Federal Crop Insurance Disputes

The Federal Crop Insurance Act (FCIA), 7 U.S.C. §§ 1501-24, is designed to “promote the national welfare by improving the economic stability through a sound system of crop insurance and providing the means for the research and experience helpful in devising and establishing such insurance.” 7 U.S.C. § 1502(a). Congress created the Federal Crop Insurance Corporation (FCIC), a government-owned corporation which acts as an agency of and within the U.S. Department of Agriculture (USDA) to administer the FCIA. 7 U.S.C. § 1503. In addition, Congress created the Risk Management Agency (RMA) to supervise the FCIA and administer all programs authorized under the FCIA. 7 U.S.C. §§ 6933(a), (b)(1)-(3); 7 C.F.R. § 400.701. The FCIA empowers the FCIC to provide reinsurance “to the maximum extent practicable” to private entities providing such crop insurance. 7 U.S.C. § 1508(a)(1) and (k). The FCIC encourages farmers to purchase multiple peril crop insurance which protects farmers from crop losses from natural disasters. Meyer v. Conlon, 162 F.3d 1264, 1266 (10th Cir. 1998). The FCIC makes crop insurance available by reinsuring insurers that issue crop insurance. Private insurance companies that provide crop insurance pursuant to the FCIA are referred to as “authorized insurance providers” (AIPs).

The resolution of disputes involving federal crop insurance claims is a highly specialized area of law that not only requires a thorough understanding of the FCIA, the applicable federal regulations, the specific crop insurance policy provisions and other applicable FCIC manuals, procedures and final agency determinations, but also insight into the agriculture industry and in-depth knowledge of farming practices.

McAfee & Taft has a proven track record representing agricultural producers — both individual farmers and groups of all sizes — throughout the country in crop insurance disputes. Unlike other litigation which is typically settled out of court after extensive pretrial discovery, motion practice and aggressive settlement negotiations or litigated in the courtroom following state or federal law, crop insurance disputes are governed by complex dispute resolutions provisions which take several forms:

  • Arbitration or Mediation to resolve disputes with AIPs
  • National Appeals Division (NAD) Administrative Appeals to resolve disputes over adverse RMA determinations
  • Federal Court Judicial Reviews to resolve disputes regarding good farming practice determinations, appeals of NAD decisions or arbitration awards, and actions to enforce NAD decisions

In addition to recovering monies owed to farmers through their policies, we have successfully recovered attorneys’ fees and other costs by meeting the strict requirements and heavy burden for recovery of such fees and costs under the Equal Access to Justice Act (EAJA).

The firm also holds the distinction of having been awarded enhanced attorney fees under the Equal Access to Justice Act by demonstrating special expertise in crop insurance matters. In justifying the award on two separate occasions, a federal district court judge held McAfee & Taft attorneys Jeff Todd and Jeremiah Buettner “demonstrated their special competence in understanding farming practices as well as the complexities of the Federal Crop Insurance Act, the operation of the Federal Crop Insurance Corporation, the Risk Management Agency, the Group Risk Income Protection (GRIP) policy and the factual context in which this dispute arose.”

McAfee & Taft employs a team approach which utilizes the skills of Agriculture Industry Group litigators with proven experience in the various forms of crop insurance dispute resolution. Leveraging such experience and taking a focused team approach allows us to provide legal services in a manner that is responsive and aggressive while also being efficient and cost-effective.

