[Federal Register Volume 60, Number 235 (Thursday, December 7, 1995)]
[Rules and Regulations]
[Pages 62710-62730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29606]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 401, 443, and 457
RIN 0563-AB43
General Crop Insurance Regulations, Various Endorsements; Hybrid
Seed Crop Insurance Regulations; and Common Crop Insurance Regulations,
Various Crop Insurance Provisions
AGENCY: Federal Crop Insurance Corporation.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (``FCIC'') hereby
amends the General Crop Insurance Regulations, Hybrid Sorghum Seed and
Rice Endorsements; the Hybrid Seed Crop Insurance Regulations; and the
Common Crop Insurance Regulations, Small Grains, Cotton, Extra Long
Staple Cotton, Sunflower Seed and Coarse Grains Crop Insurance
Provisions, applicable beginning with the 1996 crop year for spring
planted crops with contract change dates on or after the effective date
of this rule, by revising prevented planting coverage. The intended
effect of this regulation is to expand prevented planting benefits
available under the various policies being amended.
DATES: The effective date of this rule is November 30, 1995. The
comment period for information collections under the Paperwork
Reduction Act of 1995 continues through January 8, 1996.
ADDRESSES: For information collection comments submission, see
SUPPLEMENTARY INFORMATION.
FOR FURTHER INFORMATION CONTACT: For further information and a copy of
the
[[Page 62711]]
Cost-Benefit Analysis and Regulatory Flexibility Analysis to the
General Crop Insurance Regulations; Hybrid Seed Crop Insurance
Regulations; and Common Crop Insurance Regulations for implementation
of the prevented planting provisions, contact Diana Moslak, Regulatory
and Procedural Development Staff, Federal Crop Insurance Corporation,
U.S. Department of Agriculture, Washington, D.C. 20250. Telephone (202)
254-8314.
SUPPLEMENTARY INFORMATION: This action has been reviewed under United
States Department of Agriculture (``USDA'') procedures established by
Executive Order 12866 and Departmental Regulation 1512-1. This action
does not constitute a review as to the need, currency, clarity, and
effectiveness of these regulations under those procedures. The sunset
review date established for Small Grains is July 1, 1998; Coarse
Grains, Cotton, Extra Long Staple Cotton and Sunflower Seed is March 1,
1999; Hybrid Seed is October 1, 1997; Hybrid Sorghum Seed is May 1,
2000; and Rice is August 29, 1998.
This rule has been determined to be ``economically significant''
for the purposes of Executive Order 12866 and, therefore, has been
reviewed by the Office of Management and Budget (``OMB'').
A Cost-Benefit Analysis is completed and is available to interested
persons at the address listed above. In summary, the analysis finds
that the expected Treasury costs of these changes are expected to range
between $2.1 and $20.8 million. Added costs are due to higher
reimbursements to reinsured companies and for premium subsidies for
producers. The estimates assume the majority of producers will decline
the coverage for the substitute crop, opting instead for a reduced
premium on the intended crop. Nationwide, premium rates will increase 6
to 7 percent for the added coverage. As examples of monetary impacts,
this means an average increase in the producer paid premium of 20-25
cents per acre for wheat in the Northern Plains; 30 cents for corn in
Iowa; and 60-90 cents per acre for upland cotton. However, the premium
rate increases will not be uniform. Instead, the highest risk areas
(such as lowlands along rivers and similar conditions) can expect
greater increases in premium to cover the added risk. Producers who
farm such lands are expected to be the primary group that will retain
this added coverage and elect to pay the additional premium. The
changes to the prevented planting rules will provide producers with
added assistance in extreme weather conditions in a manner that
maintains the actuarial integrity of the Federal crop insurance
program.
Paperwork Reduction Act of 1995
The information collection requirements contained in these
regulations were submitted to OMB for their approval under section
3507(j) of the Paperwork Reduction Act of 1995, and received emergency
approval through February 28, 1996. The agency is also seeking a valid
approval for 3 years under section 3507(d). Public comments are due by
January 8, 1996.
The title of this information collection is ``Catastrophic Risk
Protection Plan and Related Requirements including General Crop
Insurance Regulations, Hybrid Seed Crop Insurance Regulations and
Common Crop Insurance Regulations.'' The information to be collected
includes: a crop insurance acreage report, an insurance application and
continuous contract. Information collected from the acreage report and
application is electronically submitted to FCIC by the reinsured
companies. Some respondents may provide additional information for the
purpose of selecting insurance options that apply to specific crops or
specific areas in which a crop is produced. Potential respondents to
this information collection are growers of crops that are eligible for
Federal Crop Insurance.
The information requested is necessary for the insurance company
and FCIC to provide insurance, provide reinsurance, determine
eligibility, determine the correct parties to the agreement, determine
and collect premiums or other monetary amounts (or fees), and pay
benefits.
All information is reported annually. The reporting burden for this
collection of information is estimated to average 16.9 minutes per
response for each of the 3.6 responses from approximately 1,750,015
respondents. The total annual burden on the public for this information
collection is 2,668,750 hours. The total annual burden has increased
from the 1995 requirements to reflect the paperwork burden on the
reinsured companies.
Comments were invited on the information collection requirements
during the proposed rule stage. The comment period for information
collections under the Paperwork Reduction Act of 1995 continues through
January 8, 1996, on the following: (a) Whether the proposed collection
of information is necessary for the proper performance of the functions
of the agency, including whether the information shall have practical
utility; (b) the accuracy of the agency's estimate of the burden of the
proposed collection of information; (c) ways to enhance the quality,
utility, and clarity of the information to be collected; and (d) ways
to minimize the burden of the collection of information on respondents,
including through the use of automated collection techniques or other
forms of information technology.
Comments should be submitted to the Desk Officer for Agriculture,
Office of Information and Regulatory Affairs, Office of Management and
Budget (OMB), Washington, D.C. 20503 and to Bonnie Hart, Information
Management Branch, Consolidated Farm Service Agency, U.S. Department of
Agriculture, Washington, D.C. 20250. Copies of the information
collection may be obtained from Bonnie Hart at the above address.
Telephone (202) 690-2857.
