What is an adverse determination letter?

The last thing anyone wishes to receive is a letter from the government saying that you’re not complying with their rules and regulations. Unfortunately, some Idaho agricultural producers have received just such a letter telling them that they have failed to comply with one, two or all of the terms of a USDA contract for a specific program that they are engaged in. Such letters may be received for apparent non-compliance within any of the programs offered through the USDA, including but not limited to CRP (Conservation Reserve Program), EQIP (Environmental Quality Incentives Program), grazing permit status, federal crop insurance policies, Whole Farm Revenue Protection (WFRP), farm credit loans and even programs of the Risk Management Agency.

The letter 

Adverse determination letters are issued by the local county committee (COC) of the State Farm Services Agency (FSA). Such a letter is normally sent by mail, although occasionally they have been sent via email. Some individuals, however, have pointed out that email may not be appropriate since not all producers use that form of medium.

Why are adverse determination letters issued?

An adverse determination letter may be issued following a meeting of the COC during which the committee has reviewed a producer’s compliance with the terms of their USDA contractual obligations.

The letter will detail the explicit background of the situation. Historically, the letter isolates the program, the producer’s enrollment date and identification of specific areas of the contract in which the producer appears to be in non-compliance. The letter will contain specific identified policy statements, regulation numbers and violation identifications. The letter will also note that the COC reviewed this matter at a recent county committee meeting and the committee voted to find the producer in non-compliance and instructed the local office to send an adverse determination letter to the producer.

Following the background explanation, the adverse determination letter will highlight the specific problems with contractual compliance, it will note the exact wording of the rules or contractual obligations that apply and will clearly state the decision reached by the COC. In almost all situations, the decision dictates the repayment of funds, cancellation of the contract and what should happen from this point forward for the producer.

Producer options

The receipt of an adverse determination letter does not mean that a producer has immediately lost the case, nor does it mean the producer faces an impossible situation. The letter quantifies the decision of a county committee. There are avenues for appeals and for potential discussions through mediation. Every producer should know what the letter means, what to do next and how the final outcome will impact the producer’s operation. An adverse decision as specified in the adverse determination letter may be appealed through three different options, and there is also the possibility for a reconsideration by the county committee.

The county committee – The easiest option for the producer is to ask for reconsideration by the members of the committee by filing a written request within 30 days. The producer would be invited to the next county committee meeting for an informal hearing with the COC. During the hearing, the producer or the producer’s representative will be allowed to present information to the members showing how there was no violation, or extenuating circumstances such as weather, illness or personal farm operational problems. The reconsideration may be handled by telephone or Zoom. Reconsideration by the county committee does not remove any of the other appeal rights available to recipients of an adverse determination letter.

The state committee – A second option provided to a producer is to appeal the decision of the county committee to the state FSA office. No later than 30 calendar days after receipt of the adverse determination, a producer may appeal to the state FSA committee by filing a written request. The request will allow the producer or the producer’s representative to attend an informal hearing in person or by telephone with the state committee. Again, the producer will be allowed to explain why there was no violation or if there were extenuating circumstances that could abate the adverse determination letter’s sanctions. If the producer appeals to the state committee, the producer may later appeal the determination to the National Appeals Division. However, if the producer appeals the initial decision of the county committee, the producer waives any right to reconsideration by the county committee.

Mediation – Mediation is available as part of the FSA’s informal appeals process. It is encouraged as a process that allows for the narrowing of the issues and a potential resolution to the matter by mutual agreement. In Idaho, there is no charge for mediation services provided to producers through the Fulcrum Institute Dispute Resolution Clinic. Once mediation is requested, the running of the time frame in which appeals may be filed stops. When mediation closes, the clock restarts and the balance of days remaining from the 30-day window are given to the producer to file an appeal. Mediation requests must be submitted no later than 30 days after receipt of the adverse determination letter.

National Appeals Division (NAD) – The formal appeal process is conducted through the National Appeals Division following a written request no later than 30 calendar days following receipt of the letter. The National Appeals Division process is a formal process through which the producer or the producer’s representative receives a formal hearing. Once a hearing with NAD begins, all rights are waived concerning reconsideration, appeal to the state and mediation. The NAD process is begun through a writing that explains why the producer believes the adverse termination was erroneous. Producers must personally sign their written appeal, include a copy of the adverse letter, and send a copy of the local office making the original decision. USDA officials will provide NAD with complete access to the producer’s file.

Producer decisions

In summary, once a producer receives an adverse determination letter, the USDA provides the Idaho agricultural producer several options. The choice of which one to pursue is entirely up to the producer. The producer may go back to the determining committee, the state or to NAD. Mediation may be used at any of the informal levels. Only the choice to go before the National Appeals Division does not allow for mediation. In some cases, the producer may ask for reconsideration, then mediation, then appeal to the state, then ask for mediation again and finally appeal to NAD.

Note: Questions about this article or any mediation-related question may be directed to the Idaho Mediation Program Administrator, Gayle Cooper at (208) 667-5325.

Next month: The current farm bill and impacted cases for mediation