Representative Experience

  • We represented a Kansas farmer in an arbitration after the client’s crop insurance provider denied his claims for prevented planting due to drought conditions. The insurance company alleged that the claims should be denied because the fields at issue were rotationally unavailable for dryland corn. The arbitrator ruled that no such standard existed under the federal crop insurance program and determined that the client established his right to be paid under the policy for prevented planting on fields where the planting history indicated the acreage would not have remained fallow for the year in question. The decision resulted in a six-figure recovery by the client.
  • We represented a partnership in a NAD administrative proceeding where the RMA voided our client’s GRIP policy for corn grown on its Colorado farm. After exhausting administrative remedies, we sought judicial review in the U.S. District Court of Colorado. In a July 6, 2012, 20-page decision, U.S. District Judge Richard P. Matsch held that the USDA’s conclusions were illogical, contrary to established agency law and uncontroverted evidence, and that there was no legal or factual basis for the determination regarding credit arrangements. He concluded that the USDA’s determination that our client did not have a bona fide interest in the insured crop was arbitrary and capricious and contrary to law. As a result, our client was entitled to a multi-million indemnity payment under its GRIP insurance policy. Judge Matsch subsequently ruled that our client was entitled to attorney’s fees under the Equal Access to Justice Act and awarded enhanced rates due to our special competence in crop insurance matters.
  • We represented a group of Colorado farmers who had been denied insurance coverage on certain acreage under their GRIP policies based on claims that they had failed to follow good farming practices. We sought judicial review in the U.S. District Court of Colorado. In a July 6, 2012, decision, U.S. District Judge Richard P. Matsch held that “[t]he exchange of [RMA] email communications in the record reveals the adoption of a strategy to use the failure to follow good farming practices exclusion from coverage to reduce the expected losses.” The opinion found that the government’s denial of our client’s claims based on its alleged improper fertilizer practice was arbitrary and capricious that must be reversed. As a result, our client was entitled to an insurance indemnity exceeding $700,000. Judge Matsch subsequently ruled that our client was entitled to attorney’s fees under the Equal Access to Justice Act and awarded enhanced rates due to our special competence in crop insurance matters.
  • We represented a Texas partnership on judicial review in the U.S. District Court the Southern District of Texas after the NAD director ruled that our client’s NAD appeal was untimely. The court ruled that the director improperly applied a subjective “knew or should have known” standard when the applicable regulation, 7 C.F.R. 11.6(b)(1), required actual notice of an adverse decision by the regulatory agency. The court further ruled that the director’s determination violated the Accardi Doctrine by failing to apply its own rules regarding the timing of appeals. Finally, the court ruled that there was no substantial evidence to support the director’s decision.
  • We represented a Colorado partnership in an arbitration after the client’s insurance provider cancelled a policy insuring over 4,000 acres of corn. The insurance company alleged that mistakes on the application were intentional misrepresentations justifying voidance of the policy. The arbitrator rendered an award declaring that the policy should be reinstated and found that the mistakes were simple errors, not misrepresentations, and that the producer timely corrected the mistakes pursuant to RMA procedure. The decision resulted in a multimillion dollar recovery by the client.
  • We represented a North Dakota producer in an arbitration proceeding against his AIP involving a Multiple Peril Crop Insurance (MPCI) policy and the insurance company’s refusal to pay under a prevented planting buy up exercised by the producer. The AIP contended that a cause of loss for potential prevented planting was present before the date the producer elected to buy up his prevented planting coverage. After hearing the evidence and applying the standards of FCIC Final Agency Decision 112 (FAD-112), the arbitrator concluded that a cause of loss was not present at the time of the election and the prevented planting buy up was proper. Accordingly, the producer received an award for the additional indemnity due plus interest.
  • We represented a group of more than 90 Texas corn farmers with respect to an adverse decision by RMA pertaining to their GRIP crop insurance policies. The issue involved RMA’s manipulation of the applicable “final county yield,” a key component in calculating the GRIP indemnity. We successfully argued that RMA’s adjustment of the yields published by the National Agricultural Statistics Service (NASS) was arbitrary and capricious because it was based on “good farming practice” determinations which were later retracted. The NAD director found RMA’s actions erroneous, and RMA later agreed to a settlement that included payment of more than $3 million in unpaid indemnity plus a large portion of attorney’s fees and costs to the group.
  • We represented another group of wheat farmers in a NAD appeal against RMA arising from RMA’s revision of the applicable “final county yield” based on a correction by NASS of its data. The correction, which occurred well after the producers had been paid under their policies and after the deadline for issuing final county yields, increased the final county yield to a point that RMA argued that the farmers should return their payments. Through the NAD appeal, we ensured that this untimely revision by RMA would not result in a recalculation of the group’s indemnity and a demand for reimbursement.
