[Federal Register: March 4, 2008 (Volume 73, Number 43)]
[Rules and Regulations]
[Page 11519-11527]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04mr08-2]
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DEPARTMENT OF AGRICULTURE
Farm Service Agency
7 CFR Part 786
RIN 0560-AH74
Dairy Disaster Assistance Payment Program III
AGENCY: Farm Service Agency, USDA.
ACTION: Final rule.
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SUMMARY: This final rule establishes a new program, the Dairy Disaster
Assistance Payment Program III, as authorized by the U.S. Troop
Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability
Appropriations Act, 2007. The program will provide $16 million in
assistance for producers in counties designated as a major disaster or
emergency area by the President, or those declared a natural disaster
area by the Secretary of Agriculture. Counties declared disasters by
the President may be eligible, even though agricultural loss was not
covered by the declaration, if there has been a Farm Service Agency
Administrator's Physical Loss Notice covering such losses. The natural
disaster declarations by the Secretary or the President must have been
issued between January 1, 2005 and December 31, 2007, that is, after
January 1, 2005, and before December 31, 2007. Counties
[[Page 11520]]
contiguous to such counties will also be eligible. This program is
designed to provide financial assistance to producers who suffered
dairy production losses due to natural disasters in the eligible
counties.
DATES: This rule is effective on March 4, 2008.
FOR FURTHER INFORMATION CONTACT: Danielle Cooke, telephone: (202) 720-
1919; e-mail: Danielle.Cooke@wdc.usda.gov.
SUPPLEMENTARY INFORMATION:
Background
This rule establishes regulations based on the proposed rule
published in the Federal Register on November 26, 2007 (72 FR 65889-
65897). The 30-day comment period for the proposed rule closed on
December 26, 2007; 16 comments were submitted. The issues raised in the
comments and the resulting changes to the rule are discussed later in
this final rule.
The proposed rule provided that the DDAP-III program would be based
on disaster related dairy production losses suffered during the period
of January 2, 2005, and February 27, 2007, in counties declared or
designated a natural disaster by the President or Secretary of
Agriculture. For timely Presidential declarations that do not cover
agricultural loss, the subject counties may still be covered if the
county was the subject of a Farm Service Agency (FSA) Administrator's
Loss Notice. Counties contiguous to such declared counties are also
eligible. The program will end at the conclusion of the application
period and disbursement of allotted funds. The DDAP-III program will
operate under regulations codified in 7 CFR part 786.
The proposed rule specified that dairy producers would disclose the
number of cows in the operation's dairy herd for each month of the
calendar year in which a disaster declaration was issued to determine
the average number of cows in the dairy herd for the operation per
applicable year and calculate the qualifying production loss for the
operation. The proposed rule also provided that spoiled or dumped milk
would be counted as production for the relevant claim period. In
addition, the proposed rule provided that qualifying production losses
would be calculated from a set base amount determined from data
obtained from the National Agricultural Statistics Service (NASS). The
proposed rule provided that if the limited program funds were not
sufficient to pay all claims for lost production, then priority would
be given in making payments to those persons whose losses for each
applicable disaster year were greater than 20 percent. The proposed
rule also specified that the prices at which payments would be made
would be amounts set out in the rule which were derived from a series
of reported ``mailbox'' prices.
Comments and Changes to the Final Rule
During the 30-day comment period the Agency received public
comments from a dairy cooperative, five associations, a Farm Bureau,
and eight private citizens. In general, the comments supported the
proposed rule, however, each of the comments raised one or more issues
addressing a specific aspect of implementing DDAP-III and several
comments raised the same issues. As explained below, minor changes to
the regulations based on the comments will slightly modify the
provisions specified in the proposed rule.
Two comments opposed the program, one indicated that assistance
should only be provided to small dairy operations and the other
objected to anyone other than the President making disaster
declarations. One of those comments also indicated that assistance
provided by this program is a misuse of taxpayer dollars and that it
was misleading for Congress to insert a statute for agriculture in a
non-related military spending bill. No changes have been made in the
rule based on these comments. The Agency is charged with implementing
the statutory provisions and has done so in this final rule.
One comment requested clarification regarding spoiled or dumped
milk being counted as production during the relevant claim period.
Specifically, to ensure that milk production that spoiled or was dumped
for a disaster related reason would be included in the qualifying
production losses for the dairy operation. The provision in the rule
that requires spoiled or dumped milk being counted as production is
intended to account for milk that spoiled or was dumped due to non-
disaster related reasons and must be counted as production. The Agency
clarified this point in the rule by revising section 786.106,
paragraphs (e) and (h), which were proposed as paragraphs (c) and (f),
respectively.
Comments were received on the method of payment at two levels in
the event of inadequate funds for all eligible losses and the
appropriate loss level percentage. Two respondents opposed the use of
the 20 percent threshold because its use over a full calendar year for
an initial round of disaster benefits may not recognize the economic
reality of significantly higher input costs on dairy farms and the
devastating effect of short term disasters. With funding limitations,
the proposed threshold percentage provides fair compensation and is
consistent with other disaster programs administered by the Agency.
