UNITED STATES DEPARTMENT OF AGRICULTURE

OFFICE OF THE SECRETARY

NATIONAL APPEALS DIVISION

DIRECTOR REVIEW DETERMINATION

 

 

In the Matter of

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XXXXX

 

     Appellant

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and

 

)   Case No. 2015W000388 

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FARM SERVICE AGENCY

 

     Agency

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Introduction

 

This appeal concerns a dispute between XXXXX (Appellant) and the Farm Service Agency (FSA) over whether FSA properly denied Appellant’s request to change his approval for emergency grazing to emergency haying under the Conservation Reserve Program (CRP).  Appellant appealed FSA’s decision to the National Appeals Division (NAD) and after conducting a hearing, a NAD Administrative Judge issued a determination concluding that FSA properly denied Appellant’s request.[1]  Appellant then filed this request for Director review contesting the Administrative Judge’s determination and requesting equitable relief.  Based on my review of the entire record, I uphold the Administrative Judge’s determination, and I deny Appellant’s request for equitable relief.

 

Issue to be Determined

 

The issue on Director review is whether FSA properly denied Appellant’s request to engage in emergency haying of his CRP acreage after FSA approved Appellant’s request for emergency grazing.  See 7 C.F.R. § 1410.20(a)(5).  If I conclude that FSA properly denied Appellant’s request, then I must decide whether exercise of my equitable relief authority under 7 U.S.C. § 6998(d) is warranted in this case to compensate Appellant for the losses he suffered as a result of being prohibited from engaging in emergency haying on the CRP acreage.  To resolve this issue, I must determine whether Appellant, despite failing to comply fully with the requirements of the CRP program, either detrimentally relied on the action or advice of an authorized NRCS representative, or made a good faith effort to comply with the requirements of the CSP program under circumstances that warrant equitable relief.  See 7 U.S.C. § 7996(b)(1)-(2).

 

Background

 

Under the CRP program, FSA “will enter into contracts with eligible participants to convert eligible land to a conserving use during the contract period in return for financial and technical assistance.”  7 C.F.R. § 1410.3(a).  The objectives of the CRP program are to cost-effectively reduce water and wind erosion, protect the Nation’s long-term capability to produce food and fiber, reduce sedimentation, improve water quality, and create and enhance wildlife habitat.  7 C.F.R. § 1410.3(c). 

 

Appellant is a livestock producer who offered 696.2 acres of grassland into the CRP program.  Appellant signed CRP contract 1364 in August 2010 and FSA approved it the following month.  Under the terms of the CRP contract, Appellant completed, on time and according to FSA specifications, a watering facility and certain habitat management practices, and earned cost-share payments for his work.  Also as part of the CRP contract, in exchange for annual rental payments from FSA in the amount of $31.29 per acre, Appellant agreed, among other things, not to make commercial use of forage or other cover on the 696.2 acres of CRP land.  However, the CRP contract provides an exception for emergency haying or grazing, when approved by FSA.

 

Drought struck Appellant’s county, and FSA authorized emergency haying and grazing for the county beginning in July 2013.  Producers were required to request and receive FSA permission and accept a ten-percent reduction in annual CRP rental payments before engaging in haying or grazing when sanctioned by FSA.  FSA announced the authorization of emergency haying and grazing by issuing a press release, which was available online.  FSA also recorded an interview with a local radio station and sent notifications regarding the availability of emergency haying and grazing via email to a list of subscribers.  Appellant does not use email and does not have access to the internet in his home.  Appellant listens to the local radio station, but does not recall hearing the FSA interview.  Appellant learned that emergency grazing was available around August 2, 2013, through conversations with his neighbors or others.

 

When Appellant approached FSA to request the emergency approval, FSA advised Appellant that he could fill out a formal application to request emergency haying or grazing.  Appellant completed his application on August 9, 2013, requesting emergency grazing on 175.7 acres of CRP land.  Pursuant to Appellant’s request for emergency grazing, officials from the Natural Resources Conservation Service (NRCS) modified Appellant’s conservation plan to reflect the change and the accompanying reduction in rental payments.

 

On August 13, 2013, FSA employees reviewed and approved Appellant’s request for emergency grazing, and FSA notified Appellant of his approval.  The next day, Appellant attempted to revoke his authorization for emergency grazing.  Appellant wrote “void” on his request to participate in emergency grazing, the terms and conditions of grazing, and the approved conservation planning sheet that had been signed by NRCS and FSA officials.  Appellant then submitted a request to engage in emergency haying on 155.7 acres of the 175.7 acres for which he had already been approved for grazing because he determined that haying that acreage would be more profitable than grazing it.  Appellant wanted to continue to graze on the remaining 20 acres.