It has been determined under section 6(a) of Executive Order 12612,
Federalism, that this rule does not have sufficient federalism
implication to warrant the preparation of a Federalism Assessment. The
provisions contained in this rule will not have a substantial direct
effect on states or their political subdivisions, or on the
distribution of power and responsibilities among the various levels of
government.
The amount of work required of the insurance companies and FSA
offices delivering the policies and the procedures therein may increase
significantly from the amount of work currently required to deliver
previous policies to which this regulation applies. Therefore, this
action has been reviewed under the provisions of the Regulatory
Flexibility Act (5 U.S.C. 605) and a Regulatory Flexibility Analysis is
available to interested persons at the address listed above.
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
This program is not subject to the provisions of Executive Order
12372 which require intergovernmental consultation with state and local
officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
The Office of the General Counsel has determined that these
regulations meet the applicable standards provided in subsections 2(a)
and 2(b)(2) of Executive Order 12778. The provisions of this rule will
not have retroactive effect prior to the effective date. The provisions
of this rule will preempt state and local laws to the extent such state
and local laws are inconsistent herewith. The administrative appeal
requirements of the National Appeals Division under
[[Page 62712]]
Public Law 103-354 must be exhausted before judicial action may be
brought.
This action is not expected to have any significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
Background
Current regulations do not allow an insured producer to obtain a
prevented planting guarantee for one crop and plant a substitute crop
intended for harvest in the same crop year on the same land. By this
rule a producer who purchases limited or additional coverage beginning
with the 1996 crop year for spring crops with contract change dates on
or after the effective date of this rule, will be eligible to: (1)
Receive a prevented planting guarantee equal to 25 percent of the
guarantee for timely planted acreage (20 percent for hybrid seed (corn)
and 17.5 percent for cotton, ELS cotton, and rice) when acreage that is
prevented from being planted is planted to a substitute crop after the
10th day after the final planting date for the intended crop (10th day
after the latest final planting date for each specific crop insured
under the Small Grains Crop Provisions) and, as applicable, a 0/92 or
50/92 program benefit; (2) exclude eligibility for prevented planting
coverage when a substitute crop is planted in return for a reduction in
the premium; and (3) receive prevented planting coverage on double
cropped acreage (except for ELS cotton) if the producer can provide
proof that planting of a second crop (double crop) following the
harvest of an initial crop in the same crop year is a farming practice
normally followed by that producer.
By this rule, the prevented planting provisions will also: (1)
Allow all insured producers to receive a 0/92 or 50/92 program benefit,
as applicable, and a crop insurance prevented planting guarantee equal
to 50 percent of the guarantee for timely planted acreage (40 percent
for hybrid seed (corn) and 35 percent for cotton, ELS cotton, and rice)
when acreage that is prevented from being planted is not planted to a
substitute crop; (2) eliminate the provisions that require acreage
eligible for a prevented planting guarantee to be prorated to all units
that could have been planted in the crop year; (3) change the date that
notice of loss is required from 3 days after the final planting date,
or the date the producer discovers that planting will not be possible
within the late planting period, to the acreage reporting date; and (4)
allow prevented planted acreage planted with a conserving use cover
crop to be hayed and grazed without affecting prevented planting
benefits.
On Wednesday, November 8, 1995, FCIC published a proposed rule in
the Federal Register at 60 FR 56257 to revise prevented planting
coverage under various policies. Following publication of that proposed
rule, the public was afforded 15 days to submit written comments, data,
and opinions. A total of 14 comments were received: 3 from Regional
Service Offices; 5 from reinsured companies; 4 from crop insurance
trade associations; 1 from a grower association; and 1 from a
congressional office. The comments received and FCIC responses are as
follows:
Comment: One comment received from the crop insurance industry
indicated that the proposed changes for 1996 are less than timely, as
1996 training and marketing activities have already begun for the crops
affected by the proposed rule. The comment recommends that FCIC move to
process the final rule as soon as practical to minimize confusion in
the 1996 crop year.
Response: FCIC agrees that the 1996 prevented planting regulations
need to be published and implemented as quickly as possible.
Comment: Two comments received from the crop insurance industry
recommended that whatever the final prevented planting provisions are,
they should stand for the crop year without further change.
Response: FCIC agrees with the comment and is committed to limit
changes unless deemed essential.
Comment: One comment received from the FSA stated that canola crop
provisions need to be included and amended to conform to the 1996
prevented planting changes since the canola policy has prevented
planting provisions.
Response: FCIC disagrees because canola is a pilot policy that has
not been published in the Federal Register. No change will be made.
Comment: One comment received from the crop insurance industry
noted that the term ``Consolidated Farm Service Agency'' is used in the
provisions and that the term used should now be ``Farm Service
Agency.''
Response: FCIC agrees and has made the necessary changes.
Comment: One comment received from the legal counsel of a reinsured
company stated that FCIC's proposed rulemaking is in violation of the
Administrative Procedure Act.
Response: The Office of General Counsel approved FCIC's proposed
regulation for legal sufficiency. The short comment period was
necessary due to pressure to provide an adequate program to producers
by the applicable contract change dates. FCIC believes that adequate
time was given for the public to comment, based on the number and
length of comments received.
Comment: One comment received from the crop insurance industry
indicated that administrative costs and errors and omission exposure
will increase at the point of sale to the extent the provisions must be
explained adequately.
Response: FCIC agrees that the provisions must be clearly
communicated to avoid the exposures indicated in the comment. FCIC is
making every effort to provide the new provisions as early as possible
to allow adequate time for training, etc.
Comment: Four comments received from the crop insurance industry
indicated the need to allow modification of the already approved 1996
Standard Reinsurance Agreement to recognize the increased
administrative and underwriting costs associated with the increased
benefits and potential adverse selection associated with this rule.
