Billing Code 3410-05 P DEPARTMENT OF AGRICULTURE Farm

Billing Code 3410-05 P

DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Parts 756 and 760

Commodity Credit Corporation

7 CFR Parts 1410, 1421, 1425, 1427, 1430, 1434, and 1435

[Docket ID FSA-2021-0003]

RIN: 0560-AI59

Supplemental Dairy Margin Coverage Payment; Conservation Reserve Program;

Dairy Indemnity Payment Program; Marketing Assistance Loans, Loan Deficiency

Payments, and Sugar Loans; and Oriental Fruit Fly Program

AGENCY: Commodity Credit Corporation (CCC) and Farm Service Agency (FSA),

Department of Agriculture (USDA).

ACTION: Final Rule.

SUMMARY: This rule amends the regulations for Dairy Margin Coverage (DMC) to

allow supplemental DMC payments to participating eligible dairy operations. DMC

provides dairy producers with risk management coverage that pays producers when the

difference between the price of milk and the cost of feed (the margin) falls below a

certain level. Eligible dairy operations with less than 5 million pounds of established

production history may enroll supplemental pounds based upon a formula using 2019

actual milk marketings. Supplemental DMC coverage is applicable to calendar years

2021, 2022, and 2023. Participating dairy operations with supplemental production may

receive supplemental payments in addition to payments based on their established

production history. In addition, the rule amends the alfalfa hay calculation used in

determining the average feed cost and actual dairy production margin. To end prolonged

months of milk indemnity payments, the rule amends the regulations for Dairy Indemnity

Payment Program (DIPP) to indemnify affected farmers for depopulating and

permanently removing cows after discovery of chemical residues affecting the

commercial marketing of milk for the applicable farm and likely affecting the

marketability of cows for a lengthy duration. The rule also implements a new Oriental

Fruit Fly (OFF) Program as authorized in the Consolidated Appropriations Act, 2019. In

addition, the rule updates the existing Marketing Assistance Loans (MAL) and Loan

Deficiency Payments (LDP) loan rates to be consistent with the Agriculture Improvement

Act of 2018 (the 2018 Farm Bill); the loan rates were already changed administratively

because the loan rate changes were self-enacting. This rule also amends the Conservation

Reserve Program (CRP) regulations to remove two discretionary requirements.

DATES: Effective: [Insert date of publication in the FEDERAL REGISTER].

Comment due date: For the OFF Program only, we will consider comments on

the Paperwork Reduction Act that we receive by: [Insert date 60 days after publication

in the FEDERAL REGISTER].

FOR FURTHER INFORMATION CONTACT: For the Supplemental DMC Payment

Program and DIPP, contact Douglas Kilgore; telephone: (202) 720-9011; email:

[email protected]. For the MAL and LDP Programs, contact Shayla Watson;

telephone: (202) 690-2350; email: [email protected]. For the OFF Program,

contact Kimberly A. Kempel; telephone: (202) 720-0974; or e-mail:

[email protected]. For CRP, contact Jody Kenworthy; telephone: (202) 690-

5230; email: [email protected]. Persons with disabilities who require

alternative means for communication should contact the USDA Target Center at (202)

720-2600 (voice).

SUPPLEMENTARY INFORMATION:

Supplemental DMC Payments

FSA is amending the DMC regulations in 7 CFR part 1430 to establish

supplemental payments to participating dairy operations. Subtitle D, section 1401, of

Title I of the 2018 Farm Bill (Pub. L. 115-334) (changes codified in 7 U.S.C. 9055 -

9057) authorizes DMC to provide a risk management program for dairy operations that

pays producers when the difference between the price of milk and the cost of feed (the

margin) falls below a certain dollar amount selected by the producer. Producers are

eligible for catastrophic level margin protection (based on a $4 margin and 95 percent

production history coverage) for their dairy operations by paying an annual

administrative fee, and are also able to purchase greater coverage (up to $9.50 margin on

5 to 95 percent of production history) for an annual premium.

Section 761 of Subtitle B of Title VII of Division N of the Consolidated

Appropriations Act, 2021 (Pub. L. 116-260) authorizes eligible participants in DMC, who

have an approved DMC contract, the opportunity to create a supplemental production

history and receive supplemental payments whenever the average actual dairy production

margin for a month is less than the coverage level threshold as selected by the dairy

operation. Dairy operations eligible for supplemental coverage must have an approved

DMC contract for the applicable calendar year and have an existing DMC production

history of less than 5 million pounds.

A significant number of current DMC participants established a production

history using marketings from 2011, 2012, and 2013. Since that time, many dairy

operations have increased their milk production above their established production

history by expanding the dairy herd or increasing milk production per cow.

Eligible DMC operations that have an increase in 2019 milk marketings from

their established production history have the opportunity to receive payments on

supplemental pounds of milk marketings. The supplemental production history is

determined by multiplying 75 percent of the result of subtracting the dairy operation’s

established production history from their actual milk marketings for the 2019 calendar

year; calculated as follows:

(2019 milk marketings – production history) x 75%

A participating dairy operation with approved supplemental pounds will have the

same coverage percentage and level as on the DMC contract for the applicable calendar

year. DMC indemnity payments will be issued according to the corresponding coverage

levels for both established production history and supplemental pounds.

The sum of the pounds covered by supplemental DMC and the established

production history cannot exceed 5 million pounds. The total covered production history

is determined by the coverage percentage multiplied by the sum of supplemental

production history and the existing DMC production history.

Supplemental production premium fees are determined using the Tier 1 premium

rate and the supplemental production history to ensure that the total covered production

history does not exceed 5 million pounds. Tier 1 premium rates are specified in 7 CFR

1430.407. Dairy operations enrolled in multi-year lock-in contracts are not eligible for

the premium discount on supplemental pounds. Multi-year lock-in contracts will pay the

standard premium rate by coverage level on supplemental production history. When a

dairy operation with a multi-year lock-in contract enrolls supplemental production

history, the supplemental history is enrolled up to and including the 2023 coverage year.

FSA will announce by press release and external communications a 45-day or

more special enrollment or coverage election period for participating dairy operations to

establish supplemental production history. When supplemental production history is

established, dairy operations are required to cover the pounds of established production

history and supplemental production history. Dairy operations not enrolled for 2021

DMC cannot enroll during the supplemental special enrollment. Eligible dairy operations

for supplemental production history once enrolled and approved may receive applicable

indemnity starting in January of 2021 through December 2023. For dairy operations

where a succession-in-interest occurred or occurs on or after January 2, 2021, through the

special enrollment opening, the predecessor must establish supplemental history for the

successor to be eligible for 2021 supplemental DMC coverage because the predecessor

originally established the production history. The successor will only be eligible for the

days in 2021 in which they succeeded to the dairy operation. The successor will not be

eligible for 2021 supplemental coverage if the predecessor does not establish

supplemental production history. Otherwise, supplemental production history established

by a successor during the same period will not be effective until the 2022 coverage year.

To accurately reflect dairy operation feed costs, the rule will amend the

calculation of average feed cost and actual dairy production margins by determining the

price for alfalfa by using the price for high quality hay. The previous rule used an

average of high quality (premium and supreme) alfalfa hay and average quality hay to

calculate the hay price according to 7 CFR 1430.411(c)(3). USDA is making this change

retroactive to the beginning of the 2020 program year, as a discretionary change.

Dairy Indemnity Payment Program

As codified in 7 U.S.C. 4551, the Secretary of Agriculture is authorized to

indemnify affected farmers and manufacturers of dairy products who, through no fault of

their own, suffer income losses with respect to milk or milk products containing harmful

pesticide residues, chemicals, or toxic substances, or that were contaminated by nuclear

radiation or fallout. DIPP was originally authorized by section 3 of Public Law 90-484,

and was amended by section 1402(b) of the 2018 Farm Bill, extending the authority for

DIPP until September 30, 2023.

This rule amends the regulations in 7 CFR part 760 to indemnify affected farmers

for depopulating and permanently removing cows in certain situations as explained in this

section. This rule is also amending the amount of time a dairy is eligible to receive

indemnification for milk under DIPP. Both changes are discretionary.

For certain affected farmers, elevated levels of perfluoroalkyl and polyfluoroalkyl

substances (PFAS) chemical residues in their dairy cows has led to extended participation

in DIPP, resulting in the need to consider an appropriate change under DIPP to better

address these circumstances. Because efforts to investigate and address PFAS by the

Federal government are ongoing and additional studies are needed to understand how to

significantly reduce accumulated PFAS levels in dairy cows, affected cows may be

determined likely to be not marketable for a lengthy duration. Currently the science

related to PFAS is evolving. FSA carefully considered the circumstances and determined

that in cases where dairy cows are likely to be not marketable for a lengthy duration, as

determined by the Deputy Administrator for Farm Programs (DAFP), the affected cows

would be eligible for depopulation. The potential increase in these situations requires this

change in DIPP policy for contaminated milk and other similar events resulting in milk

and cows that are likely to be not marketable for longer durations. Therefore, the

amended rule:

• limits indemnification of milk due to chemical residues to 3 months to

monitor chemical levels, unless an extension is approved, removing the

cows from milk production during that time; and

• provides indemnification of the cows through DIPP where the cows are

likely to be not marketable for 3 months or longer [from the date the

affected farmer submits an application for cow indemnification per 7 CFR

760.13].

Changing the DIPP regulations to allow for the indemnification of affected cows

from the same loss

will eliminate the potential for continued and prolonged months of

milk indemnification and in most cases reduce the overall expense to the government and

producer. The DIPP statute authorized the Secretary to make indemnity payments for

cows or milk but USDA has not previously implemented regulations for the

indemnification of cows. The term of DIPP milk eligibility is changing in this rule to

limit indemnification for contaminated milk due to the same loss to 3 months, unless an

As defined in § 760.2, “same loss” means the event or trigger that caused the milk to

be removed from the commercial market. For example, if milk is contaminated, the

original cause of the contamination was the trigger and any loss related to that

contamination would be considered the same loss. An example of a cause of

contamination would be contaminated water from a specific well or feed grown on

certain fields.

extension is approved. An extension may be granted if, upon request from an affected

farmer and at the discretion of DAFP, DAFP approves additional months of milk

indemnity payments to allow additional time for planning for removal (depopulation and

disposal), and public agency approval of such plan, required for cow indemnification or

in circumstances where chemical residues are anticipated to be reduced to marketable

levels according to a plan submitted by the affected farmer. Prior to this rule, an affected

farmer was limited to receiving 18 months of payments under DIPP due to the same loss.

As a result of the changes being made by this rule, any affected farmer may apply

for cow indemnification, with eligibility then determined by DAFP. The application

must be filed with the FSA county office for the county where the farm headquarters is

located by December 31 following the fiscal year end in which the affected farmer’s milk

was removed from the commercial market, except that affected farmers that have

received at least 3 months of milk indemnity payments prior to [Insert date of

publication in the Federal Register] must file the form within 120 days after [Insert

date of publication in the Federal Register]. Upon written request from an affected

farmer and at DAFP’s discretion, the deadline for that affected farmer may be extended.

For affected cows that produce contaminated milk, DAFP will determine eligibility for

cow indemnity based on whether those cows are likely to be not marketable for 3 months

or longer [from the date the affected farmer submits an application for cow

indemnification per 7 CFR 760.13]. To make this determination, DAFP will take into

consideration the levels of chemical residues in the contaminated milk by reviewing milk

testing results, the commercial market's assessment of the current marketability of the

affected cows, the type and source of chemical residues in the milk and animal tissues,

and the projected duration for chemical residues to be reduced to marketable levels.

Additionally, DAFP will review the actions the affected farmer has taken to reduce the

chemical residues since the contaminated milk was discovered. After the affected farmer

submits a complete application for DIPP cow indemnification on a form approved by

DAFP, including the required documentation specified in 7 CFR 760.12, DAFP will

determine eligibility for cow indemnification for those affected cows according to 7 CFR

760.10. Once an affected farmer is approved for cow indemnity payments, that affected

farmer will no longer be eligible for additional milk indemnity payments in the future for

the same loss.

Bred (young dairy female in gestation) and open (young dairy female not in

gestation) heifers that are not marketable due to elevated levels of chemical residues as

the result of the same loss are eligible for cow indemnification through DIPP if

determined by DAFP to likely be not marketable for 3 months or longer under 7 CFR

760.11 after review of a recommendation on eligibility from the appropriate FSA county

committee. The affected farmer may include heifers in the cow indemnity request if the

heifers’ intended purpose is milk production and that future milk production is likely to

be not marketable due to the same loss. DIPP indemnity payments for affected bred and

open heifers due to same loss will be calculated as provided in 7 CFR 760.11.

Information required to apply for cow indemnity for heifers is specified in 7 CFR 760.12.

In order for the affected farmer to receive approval for cow indemnification, the

application must provide a removal plan for depopulating, disposing of, and permanently

removing the affected cows and heifers from any future commercial milk production.

That removal plan must be approved by the applicable public agency where the affected

cows are located and in accordance with the public agency’s depopulation and animal

disposal requirements at the time of disposal, including any applicable EPA, State, and

local guidelines and requirements. The removal plan must provide FSA, to the

satisfaction of the FSA county committee, a timeline of all aspects of cow removal, how

and where cows will be depopulated, including how the cows and chemical residues, if

applicable, will be disposed of, and documentation of the approval of the removal plan

from the applicable public agency.

