7 U.S.C. § 1522 — Research and development

Page 851 TITLE 7—AGRICULTURE § 1522 ch. 214, § 9, 55 Stat. 256; amended Oct. 13, 1994, Pub. L. 103–354, title I, §§ 111, 112, 108 Stat. 3199, 3202, related to noninsured crop disaster assistance program. See sec- tion 7333 of this title. § 1520. Producer eligibility Except as otherwise provided in this sub- chapter, a producer shall not be denied insur- ance under this subchapter if— (1) for purposes of catastrophic risk protec- tion coverage, the producer is a ‘‘person’’ (as defined by the Secretary); and (2) for purposes of any other plan of insur- ance, the producer is 18 years of age and has a bona fide insurable interest in a crop as an owner-operator, landlord, tenant, or share- cropper. (Feb. 16, 1938, ch. 30, title V, § 520, as added Pub. L. 92–357, July 28, 1972, 86 Stat. 501; amended Pub. L. 103–354, title I, § 113, Oct. 13, 1994, 108 Stat. 3203; Pub. L. 110–234, title XII, § 12033(c)(2)(B), May 22, 2008, 122 Stat. 1405; Pub. L. 110–246, § 4(a), title XII, § 12033(c)(2)(B), June 18, 2008, 122 Stat. 1664, 2167.) Editorial Notes CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. AMENDMENTS 2008—Pub. L. 110–246, § 12033(c)(2)(B), substituted ‘‘this subchapter’’ for ‘‘this chapter’’ in two places in intro- ductory provisions. 1994—Pub. L. 103–354 substituted ‘‘Producer eligi- bility’’ for ‘‘Persons under twenty-one years of age’’ in section catchline and amended text generally. Prior to amendment, text read as follows: ‘‘Notwithstanding any other provision of law, no person shall be denied in- surance under this chapter solely on the ground that he is under twenty-one years of age if such person is (1) over eighteen years of age, and (2) has a bona fide in- surable interest in a crop as an owner-operator, land- lord, tenant or sharecropper: Provided, That any such person who enters into a Federal Crop Insurance con- tract shall be subject to the same legal liability and have the same legal rights with respect to such con- tract as any person over the age of twenty-one years.’’ Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of this title. EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–354 effective Oct. 13, 1994, and applicable to provision of crop insurance under Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) begin- ning with 1995 crop year, with such Act, as in effect on the day before Oct. 13, 1994, to continue to apply with respect to 1994 crop year, see section 120 of Pub. L. 103–354, set out as a note under section 1502 of this title. § 1521. Ineligibility for catastrophic risk and non- insured assistance payments If the Secretary determines that a person has knowingly adopted a material scheme or device to obtain catastrophic risk, additional coverage, or noninsured assistance benefits under this sub- chapter to which the person is not entitled, has evaded this subchapter, or has acted with the purposes of evading this subchapter, the person shall be ineligible to receive all benefits applica- ble to the crop year for which the scheme or de- vice was adopted. (Feb. 16, 1938, ch. 30, title V, § 521, as added Pub. L. 103–354, title I, § 114, Oct. 13, 1994, 108 Stat. 3203; amended Pub. L. 110–234, title XII, §§ 12002(b)(2), 12033(c)(2)(B), May 22, 2008, 122 Stat. 1371, 1405; Pub. L. 110–246, § 4(a), title XII, §§ 12002(b)(2), 12033(c)(2)(B), June 18, 2008, 122 Stat. 1664, 2133, 2167.) Editorial Notes CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. AMENDMENTS 2008—Pub. L. 110–246, §§ 12002(b)(2), 12033(c)(2)(B), sub- stituted ‘‘this subchapter’’ for ‘‘this chapter’’ wherever appearing and struck out at end ‘‘The authority pro- vided by this section shall be in addition to, and shall not supplant, the authority provided by section 1506(n) of this title.’’ Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of this title. EFFECTIVE DATE Section effective Oct. 13, 1994, and applicable to pro- vision of crop insurance under Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) beginning with 1995 crop year, with such Act, as in effect on the day before Oct. 13, 1994, to continue to apply with respect to 1994 crop year, see section 120 of Pub. L. 103–354, set out as an Ef- fective Date of 1994 Amendment note under section 1502 of this title. § 1522. Research and development (a) Definition of policy In this section, the term ‘‘policy’’ means a pol- icy, plan of insurance, provision of a policy or plan of insurance, and related materials. (b) Reimbursement of research, development, and maintenance costs (1) Research and development payment (A) In general The Corporation shall provide a payment to an applicant for research and develop- ment costs in accordance with this sub- section. (B) Reimbursement (i) In general An applicant who submits a policy under section 1508(h) of this title shall be eligible for the reimbursement of reasonable re- search and development costs if the policy Page 852 TITLE 7—AGRICULTURE § 1522 is approved by the Board for sale to pro- ducers. (ii) Reasonable costs For the purpose of reimbursing research and development and maintenance costs under this section, costs of the applicant shall be considered reasonable costs if the costs are based on— (I) for any employees or contracted personnel, wage rates equal to not more than 2 times the hourly wage rate plus benefits, as provided by the Bureau of Labor Statistics for the year in which such costs are incurred, calculated using the formula applied to an applicant by the Corporation in reviewing proposed project budgets under this section on Oc- tober 1, 2016; and (II) other actual documented costs in- curred by the applicant. (2) Advance payments (A) In general Subject to the other provisions of this paragraph, the Board may approve the re- quest of an applicant for advance payment of a portion of reasonable research and devel- opment costs prior to submission and ap- proval of the policy by the Board under sec- tion 1508(h) of this title. (B) Procedures The Board shall establish procedures for approving advance payment of reasonable research and development costs to appli- cants. (C) Concept proposal As a condition of eligibility for advance payments, an applicant shall submit a con- cept proposal for the policy that the appli- cant plans to submit to the Board under sec- tion 1508(h) of this title, consistent with pro- cedures established by the Board for submis- sions under subparagraph (B), including— (i) a summary of the qualifications of the applicant, including any prior concept proposals and submissions to the Board under section 1508(h) of this title and, if applicable, any work conducted under this section; (ii) a projection of total research and de- velopment costs that the applicant expects to incur; (iii) a description of the need for the pol- icy, the marketability of and expected de- mand