Source: https://www.federalregister.gov/documents/2014/09/26/2014-22879/agriculture-risk-coverage-and-price-loss-coverage-programs
Timestamp: 2018-12-12 13:57:46
Document Index: 692360799

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A Rule by the Farm Service Agency and the Commodity Credit Corporation on 09/26/2014
57703-57721 (19 pages)
Overview of ARC and PLC
ARC and PLC Decisions Must Be Made by Current Owners and Current Producers
ARC and PLC Programs Election
Base Acre Reallocation and Opportunity To Update Records
Current Owners Make Yield Updates and Base Acre Reallocation Decisions; Current Producers Elect and Producers Enroll
FSA Notifications of General 2014 Farm Bill Information for FSA Programs and ARC and PLC Provisions
https://www.federalregister.gov/d/2014-22879 https://www.federalregister.gov/d/2014-22879
This rule implements the new Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) Programs authorized by the Agricultural Act of 2014 (the 2014 Farm Bill). It also includes conforming changes to certain Farm Service Agency (FSA) regulations that apply to multiple programs. ARC and PLC provide producers a choice between a program that provides counter-cyclical type of payment support—PLC, and a revenue support type of program—ARC. During a defined election period, current producers can elect different programs for different covered commodities on a farm, for example, choosing PLC for corn and ARC county option for soybeans on the same farm. ARC offers the additional choice of a revenue guarantee based on average revenue for a county or on actual historical revenue for an individual farm. If a producer elects ARC individual coverage based on historical revenue for that specific farm, however, all the farm's covered commodities are elected with that option, with no option for PLC on that farm. This rule specifies the eligibility requirements, enrollment procedures, and payment calculations for ARC and PLC.
First annual enrollment date: By June 1, 2015, for the 2014 and 2015 crop years.
Brent Orr; telephone: (202) 720-7641. Persons with disabilities who require alternative means for communication should contact the USDA Target Center at (202) 720-2600.
The 2014 Farm Bill (Pub. L. 113-79) authorizes the new ARC and PLC Programs. ARC and PLC are Commodity Credit Corporation (CCC) programs operated for CCC by FSA. This rule discusses:
The basic structure for all payments to farms and producers under the ARC and PLC Programs;
The one-time opportunity owners will have to reallocate base acres;
The one-time opportunity for owners to update yields;
The one-time irrevocable program election that is required from all producers on a farm for the 2014 through 2018 crop years; and
The opportunity for producers to annually enroll farms in ARC and PLC each year from 2014 through 2018.
As specified in the 2014 Farm Bill, the following are covered commodities under ARC and PLC: wheat, oats, and barley (including wheat, oats, and barley used for haying and grazing); corn; grain sorghum; long grain rice; medium grain rice; pulse crops; soybeans; other oilseeds; and peanuts. This is the same list of commodities that were previously eligible for Average Crop Revenue Election (ACRE) Program and the counter-cyclical payments portion of the previous Direct and Counter-cyclical Payment Program (commonly known as DCP), which were repealed by the 2014 Farm Bill, except that cotton is not a covered commodity. In separate rulemaking implementing the Cotton Transition Assistance Payment (CTAP) Program, published on August 8, 2014 (79 FR 46335-46348), FSA previously explained that what were upland cotton base acres under the 2008 Farm Bill are now “generic base acres” under ARC and PLC. Provisions for generic base acres are described in detail later in this document. In that separate rulemaking, FSA also implemented some of the general provisions applicable to ARC and PLC (such as the requirement to report all cropland acres on a farm, and planting flexibility provisions), so those provisions are already in the regulation in 7 CFR part 1412.
The rule specifies what farms are eligible for ARC and PLC, what producers are eligible, actions that owners and producers must perform to be eligible for payments, election periods, and enrollment periods. Enrollment for both the 2014 and 2015 crop year will take place by June 1, 2015. That means that producers will have planted and harvested their 2014 crops before:
(1) Farm owners update their farm's planting history and yields;
(2) Farm owners reallocate base acres;
(3) Producers make election; and
(4) Producers make annual enrollment decisions.
Producers will know their 2014 planted acres and actual yields before they decide whether to elect and subsequently enroll for ARC or PLC. Several universities have partnered with USDA to provide web-based decision tools and calculators to help producers evaluate the available options under these programs for their farm, and these tools and calculators will be available in time for election decisions.
Any payments under ARC or PLC for the 2014 crop year will not be issued until late 2015 because, as specified in the 2014 Farm Bill, payments cannot be made until after October 1, 2015.
Both the 2014 Farm Bill and the Food, Conservation, and Energy Act of 2008 (Pub. L. 110-246, referred to as the 2008 Farm Bill) included a choice between two types of commodity programs. Both the 2008 and 2014 Farm Bills give producers a choice between a revenue program whose revenue target can move up and down with the market and a price program whose target price is fixed for the duration of the respective Farm Bill. In nearly all cases, eligible producers for ARC and PLC would also have been eligible for DCP and ACRE, the previous programs authorized by the 2008 Farm Bill that were repealed by the 2014 Farm Bill.
ARC and ACRE both establish revenue targets, not price targets. The guarantee for ARC elected with county option (ARC-CO) is based on average Start Printed Page 57704yields and U.S. crop market year average (MYA) prices as was the guarantee revenue target for ACRE. A 5-year Olympic average is used for yields (removing high and low) of the past 5 years under both ARC-CO and ACRE. ARC-CO uses a 5-year Olympic average (removing high and low) for price while ACRE used a 2-year average. This means that under ARC-CO as with ACRE, the guarantee moves with the market (increasing when market revenue is increasing and decreasing when market revenue is decreasing).
The guarantee for ARC elected with individual farm coverage option (ARC-IC) is based on average revenues at the farm level. The guarantee for ARC-IC is the farm's individual benchmark revenue based on the 5-year average of the annual benchmark revenues excluding the years with the highest and lowest annual revenues then averaging against all crops on the farm. (Benchmark revenue calculations are described in more detail later in this document.) Under ACRE, producers who elected ACRE agreed to a reduction in direct payments on the farm. The 2014 Farm Bill contains no direct payments.
Under the 2008 Farm Bill, the yield for the State was used to determine the ACRE guarantee. Under the 2014 Farm Bill, the yield for the county is used for ARC-CO. ARC is likely to provide better protection against low yield than ACRE did because producer yields are likely to be better represented by yields in their farm's county than in their State, because of similar growing conditions in the smaller geographic area of a county. Under ACRE, producers agreed to a reduction in a crop's loan rate for marketing assistance loans (MALs) and loan deficiency payments (LDPs); no similar loan rate reduction applies to producers on farms that elect ARC (loan rates for commodities are the same regardless of election).
PLC prices are set in the 2014 Farm Bill for the duration of the 2014 Farm Bill, as was the case with DCP with respect to the 2008 Farm Bill. For PLC, these are called reference prices. PLC makes payments based on historical base acres, although the base acres of covered commodities under the 2014 Farm Bill may differ from those under the 2008 Farm Bill based on the option owners have to reallocate base acres of covered commodities, upland cotton not being a covered commodity, and the use of generic base acres. (Base acre reallocation is described in more detail later in this document.) Under ARC and PLC, generic base acres planted to a covered commodity will be recognized as base acres of the planted covered commodity in certain instances (without regard to the base acres of that covered commodity that may be on the farm). In other words, when there are generic base acres on a farm and covered commodities are planted or there are eligible subsequently planted crop acreage, the acres planted to the covered commodity or eligible subsequently planted crop acreage that are attributed to the generic base acres become base acres of the covered commodity for the purposes of ARC and PLC, thereby increasing the base acres of that covered commodity on the farm (by virtue of planting covered commodities, or eligible subsequently planted crop acreage on generic base acres) only in the year of planting. As specified in § 1412.45, generic base acres on a farm will be attributed to a covered commodity as follows:
1. If a single covered commodity is planted or is eligible subsequently planted crop acreage and the total planted or eligible subsequently planted crop acreage exceeds the generic base acres on the farm, the generic base acres are attributed to that covered commodity in an amount equal to the total number of generic base acres on the farm.
2. If multiple covered commodities are planted or are eligible subsequently planted crop acreage and the total number of acres planted or eligible subsequently planted crop acreage to all covered commodities on the farm exceeds the generic base acres on the farm, the generic base acres will be attributed to each of the covered commodities on the farm on a pro rata basis to reflect the ratio of:
The planted and eligible subsequently planted crop acreage to a covered commodity on the farm; to
The total planted and eligible subsequently planted crop acreage to all covered commodities on the farm.
3. If the total number of planted and eligible subsequently planted crop acreage to all covered commodities on the farm does not exceed the generic base acres on the farm, the number of planted and eligible subsequently planted crop acreage to a covered commodity is attributed to that covered commodity.
In the 2014 Farm Bill, there is the one-time program irrevocable election between the ARC and PLC Programs that must be made by all current producers on a farm (current owners who have a share of crops on the farm are included as current producers). In contrast, under the 2008 Farm Bill, once a farm's producers and owners elected ACRE, the decision was irrevocable from the year of election through the 2012 crop year and an election for only the 2013 crop year was required for the 1-year extension of the 2008 Farm Bill. If ACRE was not elected in a crop year, the producers and owners on the farm could elect ACRE in the next crop year. Under the 2014 Farm Bill, all current producers on a farm are required to affirmatively and unanimously elect PLC or ARC during the single election period, and, if an election is not made, the farm will be ineligible for payments in the 2014 crop year and default to PLC for the 2015 through 2018 crop years. This provision is specified in the 2014 Farm Bill and neither FSA nor CCC has any discretion to specify a different policy for farms that do not have a valid election made during the election period. Farms with producers who do not make a valid election in the election period announced in this rule will not be eligible for 2014 crop year payments.