DAFP, upon request from an affected farmer on the application for cow

indemnity and at DAFP’s discretion, may approve indemnification of affected cows that

were not marketable and were depopulated or died above normal mortality rates

for the

farm between approval of the affected farmer’s application for the first month of milk

indemnity and approval of the removal plan for cow indemnification. An affected farmer

making such a request must submit an accounting of affected cows depopulated or died

above normal mortality rates for cows between approval of the affected farmer’s

application for the first month of milk indemnity but before the public agency approved

the removal plan. This request for cow indemnification may include both cows that were

included in applications for milk indemnity and heifers that were affected from the same

loss.

DIPP will use the normal mortality rates for cows established by the FSA State

Committees for the Livestock Indemnity Program (LIP). The FSA State Committee

annually determines normal mortality rates in their state for the following weight ranges:

• Dairy, nonadult less than 400 pounds;

• Dairy, nonadult 400 pounds or more; and

• Dairy, adult cow.

Indemnification for affected cows through the Livestock Indemnity Program

(LIP) is not an option for affected farmers because chemical residues are not an eligible

cause of loss under LIP.

The application for cow indemnification should include all affected cows,

including heifers, as well as any deceased or previously depopulated cows, for which the

affected farmer seeks indemnification. To apply, the affected farmer will need to provide

the information specified in 7 CFR 760.12: an application form approved by FSA, a

removal plan, an inventory of adult cows or bred or open heifers at applicable weight

ranges, and depopulation and disposal authorization from an applicable public agency. A

written statement is required from 2 commercial markets that declined the acceptance of

the affected cows through a cull cow market, slaughter facility, or processing facility due

to the levels of chemical residues in the affected cows. Additionally, documentation of

any projected timelines to reduce the chemical residues, actions the affected farmer has

taken to reduce the chemical residues to marketable levels, including any professional

assistance obtained for chemical residue remediation, including, but not limited to advice,

consultation, and discussion of strategies with the public agencies. For heifers, the

affected farmer will also need to provide: veterinarian records, blood test results, or other

testing information for DAFP to make its eligibility determination. In addition to any

other information sought in § 760.12, if an affected farmer has not applied for milk

indemnification through DIPP before applying for cow indemnification, the affected

farmer will also need to provide documentation according to 7 CFR 760.6(a), (b), (h), and

(i).

Affected farmers have the choice to receive 50 percent of cow indemnification

after application approval and the remaining 50 percent after the cows are depopulated

and removed or 100 percent after the cows are depopulated and removed. FSA will

provide indemnification of cows to compensate for the value of the affected cows for

eligible affected farmers according to the calculations set forth in 7 CFR 760.10 and

760.11, but will not provide cost share assistance of cow depopulation and removal

expenses. The Natural Resources Conservation Service can assist affected farmers in

developing a removal plan and may provide cost share assistance to help with proper

disposal and permanent removal through the Environmental Quality Incentives Program.

Once approved for cow indemnification, the affected farmers will dry the affected

lactating dairy cows to stop further milk production. Affected farmers approved for

indemnification of cows that subsequently restock the original farm with new dairy cows

and commercially market milk at the original location of contamination, are not eligible

for DIPP indemnification for any future contamination from the same loss.

FSA is also amending 7 CFR 760.6(i) to include the requirement that all milk

indemnification applicants provide monthly milk testing results detailing the chemical

residue levels in the milk to align with current procedure. In addition, FSA is amending 7

CFR 760.2 to add definitions for “contaminated milk,” “depopulation,” “not marketable,”

and “violating substance” in 7 CFR 760.2 and FSA is amending § 760.7 to apply to both

milk and cow indemnification.

Marketing Assistance Loans and Loan Deficiency Payment Programs

FSA administers the MAL and LDP Programs for CCC. The 2018 Farm Bill

extends the existing MAL and LDP programs for the 2019 through 2023 crop years with

minor changes implemented by this rule. Sections 1201 through 1205 and 1301 of the

2018 Farm Bill authorize the continuation of the MAL and LDP programs, the Economic

Adjustment Assistance for Textile Mills, the Extra Long Staple (ELS) Cotton

Competitiveness Payment Program, and the Sugar Program. The changes required by the

2018 Farm Bill include: Revising the loan rates for wheat, feed grains, soybeans, and

pulse crops; providing the ability to pledge contaminated commodities for recourse loans

at 100 percent of the loan rate if merchantable; removing payment limitation and other

payment eligibility criteria for MAL and LDP for all commodities; providing a new

formula for upland cotton base loan rates; revising the name of the Economic Adjustment

Assistance for Users of Upland Cotton Program to Economic Adjustment Assistance for

Textile Mills, and adjusting the trigger point for payment under the ELS Cotton

Competitiveness Payment Program. The 2018 Farm Bill also established the loan rates

for raw cane sugar and refined beet sugar. This rule also makes discretionary changes to

include provisions for Commodity Certificate Exchanges, to clarify the regulations and to

remove expired provisions.

This rule updates 7 CFR parts 1421, 1425, 1427, 1434, and 1435 to implement the

mandatory changes required by the 2018 Farm Bill and the discretionary clarifying

changes and technical corrections. All applicable handbooks and forms are also being

updated with conforming changes.

The 2018 Farm Bill changes in this rule have already been implemented

administratively for the 2019 and subsequent crop year.

Existing MAL and LDP Programs

Producers of eligible commodities can apply for MALs or LDPs, subject to terms

and conditions as specified in applicable regulations. MALs are 9-month loans with the

commodity pledged as collateral for the loan. A producer who is eligible for MAL may

choose to receive LDP in lieu of receiving a MAL. LDPs allow the producer to receive a

payment when the alternative repayment rate for that commodity is below the loan rate,

instead of pledging the commodity as collateral for MAL. The general structure of the

MAL and LDP Programs are not changing with this rule. The 2018 Farm Bill changes

eligibility requirements for producers, as well as the loan rates for many commodities.

MALs and LDPs are available beginning with harvest or shearing season for each

commodity and extend through the marketing year for that particular commodity. Nearly

all MALs are nonrecourse loans, meaning that the commodity is collateral for MALs and

may be delivered at maturity as full payment for an outstanding MAL. Recourse loans

are available for a few commodities for which long term storage is not readily available,

meaning that the collateral cannot be delivered as full payment for MALs. With the 2018

Farm Bill, recourse loans will now be available for contaminated commodities that are

merchantable. MALs and LDPs must be requested on or before the final loan availability

date for the applicable commodity. Producers may repay the MAL at a rate that is the

lesser of the loan rate plus interest or an alternative repayment rate as determined and

announced by the USDA. The repayment rate is based on average market prices for the

preceding 30 days, or an alternative rate set by a similar method established by the

Secretary. If the market price as reflected in the repayment rate falls below a loan rate

specified in the 2018 Farm Bill for that commodity, producers can redeem a MAL at the

posted repayment rate, deliver the MAL commodity to CCC, or use Commodity

Certificates to exchange the commodity.

As an alternative to receiving a MAL, a producer can forgo a MAL, and instead,

may obtain an LDP on their crop, if an LDP is currently available for the applicable

commodity and the producer is eligible for the MAL. LDPs allow the producer to receive

a payment when the repayment rate for a commodity is below the loan rate for that

commodity.

Upland Cotton National Loan Rate Calculation and ELS Loan Rate Change

Section 1202 of the 2018 Farm Bill specifies the national loan rates for the 2019

through 2023 crop years for the eligible loan commodities.

Section 1202(a)(3) of the 2018 Farm Bill amended 7 U.S.C. 9032 to add

subsection (b)(6) and sets the base loan rate for upland cotton at no less than $0.45 per

pound or more than $0.52 per pound based on the average of the adjusted prevailing

world price for the two immediately preceding marketing years, as determined by the

Secretary, and may not equal less than 98 percent of the loan rate for the preceding year.

This change is designed to make the loan rate more reflective of prevailing market prices,

and serves to limit the impact of decreased market prices on the loan rate while allowing

any price changes to the established loan rate to be reflected in future base loan rates.

Payment Limitations and Adjusted Gross Income

Section 1703(a)(2) of the 2018 Farm Bill removed references to market loan gains

and loan deficiency payments in 7 U.S.C. 1308, and as a result, payment limitations no

longer apply to market loan gains and LDPs. Additionally, by removing market loan

gains and loan deficiency payments, payment limitations, actively engaged in farming

requirements, and the cash rent tenant provisions no longer apply to market loan gains

and LDPs as well.

The average Adjusted Gross Income (AGI) limit for most FSA and CCC

programs is $900,000 and remains unchanged. The $900,000 limit is for total average

AGI, as opposed to the way AGI has operated previously, with multiple limits for farm

and non-farm income, and the separate, different limit for conservation programs.

Producers exceeding AGI can apply for and receive a MAL. Nonrecourse MALs must

either be repaid at principal plus interest, exchanged with commodity certificates if the

alternative repayment rate is below the established loan rate, or forfeited to the

commodity to CCC in satisfaction of the loan debt. Producers who exceed AGI may use

a commodity certificate to repay MALs and receive a market loan gain. An alternative

repayment rate does not apply to ELS cotton or sugar. All recourse loans must be repaid

at principal plus interest and cannot be forfeited.

This rule makes conforming changes to payment limitation references throughout

7 CFR parts 1421, 1425, 1427, and 1434.

Summary of MAL and LDP Discretionary and Clarifying Changes

In addition to implementing the 2018 Farm Bill changes, FSA is making changes

resulting from a retrospective review of the MAL and LDP regulations. Most of the

changes are clarifying changes to make the regulations clear and consistent. Information

regarding commodity certificate exchanges is now included in 7 CFR 1421.110 and

1427.22. That information is a technical correction as commodity certificates were

reintroduced to the MAL program in Section 740 of Title VII of Division A of the

Consolidated Appropriations Act, 2016 (Pub. L. 114-113), which amended section 166 of

the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7286).

Beginning with 2015 crop year MALs, the Secretary has the authority to provide

commodity certificates in the same terms and conditions as were in effect for the 2008

crop year for loans.

New and Revised MAL and LDP Definitions

This rule adds a definition for “commodity certificate exchange” in §§ 1421.3 and

1427.3. A commodity certificate exchange is the exchange of commodities pledged as

collateral for a marketing assistance loan at a rate determined by CCC in the form of a

commodity certificate bearing a dollar denomination. A commodity certificate may not

be transferred or exchanged for the inventory of CCC.

This rule also revises the definition for “market loan gain” in 7 CFR part 1421

and adds a definition for “market loan gain” for upland cotton in 7 CFR part 1427 to be

consistent across all rules involving marketing assistance loans. A market loan gain is

the loan rate, minus the announced repayment rate on loans repaid at a rate that is less

than the loan rate. A producer's AGI must be below the limit as specified in 7 CFR parts

1421 and 1427 in order to be eligible to receive a market loan gain.

The changes are being made to add clarity and consistency in the regulations.

Commodity Certificate Exchange

Use of commodity certificates was reintroduced and made effective with the 2015

crop year MALs as authorized under section 740 of the Title VII of Division A of the

Consolidated Appropriations Act, 2016 (Pub. L. 114-113), by amending section 166 of

the Federal Agriculture Improvement and Report Act of 1996 (7 U.S.C. 7286) using the

same terms and conditions in effect for the 2008 crop year. This rule revises the

regulations to clarify the availability of commodity certificates at loan redemption.

Cotton

The 2018 Farm Bill reauthorizes and extends existing cotton MAL and LDP

provisions, which are in 7 CFR part 1427. It also extends the authorizations for the

Economic Adjustment Assistance for Users of Upland Cotton Program and ELS Cotton

Competitiveness Payment Program.

This rule amends 7 CFR part 1427 to remove outdated references, and to clarify

definitions consistent with the changes being made to 7 CFR part 1421.

As specified in section 1203(b) of the 2018 Farm Bill, the Economic Adjustment

Assistance to Users of Upland Cotton will be referred to as Economic Adjustment

Assistance for Textile Mills.

As specified in section 1204(b) of the 2018 Farm Bill, the regulations for the ELS

Cotton Competitiveness Payment Program are amended to reflect the statutory change of

the payment trigger from 134 percent to 113 percent.

Honey

Section 1703(a)(2) of the 2018 Farm Bill reauthorizes and extends existing honey

MAL and LDP provisions with some modified numbers and removed the words

“payment limitations” in 7 CFR 1434.1.

Miscellaneous Changes

This rule makes a discretionary change in 7 CFR 1421.9 to allow DAFP

additional flexibility to adjust premiums and discounts and whether they are accounted

for at the time of disbursement.

Throughout 7 CFR part 1421 nonsubstantive housekeeping changes are being

made to the regulations to fix typographical errors and add to the clarity, readability, and

consistency in the regulations. These changes do not represent substantive policy or

administrative changes. These changes are in 7 CFR 1421.5, 1421.104, 1421.112, and

1421.417.

Oriental Fruit Fly

This final rule establishes provisions in 7 CFR part 756, for providing assistance

as authorized by section 778 of Subtitle B of Title VII of Division N of the Consolidated

Appropriations Act, 2019 (Pub. L. 116-6), which appropriated $9 million to FSA for the

purpose of making payments to producers affected by an Oriental fruit fly (Bactrocera

dorsalis) quarantine as referenced in House Report 115-232. Funds will remain available

until expended. The quarantine, which lasted from August 28, 2015 through February

13, 2016, was necessary and successful in eradicating the Oriental fruit fly. Because the

Non-Insured Crop Assistance Program (NAP) does not apply in instances of a state or

federally declared quarantine and RMA does not offer a quarantine endorsement in

Florida, the affected producers need relief. The Oriental Fruit Fly (OFF) Program will

provide payments to producers affected by the quarantine. This rule specifies the

administrative provisions, eligibility requirements, application procedures, and payment

procedures for the OFF Program.

