Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Rules and Regulations 

State, and FSA State committees will 

consult with the State technical 

committees for recommendations 

concerning the invasive and noxious 

status for otherwise eligible crops for 

the purposes of NAP. Information on 

ineligible species will be available in 

FSA county offices. 

Eligible Causes of Loss 

This rule specifies that in limited 

instances, insufficient chill hours is an 

eligible cause of loss by itself for 

specific crops and locations for which 

FSA has determined, in advance of a 

coverage period, based on its review of 

sufficient scientific evidence, that chill 

hours are required for the crop to 

produce and a lack of chill hours is 

detrimental to crop production 

irrespective of management. In cases 

where FSA makes the decision to 

include insufficient chill hours as an 

eligible cause of loss by itself for a crop 

and location, the crop and location and 

subsequent crop year coverage period 

for which the decision will apply will 

be specified in a list maintained by FSA 

and available at FSA county offices. If 

the crop and location is not on that list, 

then insufficient chill hours can only be 

an eligible cause of loss if the 

insufficient chill hours was related to 

damaging weather or an adverse natural 

occurrence (as specified in 

§ 1437.10(b)(1) or (b)(2)). This is 

consistent with current policy. 

FSA is also making discretionary 

changes to clarify and specify additional 

ineligible causes of loss under this rule. 

Causes of loss that were previously 

ineligible will continue to be ineligible 

under this rule, except for insufficient 

chill hours as discussed above. This rule 

also clarifies that ineligible causes of 

loss include: Failure to carry out a good 

irrigation practice; variance of 

temperatures from average normal 

temperatures that are not otherwise 

specified as eligible causes of loss; 

managerial decisions to attempt to grow 

or produce a crop in an area that is not 

suited for successful commercial 

production of that crop; for aquaculture, 

loss of inventory or missing noncontainerized inventory resulting from a 

managerial decision not to seed or raise 

the crop in containers, net pens, or wire 

baskets, on ropes, or using similar 

devices (except as provided for 

mollusks in this rule); failure to follow 

organic farming practices or 

contamination by application or drift of 

prohibited substances onto organic 

crops; weeds; and any cause of loss that 

results in damage that is not evident or 

would not have been evident during the 

NAP coverage period. The addition of 

these causes of loss is discretionary and 

is intended to provide clarification and 

consistency with the intent of NAP to 

provide coverage only for losses due to 

drought, flood, or other natural disaster, 

as determined by the Secretary, which 

has been interpreted to include 

damaging weather and adverse natural 

occurrences and related conditions. FSA 

is adding ropes as a device on which 

aquacultural species are raised because 

aquacultural species, including mussels 

and other aquatic organisms such as 

kelp, are seeded and raised on ropes. 

FSA is adding ropes as an example of 

a containment device. The Deputy 

Administrator for Farm Programs will 

determine on a species by species, area 

by area, and practice by practice basis 

whether ropes provide the necessary 

containment and protection. 

Buy-Up Coverage Levels and Premiums 

Prior to the passage of the 2014 Farm 

Bill, NAP provided only one level of 

coverage, equivalent to CAT risk 

protection available under section 

508(b) of the Federal Crop Insurance 

Act. This CAT-level protection covers 

losses due to low yield that are greater 

than 50 percent of expected production. 

As specified in current regulations in 7 

CFR part 1437, NAP payments for low 

yield are calculated based on the 

amount of loss that exceeds 50 percent 

of expected production at 55 percent of 

the average market price for the crop. 

This means that the maximum NAP 

payment for a total loss under CAT-level 

coverage is 27.5 percent (50 percent of 

55 percent) of the value of the covered 

crop or commodity. Under NAP, 

prevented planting was calculated not 

on a loss of expected yield, but based on 

acreage prevented from being planted 

based on total acreage intended to be 

planted in a crop year. A NAP 

prevented planting payment was issued 

based on the eligible approved 

prevented planted crop acreage in 

excess of 35 percent of total planted and 

prevented planted acreage times 55 

percent of the average market price of 

the crop. NAP CAT-level coverage is 

available for a service fee of $250 per 

crop per county, up to $750 per county, 

not to exceed $1,875 per producer—this 

rule does not change the service fee for 

CAT-level coverage. 

NAP will continue to offer CAT-level 

coverage for eligible crops. For the 2015 

through 2018 crop years, the 2014 Farm 

Bill authorizes additional levels of 

coverage equivalent to coverage under 

subsections (c) and (h) of section 508 of 

the Federal Crop Insurance Act. This 

means that producers may select buy-up 

coverage ranging from 50 to 65 percent 

of production, in 5 percent increments, 

and for 100 percent of the average 

market price. In other words, all buy-up 

coverage levels are at 100 percent of the 

average market price. If a producer 

elects buy-up coverage for a crop, 

prevented planting on that crop will be 

calculated as it was before but with 100 

percent of the average market price. 

Payment factors (for acres prevented 

from being planted, planted and not 

harvested, and planted and harvested) 

will continue to be applied as they were 

before. Crops and grasses intended for 

grazing are specifically excluded from 

buy-up coverage by the 2014 Farm Bill. 

To obtain buy-up coverage, producers 

are required to pay a premium, equal to 

5.25 percent times the level of coverage, 

in addition to the NAP service fee. The 

coverage levels and premium 

calculations are specified in the 2014 

Farm Bill and FSA has no discretion to 

offer different coverage levels or 

premiums. 

Premiums for additional coverage will 

be calculated as the product of the 

producer’s share of the NAP covered 

crop, times the number of eligible acres 

devoted to the crop, times the approved 

yield per acre, times the coverage level, 

times the average market price, times a 

5.25 percent premium fee. The 

maximum premium per producer, as 

specified in the 2014 Farm Bill, is 

$6,562.50 (the product of the applicable 

payment limitation of $125,000 times a 

5.25 percent premium fee for the 

maximum level of coverage). 

For example, if Farmer Smith has a 

100 percent share interest in 20 acres of 

apple trees intended for the fresh 

market, and the approved yield per acre 

for that crop is 450 bushels, and the 

average fresh market price is $10.00 per 

bushel, and the coverage level is 65 

percent, the premium will be 1.000 (100 

percent share) times 20 (acres) times 450 

(bushels per acre) times 0.65 (coverage 

level of 65 percent) times $10.00 (price 

per bushel) times 0.0525 (premium 

factor), which equals $3,071.25. If 

Farmer Smith suffers a 100 percent loss, 

the payment would be calculated as 

1.000 (100 percent share) times 20 

(acres) times 450 (bushels per acre) 

times 0.65 (coverage level) minus 0 

bushels (actual production) times 

$10.00 (price per bushel), which equals 

a NAP payment of $58,500. 

Buy-up coverage will also be available 

for value loss crops. NAP payments for 

value loss crops are based on the field 

market value of the crop before the 

disaster rather than on an approved 

yield. Examples of value loss crops 

include aquaculture, floriculture and 

ornamental nursery. The value of a crop 

before a potential disaster will be 

unknown at the time of premium 

calculation due to variations in 


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Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Rules and Regulations 74565 

inventory and field value throughout 

the crop year. As a result, premiums for 

value loss crop will be based on the 

maximum dollar value for which a 

producer requests coverage, subject to 

applicable payment limitation, times the 

5.25 percent premium. In the event of a 

loss, the NAP payment will be 

calculated using the lesser of the field 

market value of the crop before the 

disaster or the maximum dollar value 

for which the producer requested 

coverage at the time of application. 

The regulations discuss application 

closing dates. Because 2015 application 

closing dates for some crops have 

already passed before FSA published 

this rule and made buy-up coverage 

available, with this rule producers may 

still nonetheless obtain buy-up coverage 

for those crops for the 2015 crop year by 

submitting an application for coverage 

requesting buy-up coverage and paying 

the service fee, even if the producer did 

not previously obtain CAT-level 

coverage and pay the service fee for the 

crop, by January 14, 2015. FSA needed 

time to develop the regulatory changes 

required to implement the new 

provisions as required by the 2014 Farm 

Bill, including completing additional 

necessary work, such as updating 

handbooks and training staff. Therefore, 

it seemed reasonable to provide this 

retroactive option because producers 

did not know what the changes or 

available options would be when they 

typically would have been required to 

purchase NAP coverage. In addition, if 

there are application closing dates near 

the publication of this rule, those 

producers will also be given 30 days 

from the date of publication of this rule 

to submit an application for coverage to 

ensure they are able to make their 

decision to purchase NAP coverage 

based on consideration of these 

regulatory changes. 

CAT-level coverage for the 2015 crop 

year was available prior to the 

application closing date prior to this 

rule; therefore, the deadline to apply for 

CAT-level coverage is not extended. 

Coverage Periods 

This rule clarifies that, regardless of 

when the coverage period generally 

begins for any crop, a producer’s own 

individual coverage for a crop that must 

fall within the general coverage period 

can start no earlier than 30 calendar 

days after the producer’s application for 

coverage is filed, except as discussed 

below. FSA is making this change to be 

consistent with the requirements of 7 

U.S.C. 7333. 

This rule provides an exception for 

the 2015 crop year for crops with 

application closing dates that have 

passed prior to publication of this rule. 

For those crops, if a producer did not 

apply for NAP coverage prior to the 

application closing date but files an 

application for coverage and elects buyup coverage by January 14, 2015, the 

coverage period will begin as specified 

for the crop in 7 CFR 1437.6, without 

regard to the date the application for 

coverage is filed. Under this exception, 

producers must elect buy-up coverage, 

but such coverage can be for any level 

available under such buy-up coverage. 

Producers who previously purchased 

CAT-level coverage prior to the 

application closing date for those crops 

may also elect buy-up coverage until 

January 14, 2015. As noted above, if 

there are application closing dates near 

the publication of this rule, those 

producers will also be given 30 days 

following the publication of this rule to 

ensure they have the same period in 

which to make a decision to purchase 

NAP coverage based on consideration of 

these regulatory changes. 

Service Fee Waiver and Premium 

Reduction 

Prior to this rule, the NAP regulations 

waived the service fee for producers 

who met the definition of ‘‘limited 

resource farmer’’ in 7 CFR 457.8. The 

2014 Farm Bill continues to waive 

service fees for limited resource farmers 

and ranchers and now waives service 

fees for beginning and socially 

disadvantaged farmers and ranchers as 

well. In addition to the service fee 

waiver, beginning, limited resource, and 

socially disadvantaged farmers and 

ranchers who elect buy-up coverage are 

also eligible for a 50 percent premium 

reduction. For the purpose of this rule, 

‘‘beginning,’’ ‘‘limited resource,’’ and 

‘‘socially disadvantaged farmer and 

rancher’’ are defined in 7 CFR part 718. 

To be eligible for the service fee waiver 

or premium reduction, persons or legal 

entities must provide a certification of 

their status as beginning, limited 

resource, or socially disadvantaged at 

the time they file an application for 

coverage, if they have not already filed 

that certification with FSA. 

For the 2014 crop year, the expanded 

service fee waiver will apply 

retroactively. In the extension of 

authorization document published on 

March 28, 2014 (79 FR 17388–17390), 

FSA announced that beginning and 

socially disadvantaged farmers and 

ranchers who paid the service fee for the 

2014 crop year before enactment of the 

2014 Farm Bill would be refunded the 

service fee. 

Notice of Loss and Completion of 

Harvest 

This rule clarifies requirements for 

filing a notice of loss. As specified in 

the NAP regulations, a written notice of 

loss must be filed for prevented planting 

claims within 15 calendar days after the 

final planting date, or for yield claims 

or value loss, by the earlier of 15 

calendar days after the disaster 

occurrence or date of loss or damage to 

the crop first becomes apparent, or the 

normal harvest date. These 

requirements for a written notice of loss 

are not changing with this rule. 

In addition to the written notice of 

loss, FSA is making a discretionary 

change to add a requirement to provide 

notice to the administrative county 

office within 72 hours for certain crops, 

including hand-harvested crops and 

other crops as determined by FSA, if 

earlier notice is needed in order to 

conduct an accurate loss assessment of 

the crop because of the rate at which 

certain crops (these crops ordinarily 

include hand harvested fruit and 

vegetable crops that can rapidly 

deteriorate and confound loss 

adjustment work) decompose in the 

field after a loss event and the reduced 

ability to discern if alleged damage 

occurred due to an eligible cause of loss 

as opposed to other factors. For 

example, if a freeze damages a crop of 

tomatoes, the participant is required to 

provide notice to FSA of damage or loss 

to the tomatoes within 72 hours of when 

damage is first apparent to the NAP 

covered producer. The earlier notice, 

which is not required to be in writing, 

provides FSA an opportunity to assess 

the loss before the damaged crop 

deteriorates and while the amount of 

loss attributable to a specific eligible 

cause of loss is still apparent. This 

provision is consistent with RMA’s 

notification requirements for crop 

insurance. 

Producers of hand-harvested crops, 

under the prior rule, were required to 

provide FSA with notification that 

harvest is complete within 15 days of 

when damage or loss was first apparent. 

This rule changes that deadline from 15 

days to within 72 hours. This 

discretionary change allows FSA to 

make a more accurate appraisal before 

the crop deteriorates or before evidence 

of the crop suffering a loss due to an 

eligible of loss diminishes or is lost in 

order to differentiate between legitimate 

losses versus production left in a field 

because of quality or unmarketable 

because of the lack of market. 


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74566 Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Rules and Regulations 

Late-Planted Acreage 

This rule makes discretionary changes 

to the late planting provisions in 7 CFR 

1437.103 to add an exception to the rule 

that crops having multiple planting 

periods and value loss crops are not 

eligible for reduced coverage for late 

planting. The exception added by this 

rule makes reduced NAP coverage 

available for the last planting period of 

multiple planted crops and multipleplanting periods having a defined gap of 

60 days or more between the harvest 

date of the previous planting period and 

beginning of the immediately following 

planting period. 

Average Market Prices 

This rule makes discretionary changes 

to clarify how average market prices are 

established as specified in 7 CFR 

1437.12. NAP payments are calculated 

using average market prices, which are 

determined by FSA. Prior to this rule, 

an average market price was established 

for each crop and, if practicable, for 

each intended use of a crop on a 

harvested basis without the inclusion of 

transportation, storage, processing, 

marketing, or other post-harvest 

expenses. Prices should reflect the 

average market price actually received 

by producers, which may vary by state. 

The average market price has been 

typically established on a state-by-state 

basis, meaning that all NAP payments 

for a crop and, if applicable, for an 

intended use within a state would be 

based on the same average market price. 

Average market prices are based on the 

best available data (including National 

Agricultural Statistics Service (NASS) 

data, National Institute of Food and 

Agriculture (NIFA) data, knowledge of 

local markets, etc.) and are comparable 

(though not required to be equal) to 

established Federal Crop Insurance 

Corporation (FCIC) prices. In this rule, 

FSA details how it will determine, 

average market prices of eligible NAP 

crops for subsequent crop years. 

This rule clarifies that FSA may 

establish separate prices within a state 

to reflect the different prices producers 

receive based on differences due to 

different farming practices 

(conventional or organic) and sales to 

different markets (wholesale, direct 

sales to consumers at farm stands or 

farmer’s markets, etc.). These changes to 

average market price provisions do not 

extend NAP coverage to additional 

producers or crops; changes made by 

this rule will allow an eligible producer 

to obtain NAP coverage for eligible 

crops grown with organic farming 

practices or intended to be marketed 

directly to consumers. This rule simply 

clarifies that when sufficient data is 

available, FSA may establish separate 

average market prices within a State that 

more closely reflect the prices obtained 

by producers based on the specific 

situations. 

To be eligible to receive payment 

based on an organic price, producers 

must report their organic acreage of the 

crop. Producers reporting organic 

acreage of a crop must be certified or 

exempt from certification according to 

the National Organic Program 

regulations at 7 CFR part 205 and must 

provide a copy of their organic system 

plan to FSA. Yields will be adjusted as 

needed to reflect yields for crops using 

organic production methods. This rule 

also adds definitions related to organic 

acreage and production in order to 

implement these changes. 