Under the 2008 Farm Bill, producers were ineligible for payments under the DCP and ACRE if the sum of base acres of covered commodities and peanuts on a farm was 10 acres or less. The 10-acre limitation did not apply to producers on a farm that was at least 50 percent owned by a socially disadvantaged farmer or rancher or a limited resource farmer or rancher. The 2014 Farm Bill likewise has a 10-acre limitation; however, producer payment eligibility on a farm having 10 or less base acres (including generic base acres) is no longer contingent upon the ownership of the farm. Rather, it depends solely on the number of base acres. A producer is not eligible for ARC or PLC payments on a farm having a sum total of 10 or less base acres; however, if that producer is a socially disadvantaged farmer or rancher or a limited resource farmer or rancher, such limitation does not apply.
This rule includes specific actions that must be made by owners and producers. The timing of enactment of the 2014 Farm Bill and publication of this regulation require FSA to distinguish “current owners” and “current producers” under this rule from “owners” and “producers” as defined in 7 CFR part 718. Many of the actions required under ARC and PLC (updating of planted and considered planted (P&CP) acres, reallocation of base acres, and yield updates) can only be made by the farm's current owners as of the date of those actions. As is discussed in greater detail below, current producers will be required to unanimously elect ARC or PLC during the specified election period and such election is irrevocable. That election period will be announced in a press release. The terms “current owner” and “current producer” are defined in this rule to mean the person or legal entity who is the owner or producer, as Start Printed Page 57705applicable, on the date the action, which is required by this rule, is actually made (during a prescribed period). Defining these terms is a clarification necessary to determine who is included as the relevant owner or producer eligible for the actions required under the ARC and PLC Programs.
Following the election period, enrollment will occur. Producers who were producers in 2014 (2014 producers on the farm) are eligible for 2014 enrollment; 2015 and subsequent crop year producers on a farm are eligible for 2015 and subsequent crop year enrollment. The core principle is that if the producers change from year to year, the producers who were on the farm in a given year are the ones who make the enrollment for that year, even if they are different from last year, and different from the ones who made the election.
Base acres are a key part of the payment formulas for CTAP, ARC, and PLC. Section 1111 of the 2014 Farm Bill specifies that the base acres in effect under sections 1001 and 1301 of the 2008 Farm Bill (7 U.S.C. 8702 and 8751), as adjusted, as of September 30, 2013, and used for DCP and ACRE constitute the base acres for CTAP, ARC, and PLC, subject to any reallocation, adjustment, or reduction as specified in Section 1112 of the 2014 Farm Bill. The 2014 Farm Bill requires adjustments to base acres for various reasons including, but not limited to, land no longer being devoted to agricultural uses. The term base acres includes generic base acres, which are the same as upland cotton base acres (upland cotton base acres are used only for CTAP; generic base acres are used in ARC and PLC).
As is discussed in more detail later in this document, ARC has two options, a county option—ARC-CO, and an individual farm option—ARC-IC. Base acres are key to payment eligibility for both programs. For ARC-CO, the benchmark revenue is based on average revenues at the county level for covered commodities; for ARC-IC, the guarantee is based on the average revenue for that specific farm. For ARC-CO, the “payment acres” used to calculate payments are equal to 85 percent of the base acres for a covered commodity; for ARC-IC, “the payment acres” used to calculate payments are equal to 65 percent of base acres on the farm. The farm's current producers can elect either ARC-CO or PLC on a covered commodity by covered commodity basis. In other words, they do not have to elect ARC-CO or PLC for all of the covered commodities; they can elect ARC-CO for some covered commodities and PLC for others. If the farm's current producers elect ARC-IC, however, the election applies to all the covered commodities on the farm.
During the election period that will be announced in a press release, all of the current producers on a farm must make an irrevocable, one-time, unanimous election of either of the two following options:
ARC-CO or PLC on a covered commodity-by-covered commodity basis (the election for each covered commodity on the farm can be for ARC-CO or PLC); or
The election made, if valid as prescribed in this rule, will apply to the farm for the 2014 through 2018 crop years. There are consequences of not making a unanimous or timely election. In the absence of a valid election on the farm, producers will be deemed to have elected PLC for all covered commodities on the farm for the 2015 through 2018 crop years and are not eligible for any 2014 crop year payment.
There are several factors that affect payments and therefore, the decision whether to elect ARC, PLC, or both. ARC and PLC are intended to supplement, not replace, regular crop insurance, so ARC payments are capped at 10 percent of the benchmark revenue. The PLC calculation does not include current yields, so if market year prices are above the reference price but current yields are low, no PLC payment would trigger. Both programs are subject to a $125,000 annual payment limit. That means that the total payments received, directly or indirectly by a person or legal entity (except for a joint venture or general partnership) for any crop year for ARC, PLC, LDPs, and marketing loan gains combined for all commodities except peanuts cannot exceed $125,000. Peanuts have a separate $125,000 payment limit for payments received from those same programs. Producers who enroll in PLC also have the option of purchasing Supplemental Coverage Option (SCO) through the USDA Risk Management Agency (RMA). Producers of covered commodities on farms that have elected and enrolled under ARC are ineligible for SCO on all ARC commodities. A separate regulation for SCO was published on July 1, 2014 (79 FR 37155-37166).
Current owners of farms will have a one-time opportunity to either retain the farm's 2013 base acres or reallocate base acres (except for cotton base acres, which, as discussed in the next section, become generic base acres for the purposes of ARC and PLC and cannot be reallocated) to reflect actual planting history for 2009 through 2012. Partial reallocations are not allowed; the only choice for reallocation is to reallocate the base acres on the farm to reflect actual planted and considered planted (P&CP) or subsequently planted crop acreage history for 2009-2012. The reallocation cannot increase the total number of base acres on the farm. A current owner can only reallocate base acres based on the actual P&CP or subsequently planted crop acreage history for 2009 through 2012; the owner cannot reallocate base acres to covered commodities that were not P&CP or subsequently planted crop acreage to a covered commodity on the farm in those years, or in proportions other than those reflected in the actual history. For example, if a farm has 100 percent corn base acres, but it planted 50 percent corn and 50 percent soybeans, on average, in 2009 through 2012, it can keep all corn base acres for ARC and PLC, or choose a 50 percent corn and 50 percent soybean reallocation, but it cannot reallocate to other covered commodities or other percentage allocations.
As required by the 2014 Farm Bill, FSA will provide current owners of farms with base acres a one-time opportunity to update planting records, including records of yields. Previously, base acres for DCP and ACRE eligibility were based on historical plantings that dated back several decades in most cases. Actual P&CP and subsequently planted crop acreage in 2009 through 2012 may differ greatly from the history that was the basis for establishment of the base acres. In advance of this reallocation opportunity provided for ARC and PLC, FSA will provide the farm operator and farm owners of record with a summary of the history of all covered commodities for their farm during the 2009 through 2012 crop years (as reported to FSA on acreage reports in each of those years). Acreage not reported to FSA will not be included in the summary. Although farm operators are not eligible to reallocate base acres or update yields unless they are also the owner, FSA will send a copy of this information to the farm operator who may assist the current owner with analyzing this information. Current owners will be provided an opportunity to update the records, provided that there are crop insurance records or other verifiable documentation available to Start Printed Page 57706support the updates. Updating the records to provide accurate information on P&CP acreage for covered commodities is independent of the decision whether or not to reallocate—a farm may decide to update the records, but then not reallocate.
Owners that update records should be aware that updating 2009 through 2012 records could adversely impact previously earned payments from other FSA or CCC programs that were conducted in those years based on those records (before any update). If a farm record is updated to reflect a new crop other than the one already recorded, any prior year program benefit under a variety of programs that may have been conducted in that year may be impacted. If, for example, a farm has recorded soybeans as an initial crop in 2010 and the farm owner updates the record to show that corn was the initial planted crop instead of soybeans, then if an amendment is made to change the previously recorded acreage of soybeans to corn, that change could impact benefits in 2010.
In the event that an update to a farm's records for 2009 through 2012 causes any payment under another FSA or CCC program to become unearned, the overpayment must be refunded to FSA or CCC in accordance with the rules for that program and FSA or CCC's rules governing the overpayment (7 CFR parts 718 and 1403). That would include payments to producers who may not be current owners, payments that were issued to either current or previous owners who were producers at the time those payments were made, as well as other current producers and previous producers.
Persons responsible for refunding any unearned payments will be determined using the rules for the program under which the overpayment was issued as well as either FSA or CCC's debt settlement rules (7 CFR parts 792 or 1403). Current owners are under no obligation to update records, but if they wish to do so, they must to do so before reallocating base acres because record updates cannot be made after reallocation.
Once records have been updated, the owner(s) will have the opportunity to reallocate the farm's base acres based on a proration of each covered commodity's P&CP acres in crop years 2009 through 2012 to the total P&CP acres of all covered commodities during that time. As discussed above, the reallocation of the farm's base acres will be based on a proration of each covered commodity's P&CP or subsequently planted crop acreage in crop years 2009 through 2012 to the total P&CP acres and subsequently planted crop acreage of all covered commodities on the farm during that time. The table provides an example of base acre reallocation for a farm with 500 acres of cropland and shows the relevant information required to see how an owner decided to reallocate the farm's base acres.