  • We represented a Colorado ranch in an arbitration proceeding involving its Pasture, Rangeland, and Forage (PRF) Rainfall Index crop insurance policy which insured grassland and hayland against drought. The ranch’s insurance company retroactively revised the PRF policy and re-designated all the hayland acres to grassland acres. After establishing the ranch’s clear intent and ability to hay all of the land designated as hayland in the arbitration proceeding, the case settled.
  • We represented a group of farmers from two Texas counties after RMA demanded a repayment of their GRIP indemnity due to a late “correction” of the NASS final county yields. In the NAD appeal, the NAD hearing officer and director agreed that demanding repayment based on revisions to the “final county yield” occurring after the deadline for establishing final county yields was arbitrary and capricious, and reversed RMA’s determination requiring repayment. After filing an application for attorney’s fees under the EAJA, RMA agreed to reimburse a portion of the group’s fees.
  • In 2009 and 2010, we represented two producers in a NAD appeal relating to whether RMA had improperly relied on unofficial, unpublished (and significantly high) NASS statistics in determining their right to indemnities under their GRIP policies. We prevailed in the NAD appeal and obtained a finding that RMA could not utilize unofficial, unpublished NASS data to determine payments under the policy. Instead of correcting its mistake, RMA recalculated the producers’ indemnities based on its own internal data. We appealed to the NAD again and obtained a second ruling that RMA was required to utilized official NASS county yields to determine payment. The matter was ultimately settled.
  • We represented two corn farmers in a dispute with their AIP who refused to use the yields from representative strips to determine the indemnity due under their crop revenue coverage (CRC) insurance policy. In the arbitration proceeding, the arbitrator noted when there is a dispute over adjusted yields and representative strips are retained, the strips must be maintained in the same manner as the farmer would maintain other crops. After hearing the evidence, the arbitrator concluded that the farmers did maintain the strips after their claim was filed in the same manner as they maintained their other crops. Accordingly, the farmers received an award for additional indemnity due based on the yields from the harvested strips.
  • We represented 24 Colorado corn farmers in connection with their GRIP policies. We established that RMA arbitrarily and capriciously manipulated the final county yields in an effort to lower the indemnities due to every GRIP policyholder in the county. NAD rejected RMA’s determination and made it clear that indemnity payments should be calculated on the official, published NASS data instead. This decision lead to a group recovery of more than $1 million in unpaid indemnity plus interest. We also obtained a ruling under the EAJA that RMA’s actions were not substantially justified leading to an award of attorney’s fees under the Act.
  • In 2010, we represented three Arizona producers, who farmed cotton within an Irrigation and Drainage District, with respect to a prevented planting claim under their 2009 MPCI policies. After the producers had purchased the policies and selected their planting strategy, RMA issued a bulletin that retroactively changed the maximum acreage a farmer could claim for prevented planting based on failure of the irrigation water source (which significantly reduced the producers’ prevented planting indemnity). We appealed to NAD contending that the bulletin constituted retroactive rulemaking and erroneously modified the terms of the policy purchased. The NAD hearing officer agreed and held the application of the bulletin created a new, retroactive procedure for calculating eligible prevented planting acres.
  • We represented a producer who purchased a GRIP policy for his 2008 grain sorghum. Rather than calculate the applicable “final county yield” based on the official published NASS data as required by the policy, RMA attempted to utilize NASS data for the multi-county district where the producer’s farm was located which resulted in no payment due the producer despite a devastating grain sorghum crop of the county. We appealed to NAD and received a determination that RMA’s use of district level data was error. The hearing officer explained that “[t]he Policy is the contract between the parties, and Policy language emphasizes that Appellant cast his lot with other grain sorghum producers in his county, but not with every producer in the [District].” After filing an application for attorney’s fees under the EAJA, RMA agreed to pay the requested fees.
  • We represented a New Mexico cotton farmer in a NAD appeal over RMA’s refusal to issue a final agency determination (FAD) involving the insurance company’s obligation to adjust for disease loss in his crop. NAD determined that the farmer was entitled to an interpretation of the applicable policy by way of a FAD.

For more information about federal crop insurance disputes, check out our Frequently Asked Questions page. For inquiries, please contact:

Jeff Todd
(405) 552-2269


Federal Crop Insurance Disputes Team

Colby J. Byrd

Associate, Industry Group Leader

(405) 270-6059

Garrett J. Reed


(405) 552-2316

Spencer F. Smith


(405) 552-2334

Gatlin C. Squires


(405) 270-6096

Jeff L. Todd

Of Counsel

(405) 552-2269