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, 70689-70708 [2021-26827]

Agencies

• DEPARTMENT OF AGRICULTURE
• Commodity Credit Corporation
• Farm Service Agency

[Federal Register Volume 86, Number 236 (Monday, December 13, 2021)]
[Rules and Regulations]
[Pages 70689-70708]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26827]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 86, No. 236 / Monday, December 13, 2021 / 
Rules and Regulations

[[Page 70689]]



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.

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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: December 13, 2021.
    Comment due date: For the OFF Program only, we will consider 
comments on the Paperwork Reduction Act that we receive by: February 
11, 2022.

ADDRESSES: For the OFF Program only, we invite you to submit comments 
on the information collection request. You may submit comments by going 
through the Federal eRulemaking Portal as follows:
     Federal eRulemaking Portal: Go to https://www.regulations.gov and search for Docket ID FSA-2021-0003. Follow the 
online instructions for submitting comments.
    You may also send comments to the Desk Officer for Agriculture, 
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Washington, DC 20503. All comments received, including those 
received by mail, will be posted without change and publicly available 
on https://www.regulations.gov.

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 email: [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

    This rule 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

[[Page 70690]]

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 \1\ 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 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

[[Page 70691]]

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.
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    \1\ As defined in Sec.  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.
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    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 December 13, 2021, must file the form within 120 days 
after December 13, 2021. 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 Environmental Protection Agency (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 \2\ 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.
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    \2\ 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.
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    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 Sec.  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

[[Page 70692]]

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 Sec.  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

[[Page 70693]]

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 Sec. Sec.  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

[[Page 70694]]

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 \1/2\ 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 \1/2\ 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 
Sec.  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 Sec.  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 Sec.  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 Sec.  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

[[Page 70695]]

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 (See 84 FR 66813, 
December 6, 2019)

    FSA received comments on the two provisions in Sec. Sec.  
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 
Sec.  1410.6(e)(4), this rule is removing Sec.  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. Section 
1410.6(e)(4)(i) and (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 Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  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

[[Page 70696]]

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'' \3\ hay in the 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.
---------------------------------------------------------------------------

    \3\ Referred to as ``premium'' for simplicity.
---------------------------------------------------------------------------

    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 (84 FR 28171, 
June 18, 2019), the regulation was changed to 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.\4\ 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.
---------------------------------------------------------------------------

    \4\ Supplemental DMC allows for enrollment above and beyond what 
is already enrolled in 2021 DMC.
---------------------------------------------------------------------------

    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.
    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

[[Page 70697]]

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
----------------------------------------------------------------------------------------------------------------
                                                               FY 2021 net       FY 2022 net       FY 2023 net
                                                                estimated         estimated         estimated
                           Item                                outlays (in       outlays (in       outlays (in
                                                               million $)        million $)        million $)
----------------------------------------------------------------------------------------------------------------
Item 1 Calculate the DMC formula using 100 percent premium           $108.47           $125.01       \a\ $101.95
 alfalfa hay..............................................
Item 2 Allow supplemental dairy production to become                  110.31            273.66            260.55
 eligible for DMC payments \b\............................
Item 3 Implement DIPP changes.............................              4.19            (2.15)            (3.27)
Item 4 Implement a one-time OFF Program...................          \c\ n.a.          \c\ 8.73          \c\ n.a.
Item 5 Modify certain CRP provisions......................          \d\ n.a.    \d\ negligible    \d\ negligible
Item 6 Add MAL and LDP housekeeping changes associated              \e\ n.a.          \e\ n.a.          \e\ n.a.
 with the 2018 Farm Bill..................................
                                                           -----------------------------------------------------
    Total.................................................            222.97            405.25            359.23
----------------------------------------------------------------------------------------------------------------
\a\ 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.
\b\ 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.
\c\ 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.
\d\ Impacts for the CRP rule changes are expected to be quite small; see the discussion in the full Cost Benefit
  Analysis for the discussion.
\e\ 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 799.31 apply, 
specifically 7 CFR 799.31(b)(6)(iii), (iv) and (vi), as follows: Sec.  
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 Sec.  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 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 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.