for the policy among affected pro- ducers, and the potential impact of the policy on producers and the crop insurance delivery system; (iv) a summary of data sources available to demonstrate that the policy can reason- ably be developed and actuarially appro- priate rates established; and (v) an identification of the risks the pro- posed policy will cover and an explanation of how the identified risks are insurable under this subchapter. (D) Review (i) Experts If the requirements of subparagraph (B) and (C) are met, the Board may submit a concept proposal described in subpara- graph (C) to not less than 2 independent expert reviewers, whose services are appro- priate for the type of concept proposal sub- mitted, to assess the likelihood that the proposed policy being developed will result in a viable and marketable policy, as de- termined by the Board. (ii) Timing The time frames described in subpara- graphs (C) and (D) of section 1508(h)(4) of this title shall apply to the review of con- cept proposals under this subparagraph. (E) Approval (i) In general The Board may approve up to 50 percent of the projected total research and devel- opment costs to be paid in advance to an applicant, in accordance with the proce- dures developed by the Board for the mak- ing of the payments, if, after consideration of the reviewer reports described in sub- paragraph (D) and such other information as the Board determines appropriate, the Board determines that— (I) the concept, in good faith, will like- ly result in a viable and marketable pol- icy consistent with section 1508(h) of this title; (II) at the sole discretion of the Board, the concept, if developed into a policy and approved by the Board, would pro- vide crop insurance coverage— (aa) in a significantly improved form; (bb) to a crop or region not tradition- ally served by the Federal crop insur- ance program; or (cc) in a form that addresses a recog- nized flaw or problem in the program; (III) the applicant agrees to provide such reports as the Corporation deter- mines are necessary to monitor the de- velopment effort; (IV) the proposed budget and timetable are reasonable, as determined by the Board; and (V) the concept proposal meets any other requirements that the Board deter- mines appropriate. (ii) Waiver The Board may waive the 50-percent lim- itation and, upon request of the submitter after the submitter has begun research and development activities, the Board may ap- prove an additional 25 percent advance payment to the submitter for research and development costs, if, at the sole discre- tion of the Board, the Board determines that— (I) the intended policy or plan of insur- ance developed by the submitter will provide coverage for a region or crop that is underserved by the Federal crop insurance program, including specialty crops; and (II) the submitter is making satisfac- tory progress towards developing a via- Page 853 TITLE 7—AGRICULTURE § 1522 1 So in original. The second closing parenthesis probably should not appear. ble and marketable policy or plan of in- surance consistent with section 1508(h) of this title. (F) Submission of policy If the Board approves an advanced pay- ment under subparagraph (E), the Board shall establish a date by which the applicant shall present a submission in compliance with section 1508(h) of this title (including the procedures implemented under that sec- tion) to the Board for approval. (G) Final payment (i) Approved policies If a policy is submitted under subpara- graph (F) and approved by the Board under section 1508(h) of this title and the proce- dures established by the Board (including procedures established under subparagraph (B)), the applicant shall be eligible for a payment of reasonable research and devel- opment costs in the same manner as poli- cies reimbursed under paragraph (1)(B), less any payments made pursuant to sub- paragraph (E). (ii) Policies not approved If a policy is submitted under subpara- graph (F) and is not approved by the Board under section 1508(h) of this title, the Cor- poration shall— (I) not seek a refund of any payments made in accordance with this paragraph; and (II) not make any further research and development cost payments associated with the submission of the policy under this paragraph. (H) Policy not submitted If an applicant receives an advance pay- ment and fails to fulfill the obligation of the applicant to the Board by not submitting a completed submission without just cause and in accordance with the procedures estab- lished under subparagraph (B)) 1, including notice and reasonable opportunity to re- spond, as determined by the Board, the ap- plicant shall return to the Board the amount of the advance plus interest. (I) Repeated submissions The Board may prohibit advance payments to applicants who have submitted— (i) a concept proposal or submission that did not result in a marketable product; or (ii) a concept proposal or submission of poor quality. (J) Continued eligibility A determination that an applicant is not eligible for advance payments under this paragraph shall not prevent an applicant from reimbursement under paragraph (1)(B). (K) Waiver for hemp The Board may waive the viability and marketability requirements under this para- graph in the case of research and develop- ment relating to a policy to insure the pro- duction of hemp. (3) Marketability (A) In general Subject to subparagraph (B), the Corpora- tion shall approve a reimbursement under paragraph (1) only after determining that the policy is marketable based on a reason- able marketing plan, as determined by the Board. (B) Waiver for hemp The Corporation may waive the market- ability requirement under subparagraph (A) in the case of research and development re- lating to a policy to insure the production of hemp. (4) Maintenance payments (A) Requirement The Corporation shall reimburse mainte- nance costs associated with the annual cost of underwriting for a policy described in paragraph (1). (B) Duration Payments with respect to maintenance costs may be provided for a period of not more than four reinsurance years subsequent to Board approval for payment under this subsection. (C) Options for maintenance On the expiration of the 4-year period de- scribed in subparagraph (B), the applicant responsible for maintenance of the policy may— (i) maintain the policy and charge a fee to approved insurance providers that elect to sell the policy under this subsection; or (ii) transfer responsibility for mainte- nance of the policy to the Corporation. (D) Fee (i) Amount Subject to approval by the Board, the amount of the fee that is payable by an ap- proved insurance provider that elects to sell the policy shall be an amount that is determined by the applicant maintaining the policy. (ii) Approval The Board shall approve the amount of a fee determined