Oriental fruit flies were first detected in Miami-Dade County, Florida on August

26, 2015. The Oriental fruit fly is considered one of the most destructive of the world’s

fruit fly pests and attacks more than 430 different fruits, vegetables, and nuts. Population

growth can be massive since females can produce hundreds of eggs infesting fruit and

rendering it unsuitable for human consumption. The female deposits eggs under the skin

of host fruit and the larvae infests the fruit. The detection of multiple flies triggered the

State of Florida and Animal Plant Health and Inspection Service (APHIS) to implement a

quarantine in the Redland area of Miami-Dade County on August 28, 2015. The

quarantine area was established and covered 98.65 square miles authorized in Florida

Statute 581.031 and defined in 5B-66 Florida Administrative Code. As part of the effort

to eradicate the Oriental fruit fly, producers in the quarantine area were required to sign a

compliance agreement that outlines the procedures necessary for the harvesting, handling,

and postharvest of crops in the quarantined area. On February 13, 2016, APHIS

rescinded the quarantine after three lifecycles elapsed without any new Oriental fruit fly

detections. Therefore, the quarantine was necessary and successful in eradicating the

Oriental fruit fly. Due to the timing of the State of Florida and APHIS implemented

quarantine, crops were negatively affected during the 2015 and 2016 crop growing

seasons and producers suffered revenue losses.

Crops were negatively affected in the following ways:

1) Host crops within a 200-meter radius of an Oriental fruit fly find had to be

stripped, double bagged, transported, and disposed of in a landfill.

2) Host crops within ½ mile radius of an Oriental fruit fly find were only allowed

to be harvested and sold if a post-harvest treatment plan was implemented.

This option was expensive and unfeasible, as there were no post-harvest

treatment facilities in Miami-Dade County, Florida.

3) Host crops within the quarantine area, but outside the 200 meter and ½ mile

radius were required to follow a 30-day pre-harvest treatment plan or post-

harvest treatment plan to be harvested and sold. The pre-harvest treatment

plan was expensive and sometimes impractical, as the treatment method

involved a 30-day pre-harvest treatment of pesticide at 6 to 10-day intervals.

Therefore, crops suffered revenue losses due to crop drop, spoilage, reduced

post-harvest shelf life, and costly methods to complete pre- or post-harvest

treatment.

4) Producers within the quarantine area, may have been prevented from planting

an annual crop in the 2015 or 2016 season as a response to the perceived risk

of the Oriental fruit fly outbreak.

Producer Eligibility for the OFF Program

To be eligible for the OFF Program, the producer must have been actively

producing and marketing crops from August 28, 2015 through February 13, 2016, and

also be affected by the State of Florida and APHIS implemented quarantine. Producers

will not be required to be in the business of producing and marketing agricultural

products at the time of the OFF Program application.

OFF Program Application Process

Producers must submit OFF Program applications to their administrative FSA

county office by the deadline that will be announced by an FSA press release and FSA

notice, by DAFP. A complete OFF Program application consists of filing an FSA-438,

Oriental Fruit Fly Program (OFF) Application. If not already on file with FSA,

applicants must also submit AD-1026, Highly Erodible Land Conservation (HELC) and

Wetland Conservation (WC) Certification; CCC-902, Farm Operating Plan for Payment

Eligibility; CCC-901 Member Information for Legal Entities, if applicable; CCC-941,

Average Adjusted Gross Income (AGI) Certification and Consent to Disclosure of Tax

Information; and CCC-942 Certification of Income from Farming, Ranching and Forestry

Operations, if applicable. Actively engaged in farming requirements, cash rent tenant

rules, and rules for foreign persons will not apply.

The producer’s self-certified gross revenue for the applicable calendar years

entered on the FSA-438 is subject to compliance spot-check and based on their verifiable

or reliable documentation that substantiate the information provided by the producer on

FSA-438. Gross revenue is income from crop sales received during the applicable

calendar years for the crops that suffered a loss due to the Oriental fruit fly quarantine.

The following is an example of how an OFF Program payment will be calculated:

Calendar Year 2014 Gross Revenue = $200,000

Calendar Year 2015 Gross Revenue = $150,000

Calendar Year 2016 Gross Revenue = $160,000

$200,000 - $150,000 = $50,000 (2015 Gross Revenue Loss)

$200,000 - $160,000 = $40,000 (2016 Gross Revenue Loss)

$90,000 (Total 2015 & 2016 Gross Revenue Loss)

x 70% OFF Program Factor = $63,000 (OFF Program Payment)

The following is an example of how an OFF Program payment will be calculated

if the producer did not have 2014 revenue. The producer’s 2019 revenue will be used in

place of the 2014 revenue:

Calendar Year 2019 Gross Revenue = $150,000

Calendar Year 2015 Gross Revenue = $110,000

Calendar Year 2016 Gross Revenue = $90,000

$150,000 -$110,000 = $40,000 (2015 Gross Revenue Loss)

$150,000 - $90,000 = $60,000 (2016 Gross Revenue Loss)

$100,000 (Total 2015 & 2016 Gross Revenue Loss)

x 70% OFF Factor = $70,000 (OFF Program Payment)

After the application period closes, payments will be prorated if the total

calculated payments to all eligible producers would exceed funding.

It is possible a producer may not receive a payment if there is no gross revenue

loss determined. Below is an example of a zero payment.

Calendar Year 2014 Gross Revenue = $200,000

Calendar Year 2015 Gross Revenue = $220,000

Calendar Year 2016 Gross Revenue = $210,000

$200,000 - $220,000 = $20,000 (2015 Gross Revenue Gain)

$200,000 - $210,000 = $10,000 (2016 Gross Revenue Gain)

$30,000 (Gross Revenue Gain)

There is no revenue loss for calendar years 2015 and 2016, therefore the OFF

Program payment will be zero.

Conservation Reserve Program

Under CRP, CCC will enter into contracts with eligible producers to convert

eligible land to an approved cover during the contract period in return for financial and

technical assistance. A producer must obtain and adhere, for the contract period, to a

conservation plan prepared in accordance with CCC guidelines and the other provisions

in § 1410.22. The objectives of CRP are to cost-effectively reduce water and wind

erosion, protect the Nation's long-term capability to produce food and fiber, reduce

sedimentation, improve water quality, create and enhance wildlife habitat, and other

objectives including, as appropriate, addressing issues raised by State, regional, and

national conservation initiatives and encouraging more permanent conservation

practices, including, but not limited to, tree planting. FSA administers CRP on behalf of

CCC.

Two discretionary requirements that were added to the CRP regulation in 7 CFR

part 1410 from an interim rule published on December 6, 2019, are being removed

because they limit participation in CRP.

The requirement in § 1410.6(e)(4)(iii) is being removed because it has affected

enrollment by reducing the rental payment rate for the acres within the footprint of the

resource conservation measures otherwise required by Tribal, State, or other local laws,

ordinances, or regulations. Once removed, contracts with reduced payment rates will be

modified if CCC and the participant agree to modify the contract under §1410.33(a)(3) if

doing so, in CCC’s determination, will facilitate the practical administration of CRP. The

contract modification would apply to future contract payments and subsequent years.

The requirement in § 1410.90(c) has the potential of limiting interest and

opportunity for potential Conservation Reserve Enhancement Program (CREP) partners,

due to the level of the cash matching fund requirement for direct payments.

Sixty-seven public comments were received in response to the CRP interim rule.

At this time, FSA is not responding to all comments, but only those regarding the two

provisions being amended in this rule. The comments not addressed in this rule will be

addressed at a later date.

Summary of Public Comments and FSA Responses for CRP

FSA received comments on the two provisions in §§ 1410.6 (e)(4)(iii) and

1410.90 from non-profit organizations, a coalition of grassroot organizations, and private

individuals.

In line with public comments received requesting the removal of § 1410.6(e)(4),

this rule is removing § 1410.6(e)(4)(iii) - the language requiring a 25 percent payment

reduction. This discretionary reduction was intended, while allowing the land to be

eligible, to reduce the payment for land required to be in compliance with resource

conservation measures or practices by law, ordinance, or regulation. It would not work to

strike the entire section, as that would make all land for which Tribal, State, or other local

laws, ordinances, or other regulations require any resource conserving or environmental

protection measures or practices, to be ineligible to enroll in CRP. Sections

1410.6(e)(4)(i) and 1410.6(e)(4)(ii) provide exceptions to land eligibility, making land

requiring resource conserving or environmental protection measures or practices by

Tribal, State, or other local laws, ordinances, or other regulations, eligible for enrollment.

This rule is removing part of § 1410.90, as it is likely impeding the opportunity

for potential CREP partners to enter into agreements. By eliminating the requirement of

at least half of the matching funds be provided in the form of direct payments to

participants, potential CREP partners will be able to provide matching funds in other

forms, allowing for a more inclusive group of potential partners to participate. Public

comments were received in favor of this change, as it is recognized a cash match is

difficult for many Tribes, non-profits, and local agencies. As a result of the change made

by this rule, partners may provide matching funds in the form of cash, in-kind

contributions, or technical assistance.

The following discussion summarizes the issues raised by commenters and FSA’s

responses to those comments.

Comment: Strike § 1410.6(e)(4) and ensure that CRP provides full support to

farmers in complying with state water protection regulations.

Eliminate the 25 percent reduction to the annual rental payment for land for which

Tribal, State, or other local laws, ordinances, or other regulations require any resource

conserving or environmental protection measures or practices, and to provide full annual

rental payments through CRP for otherwise eligible land.

Response: This rule is removing § 1410.6(e)(4)(iii), which previously required a

25 percent reduction to the annual rental payment that would have been paid if there were

no such Tribal, State, or other law, ordinance, or regulation. The removal of the section

will help increase interest in enrollment by not reducing the rental payment due to

requirements regarding resource conservating practices and measures, and ensure

participation in CREP. The entire section is not being struck because land for which

Tribal, State, or other local laws, ordinances, or other regulations require any resource

conserving or environmental protection measures or practices, and the owners or

operators of such land have been notified in writing of such requirements, is still

ineligible for enrollment unless it meets one of the exceptions in § 1410.6(e)(4)(i) or (ii).

Comment: Promote, don't discourage, state, local, and Tribal partnerships. CREP

leverages state and other funding to focus CRP contracts where they will do the most

good to solve state-level water, soil, and wildlife problems. Instead of adopting high

requirements for providing a cash match that would be difficult for many Tribes, non-

profits, and local agencies, USDA should actively promote CREP agreements with states

and other entities to bring together new conservation funds to address these difficult

issues.

Response: This rule is removing § 1410.90 due to it impeding the opportunity for

potential CREP partners to participate in matching funds. By eliminating the requirement

of at least half of the matching funds being provided as a direct payment to the

participants, the CREP partners will be able to provide matching funds in other forms and

will allow for a more inclusive group of potential CREP partners to participate.

Notice, Comment, Exemptions, and Effective Date

As specified in 7 U.S.C. 9091, the regulations to implement the DMC Program,

DIPP, MAL, and LDP, are:

• Exempt from the notice and comment provisions of 5 U.S.C. 553, and

• Exempt from the Paperwork Reduction Act (44 U.S.C. chapter 35).

As specified in 16 U.S.C. 3846, the regulations to implement CRP are:

• To be made as an interim rule effective on publication, with an

opportunity for notice and comment, as was done through the CRP interim

rule published in the Federal Register on December 6, 2019 (84 FR 66813

- 66833) – this rule includes changes in response to certain comments to

the interim rule, and

• Exempt from the Paperwork Reduction Act (44 U.S.C. chapter 35).

In addition, 7 U.S.C. 9091(c)(3) and 16 U.S.C. 3846 direct the Secretary to use

the authority provided in 5 U.S.C. 808, which provides that when an agency finds for

good cause that notice and public procedure are impracticable, unnecessary, or contrary

to the public interest, the rule may take effect at such time as the agency determines.

For the OFF Program, the Administrative Procedure Act (5 U.S.C. 553) provides

that the notice and comment and 30-day delay in the effective date of the provisions do

not apply when the rule involves a matter relating to agency management or person to the

public property, loans, grants, benefits, or contracts (5 U.S.C. 553(a)(2)). This rule

involves programs for payments to certain agricultural commodity producers and

therefore the exemption applies.

FSA is authorized to provide payments to the producers to comply with the

recently enacted Consolidated Appropriations Act, 2021 in providing the Supplemental

DMC Payments to dairy producers in the DMC Program. FSA and CCC find that notice

and public procedure are contrary to the public interest. Therefore, even though this rule

is a major rule for purposes of the Congressional Review Act of 1996, FSA and CCC are

not required to delay the effective date for 60 days from the date of publication to allow

for Congressional review. Therefore, this rule is effective on the date of publication in

the Federal Register.

Although the OFF Program regulations is exempt from the Administrative

Procedure Act public comment requirements, as noted below in the Paperwork Reduction

Act section, the 60-day public comment requirements of the Paperwork Reduction Act

apply to the information collection request. Therefore, this rule has a 60-day comment

period specifically to request input from the public on the information collection request.

In addition, because this rule is exempt from the requirements in 5 U.S.C. 553, it

is also exempt from the regulatory analysis requirements of the Regulatory Flexibility

Act (5 U.S.C. 601-612), as amended by the Small Business Regulatory Enforcement

Fairness Act of 1996 (SBREFA). The requirements for the regulatory flexibility analysis

in 5 U.S.C. 603 and 604 are specifically tied to the agency being required to issue a

proposed rule by section 553 or any other law, further, the definition of rule in 5 U.S.C.