Base Acre Reallocation Example Table
2009 P&CP 1
2010 P&CP
2011 P&CP
2012 P&CP
Average P&CP 2009 through 2012
Reallocation percentage
2014 Base acre reallocation
Wheat 200 150 150 150 200 162.5 41.94 167.76
Barley 0 50 50 50 50 50 12.9 51.60
Dry Peas 100 200 150 200 150 175 45.16 180.64
Canola 100 0 0 0 0 0 0 0
Subtotal 400 400 350 400 400 387.5 100 400.00
Upland Cotton 100 100 50 100 150 N/A N/A 100
Generic Base Acres 2 N/A N/A N/A N/A N/A N/A N/A 100
Total 500 400 350 400 400 387.5 100 500
1“For the purpose of the example shown in this table, P&CP history shown reflects either P&CP or subsequently planted crop acreage.
2 The 100 upland cotton base acres that were in existence as of September 30, 2013, become generic base acres for the purposes of ARC and PLC and are not included in the reallocation or in the proration of P&CP or subsequently planted crop acreage of each covered commodity to the P&CP or subsequently planted crop acreage of all covered commodities.
In the base acre reallocation example table above, the owner has the following options:
Retain the 2013 base acres of 200 wheat, 100 dry peas, 100 canola and 100 acres of generic (do not reallocate any acres); or
Retain 100 acres of generic base acres, and reallocate base acres of covered commodities (based on the farm's P&CP or subsequently planted crop acreage history) to 167.76 wheat base acres (400 total base acres times 41.94 reallocation percentage), 51.6 barley base acres (400 total base acres times 12.9 reallocation percentage), 180.64 dry peas base acres (400 total base acres times 45.16 reallocation percentage). Therefore, the total base acres are 100 generic base acres and 400 reallocated base acres, for a total of 500 base acres.
The 2014 Farm Bill does not include upland cotton as a covered commodity for ARC and PLC. Upland cotton base acres that were in existence as of September 30, 2013, are generic base acres for the purposes of ARC and PLC as of October 1, 2013 (fiscal year 2014).
Generic base acres are treated for the purposes of ARC and PLC like other base acres, except that they cannot be reallocated. Generic base acres may:
Be planted to any crop including covered commodities, fruits, vegetables, minor oilseeds, or other crops;
Receive payment for the acres planted to a covered commodity
Be reduced for CRP participation;
Be reduced when taken out of agriculture production;
Be reduced on farms having more base acres than available cropland.
As stated in an example above, if generic base acres are planted to a covered commodity or eligible subsequently planted crop acreage, the covered commodity's crop acreage will be treated as base acres for that crop year for ARC and PLC payment calculations.
The 2014 Farm Bill specifies that the payment yield for PLC is either the counter-cyclical yield from the previous DCP program, or 90 percent of the farm's average yield from 2008 through 2012 for that commodity. The farm owner must choose which yield applies Start Printed Page 57707to the farm. (Note that, as specified in the 2014 Farm Bill, planted acres can be updated, and if that is done, the updated acres will be based on 2009 through 2012 data, while payment yield can be updated, and if done, the updated yields will be based on 2008 through 2012 data.) Therefore, FSA is providing owners of farms an opportunity to update, for each covered commodity on the farm, the payment yield that will be used for calculating PLC. The opportunity to update yields will occur before the election period. A current owner's decision to update yields is independent of subsequent decisions of current producers on that farm as to what program(s) to elect or subsequent enrollment decisions. In other words, a current owner can update yields for PLC and then the current producers on that farm may later elect and enroll in ARC.
If the Secretary at any time designates an oilseed or pulse crop as a covered commodity for PLC and there is not a counter-cyclical yield already established for that commodity, this rule specifies how an equivalent average yield will be established for that type of commodity for the purposes of PLC in section § 1412.33.
A press release will announce specific periods for yield updates and it is only during those periods that current owners of a farm can update yields.
As discussed above, current owners are allowed to update acreage records incidental to reallocating base acres and yield updates for a farm. Current producers on the farm elect ARC or PLC or a combination of ARC-CO and PLC. If during the established periods for yield updates or base reallocation which occur before the election period, current owners exercise the option to update yields or reallocate base acres, that yield update and base reallocation will apply to the farm and to any subsequent election unless the yield update or base reallocation is either withdrawn during the yield update or base reallocation period by any current owner, or rescinded, modified, or withdrawn by a current owner on the farm in the established yield update or base reallocation period. Neither FSA nor CCC is under any obligation to notify owners on a farm if a yield update or base reallocation has been filed, rescinded, modified, or withdrawn during the base reallocation period or yield update period. If a person or legal entity acquires ownership of a farm before the end of the election period and that farm already had an election of ARC or PLC made by current producers, FSA will provide the election status to the new owner on request, but is under no obligation to notify new owners or new producers whether an election has previously been made on that particular farm.
All current producers on a farm must unanimously make the one-time election of ARC or PLC for each covered commodity on the farm. If the current producers on the farm do not make a unanimous election, then the current producers on the farm are deemed to have elected PLC from 2015 through 2018. Although the 2014 Farm Bill provides that the current producers on the farm are deemed to have elected PLC commencing with the 2015 crop year, for administrative purposes, the farm will be deemed to have elected PLC commencing with the 2014 crop year. Nevertheless, per the 2014 Farm Bill, the farm is not eligible for any 2014 payments. To deem such election to occur commencing with the 2014 crop year serves to resolve any potential ambiguity with respect to eligibility for SCO.
Election is not enrollment. In order to be eligible for payments, producers on the farm must annually enroll their respective share interest of base acres or interest of covered commodities. Only producers that annually enroll are eligible to receive payments. The role of owners versus the roles for producers is specified in the 2014 Farm Bill; FSA does not have discretion to do otherwise for these actions.
As noted above, PLC makes a payment when the “effective price” for a covered crop is less than its “reference price” specified in the 2014 Farm Bill. The reference prices are already specified in 7 CFR part 1412. The “effective price” is the higher of the national average market price received by producers during the 12 month marketing year for that covered commodity, or the national average loan rate (the MAL rate) for that crop year. The reference price for each covered commodity is set through 2018 and does not change from year to year.
As authorized by the 2014 Farm Bill and as specified in 7 CFR part 1412, temperate japonica rice will have a separate reference price set by USDA for high altitude or high latitude areas versus other areas of the United States where rice is grown. The Secretary has determined that the applicable high altitude or high latitude areas of the United States for which this applies is California. Therefore, this rule specifies a separate reference price for temperate japonica rice in § 1412.52.
As specified in the 2014 Farm Bill, payments for a given crop year will be made after October 1 of the following year. So, for example, 2014 crop year payments will be made after October 1, 2015. The 2015 crop year payments will be made after October 1, 2016.
PLC Example—Corn
Reference price $3.70/bu.
Effective price $3.55/bu.
Payment rate (reference price minus effective price) $0.15/bu.
Base acres (including any corn planted and attributed to generic base acres) 100
Payment (payment rate times payment yield times 85 percent of base acres) $0.15 × 150 bu. × 85 percent = $1,913.
As noted above, the payment is based on a reference price ($3.70/bu.) and payment yield (150 bu./acre). In the example above, the producer would receive a payment of $1,913 for 100 base acres of corn ($3.70/bu. reference price minus $3.55/bu. effective price = $0.15 payment rate times 85 percent of the 100 corn base acres times the 150 bushels per acre payment yield. Corn base acres are always included for payment, even if the corn base acres Start Printed Page 57708were planted to another covered commodity. Corn planted or eligible subsequently planted crop acreage that is attributed to generic base acres become corn base acres for PLC payment purposes. Therefore, PLC payment is made on corn base acres and not necessarily corn planted on the farm. In the above example, the number of corn base acres attributed from generic base acres is not broken out or specified.
ARC is a revenue-based program that is designed to cover a portion of a farmer's out-of-pocket loss when crop revenues fall below the guarantee, with the benchmark revenue based on either county level historic revenue for ARC-CO or the individual farm's historic revenue for ARC-IC. For both PLC and ARC-CO, the payment calculation is based on base acres including any base acres attributed to a covered commodity from generic base acres based on P&CP or eligible subsequently planted crop acreage.
Under ARC-CO, payments are triggered when actual county crop revenue of a covered commodity is less than the ARC-CO guarantee for the covered commodity. Since payment is not based on the revenue or yield of the individual farm, the producer does not need to provide FSA any additional price or yield data to qualify for ARC-CO payment. The data used in the calculation is national data for prices and county data for yields, not individual farm data. The ARC-CO guarantee is 86 percent of the crop's benchmark revenue. Under ARC-CO, benchmark revenue is calculated by multiplying the 5-year average county yield, excluding the years with the highest and lowest yields (the ARC-CO guaranteed yield) times the previous 5-year MYA price, excluding years with the highest and lowest prices. The ARC-CO payment for a covered commodity is 85 percent of the farm's base acres of the covered commodity times the difference between the county guarantee and the actual county revenue for the covered commodity.
