A Victory for Farmers

USDA’s National Appeals Division Upholds Farm Service Agency’s “Finality Rule”

By Kenneth D. Ackerman

Recently, we at OFW Law had the chance to help two Connecticut farmers win rulings from USDA’s National Appeals Division forcing the Farm Service Agency (FSA) to respect their rights under the Finality Rule, an important protection for farmers who participate in USDA programs.  Many farmers operate on thin financial margins and the Finality Rule gives them confidence that, if they receive a payment from USDA, they can invest the money into their farms without fear of a USDA mistake coming back to bite them.

In essence, the Rule says that any determination by FSA becomes final and binding after 90 days, so long as the farmer had clean hands and no “reason to know” of a mistake.

Vegetable Field
Vegetable Field

Both of the farmers in the recent Connecticut cases suffered severe crop loss from excess moisture in 2008 and received indemnity payments from FSA under its Non-Insured Crop Disaster Assistance Program, or NAP.  The FSA county office, however, had made several internal errors in calculating the payments, each of which covered over half a dozen different vegetable crops with different loss amounts for each.   The farmers were never provided or shown a breakdown of the math behind the payments, and the payments themselves did not show up in their bank accounts until long after the fact.  As a result, it literally was impossible for them to know that the payment amounts had been wrong.

In fact, not even the FSA county office caught the error until years later.  One of the farmers actually telephoned the FSA office to confirm that his amount was correct.  Still, three years after the fact – and long after these farmers had reinvested the NAP payments into their farms – FSA came forward and asked them to repay sums of money so large as to potentially cripple these farmers’ operations.

We helped these two farmers fight back by citing the Finality Rule.  To demonstrate they had no “reason to know” of the errors, we presented voluminous evidence, including testimony from the FSA county office staff plus copies of the farmers’ multiple NAP applications and certification documents, to demonstrate their good faith.  In the end, USDA’s National Appeals Division, after conducting five-hour hearings in each case, agreed with the farmers and held that the Finality Rule applied.

Here are links to the decisions.

Case 1:    — Hearing Officer Decision, upheld on National Director Review, unpublished.

Case 2:   — Hearing Officer Decision, not appealed by FSA.

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