601 is tied to the publication of a proposed rule.

Executive Orders 12866 and 13563

Executive Order 12866, “Regulatory Planning and Review,” and Executive Order

13563, “Improving Regulation and Regulatory Review,” direct agencies to assess all

costs and benefits of available regulatory alternatives and, if regulation is necessary, to

select regulatory approaches that maximize net benefits (including potential economic,

environmental, public health and safety effects, distributive impacts, and equity).

Executive Order 13563 emphasized the importance of quantifying both costs and

benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The

requirements in Executive Orders 12866 and 13573 for the analysis of costs and benefits

apply to rules that are determined to be significant.

The Office of Management and Budget (OMB) designated this rule as

economically significant under Executive Order 12866 and therefore, OMB has reviewed

this rule. The costs and benefits of this rule are summarized below. The full cost benefit

analysis is available on regulations.gov.

Cost Benefit Analysis Summary

The Supplemental DMC payments are authorized by the Consolidated

Appropriations Act, 2021. The use of 100-percent “premium and supreme”

hay in the

Referred to as “premium” for simplicity.

DMC calculation is an administrative change made by FSA. Changes to DIPP are

initiated by FSA as a result of PFAS chemical residue cases. The OFF program is

authorized by the Consolidated Appropriations Act, 2019. The CRP changes remove

discretionary limitations in order to provide greater flexibility to CREP partners and

increase payments modestly in situations where state law intersects with CRP. The MAL

and LDP provisions are technical changes that implement provisions of the 2018 Farm

Bill.

DMC provides eligible dairy producers with a risk management tool that pays

producers when the difference between the price of milk and the cost of feed (that is, the

margin) falls below a certain level. This determination is based on a formula using the

milk price and feed costs (corn, soybean meal, and alfalfa hay). In June 2019, FSA

changed the regulation specifying the alfalfa hay price used in the calculation. Prior to

that time, the calculation used only the price of conventional alfalfa hay. The 2019

regulation implemented a factored price, which was based on 50 percent of the premium

alfalfa hay price and 50 percent of the conventional alfalfa hay price. Given USDA

analysis indicating that the DMC feed cost formula does not adequately capture the costs

experienced by dairy producers, 100-percent premium alfalfa hay will be used in the

calculation. This change in the DMC margin formula will be retroactive and will start in

January 2020. The accrued Fiscal Year (FY) 2021 costs associated with this change,

including the retroactive January 2020 through September 2020 payment period, are

estimated at $108.47 million (Table 1). A 3-fiscal year (FY 2021 through FY 2023) cost

estimate, including the estimate for the first quarter of FY 2024 in the FY 2023 data, is

$335.43 million. The 10-year (FY 2021 through FY 2030) cost estimate is $705.32

million.

The Consolidated Appropriations Act, 2021, allows eligible dairy operations with

less than 5 million pounds of established milk production history to enroll supplemental

pounds of milk in DMC using 2019 actual milk marketings.

Participating dairy

operations with supplemental production may receive additional payments over and

above their currently established production history. Supplemental DMC is available to

participating DMC dairy operations starting in January of 2021 and lasting through

December 31, 2023. Supplemental DMC payments will be made retroactively, starting in

January 2021, for the months when DMC triggered. The Supplemental DMC estimates

are calculated using the DMC formula based on 100-percent premium alfalfa hay.

FY 2021 accrued gross costs for Supplemental DMC are estimated at $114.62

million. After subtracting premiums paid by farmers for supplemental milk production

enrollment, net costs are estimated at $110.31 million (see Table 1). To provide

perspective, DMC gross costs for FY 2021 (prior to Supplemental DMC) are estimated at

$1.70 billion.; as a result, supplemental DMC is estimated to increase payments to dairy

producers by 6.7 percent ($114.62 million/$1.7 billion) accrued in FY 2021. As

indicated above, Supplemental DMC is available to participating operations from January

2021 to December 2023. Total stochastic gross and net outlays for the entirety of the 3-

year program are estimated at $661.77 million and $644.52 million, respectively.

Supplemental DMC allows for enrollment above and beyond what is already

enrolled in 2021 DMC.

The rule also amends DIPP. DIPP is available to dairy farmers and dairy product

manufacturers who, through no fault of their own, suffer income losses because milk or

milk products were contaminated with harmful pesticide residues, chemicals, toxic

substances, or nuclear radiation or fallout. The rule change allows affected farmers and

manufacturers to be compensated for their milk or their cows and heifers. The rule:

1) Amends the duration a dairy claimant under DIPP is eligible to receive

indemnification for milk and milk products from 18 months to 3 months

(except in cases in which it is shorter when cow indemnity is approved or

when case-by-case extensions are granted), and

2) Allows for indemnification of cows and heifers that are affected by chemical

residues and likely to be not marketable long term and will require removal of

dairy cows from the farm by depopulation, transport, and disposal.

DIPP accrued costs in FY 2021, relative to what they would have been otherwise,

are estimated to increase by $4.19 million due to retroactive payment for depopulated

cows that were indemnified for the term of milk indemnity limitation according to the

prior regulation. These payments will be made in FY 2022. In the future, the regulatory

change will result in savings, rather than outlays.

The Consolidated Appropriations Act, 2019 provides $9 million to FSA to assist

producers affected by an Oriental Fruit Fly (Bactrocera dorsalis) quarantine as referenced

in House Report 115-232. Producers must have suffered eligible losses due to the

quarantine that occurred in the Redland area of Miami-Dade County, Florida, from

August 28, 2015, through February 13, 2016. The payment covers 70 percent of the 2015

and 2016 revenue losses suffered relative to 2014 revenue (or 2019 revenue, if the

producer does not have access to 2014 revenue). At the close of the OFF sign-up period,

a national payment factor may be determined and announced by FSA if the total of

calculated payments exceeds the authorized funding of $9 million, less a reserve amount

of 3 percent ($270,000). Gross OFF Program outlays in FY 2022 may be as high as in

the $23 million range and net outlays are estimated at $8.73 million. Given the

likelihood of a pro-rate, no payments are assumed for FY 2021.

Changes to CREP program partner percentages do not change the partner’s

overall contribution and are expected to increase outlays minimally. When state law

requires producers to install buffers or take other measures to address water quality

issues, CREP payments have been reduced; that payment reduction is now eliminated and

outlays are expected to increase modestly. This is because only Vermont has such a law

and exposure in that State is limited. The marketing assistance loan changes are technical

changes and are not addressed here.

Table 1. Summary of Changes and Estimated Fiscal Year Outlays for FY 2021-FY

2023

Item

FY 2021

Net

Estimated

Outlays (in

million $)

FY 2022 Net

Estimated

Outlays (in

million $)

FY 2023

Net

Estimated

Outlays (in

million $)

Item 1 Calculate the DMC formula

using 100 percent premium alfalfa hay

$108.47

$125.01

$101.95

Item 2 Allow supplemental dairy

production to become eligible for DMC

payments

...............................................

110.31

273.66

260.55

Item 3 Implement DIPP changes............

4.19

(2.15)

(3.27)

Item 4 Implement a one-time OFF

Program ...................................................

n.a.

8.73

n.a.

Item 5 Modify certain CRP provisions ...

n.a.

negligible

Item 6 Add MAL and LDP

housekeeping changes associated with

the 2018 Farm Bill ..................................

n.a.

Total ........................................................

222.97

405.25

359.23

For Items 1 and 2, the FY 2023 net estimated outlays include outlays for

October 2023, November 2023, and December 2023. For item 1, net outlays for the

first quarter of FY 2024 are included in addition to net outlays for FY 2023 because

2018 Farm Bill provisions for DMC expire at the end of calendar year 2023.

Estimated costs accrued for FY 2021 of $110.31 million do not include costs

associated with the first quarter of FY 2021. Total gross and net outlays for the

entirety of the 3-year program are estimated at $661.77 million and $644.52 million,

respectively.

The OFF Program is a one-time program and all outlays are expected to occur

in FY 2022 due to the likelihood of a pro-rata factor after all applications are received.

The $8.73 million is calculated for FY 2022 as $9 million less a 3 percent reserve.

Impacts for the CRP rule changes are expected to be quite small; see the

discussion in the full Cost Benefit Analysis for the discussion.

These are housekeeping changes and the impacts are similarly not addressed

here.

Environmental Review

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), the FSA regulation for compliance with NEPA (7 CFR part 799), and,

because FSA will be making the payments to producers, the USDA regulation for

compliance with NEPA (7 CFR part 1b).

Although OMB has designated this rule as “economically significant” under

Executive Order 12866, “economic or social effects are not intended by themselves to

require preparation of an environmental impact statement” when not interrelated to

natural or physical environmental effects (see 40 CFR 1502.16(b)).

The intent of DMC, DIPP, MAL, LDP, and the OFF Program are to compensate

producers who have suffered revenue losses. The discretionary aspects of the programs

being revised in this rule do not have the potential to impact the human environment. As

such, for these programs, the FSA categorical exclusions in 7 CFR part 799.31 apply,

specifically 7 CFR 799.31(b)(6)(iii), (iv) and (vi), as follows: 799.31(b)(6)(iii), Financial

assistance to supplement income, manage the supply of agricultural commodities, or

influence the cost or supply of such commodities or programs of a similar nature or intent

(that is, price support programs); and 799.31(b)(6)(vi), Safety net programs administered

by FSA (for DMC, DIPP, MAL, and LDP).

For CRP, the changes proposed are administrative in nature and covered by the

USDA categorical exclusion found at 7 CFR part 1b.3 (a)(2). This categorical exclusion

applies to activities that deal solely with the funding of programs, such as program

budget proposals, disbursements, and the transfer or reprogramming of funds. While this

environmental review evaluates impacts programmatically, it does not substitute for or

alter the existing requirement for site-specific environmental reviews for all CRP

applications.

Through this review, FSA determined that the proposed discretionary changes in

this rule fit within the categorical exclusions listed above. Categorical exclusions apply

when no extraordinary circumstances exist (7 CFR part 799.33). As such, FSA evaluated

the potential for extraordinary circumstances and determined that none apply because the

discretionary provisions identified in this final rule are minor and administrative in

nature, are intended to clarify the mandatory requirements of the programs, and do not

constitute a major Federal action that would significantly affect the quality of the human

environment, individually or cumulatively. Therefore, an environmental assessment or

environmental impact statement will not be prepared for this regulatory action; this rule

serves as documentation of the programmatic environmental compliance decision for this

Federal action.

Executive Order 12988

This rule has been reviewed under Executive Order 12988, “Civil Justice

Reform.” This rule will not preempt State or local laws, regulations, or policies unless

they represent an irreconcilable conflict with this rule. For the Supplemental DMC

implementation, Supplemental DMC payments will be made retroactively, starting in

January 2021, for the months when DMC triggered. For the DIPP rule changes, a

payment to indemnify affected farmers for affected cows due to known chemical residues

will be made retroactively, as explained above. For the MAL and LDP changes, the

changes were implemented administratively, as discussed above. Therefore, this rule has

retroactive effect for MAL and LDP for the 2018 crop year, and as specified by the 2018

Farm Bill and explained in this rule, certain provisions are effective beginning December

20, 2018. Before any judicial actions may be brought regarding the provisions of this

rule, the administrative appeal provisions of 7 CFR parts 11 and 780 are to be exhausted.

Executive Order 13175

This rule has been reviewed in accordance with the requirements of Executive

Order 13175, “Consultation and Coordination with Indian Tribal Governments.”

Executive Order 13175 requires Federal agencies to consult and coordinate with Tribes

on a Government-to-Government basis on policies that have Tribal implications,

including regulations, legislative comments or proposed legislation, and other policy

statements or actions that have substantial direct effects on one or more Indian Tribes, on

the relationship between the Federal Government and Indian Tribes, or on the distribution

of power and responsibilities between the Federal Government and Indian Tribes.

USDA recognizes that the Miccosukee Indian Reservation lies in the Northwest

corner of Miami-Dade County but was outside of the boundaries of the Oriental fruit fly

quarantine. USDA has assessed the impact of this rule on Indian Tribes and determined

that this rule does not, to our knowledge, have Tribal implications that required Tribal

consultation under Executive Order 13175 at this time. If a Tribe requests consultation,

the USDA Office of Tribal Relations (OTR) will ensure meaningful consultation is

provided where changes, additions, and modifications are not expressly mandated by law.

Outside of Tribal consultation, USDA is working with Tribes to provide information

about payments, and MAL and LDP assistance and other issues.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L. 104–4)

requires Federal agencies to assess the effects of their regulatory actions of State, local,

and Tribal governments or the private sector. Agencies generally must prepare a written

statement, including cost benefit analysis, for proposed and final rules with Federal

mandates that may result in expenditures of $100 million or more in any 1 year for State,

local or Tribal governments, in the aggregate, or to the private sector. UMRA generally

requires agencies to consider alternatives and adopt the more cost effective or least

burdensome alternative that achieves the objectives of the rule. This rule contains no

Federal mandates, as defined in Title II of UMRA, for State, local and Tribal

governments or the private sector. Therefore, this rule is not subject to the requirements

of sections 202 and 205 of UMRA.

Paperwork Reduction Act

As noted above, the regulations to implement the DMC Program, DIPP, and MAL

and LDP Programs are exempt from PRA as specified in 7 U.S.C. 9091 and the

regulations to implement CRP is exempt from PRA as specified in 16 U.S.C. 3846.