Therefore, no change was made in response to these comments.
One comment suggested making dairy operations outside of eligible
disaster counties eligible when milk was dumped as a result of the
market outlet being located in a disaster affected county. The
statutory provisions did not provide for counties outside of disaster
declared counties to be eligible. Therefore, no change was made in
response to this comment.
One comment requested clarification of the phrase ``legal resident
alien'' and believed that holders of E12 Visas should be permitted to
participate in the program. Provisions for foreign persons used for FSA
programs are provided in 7 CFR part 1400, subpart F, and apply to this
program. A definition for a lawful alien is also provided in 1400.3.
Therefore, no change was made in response to this comment.
Most comments received disagreed with how the base production for
the dairy operation was determined. Twelve respondents opposed the use
of NASS State averages to determine base production because of the
great disparity between operations with minor breeds or poor herd
management practices that produce significantly less than the NASS
average and those dairy operations with higher inputs that are more
efficient and produce well above the NASS average. Additionally, one
comment received opposed the use of the calendar year of the disaster
to determine base production and believed a period of weeks, months or
the year prior to the disaster would be more representative of base
period production for comparison. Further, the comment disagreed with
the use of cow averages during the year of the disaster to determine
base production because cow losses would factor into a decreased base
production for the dairy operation. These comments supported an
alternative method of determining base production for the dairy
operation that was not based on the year of the disaster and did not
include the use of NASS State averages based on cow averages during the
applicable disaster year.
After careful consideration of the recommendations proposed in the
comments, the Agency will change the determination of base annual
production for the dairy operation to use the average of the total
[[Page 11521]]
commercially marketed production during both calendar years 2003 and
2004 prior to the eligible period, divided by the average number of
cows in the dairy herd during both calendar years 2003 and 2004 prior
to the eligible period, to establish the average annual production per
cow. To calculate the base annual production for the dairy operation,
the average annual production per cow determined from the base year
information obtained from the producer, will be multiplied by the
average number of cows (not including cow losses resulting from the
disaster occurrence) in the dairy herd during the applicable year of
the disaster. Dairy operations without the required information from
the 2003 and 2004 base years will use an alternative method to estimate
the average annual production per cow that will be determined by the
FSA Administrator. For example, for new dairies not in operation during
2003 and 2004, FSA may obtain information from three similar farms to
estimate the base annual production for the operation. These changes
were made throughout the regulations with revised definitions, sections
786.104 through 786.106.
Miscellaneous Changes
Payment rates for the four States of Colorado, Hawaii, Oklahoma,
and Wyoming were inadvertently left out of the table in section 786.107
in the proposed rule and are incorporated in this final rule.
The Consolidated Appropriations Act of 2008 (Pub. L. 110-161),
extended the eligible period for the program from February 27, 2007 to
December 30, 2007. Changes are incorporated throughout to modify the
date to reflect the extension.
Executive Order 12866
This rule has been determined to be not significant under Executive
Order 12866 and was reviewed by the Office of Management and Budget
(OMB). A cost-benefit assessment of this rule was completed and is
available from the contact information above.
Summary of Economic Impacts
Program payments will provide eligible producers funds to help pay
operating expenses and meet other financial obligations. Program
payments are expected to total and increase both Federal outlays and
aggregate farm revenue by $16 million. This assistance will help dairy
producers affected by natural disasters to recover some lost income and
additional repair expenses to aid in continuing their agricultural
production businesses.
The States with the highest percentages of dairies expected to make
claims are: Idaho (33 percent), California (16 percent), New Mexico (13
percent), Indiana and Michigan (7-8 percent), Washington and Arizona (5
percent), and Wisconsin (3 percent). Expected claims totaled 3.1
million hundred weight (cwt).
If total eligible losses exceed available funding, losses above 20
percent will be paid at the maximum payment rates. The average payment
rate for losses below 20 percent will be determined by dividing
remaining funding by the total milk pounds below 20 percent eligible
for payment. The resulting payment rate is projected to be $5.15 per
cwt, substantially below average mailbox prices.\1\ The average mailbox
price for all Federal Orders in the United States was $12.87 in 2006
and $11.28 in California, which is outside the Federal Order system.
The lowest mailbox price in the Federal Order system in 2006 was $11.13
in New Mexico.
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\1\ The mailbox price is the net price producers receive for
their milk, after all marketing costs, discounts, premiums are
accounted for. The Agricultural Marketing Service collects and
publishes monthly mailbox prices.
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Producers who can demonstrate a loss exceeding 20 percent of their
production will receive compensation equal to the average mailbox price
prevailing in their region during the period of the disaster. To the
extent that payments equal to the mailbox price are made to some
producers, the otherwise-average payment rate of $5.15 will be reduced.
In theory, it is possible that enough producers could claim a 20-
percent-or-greater loss and receive payments equal to the mailbox
price, that payments to the remaining producers with lower losses could
be considerably less than $5.15. However, FSA does not have sufficient
data to estimate how many producers might have losses exceeding 20
percent of their production, or how much milk such losses might
represent.