[[Page 70698]]

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 (PRA)

    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:

----------------------------------------------------------------------------------------------------------------
                                                                                     Number of     Total burden
                 Form name                                 Form No.                 respondents        hours
----------------------------------------------------------------------------------------------------------------
Oriental Fruit Fly Program Application.....  FSA-438............................             750             375
Farm Operating Plan for Payment Eligibility  CCC-902............................             300              24
Average Adjusted Gross Income (AGI)          CCC-941............................             300              75
 Certification and Consent to Disclosure.
Certification of Income from Farming,        CCC-942............................              10               3
 Ranching and Forestry Operations, optional.
Member Information for Legal Entities, if    CCC-901............................              90              45
 applicable.
Highly Erodible Land Conservation (HELC)     AD-1026............................             300              24
 and Wetland Conservation Certification
 (exempt from PRA, 16 U.S.C. 3846).
----------------------------------------------------------------------------------------------------------------

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,

[[Page 70699]]

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, 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:

0
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.
756.12 Payment limitation.
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


Sec.  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.
    (c) In any case in which money must be refunded to the Farm Service 
Agency (FSA) in connection with this part, interest will be due to run 
from the date of disbursement of the sum to be refunded. This paragraph 
(c) will apply, unless waived by the Deputy Administrator for Farm 
Programs, FSA, irrespective of any other regulation in this part.


Sec.  756.2   Administration.

    (a) The OFF Program will be administered under the general 
supervision of the Administrator, 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 in this part, except as 
provided in paragraph (e) of this section.
    (c) The FSA State committee will take any required action not taken 
by the FSA 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.
    (f) 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

[[Page 70700]]

before the date authorized by FSA, will be null and void.
    (g) 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.


Sec.  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 31st.
    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 34th 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.


Sec.  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.


Sec.  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, adjusted gross income (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 certified public accountant (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 and 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.
    (c) A minor who is otherwise an eligible producer is eligible to 
receive an OFF 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.

[[Page 70701]]

Sec.  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.


Sec.  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.
    (c) Once signed by a producer, the application for payment is 
considered to 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.


Sec.  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)(1) 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)

    (2) 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)

    (c) If there is no gross revenue loss determined for calendar year 
2015 or calendar year 2016, the payment will be zero.


Sec.  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.


Sec.  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.

[[Page 70702]]

    (b) All persons with a financial interest in a legal entity 
receiving payments under this part are jointly and severally liable for 
any refund, including related charges, that is determined to be due to 
FSA for any reason.
    (c) In the event that any application under this part resulted from 
erroneous 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 part 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 part.
    (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 part 780 of this 
chapter apply to determinations under this part.


Sec.  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 1400.105 will be 
used to attribute payments to persons and legal entities for payment 
limitation determinations.


Sec.  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]


Sec.  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.


Sec.  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 part 707.


Sec.  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.
    (b) 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.
    (c) 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.
    (d) 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.


Sec.  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--INDEMNITY PAYMENT PROGRAMS

0
2. The authority citation for part 760 continues to read as follows:

    Authority:  7 U.S.C. 4501 and 1531; 16 U.S.C. 3801, note; 19 
U.S.C. 2497; Title III, Pub. L. 109-234, 120 Stat. 474; Title IX, 
Pub. L. 110-28, 121 Stat. 211; Sec. 748, Pub. L. 111-80, 123 Stat. 
2131; Title I, Pub. L. 115-123, 132 Stat. 65; Title I, Pub. L. 116-
20, 133 Stat. 871; and Division B, Title VII, Pub. L. 116-94, 133 
Stat. 2658.

Subpart A--Dairy Indemnity Payment Program

0
3. The authority citation for subpart A of part 760 continues to read 
as follows:

    Authority:  7 U.S.C. 450j-l.