The following new information collection request that supports the OFF Program

was submitted to OMB for emergency approval. FSA will collect and evaluate the

application from the producers and other required paperwork for determining the

producer’s eligibilities and assist in producer’s payment calculations. FSA is requesting

comments from interested individuals and organizations on the information collection

activities related to the OFF Program as described in this rule. Following the 60-day

public comment period for this rule, the information collection request will be submitted

to OMB for the 3-year approval to ensure adequate time for the information collection for

the duration of OFF.

Title: Oriental Fruit Fly (OFF) Program.

OMB Control Number: 0560-New.

Type of Request: New Collection.

Abstract: This information collection is required to support the regulation

in 7 CFR part 756 for the OFF Program that establishes the requirements for eligible

producers who suffered eligible revenue losses resulting from the Oriental fruit fly

quarantine as specified in Public Law 116-6 (the Consolidated Appropriations Act,

2019). The information collection is necessary to evaluate the application and other

required paperwork for determining the producer’s eligibilities and assist in producer’s

payment calculations.

For the following estimated total annual burden on respondents, the formula used

to calculate the total burden hour is the estimated average time per response multiplied by

the estimated total annual responses.

Estimate of Respondent Burden: Public reporting burden for this information

collection is estimated to average 0.50 hours per response, including the time for

reviewing instructions, searching existing data sources, gathering and maintaining the

data needed and completing and reviewing the collections of information.

Type of Respondents: Producers or farmers.

Estimated Annual Number of Respondents: 750.

Estimated Number of Reponses Per Respondent: 1.933.

Estimated Total Annual Responses: 1450.

Estimated Average Time Per Response: 0.36.

Estimated Annual Burden on Respondents: 522.

For the OFF Program, the per form estimated burden is:

Form Name

Form Number

Number of

Respondents

Total

burden

hours

Oriental Fruit Fly Program Application ........

FSA-438

750

375

Farm Operating Plan for Payment Eligibility

CCC-902

300

Average Adjusted Gross Income (AGI)

Certification and Consent to Disclosure ........

CCC-941

300

Certification of Income from Farming,

Ranching and Forestry Operations, optional ..

CCC-942

Member Information for Legal Entities, if

applicable .......................................................

CCC-901

Highly Erodible Land Conservation (HELC)

and Wetland Conservation Certification

(exempt from PRA, 16 U.S.C. 3846) .............

AD-1026

300

Federal Assistance Programs

The titles and numbers of the Federal assistance programs in the Catalog of

Federal Domestic Assistance to which this rule applies are:

10.051 – Commodity Loans and Loan Deficiency Payments

10.053 – Dairy Indemnity Payment Program

10.069 – Conservation Reserve Program

10.127 – Dairy Margin Coverage Program

10.134 – Oriental Fruit Fly Program

USDA Non-Discrimination Policy

In accordance with Federal civil rights law and USDA civil rights regulations and

policies, USDA, its Agencies, offices, and employees, and institutions participating in or

administering USDA programs are prohibited from discriminating based on race, color,

national origin, religion, sex, gender identity (including gender expression), sexual

orientation, disability, age, marital status, family or parental status, income derived from

a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights

activity, in any program or activity conducted or funded by USDA (not all bases apply to

all programs). Remedies and complaint filing deadlines vary by program or incident.

Persons with disabilities who require alternative means of communication for

program information (for example, braille, large print, audiotape, American Sign

Language, etc.) should contact the responsible Agency or USDA TARGET Center at

(202) 720–2600 (voice and TTY) or contact USDA through the Federal Relay Service at

(800) 877–8339. Additionally, program information may be made available in languages

other than English.

To file a program discrimination complaint, complete the USDA Program

Discrimination Complaint Form, AD-3027, found online at

https://www.usda.gov/oascr/how-to-file-a-program-discrimination-complaint and at any

USDA office or write a letter addressed to USDA and provide in the letter all the

information requested in the form. To request a copy of the complaint form, call (866)

632-9992. Submit your completed form or letter to USDA by mail to: U.S. Department

of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence

Avenue, SW, Washington, DC 20250-9410 or email: [email protected].

USDA is an equal opportunity provider, employer, and lender.

List of Subjects

7 CFR Part 756

Disaster assistance, Reporting and recordkeeping requirements.

7 CFR Part 760

Dairy products, Indemnity payments, Reporting and recordkeeping requirements.

7 CFR Part 1410

Acreage allotments, Agriculture, Environmental protection, Natural resources,

Reporting and recordkeeping requirements, Soil conservation, Technical assistance,

Water resources, Wildlife.

7 CFR Part 1421

Barley, Farm Services Agency, Feed grains, Grains, Loan programs-agriculture,

Oats, Oilseeds, Peanuts, Price support programs, Reporting and recordkeeping

requirements, Soybeans, Surety bonds, Warehouses, Wheat.

7 CFR Part 1425

Agricultural commodities, Confidential business information, Cooperatives,

Reporting and recordkeeping requirements.

7 CFR Part 1427

Cotton, Cottonseeds, Loan programs-agriculture, Packaging and containers, Price

support programs, Reporting and recordkeeping requirements, Surety bonds and

Warehouses.

7 CFR Part 1430

Dairy products, Fraud, Penalties, Reporting and recordkeeping requirements.

7 CFR Part 1434

Honey, Loan programs-agriculture, Reporting and recordkeeping requirements.

7 CFR Part 1435

Loan programs-agriculture, Penalties, Reporting and recordkeeping requirements,

Sugar.

For the reasons discussed above, CCC and FSA amend 7 CFR parts 756, 760,

1410, 1421, 1425, 1427, 1430, 1434, and 1435 as follows:

1. Add 7 CFR part 756 to read as follows:

Subchapter D - Special Programs

PART 756 – ORIENTAL FRUIT FLY PROGRAM

Sec.

756.1 Applicability.

756.2 Administration.

756.3 Definitions.

756.4 Qualifying disaster event.

756.5 Eligible producers.

756.6 Eligible and ineligible causes of revenue loss.

756.7 Time and method of application

756.8 Calculating OFF Program payments.

756.9 Availability of funds and timing of payments.

756.10 Miscellaneous provisions.

756.11 Payment eligibility provisions.

756.12 Payment limitation and

756.13 Estates and trusts; minors.

756.14 Misrepresentation, scheme, or device.

756.15 Death, incompetency, or disappearance.

756.16 Maintenance and inspection of records.

756.17 Appeals.

Authority: Sec. 778, Pub. L. 116-6, 133 Stat. 91.

PART 756 – ORIENTAL FRUIT FLY PROGRAM

§ 756.1 Applicability.

(a) The Oriental Fruit Fly (OFF) Program will provide payments to eligible

producers who suffered losses due to the Oriental fruit fly quarantine in Miami-Dade

County, Florida, in accordance with Public Law 116-6 (the Consolidated Appropriations

Act, 2019).

(b) The regulations in this part are applicable to crops affected by the Oriental

fruit fly quarantine.

part, interest will be due to run from the date of disbursement of the sum to be refunded.

This provision will apply, unless waived by the Deputy Administrator, irrespective of any

other regulation.

§ 756.2 Administration.

(a) The OFF Program will be administered under the general supervision of the

Administrator, Farm Service Agency (FSA), and the Deputy Administrator for Farm

Programs, FSA. The OFF Program is carried out by FSA State committees and FSA

county committees with instructions issued by the Deputy Administrator.

(b) FSA State committees and FSA county committees, and representatives and

their employees, do not have authority to modify or waive any of the provisions of the

regulations, except as provided in paragraph (e) of this section.

county committee. The FSA State committee will also:

(1) Correct or require correction of an action taken by an FSA county committee

that is not in compliance with this part; or

(2) Require an FSA county committee to not take an action or implement a

decision that is not under the regulations of this part.

(d) The Deputy Administrator for Farm Programs, FSA, or a designee, may

determine any question arising under these programs, or reverse or modify a

determination made by an FSA State committee or FSA county committee.

(e) The Deputy Administrator for Farm Programs, FSA, may authorize FSA State

committees and FSA county committees to waive or modify non-statutory deadlines and

other program requirements in cases where lateness or failure to meet such other

requirements does not adversely affect the operation of the OFF Program.

(g) A representative of FSA may execute applications and related documents

only under the terms and conditions determined and announced by FSA. Any document

not executed under such terms and conditions, including any purported execution before

the date authorized by FSA, will be null and void.

(h) Items of general applicability to program participants, including, but not

limited to, application periods, application deadlines, internal operating guidelines issued

to State and county offices, prices, and payment factors established by the OFF Program,

are not subject to appeal.

§ 756.3 Definitions.

The definitions in this section apply for all purposes of OFF Program

administration.

Administrative county office is the FSA county office where a producer's FSA

records are maintained.

APHIS means Animal Plant Health and Inspection Service, U.S. Department of

Agriculture.

Application period means the dates established by the Deputy Administrator for

producers to apply for OFF Program benefits.

Calendar year means January 1st through December 31

Deputy Administrator means the Deputy Administrator for Farm Programs, FSA.

FSA means the Farm Service Agency, U.S. Department of Agriculture.

NAP means Non-insured Crop Disaster Assistance Program.

OFF Program means the Oriental Fruit Fly Program.

OFF quarantine period means August 28, 2015 through February 13, 2016.

Oriental fruit fly quarantine means the quarantine put in place during the OFF

quarantine period in the quarantine area to protect against the entry and spread of the

Oriental fruit fly by requiring strict adherence to treatment or destruction of the host crop.

Prevented planting means when producers chose not to plant an annual crop

during the 2015 through 2016 season due to the Oriental fruit fly quarantine.

Producer means a person, partnership, association, corporation, estate, trust, or

other legal entity that produces an eligible crop as a landowner, landlord, tenant, or

sharecropper.

Program year means the relevant application year. The program year for OFF

will be 2015 and include total revenue losses for calendar year 2015 and calendar year

2016.

Quarantine area means the area mapped by The Florida Department of

Agriculture and Consumer Services Division, Division of Plant Industry (FDACS-DPI).

The map identifies areas where the Oriental Fruit Fly was detected and the associated

boundaries of the area quarantined by APHIS. The map is available by contacting

FDACS-DPI, The Doyle Conner Building, 1911 SW 34

St., Gainesville, FL 32608-

7100 or https://www.fdacs.gov/Divisions-Offices/Plant-Industry.

Reliable documentation means evidence provided by the participant that is used to

substantiate the amount of revenue reported when verifiable documentation is not

available, including copies of receipts, ledgers of income, income statements of deposit

slips, register tapes, invoices for custom harvesting, and records to verify production

costs, contemporaneous measurements truck scale tickets, and contemporaneous diaries

that are determined acceptable by the FSA county committee. To determine whether the

records are acceptable, the FSA county committee will consider whether they are

consistent with the records of other producers of the crop in that area.

Revenue means the gross income from crop sales received during the applicable

calendar years for the crops that suffered a loss due to the Oriental fruit fly quarantine.

Revenue does not mean revenue received for crops grown under contract for crop owners

unless the grower had an ownership share of the crop.

RMA means Risk Management Agency.

Secretary means the Secretary of the United States Department of Agriculture, or

the Secretary's delegate.

Verifiable documentation means evidence that can be verified by FSA through an

independent source.

§ 756.4 Qualifying disaster event.

The OFF Program will provide assistance to eligible producers who suffered

revenue losses due to the State of Florida and APHIS implemented quarantine that took

place from August 28, 2015, through February 13, 2016, in Miami-Dade County, Florida.

§ 756.5 Eligible producers.

(a) To be an eligible producer, the producer must:

(1) Be an individual person that is a U.S. Citizen or Resident Alien, or a

partnership, association, corporation, estate, trust, or other legal entity consisting solely of

U.S. Citizens or Resident Aliens that produces an eligible crop as a landowner, landlord,

tenant, or sharecropper; and

(2) Comply with all provisions of this part and, as applicable:

(i) 7 CFR part 3—Debt Management;

(ii) 7 CFR part 12—Highly Erodible Land and Wetland Conservation;

(iii) 7 CFR 400.680 Controlled substance;

(iv) 7 CFR part 1400 AGI provisions;

(A) Program year 2015 will be used to determine AGI for the OFF Program,

therefore the AGI will be the average of tax years 2013, 2012, and 2011; and

(B) The OFF Program allows an exception to the $900,000 average AGI

limitation if at least 75 percent of the average AGI was derived from farming, ranching,

or forestry operations. CCC-942 is used to collect the producer and CPA or attorney

certification statements;

(v) 7 CFR part 707—Payments Due Persons Who Have Died, Disappeared, or

Have Been Declared Incompetent;

(vi) 7 CFR part 718—Provisions Applicable to Multiple Programs; and

(vii) 7 CFR part 1400—Payment Limitation & Payment Eligibility.

(b) A receiver or trustee of an insolvent or bankrupt debtor's estate, an executor

or an administrator of a deceased person's estate, a guardian of an estate of a ward or an

incompetent person, and trustees of a trust is considered to represent the insolvent or

bankrupt debtor, the deceased person, the ward or incompetent, and the beneficiaries of a

trust, respectively. The production of the receiver, executor, administrator, guardian, or

trustee is the production of the person or estate represented by the receiver, executor,

administrator, guardian, or trustee. OFF Program documents executed by any such

person will be accepted by FSA only if they are legally valid and such person has the

authority to sign the applicable documents.

Program payment only if the minor meets one of the following requirements:

(1) The right of majority has been conferred on the minor by court proceedings or

by statute.