Payments are expected to increase producer income and defray repair
and cattle replacement costs. Outlays will be monitored to ensure that
they do not exceed the actual loss.
The $16 million is a small share of federal farm assistance. For
example, Commodity Credit Corporation (CCC) made $15.3 billion in
direct cash payments to farmers and ranchers in fiscal 2005, excluding
all payments made for disasters, with the largest category of payments
being $8 billion paid under the Direct and Counter Cyclical Program.
CCC direct cash payments for fiscal 2005 through estimated fiscal 2007
total $43.7 billion, averaging $14.6 billion, annually.
Regulatory Flexibility Act
The Regulatory Flexibility Act does not apply to this rule because
FSA is not required by 5 U.S.C. 553 or any other law to publish a
notice of proposed rulemaking with respect to the subject of this rule.
Environmental Assessment
FSA has determined that this rule does not constitute a major State
or Federal action that would significantly affect the human or natural
environment consistent with the National Environmental Policy Act 40
CFR part 1502.4, Major Federal actions requiring the preparation of
Environmental Impact Statements, and 7 CFR part 799: Environmental
Quality and Related Environmental Concerns--Compliance with NEPA
implementing the regulations of the Council on Environmental Quality,
40 CFR parts 1500-1508. Therefore no environmental assessment or
environmental impact statement will be prepared.
Executive Order 12988
This rule has been reviewed in accordance with Executive Order
12998. This rule preempts State laws to the extent such laws are
inconsistent with it. This rule is not retroactive. Before judicial
action may be brought concerning this rule, all administrative remedies
set forth at 7 CFR parts 11 and 780 must be exhausted.
Executive Order 12372
This program is not subject to Executive Order 12372, which
requires intergovernmental consultation with State and local officials.
See the notice related to 7 CFR part 3015, subpart V, published at 48
FR 29115 (June 24, 1983).
Unfunded Mandates
Although we published a proposed rule, Title II of the Unfunded
Mandates Reform Act of 1995 (UMRA) does not apply to this rule because
FSA is not required by 5 U.S.C. 553 or any other law to publish a
notice of proposed rulemaking for the subject of this rule. Further,
this rule contains no unfunded mandates as defined in sections 202 and
205 of UMRA.
Paperwork Reduction Act of 1995
The Information Collection Packages for the amendments to 7 CFR 786
contained in this final rule have been submitted to the Office of
Management and Budget (OMB) for approval as a revision to OMB Control
Number 0560-
[[Page 11522]]
0252. A proposed rule containing an estimate of the burden impact of
the rule was published in the Federal Register on November 26, 2007 (72
FR 65889-65897) with estimates of the information collection burden
required to implement this program and a request for comments on those
requirements as required by 5 CFR section 1320.8(d)(1). No comments
concerning the burden estimate were received.
E-Government Act Compliance
FSA is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes. The forms, regulations, and other
information collection activities required to be utilized by a person
subject to this rule are available at http://www.fsa.usda.gov.
Applications may be submitted at the FSA county offices.
List of Subjects in 7 CFR Part 786
Dairy products, Disaster assistance, Fraud, Penalties, Price
support programs, Reporting and recordkeeping requirements.
0
For the reasons set out in the preamble, 7 CFR part 786 is added to
read as follows:
PART 786--DAIRY DISASTER ASSISTANCE PAYMENT PROGRAM (DDAP-III)
Sec.
786.100 Applicability.
786.101 Administration.
786.102 Definitions.
786.103 Time and method of application.
786.104 Eligibility.
786.105 Proof of production.
786.106 Determination of losses incurred.
786.107 Rate of payment and limitations on funding.
786.108 Availability of funds.
786.109 Appeals.
786.110 Misrepresentation, scheme, or device.
786.111 Death, incompetence, or disappearance.
786.112 Maintaining records.
786.113 Refunds; joint and several liability.
786.114 Miscellaneous provisions.
786.115 Termination of program.
Authority: Sec. 9007, Pub. L. 110-28, 121 Stat. 112; and Sec.
743, Pub. L. 110-161.
PART 786--DAIRY DISASTER ASSISTANCE PAYMENT PROGRAM III (DDAP-III)
Sec. 786.100 Applicability.
(a) Subject to the availability of funds, this part specifies the
terms and conditions applicable to the Dairy Disaster Assistance
Payment Program (DDAP-III) authorized by section 9007 of Public Law
110-28 (extended by Pub. L. 110-161). Benefits are available to
eligible United States producers who have suffered dairy production
losses in eligible counties as a result of a natural disaster declared
during the period between January 1, 2005, and December 31, 2007, (that
is, after January 1, 2005, and before December 31, 2007).
(b) To be eligible for this program, a producer must have been a
milk producer anytime during the period of January 2, 2005, through
December 30, 2007, in a county declared a natural disaster by the
Secretary of Agriculture, declared a major disaster or emergency
designated by the President of the United States. For a county for
which there was a timely Presidential declaration, but the declaration
did not cover the loss, the county may still be eligible if the county
is one for which an appropriate determination of a Farm Service Agency
(FSA) Administrator's Physical Loss Notice applies. Counties contiguous
to a county that is directly eligible by way of a natural disaster
declaration are also eligible. Only losses occurring in eligible
counties are eligible for payment in this program.