All of the definitions in this rule 

related to organic production and 

certification are consistent with 

definitions used by AMS and with the 

basic provisions for Federal crop 

insurance used by RMA. Specifically, 

the definitions for ‘‘buffer zone,’’ 

‘‘certified organic acreage,’’ ‘‘certifying 

agent,’’ conventional farming practice,’’ 

the specification of organic farming 

practices within the definition for ‘‘good 

farming practices,’’ ‘‘organic agricultural 

experts,’’ ‘‘organic crop,’’ ‘‘organic 

farming practice,’’ ‘‘organic standards,’’ 

‘‘prohibited substance,’’ and 

‘‘transitional acreage’’ are identical to or 

consistent with those terms as used in 

the Federal crop insurance basic 

provisions. The terms ‘‘certified organic 

acreage,’’ ‘‘good farming practices,’’ 

‘‘organic crop,’’ ‘‘organic farming 

practice,’’ ‘‘organic system plan,’’ 

‘‘organic standards,’’ and ‘‘prohibited 

substance’’ reference the AMS National 

Organic Program regulations, the 

Organic Foods Production Act of 1990 

(7 U.S.C. 6501–6523), or both. 

When prices are established by 

intended use, producers with buy-up 

coverage, but without sufficient 

evidence of the historical intended and 

actual use or market as reflected in 

production records and final 

disposition, and those with CAT-level 

coverage will have NAP payments 

calculated using the average market 

price of the predominant final use of the 

crop. If a producer elects buy-up 

coverage and provides sufficient 

evidence of the intended use 

percentages of the crop in prior crop 

years, the NAP payment will be 

calculated based on those percentages 

instead of using only the price from the 

predominant final use. Premiums for 

producers who elect buy-up coverage 

will be based on the intended use of the 

crop based on the acreage report. 

If different prices are established for 

crops intended for different markets of 

an intended use of a crop, such as 

wholesale or directly to consumers 

through farmers markets or farm stands, 

and where FSA has established average 

market prices based on different 

markets, producers who elect buy-up 

coverage and provide acceptable 

documentation may elect NAP 

assistance calculated based on those 

prices. 

Approved Yields 

Prior to this rule, when a producer 

reported acreage for a crop year, but 

failed to certify a report of production, 

regardless of whether that producer 

obtained NAP coverage for that year, an 

assigned yield or zero-credited yield 

was used in the producer’s actual 

production history for calculation of 

that producer’s approved yield in later 

years. This rule defines ‘‘bypass year’’ to 

include years when the producer did 

not obtain coverage for the crop and 

does not file a report of acreage or 

production. The rule makes a 

discretionary change to stop using 

assigned yields and zero-credited yields 

for bypass years in the calculation of a 

producer’s approved yield. This change 

is intended to encourage increased 

participation in NAP by preventing an 

adverse impact on producers who 

choose not to report production during 

years when they do not have NAP 

coverage but choose to elect NAP 

coverage in later years. The policy 

regarding assigned yields and zerocredited yields for producers who have 

NAP coverage, but do not report 

production, is not changing under this 

rule. 

This rule allows replacement of 

assigned yields and zero-credited yields 

in a producer’s actual production 

history (APH) for the 1995 through 2014 

crop years with yields equal to the 

higher of 65 percent of the current crop 

year T-yield (as defined 7 CFR 1437.3) 

or the missing crop year’s actual yield. 

As with the change discussed above for 

bypass years, this discretionary change 

is intended to encourage increased 

participation in NAP and to avoid 

penalizing producers who did not report 

production in a year in which they did 

not have NAP coverage. 

Adjustment of Production for Quality 

Losses 

To provide improved risk protection 

that addresses losses in a similar 

manner to some past ad hoc disaster 

programs, the NAP payment calculation 

for yield losses will allow an adjustment 

of net production due to quality losses 

for crops and locations approved by 


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FSA. This change allows NAP to 

provide risk protection for quality losses 

in limited situations when a specific 

crop in a given location typically does 

not suffer yield losses large enough to 

result in NAP payments, but does suffer 

significant quality losses due to eligible 

causes of loss. The requests for quality 

adjustments for crops and locations may 

be processed through any of the FSA 

State offices. The crops and locations 

eligible for quality adjustments will be 

determined by the Deputy 

Administrator for Farm Programs in 

advance of the coverage period, only if 

supporting documentation of industry 

accepted standards for quality discounts 

are available. Net production will be 

adjusted only if buy-up coverage is 

elected and the covered producer elects 

to have the quality loss option; no 

adjustment will be made if a producer 

elects only CAT-level coverage for a 

crop. Evidence to support making a 

quality loss adjustment must be from 

records acceptable to FSA and are 

subject to disapproval if FSA is not 

satisfied that the alleged loss of quality 

occurred as a result of an eligible cause 

of loss in the coverage period. If a 

producer opts for quality loss 

adjustment and an adjustment to the 

unit’s net production is made, FSA will 

enter the adjusted net production into 

the producer’s actual production history 

database for the loss year. In other 

words, the lower actual yield that 

results after adjustment for quality will 

be used to compute future year 

approved yields. 

Aquaculture Coverage 

NAP regulations required that for 

aquaculture losses to be eligible for 

payment, the aquaculture species must 

be kept in a controlled environment and 

that such species must be planted or 

seeded in containers, net pens, wire 

baskets, or similar devices designed for 

protection and containment. This rule 

makes discretionary changes for 

aquaculture producers who raise 

aquacultural species on a rope and 

certain mollusk producers. 

As noted above, under changes made 

by this rule for eligible causes of loss, 

NAP coverage will be available for 

aquaculture producers who plant or 

seed aquatic species in or on certain 

specifically named devices, which now 

includes ropes, when it is determined 

by the Deputy Administrator for Farm 

Programs that the ropes provide the 

necessary containment and protection 

for the species, area, and practice. 

Under changes made by this rule, 

with respect to mollusks not planted or 

seeded in devices such as containers, 

net pens, or wire baskets, on ropes, or 

using similar devices designed for 

protection and containment, NAP 

coverage for such mollusks will only 

cover losses caused by a named tropical 

storm, typhoon, or hurricane. This 

change is intended to encourage 

additional NAP participation by 

mollusk producers who do not use 

containers or similar devices, while 

maintaining integrity in NAP by 

covering those producers’ losses only 

when their losses are caused by certain 

types of natural disasters. Mollusk 

producers who continue to seed or raise 

mollusks in devices such as containers, 

net pens, or wire baskets, on ropes, or 

using similar devices designed for 

protection and containment as well as 

meet all other required conditions 

remain eligible for all NAP qualifying 

causes of loss for such value loss crops. 

For these mollusk producers, the 

principal elements of the rule are not 

changing. 

Certain oyster producers and other 

stakeholders requested this change 

because the use of containers or similar 

devices for the protection and 

containment of the species is 

inconsistent with certain customary or 

ordinary mollusk industry production 

methods, particularly for oyster 

production on the U.S. East Coast. 

USDA data from the 2005 Census of 

Aquaculture confirms that about 70 

percent of mollusk producers use the 

‘‘on bottom’’ production method, 

without containers or pens. In 2011 and 

2012, hurricanes caused significant 

losses for mollusk aquaculture crops. 

Mollusk producers who had NAP 

coverage in those years and met the 

current requirements were compensated 

for their losses, but the majority of 

mollusk producers did not have NAP 

coverage and if they had, they would 

not have had any losses that would have 

met the NAP eligibility requirements at 

that time. (See the Cost Benefit Analysis 

Summary section for details about the 

impacts.) 

The purpose of NAP is to provide risk 

management for agricultural operations 

as they normally or ordinarily exist and 

operate. Removing the requirement to 

use containers or similar devices 

benefits mollusk producers by offering 

NAP coverage for their operations, 

independent of how those producers 

choose to manage their production. FSA 

is therefore amending the regulations to 

cover eligible losses of mollusks that are 

not grown in containers, net pens, or 

wire baskets, on ropes, or using similar 

devices. This change permits mollusk 

producers who accept the risks of 

raising mollusks without containers, net 

pens, ropes, wire baskets, or similar 

devices to be eligible for NAP coverage; 

however, under such coverage, eligible 

losses can only be caused by a named 

tropical storm, typhoon, or hurricane. It 

would likely benefit primarily U.S. East 

Coast oyster producers, as well as 

producers of other mollusk aquaculture 

crops such as clams and mussels. 

Mollusk producers who plant or seed 

mollusks in containers, net pens, or 

wire baskets, on ropes or using similar 

devices designed for protection and 

containment and meet all other required 

conditions remain eligible for NAP 

coverage for all NAP causes of loss. For 

these mollusk producers, the principal 

elements of the rule are not changing. 

As specified in 7 U.S.C. 7333, NAP is 

authorized to provide benefits only for 

losses that are the result of natural 

disaster; 7 U.S.C. 7333 also specifies 

that NAP cannot cover losses due to 

‘‘the failure of the producer to follow 

good farming practices.’’ FSA has 

determined that a producer’s decision to 

not use containers, net pens, ropes, wire 

baskets, or similar devices is not an 

example of a poor farming practice or an 

example of something that is not a good 

farming practice. However, given that 

NAP can only pay for losses stemming 

from an eligible cause of loss (and not 

a decision not to use containers, net 

pens, ropes, wire baskets, or similar 

devices), this rule specifies that for 

mollusks not grown in containers, net 

pens, or wire baskets, on ropes, or using 

similar devices, only losses caused by 

named hurricanes, typhoons, or tropical 

storms would be eligible for payment. 

NAP coverage does not cover a loss of 

mollusks if the producer does not to use 

containers to protect the mollusks from 

loss caused by other types of adverse 

weather, tidal surges, or predators, or 

other similar events or causes. Missing 

mollusk inventory reported by a 

producer that does not use containers, 

net pens, ropes, wire baskets, or similar 

devices will not be eligible for a NAP 

payment unless FSA can determine that 

the loss of inventory was a direct result 

of a named hurricane, typhoon, or 

tropical storm. All other aquaculture 

species are still subject to the 

requirement to use protective devices. 

Additionally, as previously mentioned, 

mollusk producers that choose to grow 

mollusks in an environment that 

consists of containers, net pens, ropes, 

wire baskets, or similar devices 

designed for protection and 

containment remain eligible for all NAP 

qualifying losses. 

Aquaculture species are considered a 

‘‘value loss’’ crop under NAP, which 

means that NAP coverage is based on 

the market value of the inventory before 

the loss event, rather than an expected 

yield. This rule does not change NAP 


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regulations regarding compensation of 

eligible aquaculture losses using a value 

loss calculation or the documentation 

that must be provided to prove an 

eligible loss. Mollusk producers, 

whether they choose to keep their 

mollusks in controlled environments or 

not, are still required to have control of 

the waterbed where the mollusks are 

grown, as specified in the NAP 

regulations, meaning that they must 

own or lease the waterbed. The change 

being made by this rule merely 

eliminates the requirement that a NAPcovered participant seed or raise the 

eligible mollusk inventory in containers 

or similar devices to be eligible for NAP 

coverage. It will not change any of the 

requirements for other aquaculture 

species. 

Forage 

This rule makes discretionary changes 

to methods used by FSA to establish 

losses for grazed acreage. Prior to being 

amended by this rule, grazed acreage 

losses have been established using two 

methods: 

(1) Based on the percentages of loss of 

similar mechanically-harvested forage 

acreage on the farm or on similar farms 

in the area when approved yields have 

been calculated to determine loss; or 

(2) When there is no similar 

mechanically-harvested forage acreage 

on the farm or similar farms in the area, 

on the collective percentage of loss as 

determined by FSA for the geographical 

region after consideration of at least two 

independent assessments of grazed 

forage acreage conditions. 

This rule specifies additional methods 

that FSA may use to establish a 

collective percentage of loss based on 

independent assessments of grazed 

forage acreage conditions; the U. S. 

Drought Monitor; information obtained 

from loss adjusters with sufficient forage 

knowledge to provide grazing loss 

assessments; data from approved areas 

where clippings are obtained on a 

regular basis to compare with expected 

levels of production in a geographical 

region; and information from Natural 

Resources Conservation Service 

technical service providers having 

specialized knowledge. Additionally, 

because the 2014 Farm Bill did not 

authorize buy-up coverage for grazed 

forage, this rule clarifies how FSA will 

treat forage crop acreage intended for 

mechanical harvest or grazing when 

such acreage is actually put to another 

use for producers who either select 

catastrophic coverage or buy-up 

coverage. The rule specifies that forage 

acreage reported to FSA as intended to 

be mechanically harvested, but which is 

instead, subsequently grazed, will be 

considered for crop definition purposes 

as mechanically harvested. The rule also 

amends how FSA will determine loss 

for acreage intended to be grazed, 

including in some cases acreage 

intended to be mechanically harvested, 

but instead is subsequently grazed for 

producers with catastrophic coverage. 

The rule also removes a prior 

requirement that producers show a 

history of forage production in order to 

obtain coverage. 

Payment and Income Limitation 

Section 1605 of the 2014 Farm Bill 

establishes payment and income 

limitations that apply to 2014 and 

subsequent crop, program, or fiscal year 

benefits. FSA previously implemented 

these payment and income limitations 

through the final rule published on 

April 14 (79 FR 21086–21118). The 

payment and income limitations are 

specified in 7 CFR part 1400. 

NAP assistance is limited to $125,000 

per person or legal entity, directly or 

indirectly. Attribution of payments 

under 7 CFR part 1400 applies in 

administering the payment limitation. 

The average AGI limit for most FSA and 

CCC programs, including NAP, is 

$900,000. The $900,000 limit is for total 

average AGI, as opposed to the prior 

multiple limits for farm and non-farm 

income, and the separate limit for 

conservation programs. 

Consistency With Basic Provisions 

When a producer signs up for NAP 

coverage, they receive a copy of the 

‘‘basic provisions,’’ which is a 

document that explains in detail what is 

covered by NAP and how to file a claim. 

As part of the application process, the 

producer acknowledges that they have 

received and agree to the ‘‘basic 

provisions.’’ This rule amends 7 CFR 

1437.2, ‘‘Administration,’’ to specify 

that when the NAP basic provisions are 

less restrictive than regulations that 

were in effect at the time of signup 

(such as the situation that may occur in 

2015 where the NAP basic provisions 

were provided to participants prior to 

amendment and publication of this rule 

for the 2015 crop year), the Deputy 

Administrator may determine that the 

less restrictive provision applies. This 

amendment is needed to prevent 

adverse results for participants that 

relied on the less restrictive basic 

provisions provided by FSA when they 

applied for NAP coverage. This rule also 

amends 7 CFR 1437.3, ‘‘Definitions,’’ to 

add a definition of ‘‘basic provisions.’’ 

Miscellaneous Conforming and 

Editorial Changes 

In addition to the changes required by 

the 2014 Farm Bill and the substantive 

discretionary changes discussed above, 

this rule makes a number of nonsubstantive changes to make the 

regulations clear and consistent. 

Because this rule expands waivers to 

beginning farmers and ranchers and that 

term is used for several FSA programs, 

this rule defines the term in 7 CFR part 

718 and makes a conforming change to 

remove the term and definition from the 

Emergency Assistance for Livestock, 

Honeybees, and Farm-Raised Fish 

Program (ELAP) regulations in 7 CFR 

part 1416. The definition is revised 

slightly to match the definition on the 

form FSA presents to persons or legal 

entities who claim they are beginning 

farmers or ranchers and is consistent 

with what FSA has determined is a 

beginning farmer or rancher. FSA is 

making this discretionary change to 

provide consistency in the use of the 

term among FSA programs. 

Because this program requires a few 

terms that are also needed for other FSA 

and CCC programs, this rule adds those 

terms to 7 CFR part 718 and removes 

them from parts 1416 and 1412. These 

terms are ‘‘planted and prevented 

planted,’’ ‘‘controlled environment,’’ 

and ‘‘United States.’’ This rule adds the 

terms ‘‘intended use’’ to part 718, 

because it is needed for both NAP and 

other FSA programs. It removes the term 

‘‘State’’ from 718, because it is 

redundant with the definition of 

‘‘United States.’’ 

This rule replaces ‘‘CCC’’ with ‘‘FSA’’ 

where relevant in 7 CFR part 1437 to 

clarify that NAP is administered by FSA 

for CCC. It also amends the provisions 

regarding requests to waive or modify 

deadlines or other provisions, except 

where specified by law, to clarify that 

such requests may be considered at the 

discretion of the Deputy Administrator 

for Farm Programs (‘‘Deputy 

Administrator’’). Participants do not 

have a right to a decision on a request 

for waiver or on such a request, and a 

refusal to consider a waiver or such a 

request is not a failure to act under any 

law or regulation. 