 

FSA denied Appellant’s request to switch from emergency grazing to emergency haying.  Initially, FSA considered finding that Appellant had violated his CRP contract, because Appellant voided his emergency grazing authorization and FSA alleged that it observed Appellant grazing on August 13 and 15, 2013.  However, FSA reevaluated its position and determined that it would allow Appellant to continue grazing the acreage for which he had been approved.  FSA also determined that once Appellant had been approved for emergency grazing, he could not void the approved request.  Further, because Appellant had started grazing the acreage, FSA decided he could not hay the acreage.[2]

 

Appellant appealed FSA’s decision.  After an unfavorable outcome at the county committee level, Appellant appealed the County Committee’s decision to FSA.  In April 2015, the FSA state committee upheld the decision to deny Appellant’s request to switch from emergency grazing to emergency haying on the 155.7 acres.

 

Meanwhile, the grazing and haying period had long since passed, and Appellant grazed on the land for which he was approved; he did not hay the land.  At the conclusion of the season, Appellant certified his participation in the grazing program and provided the number of acres actually grazed, which enabled FSA to calculate his CRP rental reduction.

 

Appellant then filed a NAD appeal of FSA’s decision to deny his request to change from emergency grazing to emergency haying.  After holding a hearing, a NAD Administrative Judge issued his determination upholding the FSA decision.  The Administrative Judge developed a record to enable me to consider Appellant’s request for equitable relief, finding:

 

In this case, the Appellant complied fully with the CRP program requirements.  The Appellant applied and was approved for emergency grazing, and he grazed the land for the duration of the allowable grazing period.  At the conclusion of the season, he certified his participation in the grazing program and provided the number of acres actually grazed, which enabled [FSA] to calculate his CRP rental reduction.  The Appellant did not hay the land in contravention of program rules.

 

Appeal Determination at 4-5 (citations to the record omitted).[3]  Appellant then filed this request for Director review of the Administrative Judge’s determination.

 

Legal Authorities and Standard of Review

 

The key legal authorities at issue in this appeal are the regulations governing the practice of grazing and haying on acres enrolled in the CRP program.  Under FSA’s regulations, all participants subject to a CRP contract must agree, among other things, to not allow grazing, harvesting, or other commercial use of any crop from the cropland subject to such contract except for those periods of time approved in accordance with instructions issued by the Deputy Administrator for Farm Programs.  7 C.F.R. §§ 1410.20(a)(5) and 1410.2 (definition of Deputy Administrator).  Subject to the approval of FSA, a conservation plan may include managed grazing or harvesting of the cover on the CRP land as necessary to avoid an adverse impact on surrounding land, as determined appropriate by FSA, taking into consideration the needs of the vegetative cover, wildlife concerns, and other factors.  Managed grazing or harvesting may be conditioned on a reduction in CRP payments otherwise payable under the contract, as determined by FSA.  Appendix to Form CRP-1, Conservation Reserve Program Contract, Para. 6.

 

In response to a request for Director review, I conduct a review of the Administrative Judge’s determination using the entire case record in order to determine if the decision is supported by substantial evidence.  7 C.F.R. § 11.9(d)(1).  Substantial evidence has been described by the Supreme Court as “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”  Dickinson v. Zurko, 527 U.S. 150, 162 (1999) (quoting Con. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).  Based on my review, I issue a final determination notice that upholds, reverses, or modifies the Administrative Judge’s decision.  7 C.F.R. § 11.9(d)(1).  In making a determination on the appeal, I endeavor to ensure that the RHS’s adverse decision is consistent with the laws and regulations of the RHS, and with the generally applicable interpretations of such laws and regulations.  7 C.F.R. § 11.10(b).

 

I may provide equitable relief to any participant if the participant, despite failing to comply fully with the requirements of a covered program either detrimentally relied on the action or advice of an authorized agency representative or, made a good faith effort to comply with the requirements of the program.  See 7 U.S.C. § 7996(b).

 

Analysis

 

On Director review, Appellant argues that FSA did not consider all of the relevant factors in rendering its decision.  Appellant contends that his “custom harvester examined Appellant’s CRP acreage and concluded that only the forage on the 155.7 acres that Appellant had requested to graze had sufficient height and density to make it practical to cut and bale.”  Appellant therefore requested a change from grazing to haying to enable him to reap the profits of haying.  Request for Director Review at 1.  Appellant further asserts that “if the XXXXX County FSA office had employed better means to ‘broadcast’ the facts that haying and grazing of the CRP was being allowed on account of the drought conditions, Appellant might have had the situation resolved at an earlier juncture so that the request to switch utilizations might not have been necessary.”  Id.