The ARC-CO payment cannot exceed 10 percent of the county benchmark revenue (the ARC-CO guaranteed price times the ARC-CO average historical benchmark yield). An example of an ARC-CO payment calculation using estimated 2014 soybean prices and yields is as follows:
ARC-CO Payment Calculation Example—Soybeans
2014 MYA price (estimate only) $9.65/bu.
2014 Actual average county yield (bu./acre) 56
Benchmark revenue (average historical county yield × average MYA for 2009 through 2013) $670
Base acres (including any generic base acres attributed to soybeans) 100
2014 Actual crop revenue (2014 MYA times 2014 actual county yield) $540
ARC-CO guarantee (86 percent times benchmark revenue) $575
Maximum payment (benchmark revenue times 10 percent) $67
Payment rate (ARC-CO guarantee of $575 minus actual crop revenue of $540, not to exceed maximum payment of $67) $35
Payment (payment rate of $35 times 85 percent of 100 base acres) $2,975
Under ARC-IC, payments are triggered when the actual crop revenue, averaged across all covered commodities planted or eligible subsequently planted crop acreage on the ARC-IC farm, is less than ARC-IC guarantee, averaged across those covered commodities planted or eligible subsequently planted crop acreage on the farm. The farm for ARC-IC purposes is the sum of all of that producer's interests in all ARC-IC farms in the State, meaning that if a producer has an interest in multiple farms that have elected and enrolled in ARC-IC, the ARC-IC benchmark revenue for that producer will be a weighted average of the benchmark revenue for all of those farms. The farm's ARC-IC guarantee equals 86 percent of the farm's individual benchmark revenue (5-year average of the annual benchmark revenues), excluding the years with the highest and lowest annual benchmark revenues, then averaging across all covered commodities planted or eligible subsequently planted crop acreage on the farm. The actual revenue is similarly computed, with both the guarantee and actual revenue computed using planted acreage on the farm. The ARC-IC payment equals 65 percent of the sum of the base acres of all covered commodities on the farm, times the difference between the individual guarantee revenue and the actual individual crop revenue across all covered commodities planted or eligible subsequently planted crop acreage on the farm. Payments cannot exceed 10 percent of the individual's benchmark revenue. Since the payment is based on yields for that individual farm, the producers enrolled in ARC-IC elected farms must report acreage and yield data to qualify for payment. Producers of covered commodities enrolled in ARC-IC elected farms must, as a condition of payment eligibility, file a report of production by the crop reporting date the immediate year after the production and contract year. The failure to report production will render the producers sharing in any of the covered commodities on that farm ineligible for payments on all ARC-IC elected and enrolled farms for which the producer has an interest in covered commodities in the State.
In the case of a total prevented planting situation, USDA has made a discretionary decision to calculate ARC-IC payments as if the producer had planted some acreage to each covered commodity on the farm. The reason for this decision is as follows: If a producer who has elected ARC-IC has all of their acreage prevented from being planted across their entire farm for a crop year, the ARC-IC calculation without this planting provision would result in a zero payment, an unintended result. The purpose of ARC-IC is to provide a safety net payment to a producer based on the individual's actual farm revenue. To preclude any payment if the producer suffered a complete prevented planting on all of the farm's acreage in which the producer has an interest would defeat the safety net purposes of ARC, particularly when compared to the theoretical example of a producer who suffered an almost complete prevented planting, which would trigger a payment. Therefore, if a producer has all prevented planted acreage across all acres of their farm, FSA will deem sufficient acres as being planted for each covered commodity in proportion to the approved prevented planted acreage of covered commodities on the farm to trigger an ARC-IC payment. This is being done within the Secretary's general discretion to operate the ARC program, as it is reasonably related to the purposes of ARC.Start Printed Page 57709
ARC-IC Payment Calculation Example—Corn and Soybeans—100 base acres
Benchmark revenue corn * $826
Benchmark revenue total for the farm ((0.6 × $826) + (0.4 × $687)) 770
Guarantee (86 percent of total benchmark revenue) 662
Actual revenue (2014 MYA price of each commodity times each commodity's actual yield times ratio of planted covered commodity to farm's base acres 0.6 corn and 0.4 soybeans—in this case (0.6 × $702) + (0.4 × $540)) 637
Payment rate (difference between guarantee and actual revenue) 25
Maximum payment (10 percent of benchmark revenue of $770) 77
Payment rate (ARC-IC Guarantee minus Actual Crop Revenue; adjusted, if needed to not exceed maximum payment) 25
Payment (payment rate times 65 percent of total base acres) 1,625
* The benchmark revenue numbers are calculated as the 5-year Olympic average of the annual revenue for the farm, excluding the high and low years.
The specified period in which producers may elect ARC or PLC will be announced in a press release. Current producers, as defined in this rule, will make the election. The election will be based on the farm structure that is in effect as of September 30, 2014. Reconstitutions of farms initiated after August 1, 2014 will not be considered by FSA until after the election period has ended. The election of ARC and PLC for a farm will apply to that farm in all years 2014 through 2018 and, in the case of that farm being reconstituted, the farms resulting from that reconstitution. Neither the requesting of a farm reconstitution nor the reconstitution of any farm will change either the requirement that all current producers on a farm must unanimously agree to the irrevocable election during the election period or that a valid election was made by those current producers.
If no election is made, or if all producers on the farm cannot unanimously agree, the farm will default to a PLC election, and producers on that farm will not be eligible for 2014 crop year payments (even if the farm is enrolled in 2014 PLC). During the election period, all current producers on a farm must unanimously make the irrevocable election as discussed in this rule in order to preserve the payment eligibility of all producers on the farm for 2014. If a valid election is made by all current producers on a farm during the election period, that election will be recognized as valid for the farm in the 2014 through 2018 crop years unless that election is rescinded or terminated by any current producer on the farm during the election period, or unless the valid election is modified and replaced by another valid election by all current producers during the election period. At any time during the election period, a current producer can rescind an election or terminate an election by providing FSA with written notice of the current producer's withdrawing from the election or by providing written notice to FSA requesting to have the election rescinded.
If a producer acquires an interest in a farm on or after a valid election has been made in the election period by all of a farm's current producers, that producer will be subject to any previously valid election made in the election period unless that producer changes the election during the remaining time in the election period by either withdrawing the election or getting all of the producers to agree to the new election in writing. While FSA will respond to inquiries submitted by such producers, neither FSA nor CCC has any obligation to notify owners or producers of whether or not a valid election exists or is in place or whether a producer has rescinded or terminated a previously made valid election. Additionally, neither FSA nor CCC have any role or responsibility of advising any producers on a farm of who all the farm's current producers are in the election period. The identity of all current producers for a farm may only be known to each of the current producers and that information may or may not be on file with FSA during the election period. It is the responsibility of the current producers on a farm to ensure that a valid election is made in the prescribed election period.
The election itself, its irrevocability, and the requirement that the election be made unanimously by all the current producers on a farm are required by the 2014 Farm Bill and neither FSA nor CCC has any discretion to waive these requirements. Additionally, election does not result in enrollment in ARC or PLC. Current producers on farms that have made a valid election (and those that have not completed an election and producers who might want to participate in PLC for the 2015 and subsequent crop years) must still annually enroll the farm with that election (or default election) in order to be eligible for ARC and PLC payments on farms in those crop years, as applicable.
The election made is important—it affects eligibility for some forms of crop insurance. Specifically, section 11003 of the 2014 Farm Bill amends the Federal Crop Insurance Act (7 U.S.C. 1508(c)) to authorize SCO. SCO covers a portion of the deductible for regular crop insurance on either a yield or revenue basis. As with other forms of crop insurance offered through RMA, SCO premiums are subsidized, and no payment limit or AGI limit applies. Additional details regarding SCO and benefits available under SCO can be obtained from an approved insurance provider. SCO coverage is available for crops subject to a PLC election. Producers of covered commodities on farms with a valid ARC election and enrollment, as well as acres that are enrolled in the stacked income protection plan for cotton under section 508B of the Federal Crop Insurance Act (7 U.S.C. 1508b), are not eligible for SCO coverage.
FSA will determine eligibility for shared payments similarly to how FSA made those determinations for DCP and ACRE. Each eligible producer on a farm will be given the opportunity to enroll and receive payments determined to be fair and equitable as agreed to by all the producers on the farm and approved by the FSA county committee. Each Start Printed Page 57710producer leasing a farm is required to provide a copy of their written lease to the county committee and, in the absence of a written lease, is required to provide to the county committee a complete written description of the terms and conditions of any oral agreement or lease, to the satisfaction of the county committee in order to make any determinations necessary under these programs.
An owner's or landlord's signature, as applicable, affirming a zero owner or landlord share on a contract may be accepted as evidence of a cash lease between the owner or landlord and tenant, as applicable, as determined by FSA. This would allow the producer with the cash lease to claim 100 percent of any payments made, assuming all eligibility requirements and other conditions have been met. Such signature or signatures, if entered on the contract to satisfy the requirement of furnishing a written lease, is required to be entered on the contract by June 1, 2015, for the 2014 and 2015 contract year and for subsequent crop years, June 1 of each subsequent year.
After the conclusion of the election period, the enrollment period begins. Starting with the 2015 crop year, the enrollment period ends June 1 of the relevant crop year. This means that enrollment of farms for the 2015 crop year will occur at the same time as the 2014 crop year enrollment.
The contract year is based on the fiscal year, October 1 to September 30 of each year, with the enrollment period occurring in the middle of the contract year. For 2014, the producer will enroll by June 1, 2015, for a retroactive contract that ends September 30, 2014. For each subsequent year, the June 1 enrollment deadline will be for a contract that began on October 1 of the previous year. For example, the producer must enroll by June 1, 2015 to be eligible to receive payments for a 2015 contract that runs from October 1, 2014 to September 30, 2015.
The June 1 enrollment deadline is consistent with the deadline for similar types of programs since 2002. The June 1 date is also in advance of compliance activities that are required to occur for the crop year (acreage and production reporting), and the final date for seeking reconstitution of farms. After the one-time election period ends, in each crop year or program year the producers on the farm in that crop year or program year may choose whether or not to enroll the farm.