Notice and Comment 

In general, the Administrative 

Procedure Act (APA, 5 U.S.C. 553) 

requires that a notice of proposed 

rulemaking be published in the Federal 

Register and interested persons be given 

an opportunity to participate in the 

rulemaking through submission of 

written data, views, or arguments with 

or without opportunity for oral 


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presentation, except when the rule 

involves a matter relating to public 

property, loans, grants, benefits, or 

contracts. Although FSA could use the 

APA exemption and publish this rule as 

a final rule without the opportunity for 

public comment, FSA is implementing 

the regulatory changes through an 

interim rule to provide an opportunity 

for public comment while also 

implementing the rule without 

unnecessary delay to benefit FSA 

customers with the additional flexibility 

provided by the changes. 

Executive Orders 12866 and 13563 

Executive Order 12866, ‘‘Regulatory 

Planning and Review,’’ and Executive 

Order 13563, ‘‘Improving Regulation 

and Regulatory Review,’’ direct agencies 

to assess all costs and benefits of 

available regulatory alternatives and, if 

regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. 

The Office of Management and Budget 

(OMB) designated this rule as 

significant under Executive Order 

12866, ‘‘Regulatory Planning and 

Review,’’ and therefore, OMB has 

reviewed this rule. The costs and 

benefits of this rule are summarized 

below. The full cost benefit analysis is 

available on regulations.gov. 

Clarity of the Regulation 

Executive Order 12866, as 

supplemented by Executive Order 

13563, requires each agency to write all 

rules in plain language. In addition to 

your substantive comments on this rule, 

we invite your comments on how to 

make the rule easier to understand. For 

example: 

• Are the requirements in the rule 

clearly stated? Are the scope and intent 

of the rule clear? 

• Does the rule contain technical 

language or jargon that is not clear? 

• Is the material logically organized? 

• Would changing the grouping or 

order of sections or adding headings 

make the rule easier to understand? 

• Could we improve clarity by adding 

tables, lists, or diagrams? 

• Would more, but shorter, sections 

be better? Are there specific sections 

that are too long or confusing? 

• What else could we do to make the 

rule easier to understand? 

Cost Benefit Analysis Summary 

The changes to the NAP regulations 

are expected to have a net economic 

impact of $39.4 million per year. This 

includes $39.4 million for the ‘‘buy up’’ 

coverage provisions required by the 

2014 Farm Bill, $250,000 for changes to 

mollusk coverage, $45,000 for 

aquaculture on ropes coverage, and $1.4 

million for organic price coverage. As 

noted below, the net impact of $39.4 

million includes a partial offset due to 

the $9.8 million increase in annual 

premium and fee revenue. 

The 2014 Farm Bill NAP ‘‘buy up’’ 

coverage changes are estimated to have 

a net economic cost of $39.4 million 

annually. This number is based on 

estimating the three largest effects of the 

new ‘‘buy-up’’ provisions: The shift of 

existing CAT level NAP participants to 

buy-up NAP coverage levels, an increase 

in new NAP participants (not formerly 

in CAT) who purchase buy-up NAP 

coverage, and the expected NAP 

payment increases due to the greater 

liability associated with added buy-up 

coverage levels for both existing and 

new participants. (The greater liability 

effect factors in the payment rate 

increase from 55 percent to 100 percent 

of the market value of eligible lost 

production.) These three effects together 

are expected to account for nearly $49.2 

million in additional payments to 

producers annually. However, these 

additional payments are expected to be 

partially offset by a $9.8 million 

increase in annual premium and fee 

revenue, for a net impact of $39.4 

million annually. 

The impact on costs from fee waivers 

for socially disadvantaged and 

beginning farmers is expected to be 

negligible. This is because the persons 

who are eligible for the waivers added 

by the 2014 Farm Bill for socially 

disadvantaged farmers and ranchers, 

(SDA), and beginning farmers and 

ranchers were mostly already eligible 

for the waivers for limited resource 

farmers and ranchers that were in place 

prior to this rule. The participation of 

these groups is expected to increase in 

proportion with the overall rate of 44.3 

percent increase in new participation 

estimated for buy-up coverage. 

Because the total number of eligible 

mollusk producers in the United States 

is relatively small, fewer than 800 

producers, the total impact of the 

changes in eligibility for mollusks is 

expected to be relatively small, around 

$250,000 in additional outlays per year. 

The aquaculture grown on ropes cost 

impact is even smaller, at an estimated 

$45,000 in additional outlays per year. 

The coverage for organic prices is 

estimated at $1.4 million per year, based 

on the assumption that the organic 

crops for which RMA has enough price 

data to provide an organic price election 

in at least one state, but limited enough 

RMA coverage that they fall within the 

scope of NAP, are primarily specialty 

fruit crops. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601–612), as amended by the 

Small Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA), 

generally requires an agency to prepare 

a regulatory flexibility analysis of any 

rule whenever an agency is required by 

APA or any other law to publish a 

proposed rule, unless the agency 

certifies that the rule will not have a 

significant economic impact on a 

substantial number of small entities. 

This rule is not subject to the Regulatory 

Flexibility Act because as noted above, 

this rulemaking is exempt from the 

notice and comment rulemaking 

requirements of APA and no other law 

requires that a proposed rule be 

published for this rulemaking initiative. 

Environmental Review 

FSA has determined that the 

administrative expansion of coverage for 

mollusks under NAP, identified in this 

rule, and the participation in NAP itself 

do not constitute major Federal actions 

that would significantly affect the 

quality of the human environment 

because Section 196 of 7 U.S.C. 7333 

requires that the Secretary of 

Agriculture operate NAP to provide 

coverage equivalent to the catastrophic 

risk protection otherwise available 

under section 508(b) of the Federal Crop 

Insurance Act (7 U.S.C. 1508(b)). 

In addition to adding coverage for 

mollusks, the other discretionary 

changes proposed include coverage for 

organic crops and clarifications 

regarding eligible losses and causes of 

loss (types of natural disasters). FSA has 

likewise determined that these 

discretionary efforts do not constitute 

major Federal actions that would 

significantly affect the quality of the 

human environment, individually or 

cumulatively, because of their context 

and the anticipated intensity of impacts. 

Therefore, in accordance with the 

provisions of the National 

Environmental Policy Act (NEPA, 42 

U.S.C. 4321–4347), the regulations of 

the Council on Environmental Quality 

(40 CFR parts 1500–1508), and FSA 

regulations for compliance with NEPA 

(7 CFR part 799), no environmental 

assessment or environmental impact 

statement will be prepared. 


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Executive Order 12372 

Executive Order 12372, 

‘‘Intergovernmental Review of Federal 

Programs,’’ requires consultation with 

State and local officials that would be 

directly affected by proposed federal 

financial assistance. The objectives of 

the Executive Order are to foster an 

intergovernmental partnership and a 

strengthened Federalism, by relying on 

State and local processes for State and 

local government coordination and 

review of proposed Federal Financial 

assistance and direct Federal 

development. For reasons set forth in 

the final rule related notice regarding 7 

CFR part 3015, subpart V (48 FR 29115, 

June 24, 1983), the programs and 

activities within this rule are excluded 

from the scope of Executive Order 

12372. 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988, ‘‘Civil Justice 

Reform.’’ This rule will not preempt 

State or local laws, regulations, or 

policies unless they represent an 

irreconcilable conflict with this rule. 

The rule has retroactive effect in that for 

the 2014 crop year, the expanded 

service fee waiver will apply 

retroactively, and for the 2015 crop year 

the date coverage begins will be 

retroactive as long as the application for 

coverage is filed by the application 

closing date as specified in § 1437.7(i). 

Before any judicial action may be 

brought regarding the provisions of this 

rule, the administrative appeal 

provisions of 7 CFR parts 11 and 780 are 

to be exhausted. 

Executive Order 13132 

This rule has been reviewed under 

Executive Order 13132, ‘‘Federalism.’’ 

The policies contained in this rule do 

not have any substantial direct effect on 

States, on the relationship between the 

Federal government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government, except as required 

by law. Nor does this rule impose 

substantial direct compliance costs on 

State and local governments. Therefore, 

consultation with the States is not 

required. 

Executive Order 13175 

This rule has been reviewed in 

accordance with the requirements of 

Executive Order 13175, ‘‘Consultation 

and Coordination with Indian Tribal 

Governments.’’ Executive Order 13175 

requires Federal agencies to consult and 

coordinate with tribes on a governmentto-government basis on policies that 

have tribal implications, including 

regulations, legislative comments or 

proposed legislation, and other policy 

statements or actions that have 

substantial direct effects on one or more 

Indian tribes, on the relationship 

between the Federal Government and 

Indian tribes or on the distribution of 

power and responsibilities between the 

Federal Government and Indian tribes. 

FSA has assessed the impact of this 

rule on Indian tribes and determined 

that this rule does not, to our 

knowledge, have tribal implications that 

require tribal consultation under 

Executive Order 13175. If a Tribe 

requests consultation, FSA will work 

with the USDA Office of Tribal 

Relations to ensure meaningful 

consultation is provided where changes, 

additions, and modifications identified 

in this rule are not expressly mandated 

by the 2014 Farm Bill. 

Unfunded Mandates 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA, Pub. L. 

104–4) requires Federal agencies to 

assess the effects of their regulatory 

actions on State, local, and Tribal 

governments or the private sector. 

Agencies generally must prepare a 

written statement, including a cost 

benefit analysis, for proposed and final 

rules with Federal mandates that may 

result in expenditures of $100 million or 

more in any year for State, local, or 

Tribal governments, in the aggregate, or 

to the private sector. UMRA generally 

requires agencies to consider 

alternatives and adopt the more cost 

effective or least burdensome alternative 

that achieves the objectives of the rule. 

This rule contains no Federal mandates, 

as defined in Title II of UMRA, for State, 

local, and Tribal governments or the 

private sector. Therefore, this rule is not 

subject to the requirements of sections 

202 and 205 of UMRA. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA) 

This rule is not a major rule under the 

Small Business Regulatory Enforcement 

Fairness Act of 1996, (Pub. L. 104–121, 

SBREFA). Therefore, FSA is not 

required to delay the effective date for 

60 days from the date of publication to 

allow for Congressional review. 

Accordingly, this rule is effective on the 

date of publication in the Federal 

Register. 

Federal Assistance Programs 

The title and number of the Federal 

Assistance Program, as found in the 

Catalog of Federal Domestic Assistance, 

to which this rule applies, is: 

Noninsured Assistance 10.451. 

Paperwork Reduction Act of 1995 

FSA added the changes required for 

the buy-up for additional coverage, 

organic crops, and mollusks described 

in this rule to a currently approved 

information collection by OMB under 

the control number of 0560–0175, 

Noninsured Crop Disaster Assistance 

Program. The collection of information 

from the respondents remains the same 

except the new respondents with 

organic crops and mollusks. FSA 

described the revision of information 

collection activities and the changes to 

the burden hours due to the new 

respondents in the request for public 

comment that was published in the 

Federal Register on October 15, 2014 

(79 FR 61484–61489). FSA confirmed 

that neither AMS nor RMA collect the 

information that FSA will be collecting, 

so there is no duplication of information 

collection. 

E-Government Act Compliance 

FSA and CCC are committed to 

complying with the E-Government Act, 

to promote the use of the Internet and 

other information technologies to 

provide increased opportunities for 

citizen access to Government 

information and services, and for other 

purposes. 

List of Subjects 

7 CFR Part 718 

Acreage allotments, Drug traffic 

control, Loan programs-agriculture, 

Marketing quotas, Price support 

programs, Reporting and recordkeeping 

requirements. 

7 CFR Part 1412 

Cotton, Feed grains, Oilseeds, 

Peanuts, Price support programs, 

Reporting and recordkeeping 

requirements, Rice, Soil conservation, 

Wheat. 

7 CFR Part 1416 

Dairy products, Indemnity payments, 

Pesticide and pests, Reporting and 

recordkeeping requirements. 

7 CFR Part 1437 

Agricultural commodities, Crop 

insurance, Disaster assistance, Fraud, 

Penalties, Reporting and recordkeeping 

requirements. 

For the reasons discussed above, FSA 

amends 7 CFR part 718 and CCC amend 

7 CFR parts 1412, 1416, and 1437 as 

follows: 

PART 718—PROVISIONS APPLICABLE 

TO MULTIPLE PROGRAMS 

■ 1. Revise the authority citation for part 

718 to read as follows: 


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Authority: 7 U.S.C. 1501–1508, 1921–2008, 

7201–7302, and 15 U.S.C. 714b. 

■ 2. Amend § 718.2 as follows: 

■ a. Remove the definition for ‘‘State’’; 

and 

■ b. Add, in alphabetical order, 

definitions for ‘‘Beginning farmer and 

rancher’’, ‘‘Controlled environment’’, 

‘‘Intended use’’, ‘‘Planted and 

considered planted (P&CP)’’; and 

‘‘United States’’. 

The additions read as follows: 

§ 718.2 Definitions. 

* * * * * 

Beginning farmer or rancher means a 

person or legal entity (for legal entities 

to be considered a beginning farmer or 

rancher, all members must be related by 

blood or marriage and all members must 

be beginning farmers or ranchers) for 

which both of the following are true for 

the farmer or rancher: 

(1) Has not operated a farm or ranch 

for more than 10 years; and 

(2) Materially and substantially 

participates in the operation. 

* * * * * 

Controlled environment means, with 

respect to those crops for which a 

controlled environment is required or 

expected to be provided, including but 

not limited to ornamental nursery, 

aquaculture (including ornamental fish), 

and floriculture, as applicable under the 

particular program, an environment in 

which everything that can practicably 

be controlled with structures, facilities, 

growing media (including but not 

limited to water, soil, or nutrients) by 

the producer, is in fact controlled by the 

producer. 

* * * * * 

Intended Use means for a crop or a 

commodity, the end use for which it is 

grown and produced. 

* * * * * 

Planted and considered planted 

(P&CP) means with respect to an acreage 

amount, the sum of the planted and 

prevented planted acres on the farm 

approved by the FSA county committee 

for a crop. P&CP is limited to initially 

planted or prevented planted crop 

acreage, except for crops planted in an 

FSA approved double-cropping 

sequence. Subsequently planted crop 

acreage and replacement crop acreage 

are not included as P&CP. 

* * * * * 

United States means all 50 States of 

the United States, the District of 

Columbia, the Commonwealth of Puerto 

Rico and any other territory or 

possession of the United States. 

* * * * * 

§ 718.102 [Amended] 

■ 3. Amend § 718.102 as follows: 

■ a. In paragraph (b)(3), add the word 

‘‘intended’’ immediately before the 

word ‘‘use’’; 

■ b. In paragraph (b)(4), remove the 

words ‘‘in the country of the eligible 

crop’’ and add the words ‘‘and intended 

use of the eligible crop in the country’’ 

in their place; and 

■ c. In paragraph (b)(6), add the word 

‘‘intended’’ immediately before the 

word ‘‘use’’. 

PART 1412—AGRICULTURE RISK 

COVERAGE, PRICE LOSS COVERAGE, 

AND COTTON TRANSITION 

ASSISTANCE PROGRAMS 

■ 4. The authority citation for part 1412 

continues to read as follows: 

Authority: 7 U.S.C. 1508b, 7911–7912, 

7916, 8702, 8711–8712, 8751–8752, and 15 

U.S.C. 714b and 714c. 

§ 1412.3 [Amended] 

■ 5. In § 1412.3, remove the definition 

for ‘‘Planted and considered planted 

(P&CP)’’. 

PART 1416—EMERGENCY 

AGRICULTURAL DISASTER 

ASSISTANCE PROGRAMS 

■ 6. Revise the authority citation for part 

1416 to read as follows: 

Authority: Title III, Pub. L. 109–234, 120 

Stat. 474; and 16 U.S.C. 3801, note. 

§ 1416.102 [Amended] 

■ 7. In § 1416.102, remove the 

definitions for ‘‘Beginning farmer and 

rancher’’; ‘‘Controlled environment’’; 

‘‘County committee or county office’’; 

‘‘Secretary’’; ‘‘State committee, State 

office, county committee, or county 

office’’; and ‘‘United States’’. 