(2) A guardian has been appointed to manage the minor's property and the

applicable OFF Program documents are signed by the guardian.

(3) Any OFF Program application signed by the minor is cosigned by a person

determined by the FSA county committee to be financially responsible.

(d) Foreign person rules in 7 CFR part 1400, subpart E are not applicable to the

OFF Program.

(e) Producers will not be required to be in the business of producing and

marketing agricultural products at the time of OFF Program application.

(f) The producer must have been actively producing and marketing agricultural

products during the OFF quarantine period.

§ 756.6 Eligible and ineligible causes of revenue loss.

(a) To be eligible for payments under this part the producer must have suffered a

loss of revenue due to the Oriental fruit fly quarantine of one or more of the following

types:

(1) Revenue loss on crop(s) planted or prevented from being planted within the

Oriental Fruit Fly quarantine area during the OFF quarantine period. Crops that suffered

a revenue loss due to prevented planting must have a prior history of being planted or be

able to provide verifiable or reliable documentation demonstrating legitimate intent to

plant the crop during the OFF quarantine period;

(2) Pre or post-harvest treatment costs;

(3) Transportation costs to a post-harvest treatment facility;

(4) Crop quality loss;

(5) Crop spoilage;

(6) Crop drop; or

(7) Reduced post-harvest shelf life.

(b) An ineligible cause of revenue loss under this part will apply to the following:

(1) Losses determined by FSA to be the result of poor management decisions or

poor farming practices, such as using non-optimal chemical application, over-tilling,

monoculture (growing of same crop year after year), allowing soil erosion, nonoptimal

planting time, or poor quality seed selection.

(2) Losses due to conditions or events occurring outside of the applicable

growing season for the crop;

(3) Losses due to failure of a power supply or lack of irrigation;

(4) Losses to crops not intended for harvest;

(5) Losses to home gardens for personal use and not intended to market;

(6) Losses to non-fruit bearing ornamental nursery;

(7) Losses caused by theft;

(8) Losses caused by disease or pest infestation other than the Oriental fruit fly;

(9) Losses to purchased crops.

§ 756.7 Time and Method of Application.

(a) An application for OFF Program payment under this part must be submitted

in person, by mail, email, or facsimile to the FSA county office serving as the farm's

administrative county office by the close of business 60 calendar days after the signup

start date announced by FSA. A National Special Program (SP) Notice will be issued

providing OFF program details including signup start date and program requirements.

(b) An application will include only the producer’s share of revenue for the crops

negatively affected by the Oriental fruit fly quarantine for the applicable calendar years.

contain information and certifications of and pertaining to the producer regardless of who

entered the information on the application.

(d) The producer applying for the OFF Program under this part certifies the

accuracy and truthfulness of the information provided in the application as well as any

documentation filed with or in support of the application.

(1) All information is subject to verification or spot check by FSA at any time,

either before or after payment is issued. Refusal to allow FSA or any agency of the

Department of Agriculture to verify any information provided will result in the

participant's forfeiting eligibility for the OFF Program. FSA may at any time, including

before, during, or after processing and paying an application, require the producer to

submit any additional information necessary to implement or determine any eligibility

provision of this part. Furnishing required information is voluntary; however, without it,

FSA is under no obligation to act on the application or approve payment.

(2) Providing a false certification will result in ineligibility and can also be

punishable by imprisonment, fines, and other penalties.

(e) The application submitted in accordance with paragraph (a) of this section is

not considered valid and complete for issuance of payment under this part unless FSA

determines all the applicable eligibility provisions have been satisfied and the participant

has submitted all required documentation by the application deadline date announced by

FSA.

(f) Applicants must submit all eligibility forms as listed on the FSA-438 Oriental

Fruit Fly Program (OFF) Application within 60 calendar days from the date of submitting

the application if not already on file with FSA.

§ 756.8 Calculating OFF Program payments.

(a) A revenue loss calculation and factor will determine the OFF Program

payment.

(1) A factor will be applied to reduce the participant’s payment to ensure that

total OFF Program payments are no more than 70 percent of the total revenue losses by

all eligible OFF Program participants.

(2) If necessary, at the close of the OFF Program sign-up period, a national

payment factor may be determined by the Secretary and announced if full payment of all

approved OFF Program applications would result in payments in excess of available OFF

Program funds, less a reserve amount of 3 percent. A Price Support Division SP Notice

will be issued to announce the issuance of OFF and, if applicable, the factored rate.

(b) The OFF Program payment calculation is:

(Calendar year 2014 producer certified gross revenue

- Calendar year 2015 producer certified gross revenue)

+ (Calendar year 2014 producer certified gross revenue

- Calendar year 2016 producer certified gross revenue)

= Total revenue loss for calendar year 2015 and calendar year 2016

X 70%

= OFF Program payment (subject to proration after sign-up, see paragraph (a)(2) of this

section)

(1) If the producer did not have 2014 revenue, then 2019 revenue will be used,

and the calculation will be:

(Calendar year 2019 producer certified gross revenue

- Calendar year 2015 producer certified gross revenue)

+ (Calendar year 2019 producer certified gross revenue

– Calendar year 2016 producer certified gross revenue)

= Total revenue loss for calendar year 2015 and calendar year 2016

X 70%

= OFF Program Payment (subject to proration after sign-up, see paragraph (a)(2) of this

section)

calendar year 2016, the payment will be zero.

§ 756.9 Availability of funds and timing of payments.

The total available program funds are $9 million as provided by Public Law 116-6

(the Consolidated Appropriations Act, 2019). OFF Program payments will be issued

after all applications are received and FSA has approved the application.

§ 756.10 Miscellaneous provisions.

(a) Producers who are approved for OFF Program payment will not be required

to purchase future NAP or crop insurance for those crops affected by the quarantine as is

often required by other disaster programs, because the Oriental fruit fly quarantine was

not an eligible covered loss by NAP, and RMA does not offer quarantine as an

endorsement in Florida.

(b) All persons with a financial interest in a legal entity receiving payments under

this subpart are jointly and severally liable for any refund, including related charges, that

is determined to be due to FSA for any reason.

information or a miscalculation, the payment will be recalculated and any excess

refunded to FSA with interest to be calculated from the date of disbursement.

(d) Any payment to any participant under this subpart will be made without

regard to questions of title under State law, and without regard to any claim or lien

against the commodity, or proceeds in favor of the owner or any other creditor except

agencies of the U.S. Government. The regulations governing offsets and withholding in

part 3 of this title apply to payments under this subpart.

(e) Any participant entitled to any payment may assign any payment(s) in

accordance with regulations governing the assignment of payment in part 3 of this title.

(f) The regulations in part 11 of this title and 780 of this chapter apply to

determinations under this subpart.

§ 756.12 Payment limitation

(a) For the program year 2015, direct or indirect payments made to an eligible

person or legal entity, other than a joint venture or general partnership, will not exceed

$125,000.

(b) The attribution of payment provisions in 7 CFR part 1400.105 will be used to

attribute payments to persons and legal entities for payment limitation determinations.

§ 756.13 Estates and trusts; minors.

(a) A receiver of an insolvent debtor's estate and the trustee of a trust estate will,

for the purpose of this part, be considered to represent the insolvent affected producer or

manufacturer and the beneficiaries of the trust, respectively.

(1) The production of the receiver or trustee will be considered to be the

production of the represented person.

(2) Program documents executed by any such person will be accepted only if

they are legally valid and such person has the authority to sign the applicable documents.

(b) [Reserved]

§ 756.14 Misrepresentation, Scheme or Device.

(a) A producer will be ineligible to receive assistance under the OFF Program if

the producer is determined by the FSA State committee or FSA county committee to have

knowingly:

(1) Adopted any scheme or device that tends to defeat the purpose of the OFF

Program.

(2) Made any fraudulent representation; or

(3) Misrepresented any fact affecting a determination under the OFF Program,

then FSA will notify the appropriate investigating agencies of the United States and take

steps deemed necessary to protect the interests of the government.

(b) Any funds disbursed pursuant to this part to any person or operation engaged

in a misrepresentation, scheme, or device, will be refunded to FSA. The remedies

provided in this part are in addition to other civil, criminal, or administrative remedies

that may apply.

§ 756.15 Death, incompetency, or disappearance.

In the case of the death, incompetency, or disappearance of any affected producer

who would otherwise receive an OFF Program payment, such payment may be made to

the person or persons specified in the regulations in part 707 of this chapter. The person

requesting such payment must file Form FSA-325, “Application for Payment of Amounts

Due Persons Who Have Died, Disappeared, or Have Been Declared Incompetent,” as

provided in that part.

§ 756.16 Maintenance and inspection of records.

(a) Producers randomly selected for compliance spot checks by FSA must, in

accordance with program notice instructions issued by the Deputy Administrator, provide

adequate reports of revenue as applicable. The producer must report documentary

evidence of crop revenue to FSA together with any supporting documentation to verify

information entered on the application. Verifiable documentation is preferred. If

verifiable documentation is not available, FSA will accept reliable documentation, if

determined to be acceptable by the FSA county committee.

(1) If supporting documentation is not presented to the county FSA office

requesting the information within 30 calendar days of the request, producers will be

determined ineligible for OFF Program benefits.

(2) The producer must maintain any existing books, records, and accounts

supporting any information furnished in an approved OFF Program application

for 3 years following the end of the year during which the application for payment was

filed.

(3) The producer must permit authorized representatives of the Department of

Agriculture and the General Accounting Office, during regular business hours, to inspect,

examine, and make copies of such books, records, and accounts.

§ 756.17 Appeals.

Any producer who is dissatisfied with a determination made pursuant to this part

may make a request for reconsideration or appeal of such determination in accordance

with the appeal regulations in 7 CFR parts 11 and 780.

PART 760 – DAIRY PRODUCTS

Subpart A – Dairy Indemnity Payment Program

2. The authority citation for part 760 continues to read as follows:

Authority: 7 U.S.C. 450j-l.

3. Amend § 760.2 as follows:

a. Add the definition for “Contaminated milk”, “Depopulation”, and “Not

marketable” in alphabetical order; and

b. Revise the definition of “Violating Substance”.

The additions and revision read as follows.

§ 760.2 Definitions.

* * * * *

Contaminated milk means milk containing elevated levels of any violating

substance that may affect public health based on tests made by the applicable public

agency and resulting in the removal of the milk from the commercial market.

* * * * *

Depopulation means, consistent with the American Veterinary Medical

Association (AVMA)

definition, the rapid destruction of a population of cows with as

much consideration given to the welfare of the animals as practicable.

* * * * *

Not marketable means no commercial market is available for affected cows to be

slaughtered, processed, and marketed through the food chain system as determined by the

Deputy Administrator.

* * * * *

Violating Substance means one or more of the following, as defined in this

section: pesticide, chemicals or toxic substances, or nuclear radiation or fallout.

4. Revise § 760.3 to read as follows:

§ 760.3 Indemnity payments on milk.

(a) The amount of an indemnity payment for milk, including, but not limited to

organic milk, made to an affected farmer who is determined by the county committee to

be in compliance with all the terms and conditions of this subpart will be in the amount of

the fair market value of the farmer’s normal marketings for the application period, as

determined in accordance with §§ 760.4 and 760.5, less:

(1) Any amount the affected farmer received for whole milk marketed during the

application period; and

The AVMA Guidelines for the Depopulation of Animals is available at:

https://www.avma.org/sites/default/files/resources/AVMA-Guidelines-for-the-

Depopulation-of-Animals.pdf.

(2) Any payment not subject to refund that the affected farmer received from a

milk handler with respect to milk removed from the commercial market during the

application period.

(b) The eligible period for DIPP benefits for milk for the same loss is limited to 3

calendar months from when the first claim for milk benefits is approved. Upon written

request from an affected farmer on the milk indemnity form authorized by the Deputy

Administrator, the Deputy Administrator may authorize, at the Deputy Administrator’s

discretion, additional months of benefits for the affected farmer for milk due to

extenuating circumstances, which may include allowing additional time for public agency

approval of a removal plan for cow indemnification and confirmation of site disposal for

affected cows. Additionally, the Deputy Administrator has discretion to approve

additional months based on issues that are beyond the control of the affected farmer who

is seeking cow indemnification, as well as when the affected farmer is following a plan to

reduce chemical residues in milk, cows, and heifers to marketable levels.

§ 760.6 [Amended]

5. In § 760.6, amend paragraph (i) by removing the words “and the results of any

laboratory tests on the feed supply” and adding “the results of any laboratory tests on the

feed supply, and the monthly milk testing results that detail the chemical residue levels”

in their place.

6. Revise§ 760.7 and the section heading to read as follows:

§ 760.7 Conditions required for milk or cow indemnity.

(a) An indemnity payment for milk or cows (dairy cows including, but not

limited to, bred and open heifers), may be made under this subpart to an affected farmer

under the conditions in this section.

(b) If the pesticide, chemical, or toxic substance, in the contaminated milk was

used by the affected farmer, the affected farmer must establish that each of the conditions

in this section are met:

(1) That the pesticide, chemical, or toxic substance, when used, was registered (if

applicable) and approved for use as provided in § 760.2(f);

(2) That the contaminated milk was not the result of the affected farmer’s failure

to use the pesticide, chemical, or toxic substance, according to the directions and

limitations stated on the label; and

(3) That the contaminated milk was not otherwise the affected farmer’s fault.

affected farmer, the affected farmer must establish that each of the conditions in this

section are met:

(1) The affected farmer did not know or have reason to believe that any

purchased feed contained a violating substance;

(2) None of the milk was produced by dairy cattle that the affected farmer knew,

or had reason to know at the time they were acquired, had elevated levels of a violating

substance; and

(3) The contaminated milk was not otherwise the affected farmer’s fault.