This modification, in the form of an optional amendment, would allow
the reinsured company the option of assigning policies with prevented
planting losses to FCIC or to pre-designate that such policies will
fall to a different fund and/or have a different retention percentage
than that designated in the reinsured company's plan of operation. In
addition, one of the comments proposes that provisions regarding excess
loss adjustment expense that are being considered for the 1995 crop
year be adopted for the 1996 Standard Reinsurance Agreement. One
comment indicates that the proposal may be characterized as
implementing into the subject policies the prevented planting benefits
that were administratively adopted during the 1995 crop year, and that
the changes made in 1995 appear to have significantly increased
administrative and underwriting costs. One comment stated that
reinsured companies must be provided with a means under the Standard
Reinsurance Agreement to either cede the entire premium and losses
associated with prevented planting to FCIC or to cede the premium and
losses to a risk fund other than that in which the rest of a policy is
placed. Until the adequacy of the rating can be tested, FCIC must bear
all or substantially all of the risk of loss
[[Page 62713]]
(and any gain) associated with these policies if a company is unwilling
or unable to. One comment stated that FCIC has failed to minimize moral
hazard and has proposed a program that it expects will be adversely
selected against and will therefore damage the integrity and actuarial
soundness of the crop insurance program. Without providing private
insured companies with a means to cede the increased risk associated
with the proposed provisions entirely or almost entirely to FCIC, the
proposed rule would force private companies to bear losses due to
programmatic decisions which they had no control over.
Response: FCIC has promulgated premium rates that reflect the 1996
prevented planting provisions; thus, FCIC is not compelled to provided
additional options to select among reinsurance funds or assume all the
risk associated with the program change. Promulgation of premium rates
prior to publication of this final rule was permissible because the
actuarial material also contained the premium rate that would be used
if this rule were not made final. The additional excess loss adjustment
expenses provided for the 1995 crop year were made to offset the
expense of loss adjustments when the Company had to re-open completed
claims, and to clear a considerable number of notices of loss to
determine if payable prevented planting claims existed. It was also
expected that additional expense was incurred to re-train agents and
loss adjusters on the prevented planting changes and loss procedures.
FCIC believes that administrative expense reimbursement and excess loss
adjustment expense provided under the Standard Reinsurance Agreement
effective for the 1996 reinsurance year are adequate to cover such
expenses for the 1996 crop year.
Comment: One comment received from the insurance industry indicated
concern over whether enough premium differential is included in the
prevented planting rates to adequately cover prevented planting
payments on so called 0/92 acres. The comment indicated that providing
both guaranteed deficiency payments and prevented planting payments
invites policyholders to make an economic decision not to plant, and
that these decisions will adversely impact the insurer. The comment
indicated reservation over whether enough rate could be charged to
counter this adverse selection opportunity.
Response: Guaranteed deficiency payments such as under the so
called 0/92 and 50/92 programs are independent of crop insurance
payments. Therefore, the risk of insurance against prevented planting
should be unaffected. However, farm management decisions can be and
should be made based on economics. The 0/92 and 50/92 benefits already
have a significant influence on producer reaction. There now is a moral
hazard that a producer may be influenced to collect a prevented
planting payment in addition to the 0/92 or 50/92 payment; however, the
extent of the moral hazard is unknown. That moral hazard is greatly
influenced by the assessment of the 0/92 and 50/92 program in any given
year. For example, if the guaranteed deficiency payments are decreased
or expected to decrease, then the 0/92 and 50/92 program payments are
also minimized and the moral hazard for additional prevented planting
payments are likely to disappear. The reverse is also true if the
guaranteed deficiency payments are expected to increase. Therefore, the
moral hazard can only be approximated by adding an additional rate to
counter the expected adverse selection potential of the dual payments.
County rates were increased based on the probability that some
additional losses will accrue given the influence of the so called 0/92
or 50/92 program.
Comment: One comment received from the legal counsel of a reinsured
company indicated an inconsistency with the coverage provided and the
Federal Crop Insurance Reform Act of 1994 (the ``Reform Act''). The
Reform Act indicates that for CAT coverage a prevented planting benefit
will be paid only if a producer is unable to plant another crop.
Current crop provisions and the proposed provisions provide a prevented
planting benefit if a producer is prevented from planting the insured
crop and elects not to plant a substitute crop.
Response: FCIC agrees that this issue must be analyzed and
modifications made if found necessary. However, the comment is not
germane to this rule because it applies to regulations already in
place.
Comment: One comment received from the legal counsel of a reinsured
company states that the proposed provisions are in conflict with
section 506(o) of the Federal Crop Insurance Act (the ``Act'') which
directs FCIC ``to take such actions as are necessary to improve the
actuarial soundness of the Federal multiperil crop insurance
coverage.'' Reasons cited include: (1) Increased moral hazard,
particularly if market prices (and/or yields) are expected to be low
and net returns for a substitute crop or 0-50/92 benefits are expected
to be high; (2) elimination of provisions that required prevented
planting acreage to be prorated to all units that could have been
planted to the insured crop; and (3) the addition of provisions that
provide prevented planting benefits for producers who follow a double-
cropping practice without sufficient premium to offset the risk.
Response: In addition to maintaining an actuarially sound insurance
program, FCIC is mandated to maintain fair and effective coverage for
agricultural producers. FCIC must also make the administration of its
programs efficient and practical. Virtually all insurance providers
have indicated that previous provisions requiring proration of eligible
acreage were complex, unmanageable, and not fair to producers in many
cases. Producers have been eligible to collect deficiency payments on
planted acres and certain prevented planting acreage. There is no
justification for denying those benefits when producers are eligible
for crop insurance benefits provided premium rates reflect the
increased risk of loss. FCIC has developed premium rates for prevented
planting based on sound rating principles, including those prevented
planting situations that may develop in double-cropping areas. If data
is available indicating that rates are insufficient to offset the risk,
FCIC requests submission of such data so that it can be reviewed and
any necessary changes can be made.
Comment: One comment received from a commodity group and one
comment received from the crop insurance industry stated that they have
concerns about projected premium increases. They request that producers
have the option of excluding prevented planting coverage in its
entirety. Producers need to be able to assess the rate increase before
purchasing crop insurance coverage to see if prevented planting
coverage is economically feasible for them. They stated that the
projected average cost increase is 6-8 percent and in some high rate
areas may be as much as 20 percent. Producers cannot afford another
premium increase.
Response: Prevented planting coverage was made an integral part of
the policy following the 1993 crop year to lessen the need for ad hoc
disaster assistance for growers who were prevented from planting. If
allowed to opt out of the coverage, FCIC believes that large numbers of
growers would exclude the coverage. This assessment is based on the
experience of 1993. This would result in a great deal of pressure
either to institute insurance coverage after a loss has occurred or a
great deal
[[Page 62714]]
of pressure for some other form of financial assistance.
