The United States Department of Agriculture (USDA), acting through its various agencies, including the Farm Service Agency (FSA) and the Natural Resources Conservation Service (NRCS), offers a variety of loan, risk management, disaster relief, and conservation programs to farmers and ranchers.[1] Sometimes, however, these agencies deny a farmer or rancher benefits under, or the right to participate in, these programs. In such circumstances, a participant must challenge the agency’s action by filing an appeal with the USDA National Appeals Division (NAD).

NAD, which was created by the Department of Agriculture Reorganization Act of 1994, is an independent division of the USDA tasked with resolving disputes between participants and agencies regarding “adverse decisions.” NAD’s regulations define adverse decision broadly:

Adverse decision means an administrative decision made by an officer, employee, or committee of an agency that is adverse to a participant. The term includes a denial of equitable relief by an agency or the failure of an agency to issue a decision or otherwise act on the request or right of the participant within timeframes specified by agency program statutes or regulations or within a reasonable time if timeframes are not specified in such statutes or regulations.

Put simply, any decision by an agency that denies a farmer or rancher benefits under, or the right to participate in, a covered program can be challenged by filing an appeal with NAD. A participant has 30 days to request a NAD appeal from the date the participant receives notice of an adverse decision from an agency. In circumstances where an agency fails or refuses to act on the request or right of a participant, a NAD appeal must be requested within 30 days of the date the participant knew or reasonably should have known of the agency’s failure to act.

Once a NAD appeal has been requested, a NAD hearing officer (i.e., an administrative judge employed by NAD) will be assigned to conduct a hearing and issue a determination either upholding or overturning the adverse decision. A participant has the right to a hearing within 45 days from the date NAD received the participant’s NAD appeal request. Sometimes, however, a participant may waive its right to a hearing within 45 days to allow for additional time to develop the case, conduct limited discovery, and prepare for the hearing. NAD hearings can be conducted in person, by telephone, or by videoconference. Additionally, if a hearing is not necessary, a participant can elect to proceed with “record review” wherein the NAD hearing officer will issue a determination based on the documents contained in the agency record and written submissions from the parties. Depending on whether a participant requests a hearing or record review, the NAD hearing officer will issue a determination upholding or overturning the adverse decision within 30 or 45 days.

Upon receiving the NAD hearing officer’s determination, either the participant or the agency can appeal that determination to the Director of NAD. A participant must request Director review within 30 days of receiving the NAD hearing officer’s determination. The agency must request Director review within 15 days of receiving the NAD hearing officer’s determination. On Director review, the Director of NAD will either uphold or overturn the hearing officer’s determination based on the Director’s review of the agency record, the hearing record, the request for review, and the written arguments of the parties.

If the participant or the agency disagree with the NAD Director’s determination, they can appeal that determination in federal court. The federal court will give deference to NAD’s factual findings, but not to NAD’s legal conclusions. The federal court proceedings (including potential appeals to federal appellate courts) represent the final opportunity for a participant to overturn an adverse decision.

NAD appeal procedures are intended to provide participants with speedy and accessible procedures to resolve disputes over adverse determinations. In practice, however, the NAD appeal procedures can be daunting and contain many potential pitfalls for participants. Additionally, while the NAD appeal procedures are relatively straightforward, the same cannot be said for the regulations governing the underlying program and adverse decision being appealed by the participant.

[1] Examples of programs offered by the USDA and its agencies include FSA’s Livestock Forage Disaster Program (LFP); FSA’s Farm Ownership Loan program; NRCS’s Conservation Stewardship Program (CSP); and NRCS’s Environmental Quality Incentives Program (EQIP).