(c) Subject to the availability of funds, FSA will provide benefits
to eligible dairy producers. Additional terms and conditions may be
specified in the payment application that must be completed and
submitted by producers to receive a disaster assistance payment for
dairy production losses.
(d) To be eligible for payments, producers must meet the provisions
of, and their losses must meet the conditions of, this part and any
other conditions imposed by FSA.
Sec. 786.101 Administration.
(a) DDAP-III will be administered under the general supervision of
the Administrator, FSA, or a designee, and be carried out in the field
by FSA State and county committees (State and county committees) and
FSA employees.
(b) State and county committees, and representatives and employees
thereof, do not have the authority to modify or waive any of the
provisions of the regulations of this part.
(c) The State committee will take any action required by the
regulations of this part that has not been taken by the county
committee. The State committee will also:
(1) Correct, or require the county committee to correct, any action
taken by such county committee that is not in accordance with the
regulations of this part; and
(2) Require a county committee to withhold taking any action that
is not in accordance with the regulations of this part.
(d) No provision of delegation in this part to a State or county
committee will preclude the Administrator, FSA, or a designee, from
determining any question arising under the program or from reversing or
modifying any determination made by the State or county committee.
(e) The Deputy Administrator, Farm Programs, FSA, may authorize
State and county committees to waive or modify deadlines in cases where
lateness or failure to meet such requirements do not adversely affect
the operation of the DDAP-III and does not violate statutory
limitations of the program.
(f) Data furnished by the applicants is used to determine
eligibility for program benefits. Although participation in DDAP-III is
voluntary, program benefits will not be provided unless the producer
furnishes all requested data.
Sec. 786.102 Definitions.
The definitions in 7 CFR part 718 apply to this part except to the
extent they are inconsistent with the provisions of this part. In
addition, for the purpose of this part, the following definitions
apply.
Administrator means the FSA Administrator, or a designee.
Application means DDAP-III application.
Application period means the time period established by the Deputy
Administrator for producers to apply for program benefits.
Base annual production means the pounds of production determined by
multiplying the average annual production per cow calculated from base
period information times the average number of cows in the dairy herd
during each applicable disaster year.
County committee means the FSA county committee.
County office means the FSA office responsible for administering
FSA programs for farms located in a specific area in a State.
Dairy operation means any person or group of persons who, as a
single unit, as determined by FSA, produces and markets milk
commercially from cows and whose production facilities are located in
the United States.
Department or USDA means the United States Department of
Agriculture.
Deputy Administrator means the Deputy Administrator for Farm
Programs (DAFP), FSA, or a designee.
[[Page 11523]]
Disaster claim period means the calendar year(s) applicable to the
disaster declaration during the eligible period in which the production
losses occurred.
Disaster county means a county included in the geographic area
covered by a natural disaster declaration, and any county contiguous to
a county that qualifies by a natural disaster declaration.
Farm Service Agency or FSA means the Farm Service Agency of the
Department.
Hundredweight or cwt. means 100 pounds.
Milk handler or cooperative means the marketing agency to, or
through, which the producer commercially markets whole milk.
Milk marketings means a marketing of milk for which there is a
verifiable sale or delivery record of milk marketed for commercial use.
Natural disaster declaration means a natural disaster declaration
issued by the Secretary of Agriculture after January 1, 2005, but
before December 31, 2007, under section 321(a) of the Consolidated Farm
and Rural Development Act (7 U.S.C. 1961(a)), a major disaster or
emergency designation by the President of the United States in that
period under the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, or a determination of a Farm Service Agency
Administrator's Physical Loss Notice for a county covered in an
otherwise eligible Presidential declaration.
Payment pounds means the pounds of milk production from a dairy
operation for which the dairy producer is eligible to be paid under
this part.
Producer means any individual, group of individuals, partnership,
corporation, estate, trust association, cooperative, or other business
enterprise or other legal entity who is, or whose members are, a
citizen of, or a legal resident alien in, the United States, and who
directly or indirectly, as determined by the Secretary, have a share
entitlement or ownership interest in a commercial dairy's milk
production and who share in the risk of producing milk, and make
contributions (including land, labor, management, equipment, or
capital) to the dairy farming operation of the individual or entity.
Reliable production evidence means records provided by the producer
subject to a determination of acceptability by the county committee
that are used to substantiate the amount of production reported when
verifiable records are not available; the records may include copies of
receipts, ledgers of income, income statements of deposit slips,
register tapes, and records to verify production costs, contemporaneous
measurements, and contemporaneous diaries.
Verifiable production records means evidence that is used to
substantiate the amount of production marketed, including any dumped
production, and that can be verified by FSA through an independent
source.
Sec. 786.103 Time and method of application.
(a) Dairy producers may obtain an application, in person, by mail,
by telephone, or by facsimile from any FSA county office. In addition,
applicants may download a copy of the application at http://
www.sc.egov.usda.gov.