Comment: One comment received from members of the House of
Representatives of the United States Congress stated that most of West
Texas has been given a large multiperil rate increase on cotton that
producers simply cannot afford. They have been informed that some
counties have suffered as much as a 20 percent rate increase for 1996.
They stated that the provisions suggest that the primary benefits
account for a 6-7 percent rate increase even if the secondary coverage
is rejected. The impact analysis estimates the majority of producers
will decline the coverage for the alternate crop, opting instead for a
reduced premium on the intended crop. They stated that the prevented
planting benefits appear to account for at least 13 percent of the 20
percent rate increase. They feel the prevented planting provisions
should be modified to allow producers to reject all prevented planting
coverage in return for an additional reduction in premium in the amount
of the 6-7 percent FCIC claims the primary coverage for prevented
planting is worth. They stated that producers cannot afford a premium
increase to pay for prevented planting coverage they do not need. In
1995, West Texas experienced a rate increase that was largely absorbed
by a 30-42.5 percent increase in subsidy payments. The 1996 rate
increase will be borne by producers alone. This increase is an
unnecessary burden on the agricultural community.
Response: The rate increase not associated with the 1996 prevented
planting program change is necessary to make the cotton crop insurance
program actuarially sound. Primary prevented planting benefits account
for only 0.2 percent to 0.4 percentage points of premium rate.
Therefore, growers opting out of the primary prevented planting
coverage would receive a very small credit. FCIC believes that basic
prevented planting coverage should remain an integral part of the
policy to ensure growers are covered in the event that prevented
planting occurs (also see response to comment above).
Comment: Seven comments received from the crop insurance industry
and one comment received from FSA recommended amending the definition
of prevented planting because: (1) The definition includes reference to
``most producers in the surrounding area'' and the term ``most'' is not
defined. As a result there is no way to apply the definition to any
particular policyholder when there is a dispute over whether or not
planting was actually prevented; (2) The day after the final planting
date, a producer could plant a substitute crop and receive a prevented
planting benefit; and (3) The provisions must require prevented
planting conditions to have to exist through the whole late planting
period before any prevented planting payment is due because: (a)
Prevented planting should never have been allowed for producers who
quit planting by the final planting date and made no effort to plant
within the late planting period; (b) allowing the producer to declare
prevented planting on the day after the final planting date defeats the
purpose of the late planting provision and submits the program to
unwarranted risk; (c) the producer may not plant an alternative crop or
enter into 0/92 until after the late planting period has expired for
the original crop and still collect a prevented planting payment (with
the obvious requirement that weather conditions continue to prevent
planting in the late planting period); (d) the prevented planting
payment payable when an alternative crop is planted must be reduced
from that level available if no alternative crop is planted; (e) in no
circumstance could the producer switch to an alternative crop prior to
the end of the late planting period and still collect a prevented
planting payment (they would be free to plant whatever crop they wanted
at any time, they just should not expect to collect a prevented
planting payment on the original crop if they do not go through the
late planting period of the original crop); and (f) moral hazards and
abuse are created when producers are allowed to collect a substitute
crop immediately after the final planting date. In most cases producers
will plant the crop into the late planting period as a normal practice,
but now we have created a disincentive to do so.
Response: FCIC agrees that a more definitive term than ``most''
should be used and has replaced it with the term ``majority'' to
reflect that more than 50 percent of the producers must have been
prevented from planting.
This definition was designed to accommodate extremely varied
production areas and farming practices; including those in which
growers do not plant after the final planting date and those in which
growers often do plant a crop within the late planting period. Some
farming areas have relatively short growing seasons which make the
prospect of a successful crop doubtful if planted much beyond the final
planting date. Other areas have much longer growing seasons and often
allow a successful crop to be grown even if planted after the final
planting date. In both long and short growing areas, some farming
practices, such as the production of silage, allow a grower to plant
after the final planting date and still produce an acceptable crop.
Changing the definition to require that prevented planting conditions
must have existed through the end of the late planting period before
any prevented planting coverage would be provided would not accommodate
growers who normally do not plant after the final planting date.
FCIC agrees producers should be encouraged to plant their initially
intended crop after the final planting date when it is practical to do
so. Therefore, FCIC has amended these regulations to specify that
prevented planting coverage will not be provided when a producer,
prevented from planting the initially intended crop, plants a
substitute crop within ten days after the final planting date for the
initially intended crop.
Comment: One comment received from the crop insurance industry
suggested that FCIC's actuaries re-evaluate: (1) When the late planting
period should start (i.e., final planting date); (2) whether the late
planting period should be shortened; and (3) whether or not eligibility
for a prevented planting payment should trigger at the time that
shortened period is exhausted.
Response: These evaluations are on-going. FCIC requests that any
person who has data affecting these matters make it available for
consideration.
Comment: One comment received from a commodity group stated that
they oppose the lower percentage level of insurance guarantee proposed
for prevented planted cotton compared to other commodities. They
contend the criteria that should be used to determine coverage for
prevented planting should be applied consistently among commodities.
Response: Data used by FCIC to determine prevented planting
benefits indicated cotton producers incur a larger percentage of total
production costs after planting than do producers of corn and other
grain crops. Additional post-plant costs incurred by cotton producers
include those for pest control and the costs associated with the
ginning and handling of cotton. Therefore, no change will be made. FCIC
is willing to work with producer groups and other interested parties to
review existing data to revise levels of benefits when analyses
indicate it is necessary.
Comment: One comment received from the crop insurance industry
recommended increasing the standard
[[Page 62715]]
prevented planting payment from the current 50 percent to 60 percent.
Response: The prevented planting payment of 50 percent adequately
compensates the producer for the loss of production, taking into
consideration cost, not incurred. FCIC has discovered that increasing
the standard prevented planting payment reduces the incentive for
producers to plant the intended crop by the end of the late planting
period when it is possible and increases the cost to the program.
Therefore, FCIC will not change the standard prevented planting
payment.
Comment: One comment received from counsel for a reinsured company
on behalf of the crop insurance industry stated that the Reform Act
contains a provision that allows a reduction in the benefit amount paid
to a producer to reflect out-of-pocket expenses not incurred by a
producer as a result of not planting, growing, or harvesting the crop
for which a prevented claim is made. The comment indicates that this
proposed rule is silent regarding this requirement for limited and
additional coverage, but that FCIC is required by the Reform Act to
include this provision for CAT coverage.