under clause (i) for mainte- nance of the policy unless the Board deter- mines that the amount of the fee— (I) is unreasonable in relation to the maintenance costs associated with the policy; or (II) unnecessarily inhibits the use of the policy. (iii) Review After the Board approves the amount of a fee under clause (ii), the fee shall remain in effect and not be reviewed by the Board unless— (I) the applicant petitions the Board for reconsideration of the fee; (II) a substantial change is made to the policy, as determined by the Board; or Page 854 TITLE 7—AGRICULTURE § 1522 (III) there is substantial evidence that the fee is inhibiting sales or use of the policy, as determined by the Board. (5) Treatment of payment Payments made under this subsection for a policy shall be considered as payment in full by the Corporation for the research and devel- opment conducted with regard to the policy and any property rights to the policy. (6) Reimbursement amount The Corporation shall determine the amount of the payment under this subsection for an approved policy based on the complexity of the policy and the size of the area in which the policy or material is expected to be sold. (c) Research and development authority (1) Authority The Corporation may conduct activities or enter into contracts to carry out research and development to maintain or improve existing policies or develop new policies to— (A) increase participation in States in which the Corporation determines that— (i) there is traditionally, and continues to be, a low level of Federal crop insurance participation and availability; and (ii) the State is underserved by the Fed- eral crop insurance program; (B) increase participation in areas that are underserved by the Federal crop insurance program; and (C) increase participation by producers of underserved agricultural commodities, in- cluding specialty crops. (2) Underserved agricultural commodities and areas (A) Authority The Corporation may conduct research and development or enter into contracts under procedures prescribed by the Corporation with qualified persons to carry out research and development for policies that promote the purposes of paragraph (1). (B) Consultation Before conducting research and develop- ment or entering into a contract under sub- paragraph (A), the Corporation shall consult with groups representing producers of agri- cultural commodities that would be served by the policies that are the subject of the re- search and development. (3) Qualified persons A person with experience in crop insurance or farm or ranch risk management (including a college or university, an approved insurance provider, and a trade or research organiza- tion), as determined by the Corporation, shall be eligible to enter into a contract with the Corporation under this subsection. (4) Types of contracts A contract under this subsection may pro- vide for research and development regarding new or expanded policies, including policies based on adjusted gross income, cost-of-pro- duction, quality losses, and an intermediate base program with a higher coverage and cost than catastrophic risk protection. (5) Use of resulting policies The Corporation may offer any policy devel- oped under this subsection that is approved by the Board after expert review in accordance with section 1505(e) of this title. (6) Research and development priorities The Corporation shall establish as one of the highest research and development priorities of the Corporation the development of policies that increase participation by producers of un- derserved agricultural commodities, including sweet sorghum, biomass sorghum, rice, pea- nuts, sugarcane, alfalfa, pennycress, dedicated energy crops, and specialty crops. (7) Whole farm diversified risk management in- surance plan (A) In general Unless the Corporation approves a whole farm insurance plan, similar to the plan de- scribed in this paragraph, to be available to producers for the 2016 reinsurance year, the Corporation shall conduct activities or enter into contracts to carry out research and de- velopment to develop a whole farm risk management insurance plan, with a liability limitation of $1,500,000, that allows a diversi- fied crop or livestock producer the option to qualify for an indemnity if actual gross farm revenue is below 85 percent of the average gross farm revenue or the expected gross farm revenue that can reasonably be ex- pected of the producer, as determined by the Corporation. (B) Eligible producers The Corporation shall permit producers (including direct-to-consumer marketers and producers servicing local and regional and farm identity-preserved markets) who produce multiple agricultural commodities, including specialty crops, industrial crops, livestock, and aquaculture products, to par- ticipate in the plan developed under sub- paragraph (A) in lieu of any other plan under this subchapter. (C) Diversification The Corporation may provide diversifica- tion-based additional coverage payment rates, premium discounts, or other enhanced benefits in recognition of the risk manage- ment benefits of crop and livestock diver- sification strategies for producers that— (i) grow multiple crops; or (ii) may have income from the produc- tion of livestock that uses a crop grown on the farm. (D) Market readiness The Corporation may include coverage for the value of any packing, packaging, or any other similar on-farm activity the Corpora- tion determines to be the minimum required in order to remove the commodity from the field. Page 855 TITLE 7—AGRICULTURE § 1522 (E) Review of modifications to improve effec- tiveness (i) In general Not later than 18 months after December 20, 2018— (I) the Corporation shall hold stake- holder meetings to solicit producer and agent feedback; and (II) the Board shall— (aa) review procedures and paper- work requirements on agents and pro- ducers; and (bb) modify procedures and require- ments, as appropriate, to decrease bur- dens and increase flexibility and effec- tiveness. (ii) Factors In carrying out items (aa) and (bb) of subclause (i)(II), the Board shall consider— (I) removing caps on nursery and live- stock production; (II) allowing a waiver to expand oper- ations, especially for small and begin- ning farmers; (III) minimizing paperwork for pro- ducers and agents; (IV) implementing an option for pro- ducers with less than $1,000,000 in gross revenue that requires significantly less paperwork and recordkeeping; (V) developing and using alternative records such as time-stamped photo- graphs or technology applications to document planting and production his- tory; (VI) treating the different growth stages of aquaculture species as separate crops to recognize the difference in perils at different phases of growth; (VII) moderating the impacts of dis- aster years on historic revenue, such