(b) A request for benefits under this part must be submitted on a
completed DDAP-III application. Applications and any other supporting
documentation must be submitted to the FSA county office serving the
county where the dairy operation is located, but, in any case, must be
received by the FSA county office by the close of business on the date
established by the Deputy Administrator. Applications not received by
the close of business on such date will be disapproved as not having
been timely filed and the dairy producer will not be eligible for
benefits under this program.
(c) All persons who share in the milk production of the dairy
operation and risk of the dairy operation's total production must
certify to the information on the application before the application
will be considered complete.
(d) Each dairy producer requesting benefits under this part must
certify to the accuracy and truthfulness of the information provided in
their application and any supporting documentation. Any information
entered on the application will be considered information from the
applicant regardless of who entered the information on the application.
All information provided is subject to verification by FSA. Refusal to
allow FSA or any other agency of the Department of Agriculture to
verify any information provided may result in a denial of eligibility.
Furnishing the information is voluntary; however, without it program
benefits will not be approved. Providing a false certification to the
Government may be punishable by imprisonment, fines, and other
penalties or sanctions.
Sec. 786.104 Eligibility.
(a) Producers in the United States will be eligible to receive
dairy disaster benefits under this part only if they have suffered
dairy production losses, previously uncompensated by disaster payments
including any previous dairy disaster payment program, during the claim
period applicable to a natural disaster declaration in a disaster
county. To be eligible to receive payments under this part, producers
in a dairy operation must:
(1) Have produced and commercially marketed milk in the United
States and commercially marketed the milk produced anytime during the
period of January 2, 2005 through December 30, 2007;
(2) Be a producer on a dairy farm operation physically located in
an eligible county where dairy production losses were incurred as a
result of a disaster for which an applicable natural disaster
declaration was issued between January 1, 2005 and December 31, 2007,
and limit their claims to losses that occurred in those counties,
specific to conditions resulting from the declared disaster as
described in the natural disaster declaration;
(3) Provide adequate proof, to the satisfaction of the FSA county
committee, of the average number of cows in the dairy herd and annual
milk production commercially marketed by all persons in the eligible
dairy operation during the years of the base period (2003 and 2004
calendar years) and applicable disaster year that corresponds with the
issuance date of the applicable natural disaster declaration, or other
period as determined by FSA, to determine the total pounds of eligible
losses that will be used for payment; and
(4) Apply for payments during the application period established by
the Deputy Administrator.
(b) Payments may be made for losses suffered by an otherwise
eligible producer who is now deceased or is a dissolved entity if a
representative who currently has authority to enter into a contract for
the producer or the producer's estate signs the application for
payment. Proof of authority to sign for the deceased producer's estate
or a dissolved entity must be provided. If a producer is now a
dissolved general partnership or joint venture, all members of the
general partnership or joint venture at the time of dissolution or
their duly-authorized representatives must sign the application for
payment.
(c) Producers associated with a dairy operation must submit a
timely application and satisfy the terms and conditions of this part,
instructions issued by FSA, and instructions contained in the
application to be eligible for benefits under this part.
(d) As a condition to receive benefits under this part, a producer
must have
[[Page 11524]]
been in compliance with the Highly Erodible Land Conservation and
Wetland Conservation provisions of 7 CFR part 12 for the calendar year
applicable to the natural disaster declaration and loss claim period,
and must not otherwise be barred from receiving benefits under 7 CFR
part 12 or any other law or regulation.
(e) Payments are limited to losses in eligible counties, in
eligible disaster years.
(f) All payments under this part are subject to the availability of
funds.
(g) Eligible losses are determined from the applicable base annual
production, as defined in Sec. 786.102, that corresponds to the
natural disaster declaration and must have occurred during that same
period as follows:
(1) For disaster declarations for disasters during a calendar year
(2005, 2006, or 2007), the disaster claim period is the full calendar
year and
(2) For disaster declarations issued during one calendar year that
ends in another calendar year, the producer will be eligible for both
disaster years.
(h) Deductions in eligibility will be made for any disaster
payments previously received for the loss including any made under a
previous dairy disaster assistance payment program for 2005.
Sec. 786.105 Proof of production.
(a) Evidence of production is required to establish the commercial
marketing and production history of the dairy operation so that dairy
production losses can be computed in accordance with Sec. 786.106.
(b) A dairy producer must, based on the instructions issued by the
Deputy Administrator, provide adequate proof of the dairy operation's
commercial production, including any dairy herd inventory records
available for the operation, for the years of the base period (2003 and
2004 calendar years) and disaster claim period that corresponds with
the issuance date of the applicable natural disaster declaration.
(1) A producer must certify and provide such proof as requested
that losses for which compensation is claimed were related to the
disaster declaration issued and occurred in an eligible county during
the eligible claim period.
(2) A producer must certify to the average number of cows in the
dairy herd during the base period and applicable disaster claim period
when there is insufficient documentation available for verification.
(3) Additional supporting documentation may be requested by FSA as
necessary to verify production losses to the satisfaction of FSA.