PART 1437—NONINSURED CROP 

DISASTER ASSISTANCE PROGRAM 

■ 8. The authority citation for part 1437 

continues to read as follows: 

Authority: 7 U.S.C. 1501–1508 and 7333; 

15 U.S.C. 714–714m; 19 U.S.C. 2497, and 48 

U.S.C. 1469a. 

Subpart A—General Provisions 

■ 9. Revise § 1437.1 to read as follows: 

§ 1437.1 Applicability. 

(a) The purpose of the Noninsured 

Crop Disaster Assistance Program (NAP) 

is to help manage and reduce 

production risks faced by producers of 

eligible commercial crops or other 

agricultural commodities during a 

coverage period. NAP reduces financial 

losses that occur when natural disasters 

(damaging weather or adverse natural 

occurrence that is an eligible cause of 

loss) cause a loss of expected 

production or actual value for value loss 

crops, or where producers are prevented 

from planting an eligible crop because 

of an eligible cause of loss in a coverage 

period. 

(b) The provisions in this part are 

applicable to eligible producers and 

eligible crops for which catastrophic 

coverage under section 508(b) or 

additional coverage of sections 508(c) or 

508(h) under the Federal Crop Insurance 

Act (7 U.S.C. 1508) (excluding pilot 

policies or plans of insurance) is not 

available. 

(c) The regulations in this part are 

applicable to the 2015 and subsequent 

crop years. 

■ 10. Revise § 1437.2 to read as follows: 

§ 1437.2 Administration. 

(a) NAP is administered under the 

general supervision of the 

Administrator, Farm Service Agency 

(FSA) (who also serves as the 

Commodity Credit Corporation (CCC) 

Executive Vice President), and the 

Deputy Administrator for Farm 

Programs, FSA, (referred to as ‘‘Deputy 

Administrator’’ in this part). NAP is 

carried out by FSA State and county 

committees (State and county 

committees) with instructions issued by 

the Deputy Administrator. 

(b) State and county committees, and 

representatives and their employees, do 

not have authority to modify or waive 

any of the provisions of the regulations 

in this part, NAP’s basic provisions, or 

instructions issued by the Deputy 

Administrator. 

(c) The State committee will take any 

action required by the regulations in 

this part that the county committee has 

not taken. The State committee will 

also: 

(1) Correct, or require a county 

committee to correct, any action taken 

by such county committee that is not in 

accordance with the regulations in this 

part; or 

(2) Require a county committee to 

withhold taking any action that is not in 

accordance with this part. 

(d) No delegation to a State or county 

committee precludes the FSA 

Administrator, the Deputy 

Administrator, or a designee, from 

determining any question arising under 

NAP or from reversing or modifying any 

determination made by a State or county 

committee. 

(e) The Deputy Administrator has the 

authority to permit State and county 

committees to waive or modify 

deadlines (except deadlines specified in 

a law) and other requirements or 


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program provisions not specified in law, 

in cases where lateness or failure to 

meet such other requirements or 

program provisions do not adversely 

affect operation of NAP. 

(1) Producers and participants have 

no right to a decision in response to a 

request to waive or modify deadlines or 

program provisions. The Deputy 

Administrator’s refusal to consider such 

a request or a decision not to exercise 

this discretionary authority under this 

section is not an adverse decision and 

is not appealable. 

(2) FSA’s decision not to consider a 

case under this section is not a failure 

to act under any law or regulation 

because participants have no right to a 

decision on a request for waiver or 

modification. 

(f) Items including, but not limited to, 

application periods, application 

deadlines, basic provisions, internal 

operating guidelines issued to FSA State 

and county offices, coverage periods, 

fees, prices, yields, and payment factors 

established for NAP in accordance with 

this part that are used for similarly 

situated participants and eligible crops 

are not to be construed to be individual 

program eligibility determinations or 

extent of eligibility determinations and 

are, therefore, not subject to 

administrative review. 

(g) Where there is any conflict 

between the basic provisions and the 

regulations, the regulations apply except 

when the Deputy Administrator 

determines that because of the timing of 

issuance of the regulations, the basic 

provisions applicable to the specific 

crop year or coverage period that may be 

less restrictive will apply. 

■ 11. Amend § 1437.3 as follows: 

■ a. Revise the introductory text; 

■ b. Revise the definitions for 

‘‘Application closing date’’ and 

‘‘Catastrophic coverage’’; 

■ c. In the definition for ‘‘Crop year’’, 

third sentence, add the words ‘‘or buyup coverage’’ immediately after the 

words ‘‘catastrophic coverage’’; 

■ d. Revise the definitions for ‘‘Good 

farming practices’’, ‘‘Industrial crop’’, 

and ‘‘Native sod’’; 

■ e. Remove the definitions for 

‘‘Controlled environment ’’ and 

‘‘Intended Use’’; and 

■ f. Add, in alphabetical order, 

definitions for ‘‘Acres devoted to the 

eligible crop’’, ‘‘Additional coverage’’, 

‘‘Agricultural experts’’, ‘‘Application for 

coverage’’, ‘‘Basic provisions’’, ‘‘Bypass 

year’’, ‘‘Buffer zone’’, ‘‘Buy-up 

coverage’’, ‘‘Buy-up coverage yield’’, 

‘‘Certified organic acreage’’, ‘‘Certifying 

agent’’, ‘‘Conventional farming 

practice’’, ‘‘Feedstock’’, ‘‘Generally 

recognized’’, ‘‘Guarantee’’, ‘‘Handharvested’’, ‘‘Maximum dollar value for 

coverage sought’’, ‘‘Organic agricultural 

experts’’, ‘‘Organic crop’’, ‘‘Organic 

farming practice’’, ‘‘Organic system 

plan’’, ‘‘Organic standards’’, ‘‘Prohibited 

substance’’, ‘‘Secondary use’’, ‘‘Short 

rotation woody crops’’, and 

‘‘Transitional acreage’’. 

The revisions and additions read as 

follows: 

§ 1437.3 Definitions. 

The terms and definitions in this 

section apply to NAP. The terms and 

definitions in part 718 of this title and 

part 1400 of this chapter also apply to 

NAP, except where those same terms are 

defined in this section. In that case, the 

terms and definitions of this section 

apply. 

Acres devoted to the eligible crop 

means the total planted and considered 

planted (P&CP) acres of the eligible 

crop. 

Additional coverage means insurance 

coverage offered by the Federal Crop 

Insurance Corporation under sections 

508(c) or 508(h) of the Federal Crop 

Insurance Act. 

* * * * * 

Agricultural experts means persons 

who are employed by the National 

Institute of Food and Agriculture, or the 

agricultural departments of universities, 

or other persons approved by FSA, 

whose research or occupation is related 

to the specific crop or practice for which 

such expertise is sought. 

* * * * * 

Application closing date means the 

last date, as determined by FSA, 

producers can submit an application for 

coverage for noninsured crops for the 

specified crop year and coverage period. 

Application for coverage means the 

form specified by FSA to be completed 

by a producer applying for NAP 

coverage for an eligible crop that is 

accompanied by the service fee or 

service fee waiver form in the 

administrative county office by the 

application closing date. 

Basic provisions means the document 

summarizing the terms and conditions 

of NAP coverage for a crop year that are 

acknowledged as having been received 

by the person or legal entity who signs 

an application for coverage according to 

this part. 

Bypass year means a year that the 

producer did not obtain NAP coverage 

for the crop and did not file a report of 

acreage or production, or obtained NAP 

coverage for the crop and had reported 

or determined zero acres devoted to the 

eligible crop. 

Buffer zone means a parcel of land, as 

designated in an organic system plan, 

that separates agricultural commodities 

grown under organic practices from 

agricultural commodities grown under 

non-organic practices and is used to 

minimize the possibility of unintended 

contact by prohibited substances or 

organisms. 

Buy-up coverage means NAP 

assistance that is available for all 

eligible NAP covered crops (other than 

for crops and grasses intended for 

grazing) at a payment amount that is 

equal to an indemnity amount 

calculated for buy-up coverage 

computed under section 508(c) or (h) of 

the Federal Crop Insurance Act and 

equal to the amount that the buy-up 

coverage yield for the crop exceeds the 

actual yield for the crop. 

Buy-up coverage yield means not less 

than 50 percent nor greater than 65 

percent of the approved yield for the 

crop, as elected by the NAP covered 

participant and specified in 5-percent 

increments. 

Catastrophic coverage means: 

(1) For insured crops, the coverage 

offered by the Federal Crop Insurance 

Corporation (FCIC) under section 508(b) 

of the Federal Crop Insurance Act. 

(2) For eligible NAP crops, coverage at 

the following levels due to an eligible 

cause of loss impacting the NAP 

covered crop during the coverage 

period: 

(i) Prevented planting in excess of 35 

percent of the intended acres; 

(ii) A yield loss in excess of 50 

percent of the approved yield; 

(iii) A value loss in excess of 50 

percent; or 

(iv) An animal-unit-days (AUD) loss 

greater than 50 percent of expected 

AUD. 

Certified organic acreage means 

acreage in the certified organic farming 

operation that has been certified by a 

certifying agent as conforming to 

organic standards specified in part 205 

of this title. 

Certifying agent means a private or 

governmental entity accredited by the 

United States Department of Agriculture 

(USDA) Secretary for the purpose of 

certifying a production, processing or 

handling operation as organic. 

Conventional farming practice means 

any good farming practice that is not an 

organic farming practice. 

* * * * * 

Feedstock means a crop including, 

but not limited to, grasses or legumes, 

algae, cotton, peanuts, coarse grains, 

small grains, oil seeds, or short rotation 

woody crops, that is grown expressly for 

the purpose of producing a biobased 

material or product, and does not 


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include residues and by-products of 

crops grown for any other purpose. 

* * * * * 

Generally recognized means when 

agricultural experts or organic 

agricultural experts, as applicable, are 

aware of the production method or 

practice and there is no genuine dispute 

regarding whether the production 

method or practice allows the crop to 

make normal progress toward maturity 

and produce at least the yield used to 

determine the production guarantee or 

amount of insurance. 

Good farming practices means the 

cultural practices generally recognized 

as compatible with agronomic and 

weather conditions and used for the 

crop to make normal progress toward 

maturity and produce at least the 

individual unit approved yield, as 

determined by FSA. These practices are: 

(1) For conventional farming 

practices, those generally recognized by 

agricultural experts for the area, which 

could include one or more counties; or 

(2) For organic farming practices, 

those generally recognized by the 

organic agricultural experts for the area 

or contained in the organic system plan 

that is in accordance with the National 

Organic Program specified in part 205 of 

this title. 

Guarantee means the level of coverage 

provided based on the application for 

coverage and buy-up coverage elected 

under the provisions of this part. 

Hand-harvested crop means a nonforage crop that is not harvested 

mechanically and is removed from a 

field by hand. 

* * * * * 

Industrial crop means a commercial 

crop, or other agricultural commodity 

used in manufacturing or grown 

expressly for the purpose of producing 

a feedstock for renewable biofuel, 

renewable electricity, or biobased 

products. Industrial crops include castor 

beans, chia, crambe, crotalaria, cuphea, 

guar, guayule, hesperaloe, kenaf, 

lesquerella, meadowfoam, milkweed, 

plantago ovato, sesame, and other crops 

specifically designated by FSA. 

Industrial crops exclude any plant that 

FSA has determined to be either a 

noxious weed or an invasive species. A 

list of plants that are noxious weeds and 

invasive species will be available in the 

FSA county office. 

Maximum dollar value for coverage 

sought means the total dollar amount 

elected by the NAP covered participant 

for which buy-up coverage may be 

considered for a value loss crop in a 

coverage period. The amount is set by 

the NAP covered participant for each 

value loss crop and represents the 

highest amount of field market value of 

the crop before disaster in a coverage 

period. 

* * * * * 

Native sod means land on which the 

natural state plant cover before tilling 

was composed principally of native 

grasses, grass-like plants, forbs, or 

shrubs suitable for grazing and browsing 

and is land that has never been tilled 

(determined in accordance with 

information collected and maintained 

by an agency of the USDA or other 

verifiable records that are provided by a 

producer and acceptable to FSA) for the 

production of an annual crop through 

February 7, 2014. 

* * * * * 

Organic agricultural experts means 

persons who are employed by the 

following organizations: Appropriate 

Technology Transfer for Rural Areas, 

Sustainable Agriculture Research and 

Education, or the National Institute of 

Food and Agriculture, the agricultural 

departments of universities, or other 

persons approved by FSA, whose 

research or occupation is related to the 

specific practice for which such 

expertise is sought. 

Organic crop means an agricultural 

commodity that is organically produced 

consistent with section 2103 of the 

Organic Foods Production Act of 1990 

(7 U.S.C. 6502). 

Organic farming practice means a 

system of plant production practices 

used to produce an organic crop that is 

approved by a certifying agent in 

accordance with 7 CFR part 205. 

Organic system plan means a plan of 

management of an organic production or 

handling operation that has been agreed 

to by the producer or handler and the 

certifying agent and that includes 

written plans concerning all aspects of 

agricultural production or handling 

described in the Organic Foods 

Production Act and the regulations in 7 

CFR part 205, subpart C. 

Organic standards means standards in 

accordance with the Organic Foods 

Production Act of 1990 (7 U.S.C. 6501– 

6523) and 7 CFR part 205. 

Prohibited substance means any 

biological, chemical, or other agent that 

is prohibited from use or is not included 

in the organic standards for use on any 

certified organic, transitional, or buffer 

zone acreage. Lists of such substances 

are specified in §§ 205.602 and 205.604 

of this title. 

Secondary use means the harvested 

production bears little resemblance to, 

or has a different unit of expression 

than, the unit of expression for the 

reported intended use. It does not apply 

to fresh and processed harvested 

production; is not salvage; not counted 

as production of the crop for the 

following purposes, including, but not 

limited to: 

(1) The determination of whether the 

unit suffered requisite loss; and 

(2) APH and approved yield. 

* * * * * 

Short rotation woody crops means 

fast-growing trees that reach their 

economically optimum size between 4 

and 20 years old. 

* * * * * 

Transitional acreage means acreage 

on which organic farming practices are 

being followed that does not yet qualify 

to be designated as organic acreage. 

* * * * * 

■ 12. Amend § 1437.4 as follows: 

■ a. Revise paragraph (a) introductory 

text; 

■ b. Revise paragraph (a)(4); 

■ c. In paragraph (b)(2), remove the 

words and punctuation ‘‘except for the 

2001 and preceding crop years 

assistance for forage produced on 

Federal- and State-owned lands is 

available only for seeded forage.’’; 

■ d. Revise paragraphs (b)(4)(vi), (vii), 

and (viii), and add paragraphs (b)(4)(ix) 

and (x); and 

■ e. Revise paragraphs (c) and (d). 

The revisions and addition read as 

follows: 

§ 1437.4 Eligibility. 

(a) Noninsured crop disaster 

assistance is available during the 

coverage period specified in § 1437.6 for 

loss of production or loss of value for 

value loss crops or prevented planting 

of eligible commercial crops or other 

eligible agricultural commodities: 

* * * * * 

(4) Determined by FSA to be eligible 

crops for which: 

(i) Catastrophic risk protection under 

the Federal Crop Insurance Act (7 U.S.C. 

1508(b)) is not available; 

(ii) Additional coverage under the 

Federal Crop Insurance Act (7 U.S.C. 

1508(c) or (h)) is not available 

(excluding pilot policies or plans of 

insurance) and for which the Deputy 

Administrator determines are 

appropriate for NAP coverage; or 

(iii) These specific practices for these 

crops are not included under the 

Federal Crop Insurance Act (7 U.S.C. 

1508), but only when the Deputy 

Administrator determines in advance of 

a coverage period that the specific 

practice is appropriate for NAP coverage 

and is not available for coverage under 

Federal crop insurance. 

(iv) The producer applies good 

farming practices. 

(b) * * * 


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(4) * * * 

(vi) Sweet sorghum; 

(vii) Biomass sorghum; 

(viii) Industrial crops (including those 

grown expressly for the purpose of 

producing a feedstock for renewable 

biofuel, renewable electricity, or 

biobased products); 

(ix) Seed crops, including propagation 

stock such as non-ornamental seedlings, 

sets, cuttings, rootstock, and others, as 

determined by FSA; and 

(x) Sea grass and sea oats. 