(d) The affected farmer has adopted recommended practices and taken action to

eliminate or reduce chemical residues of violating substances from the milk as soon as

practicable following the initial discovery of the contaminated milk.

7. In § 760.9, revise paragraph (c) and add paragraphs (d) and (e) to read as

follows:

§ 760.9 Payments for the same loss.

* * * * *

before [Insert date of publication in the Federal Register] no further payments for milk

indemnity will be made for the same loss except as provided in paragraph 760.3(b) and

the affected farmer may apply for cow indemnity as specified in this subpart.

(d) An affected farmer that has an approved application for cow indemnity is no

longer eligible for milk indemnity payments for the same loss.

(e) Cows purchased or bred after the initial discovery of the milk contamination

are not eligible for DIPP benefits due to the same loss.

8. Add § 760.10 to read as follows:

§ 760.10 Indemnity payments for cows.

(a) DAFP will determine eligibility for DIPP indemnification based on if the

cows of the affected farmer are likely to be not marketable for 3 months or longer [from

the date the affected farmer submits an application for cow indemnification per 7 CFR

760.13]. The Deputy Administrator will review the following factors in making that

determination:

(1) Milk testing results;

(2) Non marketability of affected cows through commercial marketing facilities;

(3) Type and source of chemical residues impacting the milk and animal tissues;

and

(4) Projected duration for chemical residue reduction including the actions taken

by the affected farmer to reduce the chemical residues to marketable levels since the

affected cows were discovered.

(b) See § 760.11 for indemnity payment eligibility for bred and open heifers.

must develop a removal plan both to permanently remove the affected cows by

depopulating the cows.

(1) The removal plan for affected cows for which an affected farmer applies for

indemnification under DIPP must be approved by the applicable public agency where the

cows are located and must be in accordance with any applicable EPA and public agency

depopulation and animal disposal requirements and guidelines, including contaminant

disposal requirements, in the State where the affected cows are located.

(2) The approved removal plan must be submitted with the application for

indemnification.

(d) The amount of an indemnity payment for cows to an affected farmer who is

determined by the Deputy Administrator to be eligible for indemnification and by the

county committee to be in compliance with all the terms and conditions of this subpart

will be based on the national average fair market value of the cows. DIPP cow

indemnification will be based on the 100 percent value of the Livestock Indemnity

Program (LIP) rates as applicable for the calendar year for milk indemnification

established for dairy cows, per head. For example, for a 100-cow farm: 100 cows

multiplied by $1,300 (2021 LIP rate based on 100 percent value of average cow) =

$130,000 payment.

(e) For any cow indemnification payment under 7 CFR 760.10 or 760.11, the

affected farmer has the option to receive 50 percent of calculated payment in advance

after application approval with the remaining fifty percent paid after the affected cows

have been depopulated and removed. Otherwise, the affected farmer may choose to

receive 100 percent of payment after cows have been depopulated and removed.

Documented records of depopulation and removal of affected cows must be provided to

FSA to the satisfaction of the county committee, before the final payment will be made.

(f) Upon written request from an affected farmer on a form authorized by the

Deputy Administrator, the Deputy Administrator may approve, at the Deputy

Administrator’s discretion, indemnification of additional affected cows as specified in

paragraphs (f)(1) through (3) of this section.

(1) The affected cows were depopulated or died above normal mortality rates for

cows between approval of the affected farmer’s application for the first month of milk

indemnity and public agency approval of the affected farmer’s removal plan for cow

indemnification. Normal mortality rates established annually by the FSA State

Committee for their state for the following cow and heifer weight groups will be used:

(i) Dairy, nonadult less than 400 pounds;

(ii) Dairy, nonadult 400 pounds or more; and

(iii) Dairy, adult cow.

(2) This request may include both cows that were included in applications for

milk indemnity and heifers that were affected from the same loss.

(3) An affected farmer making such a request must submit the information

specified in § 760.12(c).

(g) Affected cows that are marketed as cull or for breeding are not eligible for

indemnification.

9. Add § 760.11 to read as follows:

§ 760.11 Indemnity payments for bred and open heifers.

(a) Bred (young dairy female in gestation) and open (young dairy female not in

gestation) heifers that contain elevated levels of chemical residues as the result of the

same loss may be eligible for indemnification through DIPP. For affected bred and open

heifers participating affected farmers may receive indemnification if the farmer’s dairy

cows were determined to be likely not marketable for three months or longer according

to § 760.10(a) and the Deputy Administrator determines the bred and open heifers to be

eligible under paragraph (b) of this section. Except as provided in this section or

otherwise stated in this subpart, the provisions in this subpart for cow indemnity apply

equally to bred and open heifers, for example the removal requirements in § 760.10(b).

(b) The county committee will make the recommendation to the Deputy

Administrator to determine if eligible bred and open heifers that have been affected by

the same loss will likely be not marketable for 3 months or longer from the date the

affected farmer submits an application for cow indemnification per 7 CFR 760.13

because of elevated levels of chemical residues that will pass through milk once lactating.

Affected farmers must provide the information specified in § 760.12(a) and (b) for the

county committee to make a recommendation of eligibility to the Deputy Administrator.

The Deputy Administrator will take into consideration the recommendation of the county

committee in making its eligibility determination.

the national average fair market value of the non-adult heifers. DIPP bred and open

heifer indemnification will be based on the 100 percent value of the Livestock Indemnity

Program (LIP) rates as applicable for the calendar year of milk indemnification

established for non-adult dairy, by weight range, per head. For example, for an affected

farmer with 40 bred or open heifers at different weight ranges: 10 bred heifers at 800

pounds or more multiplied by $986.13 ($9861.30), 10 bred or open heifers at 400 to 799

pounds multiplied by $650.00 ($6500.00), 10 open heifers at 250 to 399 pounds

multiplied by $325.00 ($3250.00), and 10 open heifers 250 pounds or less multiplied by

$57.65 ($576.50) = $20,187.80 payment.

10. Add § 760.12 to read as follows:

§ 760.12 Information to be furnished for payment on dairy cows, and bred and

open heifers.

(a) To apply for DIPP for affected cows, the affected farmer must provide the

county committee complete and accurate information to enable the Deputy Administrator

to make the determinations required in this subpart in addition to providing the

information requested in § 760.6(a), (b), (h), and (i), if not previously provided to FSA in

a milk indemnity application. The information specified in this section must be

submitted as part of the cow indemnity application and includes, but is not limited to, the

following items:

(1) An inventory of all dairy cows as of the date of application including lactating

cows, bred heifers, and open heifers on the farm;

(2) A detailed description and timeline of how, where, and when cows will be

depopulated and permanently removed from the farm (the removal plan);

(3) Documentation of public agency approval of the removal plan for cow

depopulation and cow and contaminate disposal in accordance with any applicable EPA

and public agency disposal requirements and guidelines;

(4) Documentation from 2 separate commercial markets stating that such market

declined to accept the affected cows through a cull cow market, slaughter facility, or

processing facility due to elevated levels of chemical residues;

(5) Documentation of any projected timelines for reducing chemical residues, any

actions the affected farmer has taken to reduce chemical residues to marketable levels

including any documents verifying steps undertaken, and any professional assistance

obtained, including, discussion of strategy with the public agencies; and

(6) Any other documentation that may support the determination that the affected

cows or milk from such cows is likely to be not marketable for longer than 3 months; and

other documentation as requested or determined to be necessary by the county committee

or the Deputy Administrator.

(b) To apply for DIPP for bred and open heifers the affected farmer must provide

the information specified in paragraph (a) of this section and: veterinarian records, blood

test results, and other testing information requested by the county committee for the

recommendation specified in § 760.11(b) and eligibility for indemnification.

under § 760.10(e), the affected farmer must submit the information specified in

paragraphs (c)(1) and (2) of this section to provide an accounting of affected cows and

heifers that were depopulated or died above normal mortality rates for cows between

approval of the affected farmer’s application for the first month of milk indemnity and

the public agency approval of the affected farmer’s removal plan for cow

indemnification.

(1) Herd health record documenting cow and heifer deaths; and

(2) Farm inventory or other record identifying the loss of dairy cows and heifers.

(d) The affected farmer certifies at application that once the cow indemnity

application is approved, the affected farmer will dry off all lactating cows in a reasonable

timeframe and discontinue milking.

11. Add § 760.13 to read as follows:

§ 760.13 Application for payment of cows.

(a) Any affected farmer may apply for cow indemnity under § 760.10 and

§ 760.11. To apply for DIPP for affected cows, the affected farmer must sign and file an

application for payment on a form that is approved for that purpose by the Deputy

Administrator and provide the information described in § 760.12.

(b) The form must be filed with the FSA county office for the county where the

farm headquarters is located by December 31 following the fiscal year end in which the

affected farmer’s milk was removed from the commercial market, except that affected

farmers that have received 3 months of milk indemnity payments prior to [Insert date of

publication in the Federal Register] must file the form within 120 days after [Insert

date of publication in the Federal Register]. Upon written request from an affected

farmer and at Deputy Administrator’s discretion, the deadline for that affected farmer

may be extended.

PART 1410—CONSERVATION RESERVE PROGRAM

12. The authority citation for 7 CFR part 1410 continues to read as follows:

Authority: 15 U.S.C. 714b and 714c; 16 U.S.C. 3801-3847.

§ 1410.6 [Amended]

13. Amend § 1410.6 as follows:

a. In paragraph (e)(4)(ii), remove “CRP; and” and add “CRP.” in its place; and

b. Remove paragraph (e)(4)(iii).

§ 1410.90 [Amended]

14. In § 1410.90, amend paragraph (c) by removing the 4th sentence “At least

one-half of the matching funds must be provided as a direct payment to eligible

participants.”

PART 1421 – GRAINS AND SIMILARLY HANDLED COMMODITIES –

MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS

Subpart A—General

15. The authority citation for part 1421 continues to read as follows:

Authority: 7 U.S.C. 7231-7237, 7931-7936, and 9031- 40, 15 U.S.C. 714b and c.

§ 1421.1 [Amended]

16. In § 1421.1, amend paragraph (e) by removing the words “and payment

limitation”.

17. Amend §1421.3 as follows:

a. Add definition for “Commodity certificate exchange” in alphabetical order;

and

b. Revise the definition of “Market loan gain”.

The addition and revision read as follows:

§ 1421.3 Definitions.

* * * * *

Commodity certificate exchange means the exchange, as provided for

in § 1421.111 of this chapter, of commodities pledged as collateral for a marketing

assistance loan at a rate determined by CCC in the form of a commodity certificate

bearing a dollar denomination.

* * * * *

Market loan gain is the loan rate, minus the repayment rate on loans repaid at a

rate that is less than the loan rate. A producer's adjusted gross income must be below the

limit as specified in part 1400 of this chapter to receive a market loan gain.

* * * * *

§ 1421.4 [Amended]

18. In § 1421.4, remove paragraph (h).

§ 1421.5 [Amended]

19. In § 1421.5, amend paragraph (c)(1) by adding the word “nonrecourse” after

the words “pledged for a”.

§ 1421.9 [Amended]

20. In § 1421.9, amend paragraph (f) by adding the words “or additional

commodities as determined by the Deputy Administrator on a crop year basis” after

peanuts.

Subpart B— Marketing Assistance Loans

21. In § 1421.102, amend paragraph (a)(1) to read as follows:

§ 1421.102 Adjustment of basic loan rates.

(a) * * *

(1) For farm-stored commodities, except for peanuts, that exceed acceptable

levels of contamination, the loan rate will be discounted to 10 percent of the base county

MAL rate if pledged as collateral for a nonrecourse loan. Loan rates for commodities

with acceptable levels of contamination will not be adjusted if pledged as collateral for

recourse loans.

* * * * *

§ 1421.104 [Amended]

22. In § 1421.104, amend paragraph (a)(1) by removing the words “lien searches,

and” and to add “lien searches and” in their place.

23. Add § 1421.110 to read as follows:

§ 1421.110 Commodity Certificate Exchanges.

(a) For any outstanding marketing assistance loan, a producer may purchase a

commodity certificate and exchange that commodity certificate for the marketing

assistance loan collateral.

(b) The exchange rate is the lessor of:

(1) The loan rate and charges, plus interest applicable to the loan; or

(2) The prevailing world market price, as determined by CCC, or the alternative

repayment rate for all other commodities, as determined by CCC.

repayment rate under § 1421.10.

(d) Producers must request a commodity certificate exchange on or before loan

maturity in person at the FSA county office that disbursed the marketing assistance loan

by:

(1) Completing a written request on the form or providing the information as

required by CCC;

(2) Purchasing a commodity certificate for the exact amount required to exchange

the marketing assistance loan collateral; or

(3) Immediately exchanging the purchased commodity certificate for the

outstanding loan collateral.

(e) Loan gains realized from a commodity certificate exchange are not subject to

AGI provisions specified in part 1400 of this chapter.

§ 1421.112 [Amended]

24. In § 1421.112, amend paragraph (b) by removing the word “effected” and

adding “affected” in its place in the second sentence.

25. In § 1421.113, amend paragraph (a) to read as follows:

§ 1421.113 Recourse MALs.

(a) CCC will make recourse MALs available to eligible producers of high

moisture corn, high moisture grain sorghum, commodities that fall within acceptable

levels of contamination and remain merchantable, and other eligible loan commodities as

determined by the Deputy Administrator, Farm Programs.