Response: Prior to enactment of the Reform Act, prevented planting
production guarantees for all coverages and crops were at least 50
percent lower than the guarantee for a timely planted crop to avoid
compensating producers in excess of their actual losses and provide
actuarially sound coverage. This has not changed.
Comment: One comment received from the crop insurance industry
stated that the inclusion of drought as an insurable peril and lack of
any firm definitions or procedural guidelines subjects the Company and
FCIC to abuse and fraud.
Response: FCIC does not believe that inclusion of drought as an
insurable peril substantially subjects the company and FCIC to abuse
and fraud. The burden is on the producer to prove that drought
prevented a producer from planting. Further, the Soil Conservation and
Extension Services have advised producers on occasion not to plant
because it was so dry that planting the ground could result in severe
wind erosion. The rule also requires a majority of producers to be
affected by the cause of loss.
Comment: One comment received from the crop insurance industry
recommended that in an effort to increase the incentive to plant the
original crop as opposed to simply collecting insurance and farm
program benefits, it might be advisable to consider reducing the late
planting period from 25 to 20 days, with the reductions in guarantees
over the 20 days totalling 25 percent, to leave the person with a
guarantee equal to 75 percent of their original level--( i.e. 1 percent
per day for the first 10 days and 1.5 percent per day for the second 10
days).
Response: Under the current formula, the production guarantee is
reduced only 1 percent for each of the first ten days and 2 percent for
days 11-25. FCIC believes this formula provides adequate incentive for
producers to plant crops early in the late planting period to keep
their insurance production guarantee at the highest level possible.
Changing the length of the late planting period and the percents of
reduction could result in over insurance and increased crop insurance
indemnities. Therefore, no change will be made.
Comment: One comment received from FSA recommended that acreage
that is planted to the insured crop after the late planting period be
designated as late planted with a 50 percent reduction in guarantee.
They stated that it is very confusing to have this acreage designated
as prevented planting.
Response: If acreage is prevented from being planted through the
late planting period due to an insurable cause of loss, and is planted
to the insured crop after the late planting period, the acreage will
receive a 50 percent reduction in guarantee and must be reported as
prevented planting acreage. This information is needed by FCIC for
analytical purposes in reviewing crop insurance premium rates.
Therefore, no change will be made.
Comment: One comment received from the crop insurance industry
recommended that the cover crop planted on prevented planting acres
could only be hayed or grazed by the producer's own livestock. The
producer could not sell hay or charge others to let livestock graze.
Response: FCIC disagrees because it increases costs, is
administratively difficult to enforce, and is contrary to legislative
directives to simplify procedures. Therefore, no change will be made.
Comment: One comment received from the crop insurance industry
indicated that the ``background'' section of the proposal indicates
that prevented planting acreage may be planted to a conserving use
cover crop that may be hayed and grazed without limitation, but that
the actual policy language indicates only that a cover crop not for
harvest may be planted. The comment suggests modifying the policy
language to indicate that haying and grazing is permissible if this is
the intent.
Response: Paragraph 12(a)(3)(i) of the Hybrid Sorghum Seed
Endorsement states that prevented planting coverage is available ``if
the acreage is left idle for the crop year, or if a cover crop is
planted not for harvest. Prevented planting compensation hereunder will
not be denied because the cover crop is hayed or grazed * * *'' This
provision is also contained in a similar location in the proposed
regulations for other crop policies. Therefore, no change is required.
However, the ``background'' section will be amended to reflect that a
conserving use cover crop may be hayed or grazed without affecting
prevented planting benefits.
Comment: One comment received from FSA stated that under the
provision allowing for a production guarantee of 50 percent (40 percent
for hybrid seed (corn) and 35 percent for cotton, ELS cotton and rice)
of the timely planted guarantee, prevented planting compensation should
not be allowed when the cover crop is hayed or grazed because the
producer is receiving a benefit from that crop.
Response: FCIC agrees that some value is gained when a cover crop
is hayed or grazed. However, this benefit is of limited value in
comparison with the income that would be gained if the intended crop
could have been planted. In addition, the feed value obtained varies
widely and may be negligible in some situations. It is FCIC's opinion
that the administrative costs associated with keeping track of the
disposition of feed production outweigh any benefit that could be
derived.
Comment: Eleven comments received from FSA and the crop insurance
industry recommended eliminating the provision which provides a
prevented planting guarantee equal to 25 percent of the production
guarantee for timely planted acres (20 percent for hybrid seed (corn)
and 17.5 percent for cotton, ELS cotton, and rice) when acreage that is
prevented from being planted is planted to a substitute crop for
harvest. The following reasons were given: (1) This protection was not
intended or mandated by the Reform Act; (2) the previous disaster
programs never provided this type of protection; (3) there is no budget
to cover the subsidy or administrative expense for this protection; (4)
the indemnity would be paid even if the substitute crop provided more
economic value than the intended crop that was prevented from planting;
(5) the moral risk is high; (6) there has been little demand for this
kind of protection from producers, insurance companies or agents and
if, or when, the demand occurs a ``pilot program'' should be developed
and
[[Page 62716]]
implemented; (7) if a plan like this is offered it should be offered as
a separate policy without government subsidy and delivered by the
private insurance industry without any cost to the government; (8) the
premium for the 25 percent protection (20 percent for hybrid seed
(corn) and 17.5 percent for cotton, ELS cotton, and rice) has been
increased as much as 30 percent in some counties. This protection
should be offered as an option or a separate endorsement that does not
affect the cost of the basic protection or require the producer to sign
an exclusion; (9) the rating varies within a state from 5 percent to 30
percent for no apparent reason; (10) it puts extreme pressure on the
final planting date. For example, producers contemplating switching
from corn to soybeans would normally plant whenever they thought they
were better off with a normal soybean yield versus a reduced corn
yield, but now some producers will want to wait until the final
planting date for corn so they can have the prevented planting
guarantee when planting a substitute crop; (11) intended acres are very
hard to administer; (12) every crop could potentially show one crop as
prevented planting with a substitute crop planted (i.e. a producer
could report prevented planting corn with planted soybeans on field A
and prevented planting soybeans with planted corn on field B when the
producers intentions were to plant half of the fields to soybeans and
half to corn); (13) it encourages producers to manipulate the program
to the detriment of the American taxpayer; (14) acreage on which the
producer is able to plant a crop for harvest is not acreage that is
prevented from being planted; (15) the definition of ``indemnity'' in
the Basic Insurance Principles states, ``For insurance purposes, it
means that the producer is restored to approximately the same position
from an economic standpoint that was occupied before the loss occurred.