(c) Except as specified in paragraph 

(d) of this section, during the first 4 crop 

years of planting, as determined by the 

Secretary, native sod acreage in Iowa, 

Minnesota, Montana, Nebraska, North 

Dakota, and South Dakota that has been 

tilled for the production of an annual 

crop after February 7, 2014, will be 

subject to the following: 

(1) The approved yield will be 

determined by using a yield equal to 65 

percent of the producer’s T-yield for the 

annually planted crop; and 

(2) The service fee or premium for the 

annual covered crop planted on native 

sod will be equal to 200 percent of the 

amount determined in § 1437.7, as 

applicable, but the premium will not 

exceed the maximum amount specified 

in § 1437.7(d)(2). 

(d) If the producer’s total native sod 

acreage that is tilled in a crop year is 5 

acres or less, the approved yield, service 

fee, and premium provisions specified 

in paragraph (c) of this section will not 

apply. 

* * * * * 

§§ 1437.5 through 1437.15 [Redesignated 

as §§ 1437.6 through 1437.16] 

■ 13. Redesignate §§ 1437.5 through 

1437.15 as §§ 1437.6 through 1437.16, 

respectively. 

■ 14. Add § 1437.5 to read as follows: 

§ 1437.5 Coverage levels. 

(a) NAP coverage for prevented 

planting is provided for approved 

prevented planting of an eligible NAP 

covered crop due to an eligible cause of 

loss in the coverage period. Payment is 

based on the approved prevented 

planted acreage in excess of 35 percent 

of the total intended acres to be planted. 

(b) Except as provided in paragraph 

(d) of this section, NAP coverage is 

equal to 50 percent of the yield or 

inventory value specified in paragraph 

(c) of this section at 55 percent of the 

average market price established by 

FSA. 

(c) Except as provided in paragraph 

(d) of this section, to be eligible for a 

NAP payment a producer must have 

suffered a yield or inventory value loss 

greater than 50 percent as the result of 

an eligible cause of loss in the coverage 

period as follows: 

(1) For yield-based crops, a yield loss 

in excess of 50 percent of the approved 

yield; 

(2) For value loss crops, a loss of 

value in excess of 50 percent of the total 

value of eligible inventory at the time of 

disaster; 

(d) For 2015 through 2018 crop years, 

producers of eligible NAP crops, other 

than crops and grasses intended for 

grazing, may elect buy-up coverage at 

100 percent of the average market price 

in amounts of 50 percent to 65 percent, 

in 5 percent increments, of: 

(1) For yield-based crops, your 

approved yield; and 

(2) For value loss crops, the lesser of 

the total value of eligible inventory at 

the time of disaster or the maximum 

dollar value for coverage sought. 

(e) The quantity or value of any 

eligible NAP crop will not be reduced 

for any quality consideration unless a 

zero value is established based on a total 

loss of quality, except as specified in 

§ 1437.105. 

(f) For crop acreage intended to be 

grazed, to be eligible for a NAP 

payment, a producer must have suffered 

a loss of AUD in excess of 50 percent 

of expected AUD determined on the 

basis of acreage, carrying capacity, and 

grazing period. 

■ 15. Revise newly redesignated 

§ 1437.6 to read as follows: 

§ 1437.6 Coverage period. 

(a) Coverage period. The coverage 

period is the time during which 

coverage is available against prevented 

planting, a loss of production, or loss of 

value, as applicable, of the eligible crop 

as a result of an eligible cause of loss 

specified in § 1437.10. Except as 

provided in paragraph (h) of this 

section, coverage periods start no earlier 

than 30 days after date of filing of a 

valid application for coverage as 

specified in § 1437.7. 

(1) Relief provisions cannot be used to 

change or modify the date an 

application is filed. 

(2) If an application for coverage is 

filed within 30 days of the end of a 

coverage period, the application for 

coverage is invalid and will not be 

processed by FSA. In the event the 

application for coverage is invalid as 

discussed in this paragraph, service fees 

will not be refunded. 

(3) Except as provided in paragraph 

(h) of this section, coverage is never 

retroactive. 

(b) Annual crops. Except as provided 

in paragraph (h) of this section, the 

coverage period for annual crops, 

including annual forage crops, 

(1) Begins the later of: 

(i) 30 calendar days after the date the 

application for coverage is filed; or 

(ii) The date the crop is planted, not 

to exceed the late planting period; and 

(2) Ends on the earlier of: 

(i) The date harvest is complete; 

(ii) The normal harvest date of the 

crop in the area; 

(iii) The date the crop is abandoned; 

or 

(iv) The date the crop is destroyed. 

(c) Biennial and perennial crops. 

Except as otherwise specified in this 

part, the coverage period for biennial 

and perennial crops begins the later of 

30 calendar days after the date the 

application for coverage is filed or 30 

calendar days after the application 

closing date. The coverage ends as 

determined by FSA. 

(d) Value loss crops. Except as 

otherwise specified in this part, the 

coverage period for value loss crops, 

including ornamental nursery, 

aquaculture, Christmas tree crops, 

ginseng, and turfgrass sod; and other 

eligible crops, including floriculture and 

mushrooms begins the later of 30 

calendar days after the date the 

application for coverage is filed or 30 

calendar days after the application 

closing date. The coverage ends the last 

day of the crop year, as determined by 

FSA. 

(e) Honey. Except as provided in 

paragraph (h) of this section, the 

coverage period for honey begins the 

later of 30 calendar days after the date 

the application for coverage is filed or 

30 calendar days after the application 

closing date. The coverage ends the last 

day of the crop year, as determined by 

FSA. 

(f) Maple sap. Except as provided in 

paragraph (h) of this section, the 

coverage period for maple sap begins 

the later of 30 calendar days after the 

date the application for coverage is filed 

or 30 calendar days after the application 

closing date. The coverage ends on the 

earlier of the date harvest is complete; 

or the normal harvest date. 

(g) Biennial and perennial forage 

crops. Except as provided in paragraph 

(h) of this section, for biennial and 

perennial forage crops the coverage 

period begins the later of 30 calendar 

days after the date the application for 

coverage is filed or 30 days after the 

application closing date; for first year 

seedings, the date the crop was planted; 

or the date following the normal harvest 

date. The coverage ends on the normal 

harvest date of the subsequent year. 

(h) 2015 crop year. For the 2015 crop 

year only, if a crop’s application closing 

date is before January 14, 2015, the 

coverage period of the crop will be as 


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specified in paragraphs (a) through (g) of 

this section except that the date 

coverage begins will be retroactive as 

long as the application for coverage is 

filed by the application closing date as 

specified in § 1437.7(i). This limited 

retroactive coverage for the 2015 crop 

year only will begin 30 days after the 

established application date, which 

would be the same as if they had filed 

by the deadlines as specified in 

paragraphs (a) through (g) of this 

section. 

■ 16. Revise newly redesignated 

§ 1437.7 to read as follows: 

§ 1437.7 Application for coverage, service 

fee, premium, and transfers of coverage. 

(a) Except as provided in paragraph (i) 

of this section, with respect to each 

crop, commodity, or acreage, producers 

must file an application for coverage 

under this part in the administrative 

county office by the application closing 

date. 

(b) The service fee or request for 

service fee waiver under paragraph (g) 

of this section must accompany the 

application for coverage in order for it 

to be considered filed. The service fee 

is $250 per crop per administrative 

county, up to $750 per producer per 

administrative county, not to exceed 

$1,875 per producer. 

(c) The service fee will be applied per 

administrative county by crop and by 

planting period, as determined by FSA. 

(d) Producers who elect buy-up 

coverage must pay a premium, in 

addition to the service fee, equal to the 

lesser of: 

(1) The product obtained by 

multiplying: 

(i) A 5.25-percent premium fee; and 

(ii) The applicable payment limit; or 

(2) The sum of the premiums for each 

eligible crop, with the premium for each 

eligible crop obtained by multiplying: 

(i) The producer’s share of the eligible 

crop; 

(ii) The number of acres devoted to 

the eligible crop; 

(iii) The approved yield; 

(iv) The coverage level elected by the 

producer; 

(v) The average market price; and 

(vi) A 5.25-percent premium fee. 

(e) For value loss crops, premiums 

will be calculated based on the 

maximum dollar value for which 

coverage is sought by the applicant, 

subject to applicable payment 

limitation, times the 5.25 percent 

premium. 

(f) Premiums will be calculated 

separately for each crop, type, and 

intended use as reported on the acreage 

report and as specified in the basic 

provisions. 

(g) Beginning farmers and ranchers, 

limited resource farmers and ranchers, 

and socially disadvantaged farmers or 

ranchers will receive, upon certification, 

a waiver of the service fee and a 50 

percent premium reduction. The 

certification is required on or before the 

time the application for coverage is filed 

using the form specified by FSA. 

(h) Transfers of NAP coverage are 

governed by the basic provisions. 

(i) For the 2015 crop year, if a crop’s 

application closing date is before 

January 14, 2015, FSA will accept 

applications for coverage without regard 

to whether or not the application for 

coverage was filed by the crop’s 

application closing date, provided that 

the application for coverage includes 

buy-up coverage according to 

§ 1437.5(d) and is filed by January 14, 

2015. Except as specifically stated in 

this rule, the provisions of this 

paragraph (i) do not apply to crops 

having an application closing date 

established on or after December 15, 

2014 or to applications for coverage that 

do not include buy-up coverage as an 

option selected by the applicant. The 

coverage period for applications for 

coverage filed according to this 

paragraph (i) will be as specified in 

§ 1437.6. 

■ 17. Amend newly redesignated 

§ 1437.8 as follows: 

■ a. Revise paragraph (a) introductory 

text, add paragraph (a)(3), and revise 

paragraphs (b)(1) and (2) and (c) 

introductory text; 

■ b. In paragraph (d), revise the 

introductory text, redesignate 

paragraphs (d)(6) through (8) as 

paragraphs (d)(7) through (9), 

respectively, and add paragraph (d)(6); 

and 

■ c. Add paragraphs (i), (j), and (k). 

The revisions and additions read as 

follows: 

§ 1437.8 Records. 

(a) Producers must maintain records 

of crop acreage, acreage yields, and 

production for the crop for which an 

application for coverage is filed in 

accordance with § 1437.7. For those 

crops or commodities for which it is 

impractical, as determined by FSA, to 

maintain crop acreage, yields, or 

production data, producers must 

maintain records, in addition to the 

available records required by this 

section, as may be required in subparts 

C, D, and E of this part. Producers must 

retain records of the production and 

acreage yield for a minimum of 3 years 

for each crop for which an application 

for coverage is filed in accordance with 

§ 1437.7. Producers may be selected and 

be required to provide records 

acceptable to FSA to support any 

certification provided. For each 

harvested crop for which producers file 

an application for payment in 

accordance with § 1437.11, producers 

must provide documentary evidence 

acceptable to FSA of production and the 

date harvest was completed, including 

production of crops planted after the 

planting period or late planting period. 

Such documentary evidence must be 

provided no later than the acreage 

reporting date for the crop in the 

subsequent crop year or, for crops with 

a coverage period of more than 12 

months, no later than 60 days after the 

normal harvest date. Records of a 

previous crop year’s production for 

inclusion in the actual production 

history database used to calculate an 

approved yield for the current crop year 

must be certified by the producer no 

later than the acreage reporting date for 

the crop in the current crop year. 

Production data provided after the 

acreage reporting date in the current 

crop year for the crop may be included 

in the actual production history data 

base for the calculation of subsequent 

approved yield calculations if 

accompanied by acceptable records of 

production as determined by FSA. 

Records of production acceptable to 

FSA may include: 

* * * * * 

(3) For quality losses specified in 

§ 1437.105, verifiable records 

substantiating a quality loss due to an 

eligible cause of loss in the coverage 

period. The record submitted must 

come from tests or analysis 

substantiating that the loss of quality 

occurred from an eligible cause of loss 

during the coverage period. FSA will 

disapprove quality adjustments under 

§ 1437.105 if FSA determines the 

evidence does not substantiate a loss of 

quality occurred due to an eligible cause 

of loss in the coverage period. For 

example, if FSA determines the tests or 

analysis of the specific crop’s 

production were taken too late to 

determine if the measured loss of 

quality occurred from an eligible cause 

of loss in the coverage period (regardless 

whether a loss of quality was in fact 

measured or determined), no quality 

loss adjustment will be made or 

permitted. There is no presumption that 

a measured loss of quality occurred due 

to an eligible cause of loss in the 

coverage period. It is a NAP covered 

producer’s burden to present evidence, 

satisfactory to FSA, substantiating that 

the alleged quality loss occurred to the 

NAP covered crop in the coverage 

period. 

(b) * * * 


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(1) Producers of hand-harvested crops 

must, in addition to providing 

acceptable production records according 

to this part, notify the administrative 

county office that harvest is complete. 

This notification must be made within 

72 hours of when harvest is complete. 

If an appraisal of the crop acreage is 

requested by the producer or 

determined necessary by FSA, the 

producer must not destroy the crop 

residue until the crop acreage is 

released by an FCIC- or FSA-qualified 

loss adjustor. Producers may, at their 

expense, request that an appraisal by 

certified FCIC or FSA loss adjusters of 

hand-harvested crop acreage be 

completed during non-loss crop years in 

order to maintain accurate actual 

production history. 

(2) Producers must not allow the 

gathering (gleaning) of any produce left 

in the field following normal harvest of 

the crop acreage until the crop acreage 

is released by a qualified FSA or FCIC 

loss adjustor, as determined by FSA. 

Except, crop acreage may be released by 

an authorized FSA representative for 

acceptable gleaning operations, as 

determined by FSA, when producers 

and gleaners agree to provide acceptable 

records, as determined by FSA, of the 

quantity of the crop gleaned. 

(c) Producers must provide acceptable 

evidence, as determined by FSA, of: 

* * * * * 

(d) Reports of acreage planted or 

intended but prevented from being 

planted must be provided to FSA at the 

administrative county office for the 

acreage no later than the date specified 

by FSA for each crop and location. 

Reports of acreage filed beyond the date 

specified by FSA for the crop and 

location may, however, be processed 

and used for determining acres devoted 

to the eligible crop if all the provisions 

of 7 CFR part 718 are met. In the case 

of a crop-share arrangement, all 

producers will be bound by the acreage 

report filed by the landowner or 

operator unless the producer files a 

separate acreage report by the date 

specified by FSA for the crop and 

location. Reports of acreage planted or 

intended and prevented from being 

planted must include all of the 

following information: 

* * * * * 

(6) For organic crops with an average 

market price established under 

§ 1437.12(b), the identity of the crop 

planted on: 

(i) Acreage using conventional 

farming practices; 

(ii) Certified organic acreage; 

(iii) Transitional acreage being 

converted to certified organic acreage; 

(iv) Buffer zone acreage; 

* * * * * 

(i) Producers requesting payment 

under this part for a crop grown on 

certified organic acreage for which a 

price and T-yield are established, as 

provided in §§ 1437.12(b) and 1437.102, 

must provide, no later than the acreage 

reporting date specified by FSA for the 

crop and location: 

(1) A written certification in effect 

from a certifying agency indicating the 

name of the entity certified, effective 

date of certification, certificate number, 

types of commodities certified, and 

name and address of the certifying agent 

(a certificate issued to a tenant may be 

used to qualify a landlord or other 

similar arrangement); and 

(2) Records from the certifying agent 

showing the specific location of 

certified organic, transitional, and buffer 

zone acreage, and acreage not subject to 

organic farming practices according to 

an organic system plan. 

(j) Producers providing reports of 

acreage that include transitional acreage 

being converted to certified organic 

acreage in accordance with an organic 

system plan must provide, no later than 

the acreage reporting date specified by 

FSA for the crop and location: 

(1) Written documentation from a 

certifying agent indicating an organic 

system plan is in effect for the acreage; 

and 

(2) Records from the certifying agent 

showing the specific location of 

certified organic, transitional, and buffer 

zone acreage, and acreage not subject to 

organic farming practices according to 

an organic system plan. 

(k) Producers who are exempt from 

National Organic certification 

requirements, as specified in § 205.101 

of this title, and are requesting payment 

under this part for a crop grown on 

organic acreage for which a price and Tyield is established, as provided in 

§§ 1437.12(b) and 1437.102, must 

provide, no later than the acreage 

reporting date specified by FSA for the 

crop and location, a copy of their 

organic system plan, which must be 

developed with an organic certifying 

agent. 