When a farm's base acres are leased on a share basis, neither the landlord nor the tenant will receive 100 percent of payments for the farm. FSA will approve an ARC and PLC contract and approve the division of payment when all the following, as applicable, occur or have been determined to have occurred:
Landlords, tenants, and sharecroppers sign the application and agree to the payment shares shown;
Current owner updates P&CP acres and subsequently planted crop acreage and reallocation of base acres during acreage update and reallocation periods;
Current owner updates PLC yield during yield update period;
Current producers unanimously make ARC and PLC election during the election period; and
Producers enroll the farm during enrollment periods.
The following table provides a summary of deadlines for ARC and PLC.
2014 acreage reports by 2014 operator or producers on farm Not later than July 15, 2014, for covered commodities. For all other cropland on the farm, the acreage reporting date for the crop or crops in the State (Note: This deadline is unchanged by this rule.)
Update acreage history To be announced in a press release.
PLC yield update To be announced in a press release.
Base acres reallocation To be announced in a press release.
Election of ARC and PLC by current producers on farms in election period To be announced in a press release.
2014 contract year enrollment by 2014 producers on farms and 2015 contract enrollment by 2015 producers on farms June 1, 2015.
2014 production report of covered commodities by ARC-IC producers July 15, 2015.
2015 and subsequent crop year acreage reports by 2015 and subsequent operator or producers on farm Not later than July 15 for covered commodities. For all other cropland on the farm, the acreage reporting date for the crop or crops in the State.
2016 and subsequent years contract enrollment by 2016 and subsequent year producers June 1 of applicable program year.
2015 and subsequent year production report of covered commodities by ARC-IC producers July 15 of the year following the program year (for example, the 2015 production report is due July 15, 2016).
As noted above, the rule published on August 8, 2014, to implement the CTAP program implemented some general provisions that also apply to ARC and PLC. The regulations in 7 CFR part 1412 specify certain requirements to which the participant must agree to be eligible for payments. One such requirement is to effectively control noxious weeds and otherwise maintain the land in accordance with sound agricultural practices. Since that rule was published, the Secretary has determined to amend the applicable regulations to remove P&CP acreage and specify that only planted and eligible subsequently planted crop acreage of covered commodities will attribute generic base acres to covered commodities.
Base acres for covered commodities for ARC and PLC will be reduced for cropland that is on land that has been subdivided and developed for multiple residential units or other non-farming uses if the size of the tracts and the density of the subdivision is such that the land is unlikely to return to the previous agricultural use, unless the producers on the farm demonstrate that the land remains devoted to commercial agricultural production or is likely to be returned to the previous agricultural use. The regulation for the reductions in base acres is already in 7 CFR 1412.24, Start Printed Page 57711and was implemented through the CTAP final rule.
ARC and PLC have provisions for planting flexibility and reductions for plantings of fruits, vegetables, and wild rice on base acres. These reductions are already specified in 7 CFR part 1412.
Common provisions in 7 CFR part 718 that apply to all FSA and CCC programs, including those for base acres and farm reconstitutions, apply to CTAP and ARC and PLC.
As specified in the 2014 Farm Bill and in 7 CFR part 1400, payment limits and average adjusted gross income (AGI) limits apply to ARC and PLC. A person or legal entity is ineligible for payments if the person's or legal entity's AGI for the applicable ARC and PLC contract or AGI compliance program year exceeds $900,000.
Producers eligible for ARC and PLC are required to be a person or legal entity who is actively engaged in farming and otherwise eligible for payment, as specified in 7 CFR part 1400; and who complies with other general program eligibility requirements including, but not limited to, those pertaining to highly erodible land and wetland conservation provisions specified in 7 CFR part 12.
Neither crop insurance nor coverage under noninsured crop disaster assistance program is required as a condition of eligibility for ARC or PLC. Additionally, ARC and PLC benefits are not subject to the multiple benefit exclusion provisions of the catastrophic plan of insurance or noninsured crop disaster assistance.
The following provides information regarding the notifications FSA made to ensure that farm owners are aware of the provisions of the 2014 Farm Bill and that participants have all applicable information available on record at FSA to assist them in making participation elections. (Note: The FSA notices are available on FSA's public Web site.)
March 11, 2014 Issued a 2014 Farm Bill Fact Sheet discussing what is in the 2014 Farm Bill for Farm Service Agency customers.
March 28, 2014 Published an extension of authorization rule in the Federal Register (79 FR 17388-17390) regarding Continuation of Certain Benefit and Loan Programs, Acreage Reporting, Average Adjusted Gross Income, and Payment Limit.
April 7, 2014 Issued FSA Notice ARCPLC-1 to FSA State and county offices discussing Fruits and Vegetables and Wild Rice (FAV) provisions for 2014 through 2018 crop years.
April 7, 2014 Issued FSA Notice ARCPLC-2 to FSA State and county offices regarding establishing FAV and Wild Rice (WR) double-cropping regions.
May 23, 2014 Issued FSA Notice ARCPLC-4 to FSA State and county office regarding 2014 Farm Bill information regarding ARC and PLC.
May 29, 2014 Issued a press release concerning $6 million award for educational efforts to prepare farmers for new ARC and PLC programs.
May 29, 2014 FSA posted ARC and PLC information and several links to: http://fsa.usda.gov/​FSA/​webapp?​area=​home&​subject=​arpl&​topic=​landing
June 18, 2014 Issued FSA Notice ARCPLC-5 to FSA State and county office regarding ARC and PLC P&CP and subsequently planted crop acreage history update.
July 18, 2014 Issued FSA Notice ARCPLC-6 to FSA State and county office regarding maintaining base acres.
September 25, 2014 FSA issues a document entitled ARC and PLC Backgrounder and makes the document available in FSA service centers and on the FSA public website.
August 8, 2014 Published the final rule implementing CTAP and announced some general ARC and PLC provisions.
September 26, 2014 This rule specifies the implementing regulations for ARC and PLC.
This rule revises 7 CFR part 1412 to add the specific requirements for ARC and PLC. Subpart A covers general administration; subpart B cover base acres; subpart C covers yields and production for ARC and PLC; subpart D covers ARC and PLC contract terms and enrollment provisions; subpart E covers financial considerations including sharing payments; subpart F covers violations; subpart G covers PLC and ARC election; and subpart H covers CTAP. This rule amends subparts A, B, D, and E, and adds subparts C and G.
This rule also makes minor clarifications and amendments to 7 CFR part 718 to clarify how FSA determines a farm's administrative county, how and when a farm's administrative county can, or needs to, be changed, and a producer's options regarding the selection of an administrative county. The rule also amends farm reconstitution provisions in part 718 to remove references to obsolete programs, clarifies the deadline for initiating farm reconstitutions, and provides the effective date of farms that are reconstituted. These amendments and clarifications, which are not required by the 2014 Farm Bill, will help to ensure that ARC and PLC are implemented effectively. This rule also moves some terms and definitions from part 1416 to part 718 because those terms and definitions are used in multiple programs, including ARC and PLC.
The Administrative Procedure Act (5 U.S.C. 553) provides generally that before rules are issued by Government agencies, the rule is required to be published in the Federal Register, and the required publication of a substantive rule is to be not less than 30 days before Start Printed Page 57712its effective date. One of the exceptions is when the agency finds good cause for not delaying the effective date. Subsection 1601(c)(2) of the 2014 Farm Bill makes this final rule exempt from notice and comment. Therefore, using the administrative procedure provisions in 5 U.S.C. 553, FSA finds that there is good cause for making this rule effective less than 30 days after publication in the Federal Register. This rule allows FSA to provide adequate notice to producers about the new ARC and PLC regulation so they will have time to update base acres and yields and make the required election before the enrollment period for ARC and PLC in spring 2015. Therefore, to begin providing benefits to producers in a timely fashion, this final rule is effective when published in the Federal Register.
The Office of Management and Budget (OMB) designated this rule as economically significant under Executive Order 12866, “Regulatory Planning and Review,” and therefore, OMB has reviewed this rule. This regulatory action is being taken to implement a major budgetary program required by the 2014 Farm Bill. Consistent with OMB guidance, this type of action is considered a budgetary transfer representing a payment from taxpayers to program beneficiaries unrelated to the provision of any goods or services in exchange for the payment. As such, the benefits and payments to those who receive such a transfer are matched by the costs borne by taxpayers. The estimated transfer payments for ARC and PLC provided by this rule are summarized below. The full cost benefit analysis is available on regulations.gov.
ARC and PLC payments are estimated to total $28.6 billion for crop years 2014 through 2018 based on supply, demand and price conditions as of May, 2014. Nearly all producers on farms with base acres are expected to participate in PLC or ARC or both. Annual payments are projected at $0.8 billion for crop year 2014, $10.1 billion for crop year 2015, $10.9 billion for crop year 2016, $3.9 billion for crop year 2017, and $2.9 billion for 2018.
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 the Administrative Procedure Act (5 U.S.C. 553) 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 neither FSA nor CCC is required by any law to publish a proposed rule for public comment for this rulemaking initiative.
The environmental impacts of this final rule have been considered in a manner consistent 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 the FSA regulations for compliance with NEPA (7 CFR part 799). While ARC and PLC are new, their creation is mandated by the 2014 FB, and is therefore not subject to review under NEPA. The legislative intent for creating these new programs is to provide revenue support to the same group of producers eligible for the earlier and now-discontinued programs, DCP and ACRE. The discretionary provisions defined by FSA for ARC and PLC were administrative clarifications of the mandatory elements and FSA determined that they would not alter any environmental impacts resulting from implementing the mandatory programs. Therefore, FSA will not prepare an environmental assessment or environmental impact statement for this regulatory action.