* * * Never, under any circumstances, would a gain be permitted.''
Under this provision, a gain is almost a given; (16) a producer would
not plant two crops on the same acreage in the same crop year, except
for a producer who normally double crops. That is unfair to producers
in areas without excessive moisture who plant only one crop and may
receive an indemnity on only that crop, not an additional 25 percent on
an imaginary crop; (17) any time a producer can opt out of automatic
coverage, adverse selection is assured; (18) the more endorsements,
options, and exclusions that are added to a policy, the greater the
likelihood of producers being unaware of all of their policy provisions
and obligations which increases the appeals, litigation cases, agent
error and omissions occurrences, and Congressional referrals; (19) the
rate increases and factors that were used are inaccurate; (20) factors
used to decrease premium if a producer opts out of this coverage are
excessive; (21) the prevented planting provisions must increase the
incentive to plant the original crop and decrease any incentive to
simply not plant and collect insurance benefits; (22) adverse selection
will also occur as producers will be able to opt out of prevented
planting for a reduced charge; and (23) the most recent GAO report
addresses the inadequacy of the current premium rates and that the
programs rate structure was undermined when the Department provided
more benefits in 1995 under the prevented planting provision and, if
history is any indication, then premium rates will remain inadequate.
Response: FCIC understands the concerns of the crop insurance
industry, government employees, and others. Although the Reform Act did
not mandate this protection, FCIC's decision to develop the proposed
regulations for prevented planting was based on broad policy concerns
that had to be considered along with actuarial concerns.
When the present prevented planting provisions were developed for
the 1994 crop year, FCIC knew that changes would be needed in future
years as experience was gained. Many producers were prevented from
planting in the 1995 crop year and voiced discontent with those
provisions. It was concluded that there was an inconsistency in
coverage that resulted in three different levels of claims payments for
producers similarly affected by excessive moisture. Specifically,
producers who planted an insured crop that failed were eligible for
crop insurance indemnities for a loss in production; producers who were
prevented from planting an insured crop and did not plant a subsequent
crop were eligible for a crop insurance prevented planting payments,
but producers who were prevented from planting an insured crop and
planted a substitute crop were not eligible for any crop insurance
payments. FCIC believes that this third group should be eligible for
crop insurance payments to make them whole.
To maintain actuarial integrity 1996 crop insurance premium rates
were recalculated to reflect the prevented planting coverage changes.
FCIC believes the coverage changes merely give producers another
insurance choice when they are prevented from planting their initially
intended crops. FCIC agrees producers should be encouraged to plant
their initially intended crop after the final planting date when it is
practical to do so. Therefore, FCIC is amending this regulation so that
when Producers are prevented from planting their initially intended
crop and plant a substitute crop within ten days after the final
planting date for the initially intended crop, a prevented planting
production guarantee will not be provided for such acreage. In
addition, FCIC believes producers will make every effort to plant the
crop of the greatest economic value as soon as possible. It would make
little sense to delay planting to receive the 25 percent prevented
planting payment and run the risk of not getting any crop planted. FCIC
believes this amendment will help maintain the actuarial soundness of
the prevented planting coverage.
The proposed regulations do not provide the option to delete the
primary prevented planting coverage. They do provide producers the
option of declining eligibility for a prevented planting production
guarantee when a substitute crop is planted. Producers may wish to
delete this coverage in return for a reduction in the premium they are
required to pay. Based on the forgoing reasons, no change will be made.
Comment: One comment received from the crop insurance industry
suggested that the option to receive prevented planting benefits and
plant a substitute crop should be continuous until cancelled and should
only be completed for producers who want the additional coverage, not
for producers declining the coverage.
Response: FCIC has determined that all producers should have
complete prevented planting coverage unless they elect to exclude such
coverage when a substitute crop is planted for harvest. Experience in
1993 indicates that most producers were unaware of the availability of
prevented planting coverage when it was a separately purchased
coverage. Therefore, no change will be made.
Comment: One comment received from counsel of a reinsured company
stated that the policy provisions should be amended to read, ``Proof
that you had the inputs available to plant and produce a crop other
than a crop you planted the past year or a crop that is part of a
regular rotation of the acres planted and for which you had insurance
with the expectation of at least producing * * *.''
[[Page 62717]]
Response: FCIC does not agree. The intent of prevented planting
coverage is to provide coverage for the intended crop for the current
crop year. FCIC does not intend to interfere with producers' responses
to market signals. Therefore, no change will be made.
Comment: Two comments received from the crop insurance industry
expressed concern regarding how insurers will police provisions dealing
with a substitute crop and recommended clarifying the following issues
in the final rule. The comments state that it is difficult if not
impossible to determine the crop and acreage originally intended to be
planted and that the provisions will provide an opportunity for
producers to claim prevented planting on acreage originally intended to
be planted to a substitute crop. One of the comments further questioned
whether a minor oilseed crop planted by a grower participating in the
so called 0/92 program would be considered a substitute crop or not.
Response: The acreage reporting provisions rely on the producer to
indicate the specific acreage and crop that were prevented from being
planted. On the surface these provisions would indicate a significant
vulnerability, especially with regard to the substitute crop
provisions. However, other provisions, including those that limit
maximum eligible acreage and those that reduce eligible acreage by the
amount of any timely and late planted acreage substantially reduce this
vulnerability. For example, if a producer indicates acreage is
prevented from being planted to corn and plants grain sorghum as a
substitute crop, any other acreage planted to corn on the farm would
reduce the amount of corn acreage eligible for a prevented planting
production guarantee. Likewise, the acreage planted to grain sorghum
would reduce the amount of any grain sorghum acreage that may have
originally been eligible to receive a prevented planting production
guarantee. Other provisions that give the insurer the right to require
a producer to provide proof that the inputs were available to plant and
produce the crop will also reduce vulnerabilities that might otherwise
be associated with this coverage. A minor oilseed crop may be
considered a substitute crop if it is planted after the originally
intended crop was prevented from being planted. Growers qualifying for
prevented planting coverage in this situation may qualify for the so
called 0/92 program if the minor oilseed can be planted as a substitute
crop under that program. Participation in the so called 0/92 program is
not required to be eligible for crop insurance prevented planting
benefits.