0
4. Amend Sec.  760.2 as follows:
0
a. Add the definition for ``Contaminated milk'', ``Depopulation'', and 
``Not marketable'' in alphabetical order; and
0
b. Remove the definition of ``Violating Substance'' and add the 
definition of ``Violating substance'' in its place.
    The additions read as follows:


Sec.  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) \1\ definition, the rapid destruction of a 
population of cows with as much consideration given to the welfare of 
the animals as practicable.
---------------------------------------------------------------------------

    \1\ 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.
---------------------------------------------------------------------------

* * * * *
    Not marketable means no commercial market is available for affected 
cows to be slaughtered, processed, and marketed

[[Page 70703]]

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.
* * * * *

0
5. Revise Sec.  760.3 to read as follows:


Sec.  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 Sec. Sec.  760.4 and 760.5, less:
    (1) Any amount the affected farmer received for whole milk marketed 
during the application period; and
    (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 Dairy Indemnity Payment Program (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.


Sec.  760.6   [Amended]

0
6. Amend Sec.  760.6 in 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.

0
7. Revise Sec.  760.7 to read as follows:


Sec.  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 
Sec.  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.
    (c) If the violating substance in the contaminated milk was not 
used by the 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.

0
8. Amend Sec.  760.9 by revising the section heading and paragraph (c) 
and adding paragraphs (d) and (e) to read as follows:


Sec.  760.9   Payments for the same loss.

* * * * *
    (c) For any affected farmer that exceeded 3 months of milk 
indemnity payments before December 13, 2021 no further payments for 
milk indemnity will be made for the same loss except as provided in 
Sec.  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.

0
9. Add Sec.  760.10 to read as follows:


Sec.  760.10   Indemnity payments for cows.

    (a) The Deputy Administrator for Farm Programs (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 Sec.  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 Sec.  760.11 for indemnity payment eligibility for bred and 
open heifers.
    (c) Affected farmers applying for indemnification of cows, 
including 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 Environmental Protection Agency (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

[[Page 70704]]

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 this section or Sec.  
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 Sec.  760.12(c).
    (g) Affected cows that are marketed as cull or for breeding are not 
eligible for indemnification.

0
10. Add Sec.  760.11 to read as follows:


Sec.  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 Sec.  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 Sec.  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 Sec.  760.13 because of 
elevated levels of chemical residues that will pass through milk once 
lactating. Affected farmers must provide the information specified in 
Sec.  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.
    (c) The amount of the cow indemnity for bred and open heifers will 
be based on 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.

0
11. Add Sec.  760.12 to read as follows:


Sec.  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 
Sec.  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 Sec.  760.11(b) and eligibility for indemnification.
    (c) To request consideration for indemnification of affected cows 
and heifers under Sec.  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.

[[Page 70705]]

    (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.

0
12. Add Sec.  760.13 to read as follows:


Sec.  760.13   Application for payment of cows.

    (a) Any affected farmer may apply for cow indemnity under 
Sec. Sec.  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 Sec.  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 December 13, 
2021, must file the form within 120 days after December 13, 2021. 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

0
13. 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.


Sec.  1410.6   [Amended]

0
14. Amend Sec.  1410.6 as follows:
0
a. In paragraph (e)(4)(ii), remove ``; and'' and add a semicolon in its 
place; and
0
b. Remove paragraph (e)(4)(iii).


Sec.  1410.90  [Amended]

0
15. Amend Sec.  1410.90 in paragraph (c) introductory text by removing 
the fourth sentence.

PART 1421--GRAINS AND SIMILARLY HANDLED COMMODITIES--MARKETING 
ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS

0
16. 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.

Subpart A--General


Sec.  1421.1   [Amended]

0
17. Amend Sec.  1421.1 in paragraph (e) by removing the words ``and 
payment limitation''.

0
18. Amend Sec.  1421.3 as follows:
0
a. Add definition for ``Commodity certificate exchange'' in 
alphabetical order; and
0
b. Revise the definition of ``Market loan gain''.
    The addition and revision read as follows:


Sec.  1421.3   Definitions.