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 Start Printed Page 57713Relations to ensure meaningful consultation is provided where changes, additions, and modifications identified in this rule are not expressly mandated by the 2014 Farm Bill.
This rule is a major rule under the Small Business Regulatory Enforcement Fairness Act of 1996, (Pub. L. 104-121, SBREFA). SBREFA normally requires that an agency delay the effective date of a major rule for 60 days from the date of publication to allow for Congressional review. Section 808 of SBREFA allows an agency to make a major regulation effective immediately if the agency finds there is good cause to do so. Section 1601(c)(3) of the 2014 Farm Bill provides that the authority in Section 808 of SBREFA be used in implementing the changes required by Title I of the 2014 Farm Bill, such as for the changes being made by this rule. Consistent with section 1601(c)(3) of the 2014 Farm Bill, FSA therefore finds that it would be contrary to the public interest to delay the effective date of this rule because it would delay implementation ARC and PLC as required by the 2014 Farm Bill. The regulation needs to be effective to provide adequate time for producers to update base acres and yields in preparation for enrollment in spring 2015. Therefore, this rule is effective when published in the Federal Register.
For the reasons discussed above, CCC and FSA amend 7 CFR parts 718, 1412, and 1416 as follows:
2. In § 718.2, add definitions in alphabetical order for “limited resource farmer or rancher” and “socially disadvantaged farmer or rancher” to read as follows:
3. Revise § 718.8 to read as follows:
(c) If a county contiguous to the county in which the farm is physically Start Printed Page 57714located in the same State does not have an FSA county office, the farm will be administratively located in a contiguous county in another contiguous State that is convenient to the farm operator and owner. Requests for changes made to administrative county under this paragraph must be made to FSA by August 1 of each year for the change to take effect that calendar year.
(e) The operator and owner of a farm administered in any county can request a change of administrative county to another county in the same State by August 1 for the change to take effect that calendar year. Requests for change in administrative county will be reviewed and approved by COC if all the following can be determined to apply:
(1) The requested change does not impact the constitution of a farm; and
(2) The requested change will not result in increased program eligibility or additional benefits for the farm's producers that would not be earned absent the change in administrative county being made.
(f) The change is not to circumvent any of the provisions of other program regulations to which this part applies.
(g) The State committee will submit all requests for exceptions from regulations specified in this section to the Deputy Administrator.
4. Revise § 718.204 to read as follows:
Reconstitution of base acres.
(c) The Deputy Administrator may approve an exception to permit a reconstitution initiated after August 1 to be effective for the same year, if FSA determines that the failure is due to administrative problems as determined by FSA at the local or national level. Producers have no right to seek an exception under this paragraph. When such situations exist, FSA will establish procedures under which reconstitutions will be accepted.
5. Amend § 1412.3 as follows:
a. Add definitions in alphabetical order for “2014 farm structure”, “actual average county yield”, “actual crop revenue”, “ARC guarantee”, “ARC-IC farm”, “average historical county yield”, “benchmark revenue for ARC-CO”, “benchmark revenue for ARC-IC”, “current owner”, “current producer”, “effective price”, “farm structure”, “marketing year”, “market year average (MYA) price”, “national average loan rate”, and “transitional yield”; and
b. In the definition of “base acres”, remove the term “P&CP” and add the word “planted” in its place.
2014 farm structure means the farm as it was last constituted effective as of September 30, 2014.
Actual average county yield is calculated as the crop year production of a covered commodity in the county divided by the commodity's total planted acres for a crop year in the county, as determined by FSA. Separate irrigated and non-irrigated yields will be established in a county having a sufficient number of farms with P&CP acreage history of a covered commodity in 2009 through 2012, as determined by FSA. These separate yields will only be established where at least an average of 25 percent of a covered commodity's P&CP acreage was irrigated in 2009 through 2012 and at least an average of 25 percent of the same covered commodity's P&CP acreage in that county was non-irrigated in 2009 through 2012.
(1) ARC-CO, for a crop year of a covered commodity: The actual average county yield per planted acre of the covered commodity times the higher of either the market year average (MYA) price of the covered commodity or the national average loan rate for the covered commodity.
(i) The total production of the covered commodity for all farms in the State in which the producer has an interest; times
ARC guarantee is calculated for a crop year for a covered commodity, and is equal to 86 percent of the benchmark revenue for ARC-CO and 86 percent of the benchmark revenue for ARC-IC, as defined in this part.
Average historical county yield means the 5-year Olympic average of actual average county yields for the most recent 5 years (substituting 70 percent of the county transitional yield as defined in this part in each year where the actual average county yield is less than 70 percent of the county transitional yield). Separate irrigated and non-irrigated yields will be established in a county having a sufficient number of farms with P&CP acreage history of a covered commodity in 2009 through 2012, as determined by FSA. These separate yields will only be established where at least an average of 25 percent of a covered commodity's P&CP acreage was irrigated in 2009 through 2012 and at least an average of 25 percent of the same covered commodity's P&CP acreage in that county was non-irrigated in 2009 through 2012.
Benchmark revenue for ARC-CO is calculated as the product obtained by multiplying the average historical county yield times the MYA price for the most recent 5 crop years, excluding each of the crop years with the highest and lowest prices and substituting the reference price in each year where the MYA price is less than the reference price.Start Printed Page 57715
(1) For each covered commodity for each of the most recent 5 crop years:
(i) Yield per planted acre (substituting 70 percent of the county transitional yield in each year where the yield per planted acre is less than 70 percent of the county transitional yield); times
(ii) The MYA price for the most recent 5 crop years, excluding each of the crop years with the highest and lowest prices and substituting the reference price in each year where the MYA price is less than the reference price.
(2) For each covered commodity, the average of the revenues determined under paragraph (1) of this definition for the most recent 5 crop years, excluding each of the crop years with the highest and lowest revenues; and
(3) For each of the 2014 through 2018 crop years, the benchmark revenue for the ARC-IC farm is the sum of the amounts determined under paragraph (2) of this definition for all covered commodities on such farms, adjusted to reflect the ratio between the total number of P&CP acres and eligible subsequently planted crop acreage on such farms to a covered commodity and the total P&CP acres and eligible subsequently planted crop acreage of all covered commodities planted on such farms. If a producer has an interest in multiple farms that have enrolled in ARC-IC, the ARC-IC benchmark revenue for that producer will be a weighted average of the benchmark revenue for those multiple farms.
Current owner means the person or legal entity meeting the definition of owner in 7 CFR part 718 on the day that person or legal entity is signing any form or performing any action required under this part. For example, if a signature of a “current owner” is required under this part, the person or legal entity must be an owner on the day the person or legal entity is signing the form or performing the action required under this part.
Current producer means the person or legal entity meeting the definition of producer in 7 CFR part 718 on the day that person or legal entity is signing any form or performing any action required under this part. For example, if a signature of a “current producer” is required under this part, the person or legal entity must be a producer on the day the person or legal entity is signing the form or performing the action required under this part.
(3) Peanuts and rice: August 1 through July 31; and
6. Add § 1412.25 to read as follows:
Reallocation of base acres on a farm and updating of records.
(a) Any or all of the current owners of a farm with base acres of covered commodities as of September 30, 2013, as adjusted, will have a one-time opportunity in a reallocation period as announced by FSA to:
(1) Reallocate the farm's base acres of covered commodities (upland cotton is not a covered commodity) based on P&CP and subsequently planted crop acreage as specified in this section; or
(2) Retain the farm's base acres as of September 30, 2013.
(b) Under no circumstances will reallocation of base acres of covered commodities on a farm as specified in paragraph (a) of this section result in any increase in total base acres on a farm. Additionally, if any current owner submits a written conflicting reallocation request or expresses written disagreement with a reallocation filed in according to paragraph (a), no reallocations will be approved for the farm unless all the current owners of the farm provide CCC with written evidence of the dispute resolution during the reallocation period.
(c) FSA will provide the farm operator and owners of record with a summary of all covered commodities P&CP acres and subsequently planted crop acreage for the 2009 through 2012 crop years (as reported to FSA on acreage reports filed with FSA in each of those years). Acreage not reported to FSA by producers will not be included in the summary. The summary will reflect the 2014 farm structure.
(d) Current owners will be provided a one-time opportunity to update the records identified in paragraph (c) of this section during the reallocation period specified in paragraph (a) of this section, provided that there are crop insurance records (or other verifiable documentation available to support those requested updates). In the event that an update to a farm's P&CP acres of a covered commodity for 2009 through 2012 causes any payment under another FSA or CCC program to become unearned, the overpayment must be refunded to FSA or CCC in accordance with the rules for that program and the FSA or CCC regulations governing overpayment (7 CFR parts 718 and 1403).
(e) After an update as specified in paragraph (d) of this section, the owner may redistribute the farm's base acres during the reallocation period, based on a proration of each covered commodity's P&CP acres or subsequently planted crop acreage in crop years 2009 through 2012 to the total P&CP acres or subsequently Start Printed Page 57716planted crop acreage of all covered commodities during that time.
(f) Upland cotton base acres that were in existence as of September 30, 2013, are considered generic base acres for the purposes of ARC and PLC. Generic base acres cannot be reallocated to a covered commodity, but will be eligible for ARC and PLC payments as specified in in this part.
(g) The summary of records specified in paragraph (c) of this section is intended to assist current owners of farms with the one-time opportunity for base acre reallocation as provided in this section. Any current owner of a farm may also at any time visit the FSA county office and request to obtain a copy of the summary referenced in paragraph (c) of this section. Current owners can reallocate base acres at any time during the reallocation period without receiving or requesting the summary records, and, therefore, failure to receive a summary record from FSA is not grounds for appeal or extension of the reallocation period.