 

In response, FSA contends that the Administrative Judge’s determination should be upheld because Appellant has not demonstrated that either the Administrative Judge’s determination or FSA’s underlying decision are contrary to the rules governing the CRP program.  FSA asserts that its decision “is factually correct and in accordance with the rules governing the CRP.  Additionally, FSA does not believe the [A]ppellant has shown any factual errors in either … FSA’s or the [Administrative Judge]’s determination.”  FSA emphasizes that an NRCS District Conservationist witnessed Appellant’s cattle grazing the CRP acreage after Appellant was approved for grazing and before Appellant’s request to change to haying was considered and, because emergency haying and grazing on the same acres is prohibited, FSA properly denied Appellant’s latter request.  See Agency Response to Request for Director Review.

 

The Administrative Judge determined that FSA followed its rules when it denied Appellant’s request to switch from emergency grazing to emergency haying.  He reasoned that there are no provisions contemplating the situation in this case and therefore the issue that he had to resolve is whether FSA abused its discretion.  He weighed the fact that FSA “performed a thorough review of the relevant factors when it considered … Appellant’s original application … [and] collaborated with NRCS to review all of this information, and [FSA] promptly approved … Appellant’s request for emergency grazing and furnished written notification of approval to the Appellant.”  Appeal Determination at 4 (citations to the record omitted).

 

The Administrative Judge acknowledged that FSA claims an NRCS District Conservationist witnessed Appellant grazing on the CRP acreage prior to his request for haying and found “although the record in this case lacks sufficient evidence to prove that the Appellant grazed on some of the CRP acreage when [FSA] approved the Appellant for emergency grazing, [FSA] at least had reason to believe that the Appellant had already allowed his cattle to graze on the CRP land that he subsequently wanted to hay.  With that possibility looming, [FSA] did not make an error in judgment by allowing the Appellant to continue emergency grazing … on the CRP acreage.”  Id. (citations to the record omitted).   Accordingly, the Administrative Judge determined that FSA’s decision was not erroneous.

 

After reviewing all of the arguments and evidence presented in this case, I agree with the Administrative Judge’s determination.  Despite Appellant’s contention that FSA did not consider all of the relevant circumstances, the Administrative Judge thoroughly evaluated FSA’s consideration of Appellant’s request for emergency grazing and his subsequent request for emergency haying and determined that FSA did not abuse its discretion.  Appellant’s argument that the only acreage suitable for haying was already approved for grazing does not evidence error by FSA in deciding not to approve Appellant’s request to change a practice he had already engaged in.  If anything, it establishes that Appellant should have requested emergency haying in the first instance.

 

Similarly, Appellant’s contention that he would not have made multiple requests if FSA “had employed better means to ‘broadcast’ the facts that haying and grazing of the CRP was being allowed on account of the drought conditions” implies that if Appellant had known about the availability of haying and grazing earlier, he would have obtained an opinion from the custom harvester sooner and avoided his change of request.  This argument is speculative and not germane to my consideration of whether FSA erred in denying Appellant’s request for haying after he had already been approved for grazing.  The record demonstrates that Appellant became aware of the availability of emergency haying and grazing during the period when FSA was publicizing it and that he timely filed his requests for consideration.  Moreover, Appellant has not established that his failure to learn about the availability of emergency grazing and haying directly from FSA’s email notification, radio interview, or press release had any impact on FSA’s consideration of his request to change the requested emergency practice.  Therefore, I uphold the Administrative Judge’s determination that FSA did not err.

 

Having found that FSA’s decision is not erroneous, I now consider Appellant’s request for equitable relief.  As noted above, I may provide equitable relief to any participant who, despite failing to comply with the requirements of a covered program either made a good faith effort to comply with the requirements of a covered program under circumstances that warrant equitable relief, or detrimentally relied on the action or advice of an authorized agency representative.  See 7 U.S.C. § 7996(b).

 

On Director review, Appellant contends that NAD precedent establishes no requirement that a participant technically be determined to be out of compliance with the requirements of a covered program.  He argues that imposing such a threshold requirement with respect to non-compliance places a constraint on equitable relief which does not exist in statute or regulation.  He asserts that the NAD Director may grant any relief that he considers appropriate and necessary “in order to supply true justice and equity to producers and participants in all circumstances.”  Request for Director Review at 2 (citing, among other NAD cases, NAD Case No. 2007S000210).