as— (aa) using an average of the historic and projected revenue; (bb) counting indemnities as historic revenue for loss years; (cc) counting payments under section 7333 of this title as historic revenue for loss years; or (dd) using an assigned yield floor similar to the limitation described in section 1508(g)(6)(A)(i) of this title, as determined by the Secretary; (VIII) improving agent training and outreach to underserved regions and sec- tors such as small dairy farms; and (IX) providing coverage and indem- nification of insurable losses— (aa) after the losses exceed the de- ductible; and (bb) up to the maximum amount of total coverage. (F) Beginning farmer or rancher defined Notwithstanding section 1502(b)(3) of this title, with respect to plans described under this paragraph, the term ‘‘beginning farmer or rancher’’ means a farmer or rancher who has not actively operated and managed a farm or ranch with a bona fide insurable in- terest in a crop or livestock as an owner-op- erator, landlord, tenant, or sharecropper for more than 10 crop years. (8) Relation to limitations A policy developed under this subsection may be prepared without regard to the limita- tions of this subchapter, including— (A) the requirement concerning the levels of coverage and rates; and (B) the requirement that the price level for each insured agricultural commodity must equal the expected market price for the agri- cultural commodity, as established by the Board. (9) Tropical storm or hurricane insurance (A) In general The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified per- sons to carry out research and development, regarding a policy to insure crops (including tomatoes, peppers, and citrus) against losses due to a tropical storm or hurricane. (B) Research and development Research and development under subpara- graph (A) shall— (i) evaluate the effectiveness of risk management tools for a low frequency and catastrophic loss weather event; and (ii) result in a policy that provides pro- tection for at least 1 of the following: (I) Production loss. (II) Revenue loss. (C) Report Not later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agri- culture, Nutrition, and Forestry of the Sen- ate a report that describes— (i) the results of the research and devel- opment carried out under this paragraph; and (ii) any recommendations with respect to those results. (10) Quality loss (A) In general The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified per- sons to carry out research and development, regarding the establishment of each of the following alternative methods of adjusting for quality losses: (i) A method that does not impact the actual production history of a producer. (ii) A method that provides that, in cir- cumstances in which a producer has suf- fered a quality loss to the insured crop of the producer that is insufficient to trigger an indemnity payment, the producer may elect to exclude that quality loss from the actual production history of the producer. (iii) 1 or more methods that combine the methods described in clauses (i) and (ii). (B) Requirements Notwithstanding subsections (g) and (m) of section 1508 of this title, any method devel- Page 856 TITLE 7—AGRICULTURE § 1522 oped under subparagraph (A) that is used by the Corporation shall be— (i) optional for a producer to use; and (ii) offered at an actuarially sound pre- mium rate. (C) Report Not later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agri- culture, Nutrition, and Forestry of the Sen- ate a report that describes— (i) the results of the research and devel- opment carried out under subparagraph (A); and (ii) any recommendations with respect to those results. (11) Citrus (A) In general The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified per- sons to carry out research and development, regarding the insurance of citrus fruit com- modities and commodity types, including re- search and development of— (i) improvements to 1 or more existing policies, including the whole-farm revenue protection pilot policy; (ii) alternative methods of insuring rev- enue for citrus fruit commodities and com- modity types; and (iii) the development of new, or expan- sion of existing, revenue policies for citrus fruit commodities and commodity types. (B) Report Not later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agri- culture, Nutrition, and Forestry of the Sen- ate a report that describes— (i) the results of the research and devel- opment carried out under subparagraph (A); and (ii) any recommendations with respect to those results. (12) Hops (A) In general The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified per- sons to carry out research and development, regarding a policy to insure the production of hops or revenue derived from the produc- tion of hops. (B) Report Not later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agri- culture, Nutrition, and Forestry of the Sen- ate a report that describes— (i) the results of the research and devel- opment carried out under subparagraph (A); and (ii) any recommendations with respect to those results. (13) Subsurface irrigation practices (A) In general The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified per- sons to carry out research and development, regarding the creation of a separate practice for subsurface irrigation, including the es- tablishment of a separate transitional yield within a county that is reflective of the av- erage gain in productivity and yield associ- ated with the installation of a subsurface ir- rigation system. (B) Report Not later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agri- culture, Nutrition, and Forestry of the Sen- ate a report that describes— (i) the results of the research and devel- opment carried out under subparagraph (A); and (ii) any recommendations with respect to those results. (14) Grain sorghum (A) In general The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified per- sons to carry out research and develop- ment— (i) regarding improvements to 1 or more policies to insure irrigated grain sorghum; (ii) regarding alternative methods for producers with not more than 4 years of production history to insure irrigated grain sorghum; and (iii) to assess, by county, the difference in the rate, average yield, and coverage level of grain sorghum policies compared to policies for other feed grains in that county. (B) Report Not later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agri- culture, Nutrition, and Forestry of the Sen- ate a report that describes— (i) the results of the research and devel- opment carried out under subparagraph (A); and (ii) any recommendations with respect to those results. (15) Limited irrigation practices (A) Authority The Corporation shall— (i) consider expanding the availability of the limited irrigation insurance program to