(c) Adequate proof of production history of the dairy operation
under paragraph (b) of this section must be based on milk marketing
statements obtained from the dairy operation's milk handler or
marketing cooperative. Supporting documents may include, but are not
limited to: Tank records, milk handler records, daily milk marketings,
copies of any payments received from other sources for production
losses, or any other documents available to confirm or adjust the
production history losses incurred by the dairy operation. All
information provided is subject to verification, spot check, and audit
by FSA.
(d) As specified in Sec. 786.106, loss calculations will be based
on comparing the expected base annual production consistent with this
part and the actual production during the applicable disaster claim
year. Such calculations are subject to adjustments as may be
appropriate such as a correction for losses not due to the disaster. If
adequate proof of normally marketed production and any other production
for relevant periods is not presented to the satisfaction of FSA, the
request for benefits will be rejected. Special adjustments for new
producers may be made as determined necessary by the Administrator.
Sec. 786.106 Determination of losses incurred.
(a) Eligible payable losses are calculated on a dairy operation by
dairy operation basis and are limited to those occurring during the
applicable disaster claim period, as provided by Sec. 786.104(g), that
corresponds with the applicable natural disaster declaration.
Specifically, dairy production losses incurred by producers under this
part are determined on the established history of the dairy operation's
average number of cows in the dairy herd and actual commercial
production marketed during the base period and applicable disaster
claim period that corresponds with the applicable natural disaster
declaration, as provided by the dairy operation consistent with Sec.
786.105. Except as otherwise provided in this part, the base annual
production, as defined in Sec. 786.102 and established in Sec.
786.104(g) is determined for each applicable disaster year based on the
average annual production per cow determined according to the
following:
(1) The average of annual marketed production during the base
period calendar years of 2003 and 2004, divided by;
(2) The average number of cows in the dairy operation's herd during
the base period calendar years of 2003 and 2004.
(b) If relevant information to calculate the average annual
production per cow for one or both of the base period calendar years of
2003 and 2004, is not available, an alternative method of determining
the average annual production per cow may be established by the FSA
Administrator. For example, for new dairies not in operation during
2003 and 2004, information from three similar farms may be obtained by
FSA to estimate base annual production.
(c) The average annual production per cow, as determined according
to paragraphs (a)(1) and (a)(2) of this section, is multiplied by the
average number of cows in the dairy operation's herd during the
applicable disaster year (excluding cow losses resulting from the
disaster occurrence), to determine base annual production for the dairy
operation for each applicable disaster claim period year.
(d) The eligible dairy production losses for a dairy operation for
each of the authorized disaster claim period years will be:
(1) The relevant period's base annual production for the dairy
operation calculated under paragraph (c) of this section less,
(2) For each such disaster claim period for each dairy operation
the actual commercially-marketed production relevant to that period.
(e) Spoiled or dumped milk, disposed of for reasons unrelated to
the disaster occurrence, must be counted as production for the relevant
disaster claim period. Actual production losses may be adjusted to the
extent the reduction in production is not certified by the producer to
be the result of the disaster identified in the natural disaster
declaration or is determined by FSA not to be related to the natural
disaster identified in the natural disaster declaration. FSA county
committees will determine production losses that are not caused by the
disaster associated with the natural disaster declaration. The
calculated production loss determined in Sec. 786.106(d) will be
adjusted to account for pounds of production losses determined by the
FSA county committee to not have been associated with the declared
natural disaster for an eligible disaster county. The FSA county
committee may convert cow numbers to actual pounds of production used
in the adjustment, by multiplying the average annual production per cow
determined from base period information, by the applicable number of
cows determined to be ineligible to generate claims for
[[Page 11525]]
benefits. Other appropriate adjustments will be made on such basis as
the Deputy Administrator finds to be consistent with the objectives of
the program.
(f) Actual production, as adjusted, that exceeds the base annual
production will mean that the dairy operation incurred no eligible
production losses for the corresponding claim period as a result of the
natural disaster.
(g) Eligible production losses as otherwise determined under
paragraphs (a) through (f) of this section for each authorized year of
the program are added together to determine total eligible losses
incurred by the dairy operation under DDAP-III subject to all other
eligibility requirements as may be included in this part or elsewhere,
including the deduction for previous payments including those made
under a previous DDAP program.
(h) Payment on eligible dairy operation losses will be calculated
using whole pounds of milk. No double counting is permitted, and only
one payment will be made for each pound of milk calculated as an
eligible loss after the distribution of the dairy operation's eligible
production loss among the producers of the dairy operation according to
Sec. 786.107(b). Payments under this part will not be affected by any
payments for dumped or spoiled milk that the dairy operation may have
received from its milk handler, marketing cooperative, or any other
private party; however, produced milk that was dumped or spoiled for
reasons unrelated to the disaster occurrence will still count as
production.
Sec. 786.107 Rate of payment and limitations on funding.