Comment: One comment received from the crop insurance industry
expresses concern that the wording that advises the producer of the
choice to exclude prevented planting coverage is not prominent enough
in the policy. The comment also suggests, concurrent with the final
rule, that guidelines meeting Standard Reinsurance Agreement
requirements be issued addressing the form ``approved by us'' that is
required to opt out of prevented planting coverage when a substitute
crop is planted.
Response: Provisions indicating a producer's choice to exclude this
coverage are contained in appropriate locations within the policy. On
or before the sales closing date for the intended crop, a producer may
``opt out'' of prevented planting coverage when a substitute crop is
planted by entering the appropriate option code on the crop insurance
application or contract change form.
Comment: One comment received from the crop insurance industry and
one comment received from FSA stated that the provision that requires a
producer to provide proof that they had the inputs available to plant
and produce a crop adds complication to the loss adjustment process and
likely adds little to the ability to determine the producer's intent.
If the provision is not eliminated, one of the comments recommends
issuance, concurrent with the final rule, of procedure addressing what
constitutes proof that the inputs were available.
Response: Proof that the producer had the available inputes is not
mandatory in all cases. Such proof should be required when producers
are claiming they are prevented from planting a crop which they have
never historically planted or there are other suspicious circumstances.
Procedure is being drafted in the loss adjustment handbooks to include
what constitutes such proof. Therefore, no change is necessary.
Comment: One comment received from FSA indicated that they did not
understand why producers would request deleting the prevented planting
provisions from a policy.
Response: The producers would not have the option of deleting the
prevented planting provisions from the policy, instead they would be
allowed only to exclude eligibility for that portion of the prevented
planting coverage available when a substitute crop is planted in return
for a reduction in the premium rate attributed to such coverage.
Comment: One comment received from FSA stated that it seems
pointless to add a requirement for producers to provide proof that they
had inputs available to plant and produce the intended crop because
seed and chemical receipts are too easily obtained by persons willing
to manipulate FCIC's procedures.
Response: FCIC disagrees with the comment. Falsifying such records
could subject the producer, seed or chemical distributor to criminal or
civil sanctions. Further, inputs such as seed and chemical receipts
verify the intentions to plant and produce the insured crop. The
producer who provides false documentation is, of course, open to
substantial criminal and civil liability. Failure to produce this
evidence when requested is cause for FCIC to deny prevented planting
coverage. Therefore, no change will be made.
Comment: One comment received from the crop insurance industry
recommended deletion of the extended insurance period provisions for
carry-over insureds. The comment indicated that the current sales
closing date of March 15 in an area with normal planting times during
April and May makes the likelihood of a prevented planting cause prior
to March 15 very remote. If the provision is not deleted, it was
recommended that the provision be clarified to address whether or not
buying up from the CAT level for 1996 falls under the first year or the
subsequent year provisions.
Response: The Reform Act requires prevented planting coverage be
provided for the period between the sales closing date of the previous
crop year and the sales closing date of the current crop year.
Therefore, no change will be made.
Comment: One comment received from the crop insurance industry
recommended that acreage of hybrid seed crops (and any other crop grown
under a contract) eligible for prevented planting coverage be limited
to the same number of acres under contract for the crop year.
Response: FCIC agrees with the comment and has revised the hybrid
corn and hybrid sorghum seed crop provisions accordingly.
Comment: One comment received from the crop insurance industry
recommended clarification of provisions that limit the eligible acreage
to the number of acres planted to the insured crop during the previous
crop year. Specifically, the comment asked if this provision means the
number of acres the producer planted the previous year or the number of
acres planted on the land in question; and what happens if the
[[Page 62718]]
land changes hands from one year to the next or the producer farms
different land from one year to the next.
Response: FCIC agrees that the provision may be interpreted
incorrectly. The intent is to limit eligible acreage within a FSA farm
serial number to the total number of acres planted to the insured crop
on the FSA farm serial number the previous crop year unless we agree to
a greater number. The crop provisions have been clarified accordingly.
Comment: One comment received from the crop insurance industry and
two comments received from FSA question how the insurance provider was
to agree in writing to insure eligible acreage. They also recommended
that procedure be issued, concurrently with the final rule, to indicate
the parameters and required elements of an ``agreement in writing'' to
increase the number of acres that would be eligible for prevented
planting coverage.
Response: Presently, it is up to the insurance provider to develop
a process by which they agree in writing when the producer requests to
increase their eligible prevented planting acreage. FCIC agrees that
further instructions are needed and will incorporate such instructions
into the 1996 Catastrophic Risk Protection Handbook and the Crop
Insurance Handbook.
Comment: One comment received from the crop insurance industry
recommended adding language to provisions regarding determination of
eligible acreage that limits the eligible acreage to that indicated on
a ``report of intended acreage.'' The comment further suggests that
language be added to indicate that such report meets the criteria for
the agreement in writing that is necessary to exceed the printed policy
limitations for eligible acreage.
Response: FCIC does not require nor prohibit the use of a ``report
of intended acreage.'' However, coverage and premium are based on the
actual acreage report filed by the producer, not the report of intended
acreage. Therefore, no change is made. FCIC will consider the use of
the ``report of intended acreage'' as an ``agreement in writing'' to
exceed the printed policy limitations for eligible acreage.
Comment: One comment received from the crop insurance industry
stated that reference to the final planting date in the paragraph which
states, ``prevented planting coverage will not be provided for any
acreage * * * that does not constitute at least 20 acres or 20 percent
(20%) of the acreage in the unit'' must be clarified. They did not
understand if it applied to the final planting date for the planted
crop or the final planting date for the other crop which the producer
wants to declare as prevented planting.
Response: In FCIC's opinion, this provision does not require
clarification. This provision requires information regarding inputs
only for the originally intended crop. Therefore, no change is made.