■ 18. Revise newly redesignated 

§ 1437.10 to read as follows: 

§ 1437.10 Causes of loss. 

(a) To qualify for assistance, 

production losses or prevented planting 

must occur as a result of an eligible 

cause of loss during the coverage period. 

Not all causes of loss are eligible causes 

of loss for all crops or all commodities. 

(b) An eligible cause of loss is: 

(1) Damaging weather, including, but 

not limited to: 

(i) Drought; 

(ii) Hail; 

(iii) Excessive moisture; 

(iv) Freeze; 

(v) Tornado; 

(vi) Hurricane; 

(vii) Excessive wind; 

(viii) Insufficient chill hours, but only 

for specific crops and locations for 

which FSA has determined in advance 

of a coverage period, based on FSA’s 

review of sufficient scientific evidence 

that a requisite amount of chill hours is 

required for the crop to produce and a 

lack of chill hours is adverse to the 

crop’s production without any regard to 

any management. In this context, 

‘‘without regard to any management’’ 

means if a crop’s inability to produce 

due to lack of chill hours can be 

mitigated by any managerial practices, 

application of chemical, or other 

management intervention, the lack of 

chill hours will not be included as an 

eligible cause of loss for the crop, In 

cases where FSA makes the decision to 

include insufficient chill hours as a 

cause of loss by itself for a crop and 

location, the crop and location and 

subsequent crop year coverage period 

for which the decision will apply will 

be specified in a list maintained by FSA. 

If the crop and location is not on that 

list, then insufficient chill hours can 

only be an eligible cause of loss if the 

insufficient chill hours were related to 

a damaging weather event or an adverse 

natural occurrence included in 

paragraphs (b)(1) or (2) of this section; 

or 

(ix) Any combination of paragraphs 

(b)(1)(i) through (viii) of this section; 

(2) Adverse natural occurrence, 

including, but not limited to: 

(i) Earthquake; 

(ii) Flood; or 

(iii) Volcanic eruption; or 

(3) A condition related to an eligible 

cause of loss in paragraphs (b)(1) or (2) 

of this section (in this context, the 

related condition must result from the 

damaging weather or adverse natural 

occurrence; it is not eligible if it occurs 

on its own) including, but not limited 

to: 

(i) Heat; 

(ii) Insect infestation; 

(iii) Disease; 

(iv) Insufficient chill hours; or 

(v) Any combination thereof. 

(c) The damaging weather, adverse 

natural occurrence, or related condition 

as specified in paragraph (b) of this 

section must occur in the coverage 

period before or during harvest and 

directly cause, accelerate, or exacerbate 

destruction or deterioration of the 

eligible crop as determined by the 

county committee. 


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(d) NAP coverage is provided against 

only eligible causes of loss. All specified 

causes of loss must be due to a naturally 

occurring event during the coverage 

period. All other causes of loss, 

including, but not limited to, the 

following, are not covered: 

(1) Negligence, mismanagement, or 

wrongdoing by the NAP covered 

producer or anyone else; 

(2) Failure to follow recognized good 

farming practices for the eligible crop; 

(3) Water contained or released by any 

governmental, public, or private dam or 

reservoir project, if an easement exists 

on the acreage affected for the 

containment or release of the water; 

(4) Failure or breakdown of the 

irrigation equipment facilities, unless 

the failure or breakdown is due to an 

eligible cause of loss. If damage is due 

to an eligible cause of loss, the producer 

must make all reasonable efforts to 

restore the equipment or facilities to 

proper working order within a 

reasonable amount of time unless FSA 

determines it is not practical to do so. 

Cost will not be considered when 

determining whether it is practical to 

restore the equipment or facilities; 

(5) Failure to carry out a good 

irrigation practice for the covered crop, 

if applicable; 

(6) Any cause of loss that results in 

damage that is not evident or would not 

have been evident during the NAP 

coverage period. Even though FSA may 

not inspect the damaged crop until after 

the end of the NAP coverage period, 

only damage due to eligible causes that 

would have been evident during the 

NAP coverage period will be covered; 

(7) Except for lack of chill hours as 

specified in paragraph (b)(1)(viii) of this 

section, normal variance of 

temperatures from average normal 

temperatures including, but not limited 

to, cyclic yield variations that occur for 

a crop that are not causes of loss 

included in paragraphs (b)(1) or (2) of 

this section; 

(8) Any managerial decision to 

attempt to grow or produce a crop in an 

area that is not suited for successful 

commercial production of the eligible 

NAP crop as determined by FSA; 

(9) Failure of the producer to reseed 

to the same crop during the same 

planting period in those areas and under 

such circumstances where it is 

customary to do so; 

(10) Except for tree crops and 

perennials and as provided for in 

§ 1437.201, inadequate irrigation 

resources at time of planting; 

(11) Except as specified in § 1437.303, 

a loss of inventory or yield of 

aquaculture (including ornamental fish), 

floriculture, or ornamental nursery 

stemming from drought or any failure to 

provide water, soil, or growing media to 

such crop for any reason; 

(12) Any failure to provide a 

controlled environment or exercise good 

nursery practices when such controlled 

environment or practices are a condition 

of eligibility under this part; 

(13) Except as provided for mollusks 

in § 1437.303, any alleged or actual loss 

of inventory or missing noncontainerized inventory resulting from a 

managerial decision not to seed or raise 

the eligible NAP crop in containers, net 

pens, or wire baskets, on ropes, or using 

similar devices; 

(14) For crops grown using organic 

farming practices, failure to comply 

with organic standards; 

(15) Contamination by application or 

drift of prohibited substances onto land 

on which crops are grown using organic 

farming practices; or 

(16) Weeds. 

(e) The lack of an eligible cause of loss 

during a coverage period is not a 

compliance matter or issue. NAP will 

not provide assistance for crops that do 

not suffer from an eligible cause of loss 

during a coverage period. The relief 

provisions of these regulations and of 7 

CFR part 718 cannot be used to pay 

producers of crops that did not suffer 

from an eligible cause of loss during the 

coverage period. 

■ 19. Amend newly redesignated 

§ 1437.11 as follows: 

■ a. Revise paragraphs (a) through (c) 

and (e) through (g); 

■ b. In paragraphs (d)(3) remove the 

words ‘‘FSA administrative county 

office’’ and add the words 

‘‘administrative county office’’ in their 

place; 

■ c. In paragraph (d)(4) remove the 

words ‘‘FSA administrative county 

office’’ and add the words 

‘‘administrative county office’’ in their 

place, and remove the acronym ‘‘CCC’’ 

and add the acronym ‘‘FSA’’ in its place 

both times it appears; 

■ d. In paragraph (d)(5) remove the 

words ‘‘FSA administrative county 

office’’ and add the words 

‘‘administrative county office’’ in their 

place; and 

■ e. Add paragraph (h). 

The revisions and addition read as 

follows: 

§ 1437.11 Notice of loss, appraisal 

requirements, and application for payment. 

(a) In addition to the written notice of 

loss requirements specified for all crops 

in paragraphs (b) and (c) of this section, 

for hand-harvested crops and for other 

crops determined by FSA, at least one 

producer having a share in the unit 

must notify FSA of the damage or loss 

through the administrative county office 

for the unit within 72 hours of the date 

damage or loss on the unit first becomes 

apparent. Notification required under 

this paragraph may be via telephone to 

the administrative county office during 

business hours or via written notice on 

a form prescribed by FSA as specified 

in paragraph (c) of this section. 

(b) Unless written notice for handharvested crops has already been 

provided within 72 hours of date of 

damage or loss as specified in 

paragraphs (a) and (c) of this section, in 

case of damage to any NAP covered 

crop, at least one producer having a 

share in the unit must file a notice of 

loss in the administrative county office: 

(1) For prevented planting claims, 

within 15 days after the final planting 

date; 

(2) For low yield claims, the earlier of: 

(i) 15 days after the disaster 

occurrence or date of loss or damage to 

the crop first becomes apparent; or 

(ii) 15 days after the normal harvest 

date. 

(c) The notice of loss specified in 

paragraph (b) of this section must be for 

each crop and be in writing on a form 

prescribed by FSA and include: 

(1) The alleged cause of crop damage; 

(2) Date the disaster occurred and 

when the damage or loss first became 

apparent; 

(3) A copy of the contract or 

agreement if a contract or agreement of 

a guaranteed payment for planted 

acreage exists; 

(4) The type of loss that occurred, for 

example, prevented planting or low 

yield; 

(5) Practices used, for example, 

irrigated or non-irrigated; 

(6) For prevented planting: 

(i) Total intended planted acreage of 

the crop on the unit; 

(ii) Total acreage of the crop planted 

on the unit; 

(iii) Whether seed, chemicals, 

fertilizer, etc. was purchased, delivered, 

or an arrangement for purchase or 

delivery was made for the intended to 

be planted crop; 

(iv) What and when land preparation 

measures were completed, and 

(v) What has been done or will be 

done with the acreage, for example, 

abandoned, replanted, etc.; 

(7) For low yield: 

(i) Total acreage devoted to the crop 

in the unit; 

(ii) Total acreage of the crop affected; 

(iii) What and when land preparation 

measures and practices were completed 

before and after the loss; and 

(iv) What will be done with the 

affected crop acreage, for example, 

harvested, destroyed, replanted to a 

different crop, abandoned, etc.; and 


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74578 Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Rules and Regulations 

(8) Any other information requested 

by an FSA authorized representative. 

* * * * * 

(e) Crop acreage for which an 

application for coverage has been filed, 

that is intended for production of forage 

seed and for which a notice of loss is 

filed indicating the crop acreage will not 

be harvested as seed, will be appraised 

for potential production of seed when 

producers provide FSA acceptable 

evidence of a contract to produce seed 

for the current crop year or acceptable 

records of acreage and seed production 

for three or more of the last 5 

consecutive crop years, as determined 

by FSA. 

(f) Forage acreage for which a notice 

of loss is filed and: 

(1) Catastrophic coverage was 

obtained for forage intended to be 

grazed will have NAP benefits 

calculated based on § 1437.401(f); 

(2) Catastrophic coverage was 

obtained for forage that was intended to 

be mechanical harvested but will be 

grazed and not mechanical harvested; 

(i) Must have an appraisal and release 

for the unit to have NAP benefits 

calculated based on mechanical 

harvested forage; or 

(ii) For which an appraisal or release 

was not obtained, will have a loss 

calculated as specified in § 1437.401(f). 

(3) Buy-up coverage was obtained for 

forage intended to be mechanically 

harvested but will be grazed and not 

mechanically harvested: 

(i) Must have an appraisal and release 

in order for the unit to have NAP 

benefits calculated based on the loss of 

expected mechanically harvested forage; 

or 

(ii) For which an appraisal or release 

was not obtained is ineligible for 

payment consideration and will have 

the unit guarantee assigned to the forage 

crop acreage. 

(g) Producers must file an application 

for payment on a form specified by FSA 

to apply for NAP payments within 60 

days of the last day of coverage for the 

crop year for any NAP covered crop in 

the unit. 

(h) A notice of loss under paragraph 

(a) of this section filed beyond the time 

specified in this section or notification 

provided under paragraph (b) of this 

section may satisfy the requirements of 

these provisions, if, at the discretion of 

FSA, the notice is filed at such time that 

permits: 

(1) An authorized FSA representative 

to verify information on the notice of 

loss by inspecting the affected acreage 

or the crop or commodity involved; and 

(2) The county committee or an 

authorized FSA representative the 

opportunity to determine that eligible 

disaster conditions caused the damage 

or loss. 

■ 20. Amend newly redesignated 

§ 1437.12 as follows: 

■ a. Redesignate paragraph (b) as 

paragraph (e); 

■ c. Remove paragraphs (c) and (d); and 

■ d. Add paragraphs (b) through (d) and 

(f) through (i). 

The additions read as follows: 

§ 1437.12 Average market price and 

payment factors. 

* * * * * 

(b) For each crop and location (State 

or county or other location as 

determined appropriate by FSA), FSA 

will establish an average market price 

using the following method: 

(1) Obtaining market prices for each 

crop for the 5 consecutive crop years 

immediately preceding the crop year of 

coverage, if available; then 

(2) Dropping the crop years in the 5 

consecutive crop years with the highest 

and lowest prices; and then 

(3) Averaging the prices for the 

remaining 3 crop years in the 5 

consecutive crop years; and 

(4) If 5 crop years of data is not 

available for determining the average 

market price, FSA will use the best data 

available, as determined by FSA, for as 

many crop years of average market price 

data as possible within the 5 

consecutive crop years immediately 

preceding the previous crop year and 

determine an average market price for 

the crop by computing a simple average 

of the prices for those years. 

(c) FSA will disregard small 

differences in prices for a crop based on 

different types or varieties or various 

intended uses. If FSA determines there 

is a significant amount of production 

being marketed in a location or region 

at significantly different prices, FSA 

will determine whether or not to 

establish different average market prices 

for subsequent crop years. 

(d) Separate average market prices 

may be established within a State based 

on conventional or organic practices or 

the intended market, as determined by 

FSA. 

* * * * * 

(f) Payment factors will be used to 

calculate assistance for crops produced 

with significant and variable harvesting 

expenses that are not incurred because 

the crop acreage was prevented planted, 

or planted but not harvested, as 

determined by FSA. The imposition of 

payment factors is based on the acre 

status and disposition not whether a 

NAP participant actually incurs or does 

not incur expenses. 

(g) The average market price used to 

determine the amount of NAP assistance 

for crop acreage reported with a specific 

intended use will be based on the 

smaller of the approved average market 

price established for either the specific 

intended use reported on the acreage 

report or actual market or actual use for 

which more than 50 percent of the 

acreage’s harvested production is 

marketed. For example: A producer 

reports 50 acres of carrots intended for 

fresh market and the producer suffers a 

70 percent loss of production on the 

acreage. Additionally, more than 50 

percent of the carrots actually produced 

from the 50 acres are sold as processed 

carrots. Because the established average 

market price for processed carrots is less 

than fresh carrots and more than 50 

percent of the harvested crop was 

marketed as processed carrots, the 

established average market price for 

processed carrots will be used to 

compute the producer’s NAP assistance. 

If an average market price had not been 

established for processed carrots in this 

example before the coverage period, 

then the average market price for fresh 

carrots would be used. 

(1) The provisions of this paragraph 

do not apply to secondary use, peanuts, 

seed intended uses, and small grain 

intended for use as forage. 

(2) [Reserved] 

(h) For crops with an established 

yield and market price for multiple 

intended uses, the average market price 

will be as provided in paragraph (g) of 

this section except that for producers 

who choose buy-up coverage under 

§ 1437.5(d), the average market price 

used to determine assistance may be 

based on historical production and 

acreage evidence provided by the 

participant. The evidence of actual final 

use of historical production must come 

from the 3 previous crop years 

immediately preceding the coverage 

year. Only years in which the producer 

had acreage and production harvested 

will be counted. In other words, if a 

producer only marketed a crop in 1 

previous year, FSA will review the 

evidence of final use in that year and 

based on the evidence for that year, 

determine a percent of production 

attributable to each use. Based on that 

determined percentage, an appropriate 

average market price and use will be 

calculated and determined, respectively. 

If more than 1 and up to 3 years of final 

use evidence are available, FSA will 

count all years and production and 

determine the average. If a producer had 

crop acreage and evidence of final use 

for any year in the 3-year period, but the 

producer does not submit evidence for 

any other year in the 3-year period for 


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which the producer also had acreage, 

the average market price will be as 

provided in paragraph (g) of this 

section. 

(i) A final payment price will be 

determined by multiplying, as 

appropriate, the average market price 

determined in this section by the 

applicable payment factor (that is, 

harvested, unharvested, or prevented 

planting). 

§ 1437.14 [Amended] 

■ 21. Amend newly redesignated 

§ 1437.14 as follows: 

■ a. In paragraph (a), remove the word 

‘‘shall’’ and add the word ‘‘will’’ in its 

place; 

■ b. Remove paragraph (b)(2); 

■ c. Redesignate paragraphs (b)(3) 

through (5) as paragraphs (b)(2) through 

(4), respectively; 

■ d. In newly redesignated paragraphs 

(b)(2) through (4) remove the reference 

‘‘part 760 of this title’’ and add the 

reference ‘‘part 1416 of this chapter’’ in 

its place each time it appears; and 

■ e. In paragraph (d), remove the word 

‘‘FSA’’ and add the word ‘‘county’’ in its 

place. 