neighboring and similarly situated States (such as the States of Colorado and Nebraska), as determined by the Sec- retary; (ii) carry out research, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research, on Page 857 TITLE 7—AGRICULTURE § 1522 the marketability of the existing limited irrigation insurance program; and (iii) make recommendations on how to improve participation in that program. (B) Research In carrying out research under subpara- graph (A), a qualified person shall— (i) collaborate with researchers on the subjects of— (I) reduced irrigation practices or lim- ited irrigation practices; and (II) expected yield reductions following the application of reduced irrigation; (ii) collaborate with State and Federal officials responsible for the collection of water and the regulation of water use for the purpose of irrigation; (iii) provide recommendations to encour- age producers to carry out limited irriga- tion practices or reduced irrigation and water conservation practices; and (iv) develop web-based applications that will streamline access to coverage for pro- ducers electing to conserve water use on irrigated crops. (C) Report Not later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agri- culture, Nutrition, and Forestry of the Sen- ate a report that describes— (i) the results of the research carried out under subparagraphs (A) and (B); (ii) any recommendations to encourage producers to carry out limited irrigation practices or reduced irrigation and water conservation practices; and (iii) the actions taken by the Corpora- tion to carry out the recommendations de- scribed in clause (ii). (16) Insurable irrigation practices for rice (A) In general The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified per- sons to carry out research and development, to include new and innovative irrigation practices under the current rice policy or the development of a distinct policy endorse- ment rated for rice produced using— (i) alternate wetting and drying prac- tices (also referred to as ‘‘intermittent flooding’’); and (ii) furrow irrigation practices. (B) Report Not later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agri- culture, Nutrition, and Forestry of the Sen- ate a report that describes— (i) the results of the research and devel- opment carried out under paragraph (1); and (ii) any recommendations with respect to those results. (17) Greenhouse policy (A) In general (i) Research and development The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and develop- ment, regarding a policy to insure in a controlled environment such as a green- house— (I) the production of floriculture, nurs- ery, and bedding plants; (II) the establishment of cuttings or tissue culture in a growing medium; or (III) other similar production, as deter- mined by the Secretary. (ii) Availability of policy Notwithstanding the last sentence of section 1508(a)(1) of this title, and section 1508(a)(2) of this title, the Corporation shall make a policy described in clause (i) available if the requirements of section 1508(h) of this title are met. (B) Research and development described Research and development described in subparagraph (A)(i) shall evaluate the effec- tiveness of policies for the production of plants in a controlled environment, includ- ing policies that— (i) are based on the risk of— (I) plant diseases introduced from the environment; (II) contaminated cuttings, seedlings, or tissue culture; or (III) Federal or State quarantine or de- struction orders associated with the con- taminated items described in subclause (II); (ii) consider other causes of loss applica- ble to a controlled environment, such as a loss of electricity due to weather; (iii) consider appropriate best practices to minimize the risk of loss; (iv) consider whether to provide coverage for various types of plants under 1 policy or to provide coverage for 1 species or type of plant per policy; (v) have streamlined reporting and pa- perwork requirements that take into ac- count short propagation schedules, vari- able crop years, and the variety of plants that may be produced in a single facility; and (vi) provide protection for revenue losses. (C) Report Not later than 2 years after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agri- culture, Nutrition, and Forestry of the Sen- ate a report that describes— (i) the results of the research and devel- opment carried out under subparagraphs (A)(i) and (B); and (ii) any recommendations with respect to those results. Page 858 TITLE 7—AGRICULTURE § 1522 (18) Local foods (A) In general (i) Feasibility study The Corporation shall carry out a study to determine the feasibility of, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out a study to determine the feasibility of, a policy to insure production— (I) of floriculture, fruits, vegetables, poultry, livestock, or the products of flo- riculture, fruits, vegetables, poultry, or livestock; and (II) that is targeted toward local con- sumers and markets. (ii) Availability of policy Notwithstanding the last sentence of section 1508(a)(1) of this title, and section 1508(a)(2) of this title, the Corporation shall make available a policy described in clause (i) if— (I) the results of the feasibility study under clause (i) are viable; and (II) the requirements of section 1508(h) of this title are met. (B) Feasibility study described The feasibility study described in subpara- graph (A)(i) shall evaluate the effectiveness of policies for production targeted toward local consumers and markets, including poli- cies that— (i) consider small-scale production in various areas, including urban, suburban, and rural areas; (ii) consider a variety of marketing strategies; (iii) allow for production in soil and in alternative systems such as vertical sys- tems, greenhouses, rooftops, or hydroponic systems; (iv) consider the price premium when ac- counting for production or revenue losses; (v) consider whether to provide cov- erage— (I) for various types of production under 1 policy; and (II) for 1 species or type of plant per policy; and (vi) have streamlined reporting and pa- perwork requirements. (C) Report Not later than 2 years after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agri- culture, Nutrition, and Forestry of the Sen- ate a report that— (i) examines whether a version of exist- ing policies such as the whole-farm rev- enue protection insurance plan may be tai- lored to provide improved coverage for producers of local foods; (ii) describes the results of the feasi- bility study carried out under subpara- graph (A)(i); and (iii) includes any recommendations with respect to those results. (19) High-risk, highly productive batture land policy (A) In general (i) Research and development The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and develop- ment, regarding a