Court of Appeals Agrees USDA Did Not Have the Discretion to Implement New Program Benefiting Farmers

Combine dumping wheat into grain cart pulled by tractor in wheat field in Colorado. Image by Shannon Dizmang.

The article is not a substitute for legal advice.

            Many are paying attention to the implementation of the new Farm Bill, looking at how changes to existing and new programs will operate.  One issue that may come up after passing the 2018 Farm Bill is how quickly USDA must implement program changes or new programs.  In Ausmus v. Perdue, a group of Colorado wheat farmers recently had a lower court decision upheld.  The farmers had requested a new crop insurance product authorized in the 2014 Farm Bill before USDA’s Risk Management Agency (RMA) implemented a product for wheat.  The lower court ruled and the court of appeals agreed that although it might conflict with the agency’s other duties under federal law, RMA had to allow producers to use the program after the effective date of the 2014 Farm Bill and not when RMA implemented the regulations. 

Background

            In 2015, Colorado wheat farmers provided their crop insurance agents with written requests electing to exclude all eligible crop years in calculating their actual production histories (APH).  Crop insurance agents reached out to RMA seeking guidance on how to proceed with this request.  RMA responded with guidance that RMA authorized APH Yield Exclusion for the 2015 crop year for most crops, but not winter wheat.  Based on this guidance, the crop insurance agents denied the requests for APH Yield Exclusion on winter wheat in 2015.

            The Colorado wheat farmers appealed to the National Appeals Division (NAD).  On appeal, the NAD hearing officer determined that NAD did not have jurisdiction (aka the ability) to hear the appeal.  The wheat farmers then requested a review by the NAD Director who reversed the hearing officer, finding NAD did have jurisdiction but also that RMA had discretion on the appropriate time to implement Yield Exclusion for winter wheat.  The wheat farmers appealed this decision.  The lower court found that even if it caused issues, RMA had to make APH Yield Exclusion available to farmers upon the passage of the 2014 Farm Bill click here for more information on this ruling (insert link).  The federal government appealed this decision.

APH Yield Exclusion

            Before we discuss the court of appeals’ ruling, let’s review the specifics of APH Yield Exclusion, which allows producers to exclude specific yields from eligible years from their actual production histories (APH).  This exclusion can affect producers’ APHs and crop insurance premiums.  To learn more about APH Yield Exclusion, see here (http://go.umd.edu/YEAPH).

Court of Appeals Decision

Combine dumping wheat on truck in Colorado wheat field. Image by Shannon Dizmang.

            The court of appeals agreed with the lower court that the 2014 Farm Bill was clear that APH Yield Exclusion was available to producers immediately.  The statutory language contained mandatory language requiring RMA to apply the APH Yield Exclusion automatically upon a producer’s request. 

            The court of appeals disagreed with RMA that the statute’s language created an ambiguity allowing RMA time to implement the new provisions.  To the court, the Farm Bill’s language stated the new proisions “shall apply whenever the [FCIC] uses the actual production records of the producer to establish the producer’s actual production history for an agricultural commodity for any of the 2001 and subsequent crop years.” (7 U.S.C. § 1508(4)(A)).  In prior decisions, the court had found the language shall apply to be mandatory and not creating ambiguity.

            The court of appeals also recognized the difficulties this ruling could meant for RMA or another federal agency, but the court would not take those difficulties into account to change the meaning of the language Congress used.  To provide a different outcome, Congress would need to allow the agency more time to implement the new program.  The court of appeals affirmed the lower court’s decision.

Why Care?

            We are seeing implementation of a new farm bill creating programs USDA will need to implement.  This decision highlights the fact that although many of those new programs may become available on the effective date of the new farm bill,    USDA may not have to implement thes new programs before finalizing requirements under existing federal laws.

References

Ausmus v. Perdue, 289 F.Supp.3d 1227 (D. Colo. 2018).

Ausmus v. Perdue, 908 F.3d 1248 (10th Cir. 2018).

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