§ 1437.15 [Amended] 

■ 22. Amend newly redesignated 

§ 1437.15 as follows: 

■ a. Remove paragraph (b); and 

■ c. Redesignate paragraph (c) as 

paragraph (b). 

■ 23. Amend newly redesignated 

§ 1437.16 as follows: 

■ a. In paragraph (b), remove the word 

‘‘shall’’; 

■ b. In paragraph (c) introductory text, 

remove the words ‘‘shall be’’ and add 

the word ‘‘is’’ in their place; 

■ c. In paragraph (e), remove the words 

‘‘shall be’’ and add the word ‘‘are’’ in 

their place, and remove the acronym 

‘‘CCC’’ and add the acronym ‘‘FSA’’ in 

its place; 

■ d. In paragraph (f), remove the word 

‘‘shall’’ and add the word ‘‘will’’ in its 

place; 

■ e. Revise paragraph (g); 

■ f. In paragraph (i), remove the word 

‘‘shall’’ and add the word ‘‘will’’ in its 

place; 

■ g. Revise paragraph (j); and 

■ h. Add paragraphs (m) through (p). 

The additions and revisions read as 

follows: 

§ 1437.16 Miscellaneous provisions. 

* * * * * 

(g) The liability of any person for any 

penalty under this part is in addition to 

any other liability under any civil or 

criminal fraud statute or any other 

provision of law. 

* * * * * 

(j) For the purposes of 28 U.S.C. 

3201(e), the Secretary waives the 

ineligibility to receive benefits under 

this program but only for beneficiaries 

who as a condition of such waiver agree 

to apply the benefits to reduce the 

amount of the judgment lien. 

* * * * * 

(m) Any person or legal entity who 

has a debt from nonpayment of the 

premium for coverage levels specified in 

§ 1437.5(c) will be ineligible for 

assistance under any subsequent crop 

year NAP coverage on any crop from the 

crop year of nonpayment of premium 

until the debt is paid in full. 

(1) If a person or legal entity is 

ineligible for NAP assistance due to the 

debt because of the nonpayment of 

premium, FSA will permit the person or 

legal entity to file an application for 

coverage together with payment of any 

service fees; however, that application 

and payment of service fees will not 

make the person or legal entity eligible 

for any assistance until the premium 

debt is paid in full. 

(2) Service fees paid with applications 

for coverage that are filed by persons or 

legal entities who are ineligible for NAP 

assistance as specified in paragraph (m) 

of this section will not be credited to 

any unpaid premium debt nor are they 

refundable. 

(n) A person or legal entity ineligible 

for NAP assistance under paragraph (m) 

of this section may become eligible for 

future NAP assistance if they remit all 

unpaid debt related to the nonpayment 

of premium before the application for 

payment filing deadline (see 

§ 1437.11(g)). 

(o) Any NAP payment that was not 

issued for a prior NAP crop year due to 

an outstanding debt as specified in 

paragraph (m) of this section will not be 

issued. 

(p) Unpaid debt related to the failure 

to pay any premium satisfied by 

administrative offset will reinstate the 

eligibility of a person or legal entity 

from the date the offset satisfies all the 

unpaid premium debt with interest. 

■ 24. Add § 1437.17 to read as follows: 

§ 1437.17 Matters of general applicability. 

(a) The regulations in this part and 

FSA’s interpretation of the regulations 

in this part, the basic provisions, and 

internal agency directives issued to FSA 

State and county offices are matters of 

general applicability and are not 

individually appealable in 

administrative appeals according to 

§§ 11.3 and 780.5 of this title. 

Additionally, the regulations in this part 

and any FSA decisions that are not 

based on specific facts derived from an 

individual participant’s application, 

contract, or file are not appealable under 

parts 11 or 780 of this title. Examples of 

such decisions include how NAP is 

generally administered, signup 

deadlines, payment rates, or any other 

generally applicable matter or 

determination that is made by FSA for 

use in all similarly situated 

applications. The only extent to which 

the matters referenced in this section are 

reviewable administratively in an 

appeal forum is whether FSA’s 

determination of facts incidental to the 

case and decision to apply the generally 

applicable matter is in conformance 

with the regulations in this part. 

(b) The relief provisions of 7 CFR part 

718 are applicable only to participant 

ineligibility and noncompliance 

decisions. The relief provisions cannot 

be used to extend a benefit or assistance 

not otherwise available under law or not 

otherwise available to others who have 

satisfied or complied with all the 

eligibility and compliance requirements 

of this part. Equitable relief provisions 

of part 718 of this title cannot be used 

to obtain a review of either these 

regulations, the requirements of this 

part, the agency’s interpretations of this 

part, or compliance provisions of this 

part. 

Subpart B—Determining Yield 

Coverage Using Actual Production 

History 

■ 25. Amend § 1437.102 as follows: 

■ a. In paragraph (b)(1), remove the year 

‘‘2005’’ and add the year ‘‘2015’’ in its 

place, and remove the term ‘‘1999 

through 2003’’ and add the term ‘‘2009 

through 2013’’ in its place; 

■ b. In paragraph (b)(5)(i), remove the 

words ‘‘irrigated, non-irrigated, and 

organic practices’’ and add the words 

‘‘irrigated and non-irrigated’’ in their 

place; 

■ c. Redesignate paragraphs (b)(6) 

through (8) as paragraphs (b)(8) through 

(10), respectively; 

■ d. Add paragraphs (b)(6) and (7); 

■ e. In paragraphs (c)(1) and (2), add the 

words ‘‘in a crop year that is not a 

bypass year’’ immediately after the 

words ‘‘report of production’’; 

■ f. In paragraph (c)(3), remove the 

reference ‘‘§ 1437.7’’ and add the 

reference ‘‘§ 1437.8’’ in its place; 

■ g. In paragraph (d)(1), remove the 

words ‘‘production, as determined by 

CCC’’ add the words ‘‘production in a 

crop year that is not a bypass year, as 

determined by CCC’’ in their place; 

■ h. In paragraph (d)(2), remove the 

reference ‘‘§ 1437.7’’ and add the 

reference ‘‘§ 1437.8’’ in its place; 


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■ i. In paragraph (e)(3), remove the word 

‘‘Shall’’ and add the word ‘‘Will’’ in its 

place; 

■ j. In paragraph (g), remove the year 

‘‘2000’’ and add the year ‘‘2014’’ in its 

place and remove the acronym ‘‘CCC’’ 

and add the acronym ‘‘FSA’’ in its 

place; 

■ k. In paragraph (h), remove the words 

‘‘50 percent of the initial approved 

yield’’ and add the words ‘‘the unit 

guarantee’’ in their place, and remove 

the acronym ‘‘CCC’’ each time it appears 

and add the acronym ‘‘FSA’’ in its 

place; and 

■ l. Revise paragraph (j). 

The additions and revision read as 

follows: 

§ 1437.102 Yield determinations. 

* * * * * 

(b) * * * 

(6) Will be adjusted on a State-wide 

basis, for crops grown on certified 

organic and transitional acreage for 

which FSA has established a separate 

organic price as specified in 

§ 1437.12(b), based on an average of 

FCIC organic yield reductions, as 

determined by FSA, for the same crop 

in the same State. 

(7) May be adjusted on a county-wide 

or regional basis for crops grown on 

certified organic and transitional 

acreage for which FSA has established 

a separate organic price as specified in 

§ 1437.12(b), based on the most 

representative available historical 

information, as determined by FSA. 

* * * * * 

(j) A producer who has not shared in 

the risk of the production of the crop for 

more than two crop years during the 

base period, as determined by FSA, will 

have an approved yield calculated based 

on a combination of 100 percent of the 

applicable T-yield and any actual yield 

for the minimum crop years of the 

producer’s APH base period. Producers 

who have produced the crop for one or 

more crop years must provide FSA, at 

the administrative county office serving 

the area in which the crop is located, a 

certification of production and 

production records for the applicable 

crop years as specified in § 1437.8. 

* * * * * 

■ 26. Revise § 1437.103 to read as 

follows: 

§ 1437.103 Late-planted acreage. 

(a) Producers planting crop acreage 

after the final planting date and during 

the late planting period, as determined 

by FSA, may be eligible for reduced 

coverage as specified in paragraphs (b) 

and (c) of this section. 

(b) Crops with multiple planting 

periods and value loss crops are not 

eligible for reduced coverage for late 

planting. Exceptions to this are the last 

planting period of multiple planted 

crops and multiple-planting periods 

having a defined gap of 60 days or more 

between harvest date of the previous 

planting period and beginning of the 

immediately following planting period. 

(c) For crops with a growing period of: 

(1) 60 days or less and planted: 

(i) From 1 to 5 calendar days after the 

final planting date, production will be 

assigned equal to 5 percent of unit 

expected production for each day the 

crop is actually planted after the final 

planting date; 

(ii) From 6 days after the final 

planting date, production will be 

assigned equal to the unit guarantee for 

the late planted crop acreage. 

(2) 61 to 120 calendar days and 

planted: 

(i) From 1 to 5 calendar days after the 

final planting date, production will be 

assigned equal to 5 percent of expected 

unit production of the applicable lateplanted crop acreage and for days 6 

through 20 an additional 1 percent for 

each day the crop is planted after the 

final planting date; 

(ii) From 21 days after the final 

planting date, production will be 

assigned equal to the unit guarantee for 

the late planted crop acreage. 

(3) 121 calendar days or more and 

planted: 

(i) From 1 to 5 calendar days after the 

final planting date, production will be 

assigned equal to 5 percent of expected 

production of the applicable lateplanted crop acreage and for days 6 

through 25 an additional 1 percent for 

each day the crop is planted after the 

final planting date. 

(ii) From 26 or more calendar days 

after the final planting date, production 

will be assigned equal to unit guarantee 

of the producer’s expected production 

of the applicable late-planted crop 

acreage. 

§ 1437.104 [Amended] 

■ 27. In § 1437.104(a)(2) remove the 

reference ‘‘§ 1437.10(d)’’ and add the 

reference ‘‘§ 1437.11(e)’’ in its place. 

■ 28. Amend § 1437.105 as follows: 

■ a. In paragraph (a) introductory text, 

remove the word ‘‘shall’’ and add the 

word ‘‘will’’ in its place; 

■ b. In paragraph (a)(1), remove the 

words ‘‘eligible acreage planted’’ and 

add the words ‘‘acres devoted’’ in their 

place; 

■ c. In paragraph (a)(2), remove the 

words ‘‘50 percent’’ and add the words 

and punctuation ‘‘50, 55, 60, or 65 

percent, as selected by the producer as 

specified in § 1437.5;’’ in their place; 

and 

■ d. Revise paragraph (a)(5); and 

■ e. Add paragraphs (c), (d), (e), and (f). 

The revision and additions read as 

follows: 

§ 1437.105 Determining payments for low 

yield. 

(a) * * * 

(5) Multiplying the amount calculated 

as specified in paragraph (a)(4) of this 

section by 55 or 100 percent (selected by 

the producer as specified in § 1437.5) of 

the final payment price calculated as 

specified in § 1437.12; and 

* * * * * 

(c) The crops and locations eligible for 

quality adjustments will be determined 

by the Deputy Administrator in advance 

of the coverage period, only if 

supporting documentation of industry 

standards for quality adjustments are 

available. For specific crops and 

locations determined by the Deputy 

Administrator for which buy-up 

coverage under § 1437.5(d) is elected 

and for which adjustments to net 

production based on quality losses will 

be authorized for a coverage period in 

accordance with this paragraph, 

producers may opt for an adjustment of 

net production of a covered crop as 

specified in paragraph (a)(3) of this 

section based on a specific measure of 

quality against a set of standards that are 

acceptable to FSA. The standards and 

permissible adjustments to net 

production based on alleged quality 

losses stemming from eligible causes of 

loss in a coverage period will be based 

on FSA’s review of sufficient 

documentation and are subject to FSA 

acceptance and State committee 

recommendation to the Deputy 

Administrator. The crops and locations 

where quality adjustments will be 

permitted will be as specified on a list 

maintained by FSA. 

(d) Production will not be adjusted 

under this section unless all other 

provisions of this section are met and 

the crop and location are included on a 

list of approved crops and locations 

before the beginning of the coverage 

period for the crop. 

(e) A producer of a NAP covered crop 

in a location and coverage period 

approved by FSA as specified in 

paragraphs (c) and (d) of this section 

who opts for the quality loss adjustment 

option must submit verifiable records 

obtained by testing or analysis of the 

specific crop’s production and the 

alleged loss of quality stemming from an 

eligible cause of loss in the coverage 

period. Records must meet requirements 

of § 1437.8(a)(3). 

(f) If a quality adjustment option is 

sought by a producer and approved for 

a crop year, FSA will enter the adjusted 


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value of net production into the 

producer’s actual production history 

yield database for the loss year. The 

lower actual yield that results from the 

quality adjustment will be used for 

future approved yield calculations. 

■ 29. Amend § 1437.106 as follows: 

■ a. Revise paragraph (d); 

■ b. In paragraph (e), remove the words 

‘‘shall consist’’ and add the word 

‘‘consists’’ in its place; 

■ c. In paragraph (g) introductory text, 

remove the words ‘‘Administrative 

FSA’’ and add the words 

‘‘administrative county’’ in their place; 

■ d. In paragraph (g)(2), remove the 

reference ‘‘§ 1437.10’’ and add the 

reference ‘‘§ 1437.11’’ in its place; 

■ e. In paragraph (i), remove the words 

‘‘in excess of a 50 percent loss level’’ 

and add the words ‘‘based on the 

applicable guarantee’’ in their place; 

and 

■ f. Add paragraph (j). 

The revision and addition read as 

follows: 

§ 1437.106 Honey. 

* * * * * 

(d) In addition to filing a report of 

acreage in accordance with § 1437.8, 

honey producers must provide a record 

of colonies to FSA. The report of 

colonies must be filed before the crop 

year for which producers seek to 

maintain coverage. The report of 

colonies must include: 

* * * * * 

(j) Premiums for coverage levels 

specified in § 1437.5(c) will be 

calculated based on the highest number 

of colonies reported during the program 

year. 

■ 30. Amend § 1437.107 as follows: 

■ a. In paragraph (c), remove the 

reference ‘‘§ 1437.6’’ and add the 

reference ‘‘§ 1437.7’’ in its place, and 

remove the acronym ‘‘CCC’’ and add the 

acronym ‘‘FSA’’ in its place; 

■ b. In paragraph (d) introductory text, 

remove the reference ‘‘§ 1437.7’’ and 

add the reference ‘‘§ 1437.8’’ in its 

place; 

■ c. In paragraph (e), remove the words 

‘‘shall be’’ and add the word ‘‘is’’ in 

their place, and remove the acronym 

‘‘CCC’’ in both places it appears and add 

the acronym ‘‘FSA’’ in its place; 

■ d. In paragraph (f), remove the words 

‘‘shall be’’ and add the word ‘‘is’’ in 

their place; 

■ e. In paragraph (g), remove the words 

‘‘shall be’’ and add the word ‘‘will’’ in 

their place; 

■ f. In paragraph (i), remove the words 

‘‘in excess of a 50 percent loss level’’ 

and add the words ‘‘based on the 

applicable guarantee’’ in its place; and 

■ g. Add paragraph (j). 

The addition reads as follows: 

§ 1437.107 Maple sap. 

* * * * * 

(j) Premiums for coverage levels 

specified in § 1437.5(c) will be 

calculated based on the number of taps 

reported by the producer. 

Subpart C—Determining Coverage For 

Prevented Planted Acreage 

§ 1437.201 [Amended] 

■ 31. In § 1437.201(a), remove the word 

‘‘shall’’. 

§ 1437.202 [Amended] 

■ 32. Amend § 1437.202 as follows: 

■ a. In paragraph (a)(7), remove the 

words ‘‘by the final’’ and add the words 

‘‘by 55 or 100 percent, as selected by the 

producer as specified in § 1437.5, of the 

final’’ in their place, and remove the 

reference ‘‘§ 1437.11’’ and add the 

reference ‘‘§ 1437.12’’ in its place; and 

■ b. In paragraph (b), remove the word 

‘‘shall’’ and add the word ‘‘will’’ in its 

place. 