(h) The option to retain or reallocate base acres is an “all or nothing” decision for the farm. Partial retention of base acres or partial reallocation of base acres is not permissible. A decision by any current owner to reallocate base acres on a farm in accordance with this section is final and binding if made according to this section during the reallocation period unless that reallocation is withdrawn in writing by that current owner or another current owner. If another current owner subsequently files a different reallocation request in whatever time remains in the stated reallocation period or if there are conflicting reallocation requests of current owners in the reallocation period, FSA will deem no reallocation to have been performed unless the conflict is resolved via written agreement between the current owners who filed the conflicting requests. In the case of submitting evidence of resolution, the written agreement must be filed with FSA in the reallocation period. Any and all updates and reallocation requests mentioned in this section are subject to review and approval or disapproval by FSA for CCC.
7. Add subpart C to read as follows:
PLC yields for covered commodities.
Updating PLC yield.
PLC yield for additional oilseeds.
Submitting production evidence.
Incorrect or false production evidence.
(a) The PLC yield for covered commodities on the farm is equal to the counter-cyclical payment yield established for each covered commodity on the farm that was effective September 30, 2013, unless the PLC yield is updated as specified in § 1421.32. If the Secretary designates an additional oilseed or pulse crop as a covered commodity that does not have a counter-cyclical payment yield, the PLC yield for that commodity will be established as specified in § 1412.33 or § 1412.34, whichever is applicable.
(b) If a PLC yield is not already established for a covered commodity on a farm for which base acres are allocated through the base acres reallocation process or for which a covered commodity is planted on generic base acres, a yield will be established for the covered commodity on the farm using the yield on similarly situated farms, as determined by FSA. The yield on similarly situated farms will then be used as the 2013 county average counter-cyclical yield for the covered commodity.
(a) For any covered commodity on the farm that has base acres (except generic base acres), as adjusted, in excess of zero acres, a current owner of the farm has a one-time opportunity in a specified period, as announced by FSA to update PLC yields on a covered commodity-by-covered commodity basis equal to 90 percent of each covered commodity's 2008 through 2012 average yield per planted acre, excluding from the average any year when no acreage was planted to the covered commodity. If the yield per planted acre in any of the years 2008 through 2012 is less than 75 percent of the average of the county yield, then 75 percent of the average of the 2008 through 2012 county yield will be substituted for that year.
(b) The current owner of the farm may retain the counter-cyclical yield as the PLC yield or update the PLC yield, on a covered commodity-by-covered commodity basis.
(d) A decision by any current owner of a farm to update any PLC yield as specified in this section is final and binding unless that decision to update the yield is withdrawn by that current owner or a different yield update is made by that current owner or another current owner. If that current owner or another current owner requests a different PLC yield update for the covered commodity during the yield update period specified in paragraph (a) of this section that update will become final.
(e) All PLC yield updates are subject to review and approval by FSA as specified in § 1412.35. FSA's decision to issue payments based on the PLC yield updated by an owner is subject to verification and spot check by FSA at any time.
(f) Yield updates in this section will be permitted using the current owner's certification of yield. The certification is subject to spot check or verification by FSA at any time. If selected for spot check or verification, the owner must submit evidence specified in § 1412.34 to support the certified yield.
(B) 75 percent of the harvested average county yield for that crop determined, where practicable, by calculating the weighted 4-year average of the National Agricultural Statistics Service (NASS) harvested acreage yields for the crop using the 1998 through 2001 crop years.Start Printed Page 57717
(c) The establishment of PLC yield for an additional oilseed in this section will be permitted using a producer certification of yield. The certification is subject to spot check or verification by FSA at any time. If selected for spot check or verification, the producer must submit evidence as specified in in § 1412.34 to support the certified yield.
(1) Correct the PLC yield for the applicable covered commodity to equal the yield that would have been calculated as specified in § 1412.32 based on accurate production evidence; and
8. In subpart D, add §§ 1412.41, 1412.42, and 1412.43 to read as follows:
(i) For program year 2014, the enrollment period will end June 1, 2015.
(ii) The 2014 contract period ends September 30, 2014. Accordingly, the enrollment for 2014 is the only program year a retroactive contract can be approved.
(iii) If a 2014 farm did not have a valid election made by producers in accordance with subpart G, no producer on that farm is eligible for any 2014 ARC or PLC payment for that farm. This is not an adverse decision for any enrolled producer on that farm; rather, the farm's producers are simply not eligible for payments on the enrolled farm because the farm does not have a valid election.
(2) For program years 2015 through 2018, the enrollment period will end on June 1 of each such fiscal year. This means that the enrollment period for both 2014 and 2015 will end on June 1, 2015.
(i) Eligible producers must execute and submit an ARC or PLC program contract not later than June 1, 2015, for 2014 and 2015 fiscal year contracts and not later than June 1 of the applicable year for 2016 through 2018 fiscal year contracts.
(ii) Except as may otherwise be provided for the 2014 crop year as stated in this section, enrollment is not allowed after September 30 of the fiscal year in which the ARC or PLC payments are requested. Except as specifically stated for the 2014 crop year, FSA will not process offers of enrollment for a contract period after the contract period has ended. This is not a compliance provision but a rule of general applicability and will apply to every offer to contract in each contract year.
(3) Except as discussed in this section for PLC and ARC-CO enrollments, contracts will not be approved unless all producers sharing in contract acreage with more than a zero share have submitted all applicable signatures on the contract and documentation necessary for FSA to make such approval, as determined by the Deputy Administrator. For those producers with an interest but a zero share of contract acreage, the contract will not be approved before all producers have signed the contract or furnished supportive and necessary contractual documents (such as cash leases in lieu of signing for a zero share). A contract not having all requisite signatures of producers having more than a zero share of contract acreage on or before the enrollment deadline are deemed incomplete and will not be considered submitted to CCC for any purpose and will not be acted on or approved. For ARC-IC contracts there are no exceptions to this provision. Additionally, contracts enrolled by a Start Printed Page 57718producer by the date specified in paragraph (a)(2)(i) of this section that were not signed by other producers according to this section will be deemed withdrawn and will not be approved. An exception to this applies to PLC and ARC-CO offers of enrollment. In those instances, at the discretion of the Deputy Administrator and where no dispute of shares or other disagreement between producers is evident or suspected, PLC and ARC-CO offers of enrollment can be approved to permit payment to only those eligible producers who did enroll and without regard to shares that do not have signatures. This exception will be made only if, in the sole judgment and discretion of FSA, FSA is satisfied that those producers who did sign in accordance with this section ensure compliance with all contract provisions and requirements of this part. Producers have no right to payment on any farm that is not enrolled in ARC or PLC and they are not entitled to a decision to authorize the exception for PLC and ARC-CO enrollments as discussed above, as that is discretionary. CCC and FSA are not responsible for ensuring that producers annually enroll in ARC or PLC. Producers on a farm are solely responsible for ensuring that enrollment occurs.
(4) Eligible producers who choose to enter into a contract with FSA must enroll all base acres on the farm. Enrollment of fewer than all base acres on the farm is not allowed.
(b) Eligible producers may withdraw from a contract at any time by June 1 of the applicable contract year provided all producer signatories to the contract, including FSA, agree to the withdrawal in writing.
(d) A transfer or change in the interest of an owner or producer in the farm or in acreage on the farm subject to a contract will result in the termination of the contract. The contract termination will be effective on the date of the transfer or change. Successors to the interest in the farm or crops on the farm subject to the contract may enroll the farm in a new contract for the current and assume all obligations under the contract.
(e) In the event a 2015 or subsequent crop year farm reconstitution is completed on a properly enrolled farm or farms in accordance with part 718 of this title, FSA will issue notices to the 2015 and subsequent crop year farm operator and owners of record on a farm that all producers with an interest in the base acres on the farm must sign a new ARC or PLC program contract within the later of 30 days of the notice or September 30 of the fiscal year program payments are requested, after receiving written notification by the county committee indicating the reconstitution is completed. It is the responsibility of the operator and owners on a farm that producers with an interest in base acres are notified of the reconstitution and requirement for a new contract.
9. In § 1412.45, remove the term “P&CP” each time it appears and add the word “planted” in its place.
10. In § 1412.46, paragraph (c)(2), remove the words “percent of a farm” and add the words “percent of the base acres of a farm” in their place.
11. Add § 1412.50 to subpart D to read as follows:
(a) Land subject to an election in subpart G will continue to be subject to the election even if there is a transfer of land or change in interest of any producer or owners on the farm. If a new owner or operator or producer purchases or obtains the right and interest in, or right to occupancy of, the land subject to an election option, such new owner or operator or producer, upon the approval of FSA, may enroll and participate under a new contract with FSA with respect to such transferred land in accordance with § 1412.41.
(1) Is not for all the time remaining under the ARC or PLC program contract; Start Printed Page 57719
(f) In any case in which either an ARC or PLC payment has previously been made to a predecessor, such payment will not be paid to the successor, unless such payment has been refunded in full by the predecessor, in accordance with § 1412.41(d).
12. In § 1412.51, add paragraph (e) to read as follows:
(e) Notwithstanding any other provision of this part, a producer on a farm is not eligible to receive ARC and PLC payments if the sum of the base acres including any generic base acres on the farm is 10 acres or less. The 10-acre limitation of this subsection will not apply to a socially disadvantaged farmer or rancher or a limited resource farmer or rancher as specified in this part.
13. Add §§ 1412.52 and 1412.53 to read as follows:
PLC payment provisions.