(a) Subject to the availability of funds, the payment rate for
eligible production losses determined according to Sec. 786.106 is,
depending on the State, the annual average Mailbox milk price for the
Marketing Order, applicable to the State where the eligible disaster
county is located, as reported by the Agricultural Marketing Service
during the relevant period. States not regulated under a Marketing
Order will be assigned a payment rate based on contiguous or nearby
State's Mailbox milk price. Maximum per pound payment rates for
eligible losses for dairy operations located in specific states during
the relevant period are as follows:
----------------------------------------------------------------------------------------------------------------
Mailbox price Mailbox price Mailbox price
State 2005 2006 2007 *
--------------------------------------------------------------------------------------------------
Alabama........................................... 0.1596 0.1443 ..............
Alaska............................................ 0.2040 0.2010 ..............
Arizona........................................... 0.1388 0.1128 ..............
Arkansas.......................................... 0.1596 0.1443 ..............
California........................................ 0.1388 0.1128 ..............
Colorado.......................................... 0.1403 0.1214 ..............
Connecticut....................................... 0.1539 0.1344 ..............
Delaware.......................................... 0.1539 0.1344 ..............
Florida........................................... 0.1758 0.1603 ..............
Georgia........................................... 0.1596 0.1443 ..............
Hawaii............................................ 0.2700 0.2600 ..............
Idaho............................................. 0.1402 0.1215 ..............
Illinois.......................................... 0.1514 0.1283 ..............
Indiana........................................... 0.1503 0.1294 ..............
Iowa.............................................. 0.1507 0.1285 ..............
Kansas............................................ 0.1403 0.1214 ..............
Kentucky.......................................... 0.1527 0.1349 ..............
Louisiana......................................... 0.1596 0.1443 ..............
Maine............................................. 0.1539 0.1344 ..............
Maryland.......................................... 0.1539 0.1344 ..............
Massachusetts..................................... 0.1539 0.1344 ..............
Michigan.......................................... 0.1478 0.1264 ..............
Minnesota......................................... 0.1512 0.1277 ..............
Mississippi....................................... 0.1596 0.1443 ..............
Missouri (Northern)............................... 0.1403 0.1214 ..............
Missouri (Southern)............................... 0.1467 0.1254 ..............
Montana........................................... 0.1512 0.1277 ..............
Nebraska.......................................... 0.1403 0.1214 ..............
Nevada............................................ 0.1388 0.1128 ..............
New Hampshire..................................... 0.1539 0.1344 ..............
New Jersey........................................ 0.1539 0.1344 ..............
New Mexico........................................ 0.1323 0.1108 ..............
New York.......................................... 0.1539 0.1303 ..............
North Carolina.................................... 0.1527 0.1349 ..............
North Dakota...................................... 0.1512 0.1277 ..............
Ohio.............................................. 0.1506 0.1302 ..............
Oklahoma.......................................... 0.1596 0.1443 ..............
Oregon............................................ 0.1402 0.1215 ..............
Pennsylvania (Eastern)............................ 0.1539 0.1340 ..............
Pennsylvania (Western)............................ 0.1539 0.1302 ..............
Puerto Rico....................................... 0.2550 0.2570 ..............
Rhode Island...................................... 0.1539 0.1344 ..............
South Carolina.................................... 0.1527 0.1349 ..............
South Dakota...................................... 0.1512 0.1277 ..............
Tennessee......................................... 0.1527 0.1349 ..............
Texas............................................. 0.1405 0.1194 ..............
Vermont........................................... 0.1539 0.1344 ..............
Virginia.......................................... 0.1527 0.1349 ..............
[[Page 11526]]
Washington........................................ 0.1402 0.1215 ..............
West Virginia..................................... 0.1506 0.1302 ..............
Wisconsin......................................... 0.1535 0.1305 ..............
Wyoming........................................... 0.1403 0.1214 ..............
----------------------------------------------------------------------------------------------------------------
Note: Calculations are rounded to 7 decimal places.
* Payment rates for 2007 are currently unavailable, but will be based on the annual average Mailbox milk price
for the Marketing Order, applicable to the State where the eligible disaster county is located, as reported by
the Agricultural Marketing Service, consistent with payment rates provided for 2005 and 2006.
(b) Subject to the availability of funds, each eligible dairy
operation's payment is calculated by multiplying the applicable payment
rate under paragraph (a) of this section by the operation's total
eligible losses as adjusted pursuant to this part. Where there are
multiple producers in the dairy operation, individual producers'
payments are disbursed according to each producer's share of the dairy
operation's production as specified in the application.
(c) If the total value of losses claimed nationwide under paragraph
(b) of this section exceeds the $16 million available for the DDAP-III,
less any reserve that may be created under paragraph (e) of this
section, total eligible losses of individual dairy operations that, as
calculated as an overall percentage for each full disaster claim period
applicable to the disaster declaration, are greater than 20 percent of
the total base annual production will be paid at the maximum rate under
paragraph (a) of this section to the extent available funding allows. A
loss of over 20 percent in only one or two months during the applicable
disaster claim period does not of itself qualify for the maximum per-
pound payment. Rather, the priority level must be reached as an average
over the whole disaster claim period for the relevant calendar year.
Total eligible losses for a producer, as calculated under Sec.