* * * * *
    Commodity certificate exchange means the exchange, as provided for 
in Sec.  1421.111, 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.
* * * * *


Sec.  1421.4   [Amended]

0
19. Amend Sec.  1421.4 by removing paragraph (h).


Sec.  1421.5   [Amended]

0
20. Amend Sec.  1421.5 in paragraph (c)(1) by adding the word 
``nonrecourse'' after the words ``pledged for a''.


Sec.  1421.9   [Amended]

0
21. Amend Sec.  1421.9 in 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

0
22. Amend Sec.  1421.102 by revising paragraph (a)(1) to read as 
follows:


Sec.  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.
* * * * *


Sec.  1421.104   [Amended]

0
23. Amend Sec.  1421.104 in paragraph (a)(1) by removing the words 
``lien searches, and'' and ``law, as'' and adding ``lien searches and'' 
and ``law as'' in their places, respectively.

0
24. Add Sec.  1421.110 to read as follows:


Sec.  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.
    (c) Commodity certificate exchanges may not be used when locking in 
a repayment rate under Sec.  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.


Sec.  1421.112   [Amended]

0
25. Amend Sec.  1421.112 in paragraph (b) introductory text by removing 
the word ``effected'' and adding ``affected'' in its place in the 
second sentence.

0
26. Amend Sec.  1421.113 by revising paragraph (a) to read as follows:


Sec.  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.
* * * * *

[[Page 70706]]

Subpart C--Loan Deficiency Payments


Sec.  1421.200   [Amended]

0
27. Amend Sec.  1421.200 in paragraph (e) by removing the words ``and 
payment limitation''.

Subpart D--Grazing Payments for Wheat, Barley, Oats, and Triticale


Sec.  1421.302   [Amended]

0
28. Amend Sec.  1421.302(d)(1) by removing the words ``and payment 
limitation''.


Sec.  1421.304   [Amended]

0
29. Amend Sec.  1421.304 as follows:
0
a. Remove paragraph (d); and
0
b. Redesignate paragraphs (e) through (g) as paragraphs (d) through 
(f), respectively.

Subpart E--Designated Marketing Associations for Peanuts

0
30. Revise Sec.  1421.409 to read as follows:


Sec.  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.

0
31. Amend Sec.  1421.416 by revising paragraph (a)(1) to read as 
follows:


Sec.  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.
* * * * *


Sec.  1421.417   [Amended]

0
32. Amend Sec.  1421.417 in paragraph (a) by removing the words ``to 
producers, and'' and adding the words ``to producers and'' in their 
place.

PART 1425--COOPERATIVE MARKETING ASSOCIATIONS

0
33. The authority citation for part 1425 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.


0
34. Amend Sec.  1425.4 by revising paragraphs (a)(2) and (b)(2) to read 
as follows:


Sec.  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

0
35. The authority citation for part 1427 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.

Subpart A--Nonrecourse Cotton Loan and Loan Deficiency Payments


Sec.  1427.1   [Amended]

0
36. Amend Sec.  1427.1 in paragraph (d) by removing the words 
``Adjusted gross'' and adding ``Average adjusted'' in their place.

0
37. Amend Sec.  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:


Sec.  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 adjusted world price (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.
* * * * *

0
38. Amend Sec.  1427.4 as follows:
0
a. Revise paragraph (a)(2)(iii); and
0
b. In paragraph (g), remove the words ``and payment limitation''.
    The revision reads as follows:


Sec.  1427.4   Eligible producer.

    (a) * * *
    (2) * * *
    (iii) 7 CFR part 1400, subpart F--Average Adjusted Gross Income 
Limitation;
* * * * *


Sec.  1427.10   [Amended]

0
39. Amend Sec.  1427.10 in paragraph (f)(2) by removing the words ``so 
as'' and adding ``in a manner'' in their place.


Sec.  1427.11   [Amended]

0
40. Amend Sec.  1427.11 in paragraph (a) introductory text by adding 
the word ``electronic'' after the words ``represented by''.