(a) Provided all provisions of this part including but not limited to election have been satisfied for each of the 2014 through 2018 contract years, a PLC payment will be made to eligible participants on a farm enrolled in PLC with respect to covered commodities for which a PLC yield and base acres are established:
(1) When the effective price for a covered commodity in a crop year is less than the reference price for the PLC enrolled covered commodity for that crop year as specified in this part; and
(c) The payment rate used to calculate PLC payments with respect to covered commodity for which PLC yields and base acres are attributed to the covered commodity on a farm enrolled in a PLC contract is the reference price of the covered commodity minus the effective price of the covered commodity for a crop year, as determined in accordance with paragraph (b) of this section.
(d) For PLC contracts, when PLC payments are triggered in accordance with paragraph (a) of this section, subject to the limitation in § 1412.51 and in part 1400 of this chapter, the PLC payment to be paid to producers on a farm enrolled in a contract with respect to a covered commodity for which a PLC yield and base acres are attributed is equal to the product of:
(2) The relevant payment acres of the covered commodity, as applicable, minus any payment acre reduction in accordance with § 1412.46, multiplied by
(3) The PLC payment yield for the covered commodity on the farm enrolled in a PLC contract as determined in accordance with § 1412.31, minus
(e) If a producer declines to accept, or is determined to be ineligible for all or any part of the producer's share of the PLC payment computed for the farm in accordance with the provisions of this section, the:
(a) Provided all provisions of this part including but not limited to ARC-CO election and enrollment have been satisfied for each of the 2014 through 2018 contract years, CCC will issue, as applicable and consistent with the election and enrollment:
(1) An ARC-CO payment beginning October 1, or as soon as practicable thereafter, after the end of the applicable marketing year for the covered commodity to the producers on a farm for a covered commodity in each crop year if the farm was enrolled in ARC-CO and the ARC-CO actual crop revenue was less than the ARC-CO guarantee.
(2) Payment is equal to the result of multiplying the payment acres for the covered commodity times the difference between the actual crop revenue and the ARC-CO guarantee, not to exceed 10 percent of the ARC-CO benchmark revenue.
(b) Provided all provisions of this part including but not limited to ARC-IC election and enrollment have been satisfied for each of the 2014 through 2018 contract years, CCC will issue, as applicable and consistent with the election and enrollment:
(1) An ARC-IC payment beginning October 1, or as soon as practicable thereafter, after the end of the applicable marketing year for the farm if the farm Start Printed Page 57720was enrolled in ARC-IC and the ARC-IC actual crop revenue for that farm is less than the ARC-IC guarantee.
(c) If a producer has an interest in multiple farms that have enrolled in ARC-IC, the ARC-IC benchmark revenue for that producer used in the payment calculation will be a weighted average of the benchmark revenue for those multiple farms.
(d) In a county having a sufficient number of farms with P&CP acreage history of a covered commodity in 2009 through 2012, as determined by FSA, where at least an average of 25 percent of a covered commodity's P&CP acreage was irrigated in 2009 through 2012 and at least an average of 25 percent of the same covered commodity's P&CP acreage in that county was non-irrigated in 2009 through 2012, a separate irrigated and non-irrigated benchmark revenue, guarantee, and actual revenue will be maintained by FSA for the affected county. For farms in these counties with covered commodities enrolled in ARC-CO and ARC-IC, the average 2009 through 2012 reported acreage of each covered commodity on the farm with irrigated and non-irrigated status will be used to calculate a percentage of each applicable covered commodity that will be applied against the irrigated and non-irrigated benchmark revenue, guarantee, and actual revenue as determined by FSA.
(e) FSA will determine the irrigated and non-irrigated counties and crops prior to the 2014 enrollment period and that determination will be effective through the 2018 program year, unless there is a substantial change in the irrigated and non-irrigated practices in the county, as determined by the FSA.
(f) The effective price and guarantee for temperate japonica rice will be based on the price that all medium and short grain (including glutinous) rice receives in California. The effective price and guarantee for medium grain rice outside California will be based on the price that all medium and short grain rice receives outside California.
14. In § 1412.54(f) introductory text, remove the term “P&CP” each time it appears and add the word “planted” in its place.
15. Amend § 1412.66 by adding paragraph (c) to read as follows:
16. Add subpart G to read as follows:
Reconstitutions of farms and election.
(a) All of the current producers on a farm must make a one-time election that is both:
(b) The election by current producers is to obtain—
(c) The election will be based on the 2014 farm structure (including any reconstitutions of farms that were initiated by August 1, 2014).
(d) Valid elections specified in paragraphs (a) and (b) of this section by current producers will apply to the 2014 farm structure and 2014 producers on the farm. The valid election will also apply to any subsequent year parent to the farm reconstitution as well as farms resulting from the parent farm as specified in § 1412.73. Neither the requesting of a farm reconstitution nor the reconstitution of any farm will impact either the requirement that all current producers on a farm must make the unanimous irrevocable election in the defined election period or the valid election that was previously made by those current producers.
(e) FSA will process elections from current producers on a farm based on the election as submitted. For example, if the current producers of a farm attest that they are all or the only current producers on the farm and FSA later learns that there was another current producer at the time of election who did not agree to the election, the election is invalid. If at any time FSA determines that an election fails to satisfy the requirements of this subpart because it did not include the unanimous agreement of all current producers on the farm at the time of election, the election will immediately be invalid. This is not a compliance provision. Only valid elections by all current producers will be recognized and used by CCC. All ARC and PLC payments that were issued to any producers on a farm based on an election later determined by CCC to be invalid, for whatever reason, regardless of whether those producers who were issued unearned payments personally made or participated in the invalid election, must be refunded with interest.
(f) Election is separate from enrollment; producers on farms that Start Printed Page 57721have validly completed an election by the current producers in the prescribed election period must still annually enroll as specified in subpart D for PLC and ARC payments, as applicable.
(a) The election period will be conducted in a defined period as announced by FSA. During the election period, all current producers on a farm must unanimously make the irrevocable election as described in § 1412.71 to preserve the payment eligibility of all producers on the farm for 2014 and determine whether the default election (PLC) or elected option (either a combination of ARC-CO and PLC or ARC-IC) will apply to the farm.
(b) If an election is submitted by all current producers on a farm as specified in § 1412.71 and paragraph (a) of this section, that election will be recognized as valid for the farm in all 2014 through 2018 crop years unless any of the following occur:
(1) The election is rescinded or terminated by any current producer on the farm in accordance with paragraph (c) of this section during the election period;
(2) The valid election is modified and replaced by another valid election by all current producers during the election period;
(3) A subsequent valid election by all current producers is made with FSA during the election period; or
(c) At any time during the election period, a current producer can rescind or terminate an election by providing written notice to FSA during the election period. The written notice to rescind or terminate must be physically received by FSA for CCC during the election period in order to be recognized. Immediately following receipt of such notice to rescind or terminate, the farm will be viewed as not having any effective valid election (in other words, no valid election will be determined to exist—even if there was another previous election in effect before the election that is rescinded, or terminated as specified in with this paragraph).
(d) FSA is under no obligation to notify producers, owners, current producers, or current owners on a farm that an election has been rescinded or terminated. Current producers of a farm are solely responsible for filing a valid election during the election period or in whatever time remains in an election period following the rescission or termination of an election.
(e) FSA is under no obligation to notify current producers, current owners, producers, or owners or new producers or owners of whether or not a valid election exists or is in place or whether any current producer has rescinded or terminated an election. However, FSA will respond to inquiries regarding the status of election of a farm by any current producer or current owner on a farm including a producer or owner who gains a producer or owner interest on the farm during the election period.
(f) The election period and final day in that election period in which current producers can unanimously and irrevocably elect are not a compliance requirement or provision. The requirement of an election is mandated in the 2014 Farm Bill and as such is not subject to any of the equitable relief provisions of 7 CFR part 718, subpart D. Further, because the requirement of a unanimous irrevocable election and ramifications for not having a valid election are specified in the 2014 Farm Bill, FSA will not consider any equitable relief. There are no late-file provisions for election.
(a) If a new producer or new owner gains an interest in a farm after the filing of a valid election on that farm during the election period, that new producer or new owner, whether or not known to FSA or the other producers or owners on the farm, will be subject to any previously submitted valid election under §§ 1412.71 and 1412.72 unless that new producer or new owner modifies, rescinds, or terminates the election as a producer or owner as specified in § 1412.72(c) during the remaining time in the election period.
(b) Any reconstitution request initiated after August 1, 2014, will not be made until after the end of the election period specified in § 1412.72. Following the close of the election period in § 1412.72, a valid election on any farm cannot be changed by any reconstitution. This means that valid elected farms can only be combined with farms having an identical election for each and every covered commodity on the farm regardless of whether there are any base acres for any and all covered commodities on the farm. Reconstitutions will not be permitted to alter a valid election or the default election that may apply to a farm.
(a) If all current producers on a farm do not make a unanimous election during the period specified in § 1412.72, that farm will not have a valid election and any producer on the farm is not eligible for 2014 ARC or PLC enrollment or payments.
(b) If a valid election is not made for a farm, FSA will not make any payments with respect to the farm for the 2014 crop year and the producers on the farm will default to a PLC election for all covered commodities on the farm for the 2015 through 2018 crop years.
17. The authority for part 1416 continues to read as follows:
18. In § 1416.102, remove the definitions for “limited resource farmer or rancher” and “socially disadvantaged farmer or rancher”.
Signed on September 17, 2014.
[FR Doc. 2014-22879 Filed 9-25-14; 8:45 am]