 

I find much of Appellant’s argument to be persuasive.  When Congress provided the Secretary of Agriculture with authority to grant equitable relief to participants in covered programs, it made clear that such relief was intended to be made available to participants who were not only “not in compliance with the requirements of a covered program,” but also “ineligible for a loan, payment, or other benefit under the covered program.”  7 U.S.C. § 7996(b).  By clarifying that program participants deemed to be ineligible for program benefits can nevertheless be considered for equitable relief, Congress underscored that the purpose of equitable relief is to provide participants who have been denied benefits under a covered program with a second chance to be considered for those benefits or other equivalent relief.  In other words, the key requirement for consideration for equitable relief is not whether the participant technically has been determined by the agency to be in non-compliance with a program requirement; rather, it is the fact that the agency has denied benefits to the participant in the first place, either because the participant failed to comply with a program requirement, failed to meet eligibility requirements, failed to submit a timely application, or for any other proper, program-based reason.

 

In this case, FSA denied Appellant’s request to take advantage of the emergency haying benefit provided under the CRP program, which is a covered program for equitable relief purposes.  FSA based its determination on the proper conclusion that once Appellant had taken advantage of the emergency grazing provisions of the CRP program, he was no longer eligible to conduct emergency haying operations.  Although one could argue that Appellant has not technically violated any provision of the CRP program, he has nevertheless been determined ineligible to receive a benefit under the program and thus he may properly request that I grant him that benefit or its equivalent in the form of equitable relief.

 

Although I agree with Appellant that he is eligible to be considered for equitable relief, I do not find that the circumstances presented in this case actually warrant my granting equitable relief.  As noted above, equitable relief may be appropriate if Appellant either made a good faith effort to comply the requirements of a covered program or detrimentally relied on the actions or advice of any authorized agency representative.  When assessing whether a program participant detrimentally relied on the action or advice of an agency representative, I examine whether an agency representative acted or advised a participant in error, and whether a participant detrimentally relied on that action or advice.  See NAD Case No. 2013S000094 (Dir. Rev., Feb. 11, 2013) (granting equitable relief where the appellant started a conservation practice based on NRCS’s advice prior to NRCS approving the EQIP contract).  I also focus on the impact that an agency representative’s statements or actions may have had on a participant’s compliance with program requirements.  See NAD Case No. 2014W000245 (Dir. Rev., Dec. 10, 2014) (granting equitable relief where the appellant’s representative asked an NRCS representative if adjusted gross income requirements applied to the appellant and was incorrectly told they did not).

 

In this case, NRCS and FSA approved Appellant’s request for emergency grazing.  The following day, Appellant attempted to revoke his authorization for emergency grazing by writing “void” on his request, the terms and conditions, and the approved conservation planning sheet that had been signed by NRCS and FSA officials.  Appellant then submitted a request to engage in emergency haying on 155.7 acres of the 175.7 acres for which he had already been approved for grazing because he determined that haying that acreage would be more profitable than grazing it.  Accordingly, Appellant did not detrimentally rely on NRCS or FSA actions or information regarding his election.

 

Moreover, while the record does show that Appellant for the most part exercised good faith efforts to comply with the requirements of his CRP contract, by signing the contract, Appellant agreed that he would not hay or graze the CRP land.  When haying and grazing were made available on an emergency basis, Appellant was informed, prior to making his election, that he must choose one practice or the other.  Asking FSA to ignore that rule merely because Appellant later determined that it would be more advantageous to engage in haying when he initially elected grazing does not convince me that this is a case that warrants an award of equitable relief.

 

Conclusion

 

Based on the foregoing discussion, I uphold the Administrative Judge’s determination, and I deny Appellant’s request for equitable relief.

 

 

 

 

/S/                                                                                           02/25/2016  

Steven C. Silverman

 

Date

Director

 

 

 


[1] NAD’s regulations provide that a Hearing Officer will adjudicate an appeal that a program participant files with NAD.  See 7 C.F.R. § 11.8.  In a memorandum dated November 25, 2014, I changed the working title for Hearing Officer to “Administrative Judge” for all adjudicative duties, including conducting hearings and issuing determinations under 7 C.F.R. Part 11.  This change became effective on December 1, 2014.

[2] A CRP participant shall not hay and graze the same acreage.  2-CRP Handbook, Para. 693A. 

[3] NAD’s enabling statute confers authority to the Director to grant equitable relief in the same manner and to the same extent as such authority is provided to the Secretary in accordance with 7 U.S.C. § 7996 and other laws.  See 7 U.S.C. § 6998(d). The Administrative Judge develops a record from which the Director will determine whether equitable relief should be granted.  See 7 C.F.R. § 11.8(c)(5)(ii).