Subpart D—Determining Coverage 

Using Value 

■ 33. Amend § 1437.301 as follows: 

■ a. Revise paragraph (a); 

■ b. In paragraph (c) introductory text, 

remove the reference ‘‘§ 1437.6’’ and 

add the reference ‘‘§ 1437.7’’ in its 

place; and 

■ c. Add paragraph (d). 

The revision and addition read as 

follows: 

§ 1437.301 Value loss. 

(a) Special provisions are required to 

assess losses and calculate assistance for 

a few crops and commodities that do 

not lend themselves to yield loss 

situations. Assistance for these 

commodities is calculated based on the 

loss of value at the time of disaster. FSA 

determines which crops are value-loss 

crops, but unless otherwise announced, 

value-loss crops are those identified in 

§§ 1437.303 through 1437.309. Lost 

production of value loss crops is eligible 

for payment only as specified in this 

subpart. 

* * * * * 

(d) For coverage levels specified in 

§ 1437.5(c), producers must pay a 

premium equal to the lesser of: 

(1) The producer’s share, times the 

maximum dollar value for coverage 

sought, times the coverage level, times 

the average market price, times a 5.25 

percent premium fee; or 

(2) A 5.25 percent premium fee times 

the applicable payment limitation. 

■ 34. Revise § 1437.302 to read as 

follows: 

§ 1437.302 Determining payments. 

(a) Subject to all restrictions and the 

availability of funds, value loss 

payments for qualifying losses will be 

determined by: 

(1) Multiplying the field market value 

of the crop before the disaster, or for 

buy-up coverage specified in 

§ 1437.5(c), the lesser of the field market 

value of the crop before the disaster or 

the maximum dollar value for coverage 

sought, by 50, 55, 60, or 65 percent, as 

selected by the producer as specified in 

§ 1437.5; 

(2) Subtracting the sum of the field 

market value after the disaster and value 

of ineligible causes of loss from the 

result from paragraph (a)(1) of this 

section; 

(3) Multiplying the result from 

paragraph (a)(2) of this section by the 

producer’s share; 

(4) Multiplying the result from 

paragraph (a)(3) of this section by 55 or 

100 percent, as selected by the producer 

as specified in § 1437.5, plus whatever 

appropriate factor reflects savings from 

non-harvesting of the damaged crop or 

other factors as appropriate; and 

(5) Subtracting the producer’s share of 

any salvage value, if applicable. 

(b) [Reserved] 

■ 35. Amend § 1437.303 as follows: 

■ a. In paragraph (a) introductory text, 

remove the words ‘‘is compensable’’ and 

add the words ‘‘will have NAP 

assistance calculated’’ in their place, 

and remove the world ‘‘shall’’; 

■ b. In paragraph (d)(3), add the words 

and punctuation ‘‘on ropes,’’ 

immediately after ‘‘net pens,’’; 

■ c. Redesignate paragraphs (e) and (f) 

as paragraphs (f) and (g); and 

■ d. Add paragraph (e). 

The addition reads as follows: 

§ 1437.303 Aquaculture, including 

ornamental fish. 

* * * * * 

(e) For mollusks that are not planted 

or seeded in containers, net pens, on 

ropes, wire baskets, or similar device 

designed for the containment and 

protection of the mollusks, the only 

eligible cause of loss of mollusks or 

missing mollusk inventory will be a 

direct result of a National Oceanic and 

Atmospheric Administrationdetermined tropical storm, typhoon, or 

hurricane. 

* * * * * 

§ 1437.304 [Amended] 

■ 36. Amend § 1437.304 as follows: 

■ a. In paragraph (a) introductory text, 

remove the words ‘‘shall be’’ and add 

the word ‘‘is’’ in their place; and 


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■ b. In paragraph (g), remove the words 

‘‘shall be’’ and add the word ‘‘are’’ in 

their place both times they appear. 

§ 1437.305 [Amended] 

■ 37. In § 1437.305(e), remove the word 

‘‘shall’’ and add the word ‘‘will’’ in its 

place. 

§ 1437.306 [Amended] 

■ 36. In § 1437.306(c), remove the word 

‘‘shall’’ and add the word ‘‘will’’ in its 

place. 

§ 1437.308 [Amended] 

■ 39. In § 1437.308(d)(3), remove the 

words ‘‘a CCC-certified’’ and add the 

words ‘‘an FSA-certified’’ in their place. 

§ 1437.309 [Amended] 

■ 40. Amend § 1437.309 as follows: 

■ a. In paragraph (c), remove the words 

‘‘shall be’’ and add the word ‘‘is’’ in 

their place; 

■ b. In paragraph (d), removed the word 

‘‘shall’’ and add the word ‘‘will’’ in its 

place; and 

■ c. In paragraph (e), remove the 

reference ‘‘§ 1437.7’’ and add the 

reference ‘‘§ 1437.8’’ in its place, and 

remove the acronym ‘‘CCC’’ and add the 

acronym ‘‘FSA’’ in its place. 

§ 1437.310 [Amended] 

■ 41. Amend § 1437.310 as follows: 

■ a. In paragraph (b)(1), remove the 

word ‘‘shall’’ and add the word ‘‘will’’ 

in its place; 

■ b. In paragraphs (c)(1) and (2), remove 

the reference ‘‘§ 1437.11’’ and add the 

reference ‘‘§ 1437.12’’ in its place both 

times it appears; and 

■ c. In paragraph (h), remove the word 

‘‘shall’’ and add the word ‘‘will’’ in its 

place both times it appears. 

Subpart E—Determining Coverage of 

Forage Intended for Animal 

Consumption 

■ 42. Revise § 1437.401 to read as 

follows: 

§ 1437.401 Forage. 

(a) Forage eligible for benefits under 

this part is limited to mature vegetation, 

as determined by FSA, produced in a 

commercial operation. Benefits are not 

available for first-year seeding of alfalfa 

and similar vegetation when production 

is not produced in the seeding year, as 

determined by FSA. The commercial 

operation must use acceptable farming, 

pasture, and range management 

practices for the location necessary to 

sustain sufficient quality and quantity of 

the vegetation so as to be suitable for 

grazing livestock or mechanical harvest 

as hay or seed. Forage to be 

mechanically harvested will be treated 

under the rules for low-yield crops as 

calculated under § 1437.103, except 

claims on forage for grazing benefits will 

be determined according to paragraph 

(f) of this section. The provisions in this 

subpart apply to all claims including 

forage for mechanical harvest. 

(b) Producers of forage must, in 

addition to the records required in 

§ 1437.8, specify the intended method of 

harvest of all acreage intended as forage 

for livestock consumption as either 

mechanically or grazed. 

(c) Producers must request an 

appraisal from the administrative 

county office for the unit prior to the 

onset of grazing of any intended 

mechanically harvested forage acreage 

that will be both mechanically 

harvested and grazed. 

(d) Forage acreage reported to FSA as 

intended to be mechanically harvested, 

but which is instead subsequently 

grazed, will be considered for crop 

definition purposes as mechanically 

harvested. Expected production of the 

specific acreage for which catastrophic 

coverage was obtained will be 

calculated on the basis of carrying 

capacity. The loss of such grazed forage 

will be determined according to 

paragraph (f) of this section. For acreage 

intended to be mechanically harvested 

which is instead subsequently grazed, 

the loss of intended mechanically 

harvested forage may alternatively be 

determined based on a review of 

acceptable production evidence or 

appraisal of the specific crop acreage. 

As part of the payment computation for 

this loss, intended mechanically 

harvested forage crop acreage that is not 

mechanically harvested but instead 

grazed will be deemed to be unharvested for the purposes of 

determining a payment factor. 

(e) Small grain forage is the specific 

acreage of wheat, barley, oats, triticale, 

or rye intended for use as forage. Small 

grain forage is a separate crop and 

distinct from any other forage 

commodities and other intended uses of 

the small grain commodity. In addition 

to the records required in § 1437.8, 

producers must specify whether the 

intended forage crop is intended for fall 

and winter, spring, or full season forage. 

In addition to other eligibility 

requirements, FSA will consider other 

factors, such as water sources and 

available fencing, and adequate 

fertilization to determine small grain 

forage eligibility, yields, and 

production. 

(f) FSA will establish forage losses of 

acreage intended to be grazed including, 

in some cases, acreage intended to be 

mechanically harvested but instead 

subsequently grazed for producers with 

catastrophic coverage, on the basis of: 

(1) The percentage of loss of similar 

mechanically-harvested forage acreage 

on the farm, or on similar farms in the 

area when approved yields have been 

calculated to determine loss; or 

(2) Where there is no similar 

mechanically-harvested forage acreage 

on the farm or similar farms in the area, 

the collective percentage of loss as 

determined by FSA for the geographical 

region after consideration of at least two 

independent assessments of grazed 

forage acreage conditions. 

(i) The assessments must be 

completed by forage or range specialists 

in Federal, State, and local government 

agencies, educational institutions, and 

private companies not having a 

financial interest in the outcome of the 

assessment. Collective percentage of 

loss determined by FSA for the 

geographical region may be based on 

any or all the following methods as may 

be available and as determined 

appropriate by the Deputy 

Administrator: 

(A) Independent assessments of 

grazed forage acreage conditions; 

(B) The U.S. Drought Monitor; 

(C) Information obtained from loss 

adjusters with sufficient forage 

knowledge to provide grazing loss 

assessments; 

(D) Data obtained from approved areas 

where clippings are obtained on a 

regular basis to compare with expected 

levels of production in a geographical 

region; or 

(E) Information from Natural 

Resources Conservation Service 

technical service providers having a 

specialized knowledge. 

(ii) Neither the assessments 

themselves, nor collective loss 

percentages established in accordance 

with this section are subject to appeal. 

FSA’s determinations of geographical 

area for assessments and collective 

grazing loss are generally applicable to 

all similarly situated participants 

farming in such defined geographical 

region. 

§ 1437.402 [Amended] 

■ 43. In § 1437.402(b) introductory text, 

add the words ‘‘with catastrophic 

coverage’’ immediately after the word 

‘‘acreage’’, and remove the acronym 

‘‘CCC’’ and add the acronym ‘‘FSA’’ in 

its place. 

■ 44. Revise § 1437.403 to read as 

follows: 

§ 1437.403 Determining payments. 

(a) Subject to payment limits, 

availability of funds, and other limits as 

may apply, payments for catastrophic 


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Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Rules and Regulations 74583 

coverage of losses of forage reported to 

FSA as intended to be grazed will be 

determined by: 

(1) Multiplying the eligible acreage by 

the producer’s share; 

(2) Dividing the result from paragraph 

(a)(1) of this section by the carrying 

capacity or adjusted per day carrying 

capacity established for the specific 

catastrophic coverage acreage, as 

determined by FSA; 

(3) Multiplying the result from 

paragraph (a)(2) of this section by the 

number of days established as the 

grazing period; 

(4) Adding adjustments of AUD for 

practices and production to the product 

of paragraph (a)(3) of this section; 

(5) Multiplying the result from 

paragraph (a)(4) of this section by the 

applicable percentage of loss established 

by FSA; 

(6) Multiplying the amount of 

assigned AUD, as determined by FSA, 

by the producer’s share; 

(7) Subtracting the result from 

paragraph (a)(6) of this section from the 

result from paragraph (a)(5) of this 

section; 

(8) Multiplying the result from 

paragraph (a)(4) of this section by 0.50; 

(9) Subtracting the result from 

paragraph (a)(8) of this section from the 

result from paragraph (a)(7) of this 

section; and 

(10) Multiplying the result from 

paragraph (a)(9) of this section by 55 

percent of the final payment price 

established in accordance with 

§ 1437.12. 

(b) [Reserved] 

Subpart F—Determining Coverage in 

the Tropical Region 

■ 45. Amend § 1437.501 as follows: 

■ a. Revise paragraph (a); 

■ b. Remove paragraph (b)(2); and 

■ c. Redesignate paragraph (b)(3) as 

paragraphs (b)(2). 

The revision reads as follows: 

§ 1437.501 Applicability; definition of 

‘‘tropical region’’ and additional definitions. 

(a) This subpart applies to covered 

tropical crops in the tropical region, as 

those terms are defined in this subpart. 

Benefits under this part may be 

extended to those crops only to the 

extent that they are otherwise eligible 

for assistance under this part. Covered 

crops do not include ‘‘value loss’’ crops, 

as defined elsewhere in this part. For 

those crops that are covered by this 

subpart, loss and payment 

determinations for NAP covered in this 

part are determined by the rules that 

otherwise apply to NAP subject to the 

modifications provided by this subpart. 

The rules that otherwise apply include, 

but are not limited to, limitations on 

payments that are specified in part 1400 

of this chapter. 

* * * * * 

§ 1437.502 [Amended] 

■ 46. Amend § 1437.502 as follows: 

■ a. In paragraph (a), remove the words 

‘‘beginning in 2006 through subsequent 

years’’; 

■ b. Redesignate paragraphs (d)(1) and 

(2) as paragraphs (d) and (e), 

respectively; and 

■ c. In newly redesignated paragraph 

(d), remove the word ‘‘shall’’ and add 

the words ‘‘will be interpreted to’’ in its 

place. 

§ 1437.504 [Amended] 

■ 47. Amend § 1437.504 as follows: 

■ a. In paragraph (a), remove the 

reference ‘‘§ 1437.10(c)’’ and add the 

reference ‘‘§ 1437.11(d)’’ in its place; 

and 

■ b. In paragraph (b) introductory text, 

remove the reference ‘‘§ 1437.10’’ and 

add the reference ‘‘§ 1437.11’’ in its 

place. 

§ 1437.505 [Amended] 

■ 48. In § 1437.505(a) and (b)(1), remove 

the reference ‘‘§ 1437.10’’ and add the 

reference ‘‘§ 1437.11’’ in its place both 

times it appears. 

§§ 1437.3, 1437.4, 1437.8, 1437., 1437.11, 

1437.12, 1437.13, 1437.16, 1437.102, 

1437.104, 1437.201, 1437.301, 1437.304, 

1437.305, 1437.307, 1437.308, 1437.309, 

1437.310, 1437.402, 1437.502, 1437.503, 

1437.504 [Amended] 

■ 49. In addition to the amendments set 

forth above, in 7 CFR part 1437, remove 

the word ‘‘CCC’’ and add, in its place, 

the word ‘‘FSA’’ in the following places: 

■ a. In § 1437.3, in the definitions of 

‘‘Fiber’’, ‘‘Final planting date’’, ‘‘Food’’, 

‘‘Multiple planted’’, and ‘‘Normal 

harvest date’’; 

■ b. In § 1437.4(a)(1) and (3); 

■ c. In newly redesignated § 1437.8(a)(1) 

and (2), (e), both times it appears, and 

(f); 

■ d. In newly redesignated § 1437.11(d) 

introductory text and (d)(2)(ii) and (iii); 

■ e. In newly redesignated 

§ 1437.12(a)(2) and (4); 

■ f. In newly redesignated § 1437.13, 

each time it appears; 

■ g. In newly redesignated § 1437.16(d), 

each time it appears; 

■ h. In § 1437.102(b)(4), newly 

redesignated paragraph (b)(9), (c)(4) 

introductory text, (c)(4)(ii), (c)(5)(i) and 

(ii), and (f), both times it appears; 

■ i. In § 1437.104(a) introductory text; 

■ j. In § 1437.201(c)(2)(i) and (ii); 

■ k. In § 1437.301(c)(1) and (3); 

■ l. In § 1437.304(a)(1), (c), and (f); 

■ m. In § 1437.305(f); 

■ n. In § 1437.307(e); 

■ o. In § 1437.308(d)(1) and (4), and (e); 

■ p. In § 1437.310(d), (e)(3), (g)(1), and 

(i); 

■ q. In § 1437.402(a) introductory text, 

(a)(2), and (b)(3); 

■ r. In § 1437.502(c)(1) and (2); 

■ s. In § 1437.503(c)(2); and 

■ t. In § 1437.504(f). 

Signed on December 5, 2014. 

Val Dolcini, 

Executive Vice President, Commodity Credit 

Corporation, and Administrator, Farm 

Service Agency. 

[FR Doc. 2014–29082 Filed 12–12–14; 8:45 am] 

BILLING CODE 3410–05–P 


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