786.106, of less than or equal to 20 percent during the eligible claim
period will then be paid at a rate, not to exceed the rate allowed in
paragraph (a) of this section, determined by dividing the eligible
losses of less than 20 percent by the funds remaining after making
payments for all eligible losses above the 20-percent threshold.
(d) In no event will the payment exceed the value determined by
multiplying the producer's total eligible loss times the average price
received for commercial milk production in the producer's area as
defined in paragraph (a) of this section.
(e) No participant will receive disaster benefits under this part
that in combination with the value of production not lost would result
in an amount that exceeds 95 percent of the value of the expected
production for the relevant period as estimated by the Secretary.
Unless otherwise program funds would not be fully expended, the sum of
the value of the production not lost, if any; and the disaster payment
received under this part, cannot exceed 95 percent of what the
production's value would have been if there had been no loss. In no
case, however, may the value of production and the payment exceed the
value the milk would have without the loss.
(f) A reserve may be created to handle pending or disputed claims,
but claims will not be payable once the available funding is expended.
Sec. 786.108 Availability of funds.
The total available program funds are $16 million as provided by
section 9007 of Title IX of Public Law 110-28.
Sec. 786.109 Appeals.
Provisions of the appeal regulations set forth at 7 CFR parts 11
and 780 apply to this part. Appeals of determinations of ineligibility
or payment amounts are subject to the limitations in Sec. Sec. 786.107
and 786.108 and other limitations that may apply.
Sec. 786.110 Misrepresentation, scheme, or device.
(a) In addition to other penalties, sanctions, or remedies that may
apply, a dairy producer is ineligible to receive assistance under this
program if the producer is determined by FSA to have:
(1) Adopted any scheme or device that tends to defeat the purpose
of this program,
(2) Made any fraudulent representation,
(3) Misrepresented any fact affecting a program determination, or
(4) Violated 7 CFR 795.17 and thus be ineligible for the year(s) of
violation and the subsequent year.
(b) Any funds disbursed pursuant to this part to any person or
dairy operation engaged in a misrepresentation, scheme, or device, must
be refunded with interest together with such other sums as may become
due. Interest will run from the date of the disbursement to the
producer or other recipient of the payment from FSA. Any person or
dairy operation engaged in acts prohibited by this section and any
person or dairy operation receiving payment under this part is jointly
and severally liable with other persons or dairy operations involved in
such claim for benefits for any refund due under this section and for
related charges. The remedies provided in this part are in addition to
other civil, criminal, or administrative remedies that may apply.
Sec. 786.111 Death, incompetence, or disappearance.
In the case of death, incompetency, disappearance, or dissolution
of an individual or entity that is eligible to receive benefits in
accordance with this part, such alternate person or persons specified
in 7 CFR part 707 may receive such benefits, as determined appropriate
by FSA.
Sec. 786.112 Maintaining records.
Persons applying for benefits under this program must maintain
records and accounts to document all eligibility requirements specified
herein and must keep such records and accounts for 3 years after the
date of payment to their dairy operations under this program.
Destruction of the records after such date is at the risk of the party
required, by this part, to keep the records.
Sec. 786.113 Refunds; joint and several liability.
(a) Excess payments, payments provided as the result of erroneous
information provided by any person, or payments resulting from a
failure to meet any requirement or condition for payment under the
application or this part, must be refunded to FSA.
(b) A refund required under this section is due with interest
determined in accordance with paragraph (d) of this section and late
payment charges as provided in 7 CFR part 792. Notwithstanding any
other regulation, interest will be due from the date of the
disbursement to the producer or other recipient of the funds.
[[Page 11527]]
(c) Persons signing a dairy operation's application as having an
interest in the operation will be jointly and severally liable for any
refund and related charges found to be due under this section.
(d) In the event FSA determines a participant owes a refund under
this part, FSA will charge program interest from the date of
disbursement of the erroneous payment. Such interest will accrue at the
rate that the United States Department of the Treasury charges FSA for
funds plus additional charges as deemed appropriate by the
Administrator or provided for by regulation or statute.
(e) The debt collection provisions of part 792 of this chapter
applies to this part except as is otherwise provided in this part.
Sec. 786.114 Miscellaneous provisions.
(a) Payments or any portion thereof due under this part must be
made without regard to questions of title under State law and without
regard to any claim or lien against the livestock, or proceeds thereof,
in favor of the owner or any other creditor except agencies and
instrumentalities of the U.S. Government.
(b) Any producer entitled to any payment under this part may assign
any payments in accordance with the provisions of 7 CFR part 1404.
Sec. 786.115 Termination of program.
This program will be terminated after payment has been made to
those applicants certified as eligible pursuant to the application
period established in Sec. 786.104. All eligibility determinations
will be final except as otherwise determined by the Deputy
Administrator. Any claim for payment may be denied once the allowed
funds are expended, irrespective of any other provision of this part.
Signed at Washington, DC, on February 20, 2008.
Thomas B. Hofeller,
Acting Administrator, Farm Service Agency.
[FR Doc. E8-4141 Filed 3-3-08; 8:45 am]
BILLING CODE 3410-05-P