0
41. Add Sec.  1427.22 to read as follows:


Sec.  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.
    (c) Producers must request a commodity certificate exchange on or 
before loan 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.
    (d) Gains realized from a commodity certificate exchange are not 
subject to

[[Page 70707]]

AGI or payment limitation provisions specified in part 1400 of this 
chapter.


Sec.  1427.23   [Amended]

0
42. Amend Sec.  1427.23 in paragraph (d) by removing the words ``and 
payment limitation requirements'' and adding ``provisions'' in their 
place.

Subpart D--Recourse Seed Cotton Loans

0
43. Amend Sec.  1427.160 by revising paragraph (a) to read as follows:


Sec.  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


Sec.  1427.1200   [Amended]

0
44. Amend Sec.  1427.1200 in paragraph (b)(2) by removing ``134'' and 
adding ``113'' in its place.


Sec.  1427.1207   [Amended]

0
45. Amend Sec.  1427.1207 in paragraphs (a)(1) and (2) and (c)(2) by 
removing ``134'' and adding ``113'' in its place.

PART 1430--DAIRY PRODUCTS

0
46. The authority citation for part 1430 is revised 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

0
47. Amend Sec.  1430.402 by adding the definitions of ``Supplemental 
Dairy Margin Coverage payment'' and ``Supplemental production history'' 
in alphabetical order to read as follows:


Sec.  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.
* * * * *

0
48. Amend Sec.  1430.403 by adding paragraph (f) to read as follows:


Sec.  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.

0
49. Amend Sec.  1430.404 by revising paragraph (a) and adding 
paragraphs (b)(3), (e)(4), and (h) to read as follows:


Sec.  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 Sec.  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 https://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 Sec.  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.

0
50. Amend Sec.  1430.405 as follows:
0
a. In paragraph (a)(1), add the words ``and supplemental history'' 
after the words ``the production history'';
0
b. In paragraph (a)(2), add the words ``or 2019 milk marketings'' after 
the words ``annual milk marketings'' in the second sentence;
0
c. Add paragraph (a)(3);
0
d. In paragraph (f) introductory text, add the words ``and supplemental 
history'' after the words ``The production history'';
0
e. In paragraph (f)(1), add the words ``and supplemental history, if 
applicable,'' after the words ``and the production history'';
0
f. In paragraph (f)(2), add the words ``and supplemental history, if 
applicable,'' after the words ``associated production history''; and
0
g. In paragraph (g), add the words ``and supplemental history, if 
applicable'' after the words ``production history''.
    The addition reads as follows:


Sec.  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 paragraph (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.
* * * * *

0
51. Amend Sec.  1430.407 as follows:

[[Page 70708]]

0
a. In paragraph (a)(2), add the words ``and supplemental history'' 
after the words ``production history'';
0
b. Revise paragraph (f); and
0
c. Add paragraph (n).
    The revision and addition read as follows:


Sec.  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.

0
52. Amend Sec.  1430.409 as follows:
0
a. In paragraph (b)(2), remove the word ``and'' at the end;
0
b. In paragraph (b)(3), remove the period at the end and add ``; and'' 
in its place; and
0
c. Add paragraph (b)(4).
    The addition reads as follows:


Sec.  1430.409   Dairy margin coverage payments.

* * * * *
    (b) * * *
    (4) Supplemental history. The supplemental production history of 
the dairy operation, divided by 12.
* * * * *

0
53. Amend Sec.  1430.411 by revising paragraph (c)(3) to read as 
follows:


Sec.  1430.411   Calculation of average feed cost and actual dairy 
production margins.

* * * * *
    (c) * * *
    (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

0
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.


Sec.  1434.1   [Amended]

0
55. Amend Sec.  1434.1 in paragraph (a) by removing the words ``payment 
limitation and''.

PART 1435--SUGAR PROGRAM

0
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.

Subpart B--Sugar Loan Program


Sec.  1435.101   [Amended]

0
57. Amend Sec.  1435.101 as follows:
0
a. In paragraph (a), remove the words ``is 18.75 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
0
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.
[FR Doc. 2021-26827 Filed 12-10-21; 8:45 am]
BILLING CODE 3410-05-P