policy to insure pro- ducers of corn, cotton, and soybeans— (I) with operations on highly produc- tive batture land within the Lower Mis- sissippi River Valley; (II) that have a history of production of not less than 5 years; and (III) that have been impacted by more frequent flooding over the past 10 years due to sedimentation or federally con- structed engineering improvements. (ii) Availability of policy Notwithstanding the last sentence of section 1508(a)(1) of this title, and section 1508(a)(2) of this title, the Corporation shall make a policy described in clause (i) available if the requirements of section 1508(h) of this title are met. (B) Research and development described Research and development described in subparagraph (A)(i) shall evaluate the feasi- bility of less cost-prohibitive policies for batture-land producers in high risk areas, including policies that— (i) consider premium rate adjustments; (ii) consider automatic yield exclusion for consecutive-year losses; and (iii) allow for flexibility of final plant dates and prevent plant regulations. (C) Report Not later than 2 years after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agri- culture, Nutrition, and Forestry of the Sen- ate a report that— (i) examines whether a version of exist- ing policies may be tailored to provide im- proved coverage for batture-land pro- ducers; (ii) describes the results of the research and development carried out under sub- paragraphs (A) and (B); and (iii) includes any recommendations with respect to those results. (d) Partnerships for risk management develop- ment and implementation (1) Purpose The purpose of this subsection is to author- ize the Corporation to enter into partnerships with public and private entities for the pur- pose of either— (A) increasing the availability of loss miti- gation, financial, and other risk manage- ment tools for producers, with a priority given to risk management tools for pro- ducers of agricultural commodities covered by section 7333 of this title, specialty crops, and underserved agricultural commodities; or Page 859 TITLE 7—AGRICULTURE § 1522 (B) improving analysis tools and tech- nology regarding compliance or identifying and using innovative compliance strategies. (2) Authority The Corporation may enter into partner- ships with the National Institute of Food and Agriculture, the Agricultural Research Serv- ice, the National Oceanic Atmospheric Admin- istration, and other appropriate public and private entities with demonstrated capabili- ties in developing and implementing risk man- agement and marketing options for producers of specialty crops and underserved agricul- tural commodities. (3) Objectives The Corporation may enter into a partner- ship under paragraph (2)— (A) to enhance the notice and timeliness of notice of weather conditions that could neg- atively affect crop yields, quality, and final product use in order to allow producers to take preventive actions to increase end product profitability and marketability and to reduce the possibility of crop insurance claims; (B) to develop a multifaceted approach to pest management and fertilization to de- crease inputs, decrease environmental expo- sure, and increase application efficiency; (C) to develop or improve techniques for planning, breeding, planting, growing, main- taining, harvesting, storing, shipping, and marketing that will address quality and quantity challenges associated with year-to- year and regional variations; (D) to clarify labor requirements and as- sist producers in complying with require- ments to better meet the physically intense and time-compressed planting, tending, and harvesting requirements associated with the production of specialty crops and under- served agricultural commodities; (E) to provide assistance to State foresters or equivalent officials for the prescribed use of burning on private forest land for the pre- vention, control, and suppression of fire; (F) to provide producers with training and informational opportunities so that the pro- ducers will be better able to use financial management, farm financial benchmarking, crop insurance, marketing contracts, and other existing and emerging risk manage- ment tools; (G) to improve analysis tools and tech- nology regarding compliance or identifying and using innovative compliance strategies; and (H) to develop other risk management tools to further increase economic and pro- duction stability. (e) Funding (1) Reimbursements Of the amounts made available from the in- surance fund established under section 1516(c) of this title, the Corporation may use to pro- vide reimbursements under subsection (b) not more than $7,500,000 for fiscal year 2008 and each subsequent fiscal year. (2) Contracting (A) Conducting and contracting for research and development Of the amounts made available from the insurance fund established under section 1516(c) of this title, the Corporation may use to conduct research and development and carry out contracting and partnerships under subsections (c) and (d) not more than— (i) $12,500,000 for each of fiscal years 2008 through 2018; and (ii) $8,000,000 for fiscal year 2019 and each fiscal year thereafter. (B) Underserved States Of the amount made available under sub- paragraph (A) for a fiscal year, the Corpora- tion shall use not more than $5,000,000 for the fiscal year to conduct research and de- velopment and carry out contracting for re- search and development to carry out the purpose described in subsection (c)(1)(A). (3) Unused funding If the Corporation determines that the amount available under this section for a fis- cal year is not needed for such purposes, the Corporation may use— (A) not more than $5,000,000 for each fiscal year to improve program integrity, includ- ing by— (i) increasing compliance-related train- ing; (ii) improving analysis tools and tech- nology regarding compliance; (iii) use of information technology, as determined by the Corporation; and (iv) identifying and using innovative compliance strategies; and (B) any excess amounts to carry out other activities authorized under this section. (Feb. 16, 1938, ch. 30, title V, § 522, as added Pub. L. 106–224, title I, § 131, June 20, 2000, 114 Stat. 379; amended Pub. L. 110–234, title VII, § 7511(c)(1), title XII, §§ 12022–12024, 12033(c)(2)(B), May 22, 2008, 122 Stat. 1267, 1382–1388, 1405; Pub. L. 110–246, § 4(a) title VII, § 7511(c)(1), title XII, §§ 12022–12024, 12033(c)(2)(B), June 18, 2008, 122 Stat. 1664, 2028, 2144–2150, 2167; Pub. L. 113–79, title XI, §§ 11010(b), 11022, 11023(b), 11024, 11027(b), 11028(b), Feb. 7, 2014, 128 Stat. 959, 969, 973, 974, 977; Pub. L. 115–334, title XI, §§ 11120(a), 11121–11123, Dec. 20, 2018, 132 Stat. 4926–4935.) Editorial Notes CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. AMENDMENTS 2018—Subsec. (b)(1)(B). Pub. L. 115–334, § 11120(a)(1), amended subpar. (B) generally. Prior to amendment, text read as follows: ‘‘An applicant who submits a pol- icy under section 1508(h) of this title shall be eligible for the reimbursement of reasonable research and de- velopment costs directly related to the policy if the policy is approved by the Board for sale to producers.’’ Page 860 TITLE 7—AGRICULTURE § 1522 Subsec. (b)(2)(K). Pub. L. 115–334, § 11121(1), added sub- par. (K). Subsec. (b)(3). Pub. L. 115–334, § 11121(2), designated existing provisions as subpar. (A), inserted heading, substituted ‘‘Subject to subparagraph (B), the Corpora- tion’’ for ‘‘The Corporation’’, and added subpar. (B). Subsec. (b)(4)(C). Pub. L. 115–334, § 11120(a)(2)(A), sub- stituted ‘‘applicant’’ for ‘‘approved insurance provider’’ in introductory provisions. Subsec. (b)(4)(D)(i). Pub. L. 115–334, § 11120(a)(2)(B)(i), substituted ‘‘determined by the applicant’’ for ‘‘deter- mined by the approved insurance provider’’. Subsec. (b)(4)(D)(iii). Pub. L. 115–334, § 11120(a)(2)(B)(ii), added cl. (iii). Subsec. (c)(7) to (24). Pub. L. 115–334, § 11122, redesig- nated par. (19) as (7) and added subpars. (E) and (F), re- designated par. (24) as (8), added pars. (9) to (19), and struck out former pars. (7) to (18) and (20) to (23) which related, respectively, to study of multiyear coverage, contract for revenue coverage plans, contract for cost of production policy, energy crop insurance policy, aquaculture insurance policy, poultry insurance policy, apiary policies, adjusted gross revenue policies for be- ginning producers, skiprow cropping practices, margin coverage for catfish, biomass and sweet sorghum en- ergy crop insurance policies, study on swine cata- strophic disease program, study on poultry cata- strophic disease program, poultry business interruption insurance policy, study of food safety insurance, and al- falfa crop insurance policy. Subsec. (e)(2)(A). Pub. L. 115–334, § 11123, substituted ‘‘not more than—’’ and cl. (i) for ‘‘not more than $12,500,000 for fiscal year 2008 and each subsequent fiscal year.’’ and added cl. (ii). 2014—Subsec. (b)(2)(E). Pub. L. 113–79, § 11010(b), added subpar. (E) and struck out former subpar. (E) which re- lated to Board approval of up to 50 percent of the pro- jected total research and development costs to be paid in advance to an applicant. Subsec. (b)(4)(A). Pub. L. 113–79, § 11028(b)(1), sub- stituted ‘‘paragraph (1)’’ for ‘‘paragraphs (1)’’. Subsec. (c). Pub. L. 113–79, § 11022(a)(1), struck out ‘‘contracting’’ after ‘‘development’’ in heading. Subsec. (c)(1). Pub. L. 113–79, § 11022(a)(2), substituted ‘‘may conduct activities or enter into contracts to carry out research and development to maintain or im- prove existing policies or develop new policies to’’ for ‘‘may enter into contracts to carry out research and development to’’ in introductory provisions. Subsec. (c)(2)(A). Pub. L. 113–79, § 11022(a)(3)(A), in- serted ‘‘conduct research and development or’’ after ‘‘The Corporation may’’. Subsec. (c)(2)(B). Pub. L. 113–79, § 11022(a)(3)(B), in- serted ‘‘conducting research and development or’’ after ‘‘Before’’. Subsec. (c)(5). Pub. L. 113–79, § 11022(a)(4), inserted ‘‘after expert review in accordance with section 1505(e) of this title’’ after ‘‘approved by the Board’’. Subsec. (c)(6). Pub. L. 113–79, § 11022(a)(5), substituted ‘‘policies that increase participation by producers of underserved agricultural commodities, including sweet sorghum, biomass sorghum, rice, peanuts, sugarcane, alfalfa, pennycress, dedicated energy crops, and spe- cialty crops’’ for ‘‘a pasture, range, and forage pro- gram’’. Subsec. (c)(10) to (16). Pub. L. 113–79, § 11023(b), redes- ignated pars. (11) to (17) as (10) to (16), respectively, and struck out former par. (10) which related to contracts for organic production coverage improvements. Subsec. (c)(17) to (24). Pub. L. 113–79, § 11023(b)(2), re- designated pars. (18) to (25) as (17) to (24), respectively. Former par. (17) redesignated (16). Pub. L. 113–79, § 11022(a)(7), added pars. (17) to (24). Subsec. (c)(25). Pub. L. 113–79, § 11022(a)(6), redesig- nated par. (17) as (25). Subsec. (d)(1). Pub. L. 113–79, § 11024(a), added par. (1) and struck out former par. (1). Text read as follows: ‘‘The purpose of this subsection is to authorize the Cor- poration to enter into partnerships with public and pri- vate entities for the purpose of increasing the avail- ability of loss mitigation, financial, and other risk management tools for producers, with a priority given to risk management tools for producers of agricultural commodities covered by section 7333 of this title, spe- cialty crops, and underserved agricultural commod- ities.’’ Subsec. (d)(3)(F). Pub. L. 113–79, § 11027(b), inserted ‘‘farm financial benchmarking,’’ after ‘‘financial man- agement,’’. Subsec. (d)(3)(G), (H). Pub. L. 113–79, § 11024(b), added subpar. (G) and redesignated former subpar. (G) as (H). Subsec. (e)(1). Pub. L. 113–79, § 11028(b)(2), inserted pe- riod at end. Subsec. (e)(2)(A). Pub. L. 113–79, § 11022(b)(1)(A), in heading, substituted ‘‘Conducting and contracting for research and development’’ for ‘‘Authority’’ and, in text, inserted ‘‘conduct research and development and’’ after ‘‘the Corporation may use to’’. Subsec. (e)(2)(B). Pub. L. 113–79, § 11022(b)(1)(B), in- serted ‘‘conduct research and development and’’ after ‘‘for the fiscal year to’’. Subsec. (e)(3). Pub. L. 113–79, § 11022(b)(2), struck out ‘‘to provide either reimbursement payments or con- tract payments’’ after ‘‘available’’ in introductory pro- visions. Subsec. (e)(4). Pub. L. 113–79, § 11022(b)(3), struck out par. (4) which related to prohibited research and devel- opment by the Corporation. 2008—Subsec. (b)(1), (2). Pub. L. 110–246, § 12022(a), added pars. (1) and (2) and struck out former pars. (1) and (2) which related to reimbursement for research and development costs directly related to a policy that was submitted to and approved by the Board under sec- tion 1508(h) of this title for reinsurance and, if applica- ble, offered for sale to producers, and reimbursement for research and development costs approved prior to June 20, 2000. Subsec. (b)(2)(C)(v). Pub. L. 110–246, § 12033(c)(2)(B), substituted ‘‘this subchapter’’ for ‘‘this chapter’’. Subsec. (b)(3). Pub. L. 110–246, § 12022(b)(1), struck out ‘‘or (2)’’ after ‘‘paragraph (1)’’. Subsec. (b)(4)(A). Pub. L. 110–246, § 12022(b)(2), struck out ‘‘and (2)’’ after ‘‘paragraphs (1)’’. Subsec. (c)(10) to (16). Pub. L. 110–246, § 12023(2), added pars. (10) to (16). Former par. (10) redesignated (17). Subsec. (c)(17). Pub. L. 110–246, § 12033(c)(2)(B), sub- stituted ‘‘this subchapter’’ for ‘‘this chapter’’ in intro- ductory provisions. Pub. L. 110–246, § 12023(1), redesignated par. (10) as (17). Subsec. (d)(2). Pub. L. 110–246, § 7511(c)(1), substituted ‘‘the National Institute of Food and Agriculture’’ for ‘‘the Cooperative State Research, Education, and Ex- tension Service’’. Subsec. (e)(1). Pub. L. 110–246, § 12024(1), substituted ‘‘$7,500,000 for fiscal year 2008 and each subsequent fis- cal year’’ for ‘‘$10,000,000 for each of fiscal years 2001 and 2002 and not more than $15,000,000 for fiscal year 2003 and each subsequent fiscal year.’’ Subsec. (e)(2)(A). Pub. L. 110–246, § 12024(2), sub- stituted ‘‘$12,500,000 for fiscal year 2008’’ for ‘‘$20,000,000 for each of fiscal years 2001 through 2003 and not more than $25,000,000 for fiscal year 2004’’. Subsec. (e)(3). Pub. L. 110–246, § 12024(3), substituted ‘‘the Corporation may use—’’ for ‘‘the Corporation may use the excess amount to carry out another function authorized under this section.’’ and added subpars. (A) and (B). Subsec. (e)(4). Pub. L. 110–246, § 12033(c)(2)(B), sub- stituted ‘‘this subchapter’’ for ‘‘this chapter’’ in two places. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2018 AMENDMENT Pub. L. 115–334, title XI, § 11120(b), Dec. 20, 2018, 132 Stat. 4927, provided that: ‘‘(1) IN GENERAL.—The amendments made by this sec- tion [amending this section] shall apply to reimburse- ment requests made on or after October 1, 2016. Page 861 TITLE 7—AGRICULTURE § 1523 ‘‘(2) RESUBMISSION OF DENIED REQUEST.—An applicant that was denied all or a portion of a reimbursement re- quest under paragraph (1) of section 522(b) of the Fed- eral Crop Insurance Act (7 U.S.C. 1522(b)) during the pe- riod between October 1, 2016, and the date of the enact- ment of this Act [Dec. 20, 2018] shall be given an oppor- tunity to resubmit such request.’’ EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, except as other- wise provided, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of this title. Pub. L. 110–234, title VII, § 7511(c), May 22, 2008, 122 Stat. 1267, and Pub. L. 110–246, § 4(a), title VII, § 7511(c), June 18, 2008, 122 Stat. 1664, 2028, provided that the amendments made by section 7511(c) are effective Oct. 1, 2009. [Pub. L. 110–234 and Pub. L. 110–246 enacted identical provisions. Pub. L. 110–234 was repealed by section 4(a) of Pub. L. 110–246, set out as a note under section 8701 of this title.] EFFECTIVE DATE Section effective Oct. 1, 2000, see section 171(b)(1)(A) of Pub. L. 106–224, set out as an Effective Date of 2000 Amendment note under section 1501 of this title. REIMBURSEMENT REGULATIONS Pub. L. 107–20, title II, § 2103, July 24, 2001, 115 Stat. 165, provided that: ‘‘(a) Not later than August 1, 2001, the Federal Crop Insurance Corporation shall promulgate final regula- tions to carry out section 522(b) of the Federal Crop In- surance Act (7 U.S.C. 522(b) [1522(b)]), without regard to— ‘‘(1) the notice and comment provisions of section 553 of title 5, United States Code; ‘‘(2) the Statement of Policy of the Secretary of Ag- riculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking; and ‘‘(3) chapter 35 of title 44, United States Code (com- monly known as the ‘Paperwork Reduction Act’). ‘‘(b) In carrying out this section, the Corporation shall use the authority provided under section 808 of title 5, United States Code. ‘‘(c) The final regulations promulgated under sub- section (a) shall take effect on the date of publication of the final regulations.’’ § 1523. Pilot programs (a) General provisions (1) Authority Except as otherwise provided in this section, the Corporation may, at the sole discretion of the Corporation, conduct a pilot program sub- mitted to and approved by the Board under section 1508(h) of this title, or that is devel- oped under subsection (b) or section 1522 of this title, to evaluate whether a proposal or new risk management tool tested by the pilot program is suitable for the marketplace and addresses the needs of producers of agricul- tural commodities. (2) Private coverage Under this section, the Corporation shall not conduct any pilot program that provides in- surance protection against a risk if insurance protection against the risk is generally avail- able from private companies. (3) Covered activities The pilot programs described in paragraph (1) may include pilot programs providing in- surance protection against losses involving— (A) reduced forage on rangeland caused by drought or insect infestation; (B) livestock poisoning and disease; (C) destruction of bees due to the use of pesticides; (D) unique special risks related to fruits, nuts, vegetables, and specialty crops in gen- eral, aquacultural species, and forest indus- try needs (including appreciation); (E) after October 1, 2001, wild salmon, ex- cept that— (i) any pilot program with regard to wild salmon may be carried out without regard to the limitations of this subchapter; and (ii) the Corporation shall conduct all wild salmon programs under this sub- chapter so that, to the maximum extent practicable, all costs associated with con- ducting the programs are not expected to exceed $1,000,000 for fiscal year 2002 and each subsequent fiscal year. (4) Scope of pilot programs The Corporation may— (A) approve a pilot program under this sec- tion to be conducted on a regional, State, or national basis after considering the interests of affected producers and the interests of, and risks to, the Corporation; (B) operate the pilot program, including any modifications of the pilot program, for a period of up to 4 years; (C) extend the time period for the pilot program for additional periods, as deter- mined appropriate by the Corporation; and (D) provide pilot programs that would allow producers— (i) to receive a reduced premium for using whole farm units or single crop units of insurance; and (ii) to cross State and county boundaries to form insurable units. (b) Livestock pilot programs (1) Definition of livestock In this subsection, the term ‘‘livestock’’ in- cludes, but is not limited to, cattle, sheep, swine, goats, and poultry. (2) Programs required Subject to paragraph (7), the Corporation shall conduct two or more pilot programs to evaluate the effectiveness of risk management tools for livestock producers, including the use of futures and options contracts and poli- cies and plans of insurance that protect the in- terests of livestock producers and that pro- vide— (A) livestock producers with reasonable protection from the financial risks of price or income fluctuations inherent in the pro- duction and marketing of livestock; or (B) protection for production losses. (3) Purpose of programs To the maximum extent practicable, the Corporation shall evaluate the greatest num- ber and variety of pilot programs described in paragraph (2) to determine which of the of- fered risk management tools are best suited to protect livestock producers from the financial risks associated with the production and mar- keting of livestock.