* * * * *

Subpart C—Loan Deficiency Payments

§ 1421.200 [Amended]

26. In § 1421.200, amend paragraph (e) by removing the words “and payment

limitation”.

Subpart D—Grazing Payments for Wheat, Barley, Oats, and Triticale

§ 1421.302 [Amended]

27. Amend § 1421.302(d)(1) by removing the words “and payment limitation”.

§ 1421.304 [Amended]

28. Amend § 1421.304 as follows:

a. Remove paragraph (d); and

b. Redesignate paragraphs (e) through (g) as paragraphs (d) through (f),

respectively.

Subpart E—Designated Marketing Associations for Peanuts

29. Revise § 1421.409, including the section title to read as follows:

§ 1421.409 Monitoring AGI.

DMAs are required to monitor their producers' AGIs and may not permit

repayments with a market loan gain on peanut MALs or process peanut LDPs for those

producers with annual AGI over the allowable limit as specified in part 1400 of this

chapter.

30. Revise § 1421.416 paragraph (a)(1) to read as follows:

§ 1421.416 Processing loan deficiency payments.

(a) * * *

(1) In addition to other determinations that are required, the DMA must

determine whether the producer exceeds the AGI limits to allow the receipt of the LDP.

If the producer is over the AGI limit the DMA cannot process the request.

* * * * *

§ 1421.417 [Amended]

31. In § 1421.417, amend paragraph (a) by removing the words “to producers,

and” and adding the words “to producers and”.

Part 1425 —COOPERATIVE MARKETING ASSOCIATIONS

32. The authority citation continues to read as follows:

Authority: 7 U.S.C. 1441 and 1421, 7 U.S.C. 7931-7939; and 15 U.S.C. 714b,

714c, and 714j.

33. In § 1425.4, revise paragraphs (a)(2) and (b)(2) to read as follows:

§ 1425.4 Approval.

(a) * * *

(2) A current financial statement, dated within the last year, prepared for the

cooperative and accompanied by a letter from an independent Certified Public

Accountant, certifying that the financial statement was prepared in accordance with

generally accepted accounting principles;

(b) * * *

(2) The CMA's latest financial statement. The financial statement must be dated

within the past year and be accompanied by a letter from an independent Certified Public

Accountant certifying that the financial statement was prepared in accordance with

generally accepted accounting principles.

* * * * *

PART 1427—COTTON

Subpart A—Nonrecourse Cotton Loan and Loan Deficiency Payments

34. The authority citation continues to read as follows:

Authority: 7 U.S.C. 7231-7237, 7931-7936, 9011, and 9031-40, 15 U.S.C. 714b

and c.

§ 1427.1 [Amended]

35. In § 1427.1, amend paragraph (d) by removing the words “Adjusted gross”

and adding “Average adjusted” in their place.

36. Amend §1427.3 by adding the definitions of “Commodity certificate

exchange”, “Commodity loan gain”, “Exchange rate”, “Market loan gain”, and “Turn-

around loan” in alphabetical order to read as follows:

§ 1427.3 Definitions.

* * * * *

Commodity certificate exchange means the exchange of commodities pledged as

collateral for a marketing assistance loan at a rate determined by CCC in the form of a

commodity certificate bearing a dollar denomination.

Commodity loan gain means the difference between the loan principal amount

and the AWP-value of a commodity certificate used to exchange the loan collateral.

* * * * *

Exchange rate will be the effective AWP for cotton on the date the request to

purchase a certificate is received by CCC.

* * * * *

Market loan gain means the loan rate, minus the repayment rate on upland cotton

loans repaid at the AWP-value that is less than the loan rate. A producer's adjusted gross

income must be below the limit as specified in part 1400 of this chapter to receive a

market loan gain.

* * * * *

Turn-around loan is a special designation for a loan that is requested, approved

for disbursement, and immediately exchanged with a commodity certificate purchased

the same day.

* * * * *

§ 1427.4 [Amended]

37. Amend §1427.4 as follows:

a. In paragraph (a)(2)(iii), remove the words “Payment limitation and Payment

Eligibility” and add “Subpart F—Average Adjusted Gross Income Limitation” in their

place; and

b. In paragraph (g), remove the words “and payment limitation”.

§ 1427.10 [Amended]

38. In§ 1427.10, amend paragraph (f)(2) by removing the words “so as” and

adding “in a manner” in their place.

§ 1427.11 [Amended]

39. In § 1427.11, amend paragraph (a), introductory text, by adding the word

“electronic” after the words “represented by”.

40. Add §1427.22 to read as follows:

§ 1427.22 Commodity certificate exchanges.

(a) For any outstanding marketing assistance loan provided for upland cotton, a

producer may purchase a commodity certificate and exchange that commodity certificate

for the marketing assistance loan collateral.

(b) The exchange rate is the lesser of:

(1) The loan rate and charges, plus interest applicable to the loan; or

(2) The adjusted world price for upland cotton as determined by CCC.

maturity in person at the FSA county office by:

(1) Completing a written request on the form or providing the information as

required by CCC:

(2) Purchasing a commodity certificate for the exact amount required to exchange

the marketing assistance loan collateral; and

(3) Immediately exchanging the purchased commodity certificate for the

outstanding loan collateral.

or payment limitation provisions specified in part 1400 of this chapter.

§ 1427.23 [Amended]

41. In § 1427.23, amend paragraph (d) by removing the words “and payment

limitation requirements” and adding “provisions” in their place.

Subpart C—Economic Adjustment Assistance to Users of Upland Cotton

§ 1427.100 [Amended]

42. In § 1427.100, amend paragraph (b) by removing the words “to Users of

Upland Cotton” and adding “for Textile Mills” in their place.

Subpart D—Recourse Seed Cotton Loans

43. In § 1427.160, revise paragraph (a) to read as follows:

§ 1427.160 Applicability.

(a) This subpart is applicable to crops of upland and extra long staple seed cotton

and as otherwise determined appropriate by the Deputy Administrator. This subpart

specifies the terms and conditions under which recourse seed cotton loans will be made

available by CCC. Such loans will be available through March 31 of the year following

the calendar year in which such crop is normally harvested. CCC may change the loan

availability period to conform to State or locally imposed quarantines. Additional terms

and conditions are in the note and security agreement that must be executed by a

producer in order to receive such loans.

* * * * *

Subpart G—Extra Long Staple (ELS) Cotton Competitiveness Payment Program

§ 1427.1200 [Amended]

44. In § 1427.1200, amend paragraph (b)(2) by removing “134” and add “113” in

its place.

§ 1427.1207 [Amended]

45. In § 1427.1207 amend paragraphs (a)(1), (2), and (c)(2) by removing “134”

and adding “113” in its place.

PART 1430 – DAIRY PRODUCTS

46. The authority citation for part 1430 continues to read as follows:

Authority: 7 U.S.C. 9051-9060, and 9071 and 15 U.S.C. 714b and 714c.

Subpart D – Dairy Margin Coverage Program

47. In § 1430.402, add the definitions of “Supplemental Dairy Margin Coverage

payment” and “Supplemental production history” in alphabetical order to read as follows:

§ 1430.402 Definitions.

* * * * *

Supplemental Dairy Margin Coverage payment means a payment made to a

participating dairy operation under the DMC Program under the terms of this subpart.

Supplemental production history means the production history determined for a

participating dairy operation under this subpart when the participating dairy operation

registers to participate in DMC through special enrollment or annual coverage election

period.

* * * * *

48. In § 1430.403, add paragraph (f) to read as follows:

§ 1430.403 Eligible dairy operations.

* * * * *

(f) Dairy operation eligibility for supplemental production history requires the

dairy operation to be enrolled in DMC for the applicable calendar year. Dairy operations

with less than 5 million pounds of DMC production history are eligible for supplemental

production history.

49. Amend § 1430.404 by revising paragraphs (a) and by adding paragraphs

(b)(3) (e)(4) and (h) to read as follows:

§ 1430.404 Time and method of registration and annual election.

(a) A dairy operation may register to participate in DMC by establishing a

production history and, if eligible, supplemental production history, according

to § 1430.405 on a form prescribed by CCC and also submitting a contract prescribed by

CCC. Dairy operations may obtain a contract in person, by mail, or by facsimile from

any FSA county office. In addition, dairy operations may download a copy of the forms

at http://www.sc.egov.usda.gov.

(b) * * *

* * * * *

(3) Dairy operations enrolling supplemental production must establish

supplemental production history and apply for supplemental coverage during a special

enrollment or coverage election period specified by the Deputy Administrator. Once

supplemental production history is established, that history will be permanent and will

include previously established production history and subject to coverage elections made

by the dairy operation under the lock-in option according to paragraph 1430.407(j) or

made by the dairy operation in subsequent annual coverage year enrollments.

* * * * *

(e) * * *

(4) During the 2021 special enrollment period only, for participating dairy

operations that had a succession-in-interest occur from January 2, 2021, through the

opening of special enrollment, for supplemental production history to be applicable to

such successors, the predecessor must first establish supplemental production history.

For successions-in-interest when the successor establishes supplemental production

history before the predecessor, the successor’s supplemental production history will be

applicable for 2022.

* * * * *

(h) In addition to meeting requirements in paragraph (g) of this section, the dairy

operation must submit a separate form as prescribed by CCC to establish the

supplemental production history for the dairy operation. A supplemental production

history and a completed contract are both required for a complete submission that is then

subject to approval by FSA.

50. Amend § 1430.405 as follows:

a. In paragraph (a)(1), add the words “and supplemental history” after the words

“the production history”;

b. In paragraph (a)(2), add the words “or 2019 milk marketings” after the words

“annual milk marketings” in the second sentence;

c. Add paragraph (a)(3);

d. In paragraph (f), introductory text, add the words “and supplemental history”

after the words “The production history”;

e. In paragraph (f)(1), add the words “and supplemental history, if applicable”

after the words “and the production history”;

f. In paragraph (f)(2), add the words “and supplemental history, if applicable”

after the words “associated production history”; and

g. In paragraph (g), add the words “and supplemental history, if applicable” in its

place.

The addition reads as follows:

§ 1430.405 Establishment and transfer of production history for participating dairy

operation.

(a) * * *

(3) A participating dairy operation may establish supplemental production history

during the coverage election period preceding the coverage year, except for 2021 when a

special enrollment will occur. To determine supplemental production history, the dairy

operation production history established according to paragraphs (a), (b), or (c) of this

section must be subtracted from that dairy operation’s actual pounds of 2019 milk

production as indicated on the milk marketing statement, with the result multiplied by 75

percent.

* * * * *

51. Amend § 1430.407 as follows:

a. In paragraph (a)(2), add the words “and supplemental history” after the words

“production history”;

b. Revise paragraph (f); and

c. Add paragraph (n).

The revision and addition read as follows:

§ 1430.407 Buy-up coverage.

* * * * *

(f) The annual premium due for a participating dairy operation is calculated:

(1) For production history, by multiplying:

(i) The covered production history; and

(ii) The premium per cwt of milk specified in paragraph (e) of this section for the

coverage level elected in paragraph (d) of this section by the dairy operation; and

(2) For supplemental production history, by multiplying:

(i) The covered supplemental production history; and

(ii) The premium per cwt of milk in paragraph (e) of this section for the coverage

level elected in paragraph (d) of this section by the dairy operation.

* * * * *

(n) The premium rate for supplemental pounds eligible under a multi-year lock in

contract maintains the basic rate according to paragraph (e) of this section and will not

receive the 25 percent premium discount rate.

52. In § 1430.409 add paragraph (b)(4) to read as follows:

§ 1430.409 Dairy margin coverage payments.

* * * * *

(b) * * *

(4) Supplemental history. The supplemental production history of the dairy

operation, divided by 12.

* * * * *

53. In § 1430.411 revise paragraph (c)(3) to read as follows:

§ 1430.411 Calculation of average feed cost and actual dairy production margins.

* * * * *

(3) For alfalfa hay, the full month price received during the month by farmers in

the United States for high quality (premium and supreme) alfalfa hay as reported in the

monthly Agricultural Prices report by USDA NASS will be used to calculate the hay

price.

* * * * *

PART 1434—NONRECOURSE MARKETING ASSISTANCE LOANS AND LOAN

DEFICIENCY PAYMENTS FOR HONEY

54. The authority citation for part 1434 continues to read as follows:

Authority: 7 U.S.C. 7231-7237, 7931-7936, and 9031-40; and 15 U.S.C. 714b

and c.

§ 1434.1 [Amended]

55. In § 1434.1, amend paragraph (a) by removing the words “payment limitation

and”.

PART 1435—SUGAR PROGRAM

Subpart A—General Provisions

56. The authority citation for part 1435 continues to read as follows:

Authority: 7 U.S.C. 1359aa-1359jj, 7272, and 8110; 15 U.S.C. 714b and 714c.

§ 1435.101 [Amended]

57. Amend § 1435.101 as follows:

a. In paragraph (a), remove the words “is 18.5 cents per pound.” and add the

words “may be established based on rates that comply with applicable statutes, and may

be adjusted by CCC to reflect grade, type, quality, and other factors as applicable.” in

their place; and

b. In paragraph (b), remove the words “is equal to 128.5 percent of the loan rate

per pound of raw cane sugar.” and add the words “may be established based on rates that

comply with applicable statutes, and may be adjusted by CCC to reflect grade, type,

quality, and other factors as applicable.” in their place.

Zach Ducheneaux,

Administrator,

Farm Service Agency.

Robert Ibarra,

Executive Vice President,

Commodity Credit Corporation.