Posted on: October 12th, 2018 by The Accel Group | No Comments

The Food and Drug Administration guidelines state when an edible portion of a crop is exposed to flood waters, it is considered adulterated and can be injurious to human or animal health and should not be used for feed or food. Production from such damaged crops is considered to contain substances or conditions which are injurious to human or animal health.

FDA recommends that such production does not enter the food supply, or be tested for all such substances or conditions before being sold, fed or used in a manner where the production may enter the food supply.

In addition, there may be situations in which a Federal or State agency requires destruction or disposal of such crop and production. Failure to destroy such crop and production in an acceptable manner will result in an appraisal for uninsured causes of loss of not less than the production guarantee and penalties as stated in Section 15(j) of the Common Crop Insurance Policy 18-BR.

INSPECTION:

  • The Special Provision of Insurance instruct producers “whether you intend to harvest or not harvest such acreage”, you must give us (DCIS) notice to inspect the crop.
  • Loss adjustment procedures require that prior to applying zero appraisals based on ZMV determinations, an adjuster must perform an on-the-farm inspection to determine the amount of qualified unharvested acreage.”

UNHARVESTED ACREAGE:

  • Unharvested acreage determined by the adjuster to qualify as flood-damaged will:
    1. be assessed a zero appraisal;
    2. not require the loss adjuster to make any field level appraisals beyond determining the number of qualified unharvested acreage;
    3. not require the production to be sampled and tested by an approved laboratory; and
    4. be considered zero production to count (PTC) based on zero market value (ZMV),
      • if destroyed in a manner acceptable to DCIS.
      • The adjuster will determine an acceptable method for certified
    5. For production destroyed in a manner unacceptable to us, such production will not be adjusted for any quality deficiencies listed in Section C of the Special
    6. A claim will not be completed until all such production is sold, fed, utilized in any other manner, or

HARVESTED ACREAGE:

  • Should qualifying acreage be harvested, the following will apply as outlined in the Special Provisions of Insurance: Quality, Section C3
    1. Sold Production:
      • Discounted by the reduction in value (RIV – price received/local market price):
      • Applied by the buyer due to all insurable quality deficiencies,
      • Buyer must be a disinterested third party
      • RIVs must be reasonable, usual and customary, and
      • The production was not put into storage prior to delivery to the buyer (i.e. delivered directly from the field to the buyer or from the field to commercial storage).
    2. Production Currently Stored or Previously Stored On-Farm:
      • Discounted at 0.500
        • For production that was put in on-farm storage and was later sold, was in on-farm storage and was transported to commercial storage and later sold, was fed, was utilized in any other manner, or was sold to other than a disinterested third. No other discount factors for other grade deficiencies will be included.
    3. If production is destroyed in a manner acceptable to us, the discount factor (DF) will be 000.
      • The adjuster will determine an acceptable method for certified destruction
    4. For production destroyed in a manner unacceptable to us, such production will not be adjusted for any quality deficiencies listed in Section C of the Special
    5. A claim will not be completed until all such production is sold, fed, utilized in any other manner, or
    6. Producers should avoid commingling production from flood-damaged acreage with production from acreage not damaged by flood. Production thus commingled will not be adjusted for any quality deficiencies listed in Section C of the Special

NOTE: As required by procedure, DCIS will record the method of disposal of all such production.

FDA and USDA/RMA rules allow producers with flood-damaged acreage to destroy such contaminated production, certify its destruction and have the production counted as zero market value/zero production to count for indemnity purposes, thus preventing entry into the food/feed chain. Producers who suspect they have flood-damaged production should submit claims and have the acreage inspected by a DCIS adjuster as soon as practical and prior to harvesting so they may understand their options under policy and procedures.

Loss Adjustment Manual Handbook

Source: Diversified Crop Insurance Services