Comment: One comment received from the crop insurance industry
recommended deletion of the provision that states ``Any acreage you
report in excess of the number of acres eligible for prevented planting
coverage, or that exceeds the number of eligible acres physically
located in a unit, will be deleted from your acreage report.'' The
comment suggests replacing this provision with the following: ``Any
acreage you report that does not qualify for prevented planting will be
deleted from your acreage report.''
Response: FCIC disagrees with the comment. The recommended
replacement language that states ``does not qualify for prevented
planting'' is not specific enough regarding the eligible acres for
prevented planting. Producers need to understand that acreage deleted
from the acreage report consists of both the acreage in excess of the
number of acres eligible for prevented planting coverage and acres in
excess of the number of eligible acres physically located in a unit.
Comment: One comment received from FSA suggested that if the
``Freedom to Farm'' concept is adopted and the producer is not
restricted to a required number of acres of a crop, it will be
difficult to believe the acreage reported as ``intended to be
planted.''
Response: At this time legislative changes in the farm bill are
uncertain and it would be premature for FCIC to make changes based on
assumptions. FCIC will make the necessary changes based on the law
ultimately enacted. The restriction with regard to prior year's planted
acreage continues regardless of changes in acreage bases.
Comment: One comment received from FSA stated that the following
phrase ``acreage that is less than 20 acres or 20 percent of the
acreage in the unit will be considered intended to be planted to the
insured crop planted on the adjoining acreage, unless you can show that
you had the inputs available to plant and produce another insured crop
on the acreage before the final planting date,'' will allow prevented
planting coverage on less than 20 acres or 20 percent of the acreage in
the unit if a producer could prove he was going to plant that to
another crop. This scenario is unlikely and we are just allowing a
loophole for producers to get prevented planting coverage on their
potholes.
Response: The proposed provisions state that, ``Prevented planting
coverage will not be provided for any acreage that does not constitute
at least 20 acres or 20 percent (20%) of the acreage in the unit,
whichever is less * * *'' was intended to be used only to verify the
crop intended to be planted on the acreage. For example, assume that a
producer has one section of land comprised of three separate adjacent
fields. The first field consists of the east \1/3\ of the section (100
insurable acres), the second field consists of the central \1/3\ of the
section (100 acres of which 85 acres are not insurable), and the third
field consists of the west \1/3\ of the section (100 insurable acres).
If the producer planted corn on the first and the third fields and is
prevented from planting the 15 insurable acres in the second (middle/
adjacent) field, the 15 acres will be considered to have been intended
to be planted to corn, unless the producer can show that inputs were
available to plant and produce another crop on those 15 acres. If
inputs are not available for another crop, the 15 acres would not be
eligible for prevented planting because at least 20 acres in the unit
were not prevented from planting.
Comment: One comment received from the crop insurance industry
stated that the language should be modified (subsection 13(d)(4)(iv)(D)
of the Coarse Grains Provisions) to read: On which another crop is
prevented from being planted, if you have already received a prevented
planting indemnity, guarantee or amount of insurance for such acreage
in the same crop year, unless you provide adequate records of acreage
and production showing that the acreage has a history of double-
cropping in each of the last four crop years;
Response: FCIC agrees with the comment and has revised the
provisions accordingly.
Comment: One comment received from the crop insurance industry
stated that the language should be modified (subsection 13(d)(4)(iv)(E)
of the Coarse Grains Provisions) to read: On which the insured crop is
prevented from being planted, if any other crop is planted and fails,
or is planted and harvested, hayed or grazed on such acreage in the
same crop year (other than a cover crop as specified in paragraph
(a)(3)(i) of this section, or a substitute crop allowed in paragraph
(a)(3)(ii) of this section), unless you provide adequate records of
acreage and production showing that the acreage has a history of
double-cropping in each of the last four years;
[[Page 62719]]
Response: FCIC agrees with the comment and has revised the
provisions accordingly.
Comment: One comment received from the crop insurance industry
stated that it is currently impossible to monitor the requirement that
all acreage prevented from being planted be reported, especially when
it is small acreage and production from planted acreage will likely
exceed the combined guarantee. If this reporting requirement is
retained, guidelines must be established to be able to enforce and
possibly penalize, if not reported completely. Now may be the time to
initiate reporting of intended acreage to be planted the following year
at the same time that production is reported for the current crop year.
Response: FCIC agrees that this potential exists and will continue
to monitor this problem and to work on a solution. However, no change
will be made at this time.
Comment: One comment received from FSA suggested deleting the
following sentence because it is repetitious, ``If you have a
Catastrophic Risk Endorsement and receive a prevented planting
indemnity, guarantee, or amount of insurance for a crop and are
prevented from planting another crop on the same acreage, you may only
receive the prevented planting indemnity, guarantee, or amount of
insurance for the crop on which the prevented planting indemnity,
guarantee, or amount of insurance is received.''
Response: FCIC disagrees that the provision is repetitious. For CAT
policies only, this provision specifically disallows more than one
prevented planting benefit per acre for a crop year regardless of a
past history of double cropping. It also prohibits a prevented planting
production guarantee on acreage if another crop is planted for the
insured crop year. Both of these benefits may be provided in certain
situations under limited and additional coverage. Therefore, no change
is made.
Comment: One comment received from an attorney on behalf of the
crop insurance industry indicated that allowing both a so called 0/92
or 50/92 payment and a crop insurance prevented planting benefit is
contrary to law. The comment states that the interim rule allowing both
payments (published at 60 FR 35832 (July 12, 1995)) was a move back to
ad hoc disaster payments.
Response: The so called 0/92 and 50/92 payments are not payments
for prevented planting. Producers do not have to have been prevented
from planting to collect 0/92 or 50/92 payments. Payments under these
programs are intended to compensate producers for price deficiencies
(i.e. the difference between the target price and the market price.
Since payments under the 0/92 and 50/92 programs are available for
producers with crop failure, it would be inconsistent to deny the same
benefit to producers who are prevented from planting.
Comment: One comment received from the crop insurance industry
suggested that additional definitions and clarifications need to be
made that spell out the qualifications for double-cropped acreage such
as what proof is needed and how many years of records are needed.
Otherwise, they recommend excluding double cropped acreage.
Response: The prevented planting provisions specify that the
producer must provide adequate records of acreage and production that
show the acreage has been double-cropped for each of the last four
years. Therefore, no change is necessary.
Comment: Two comments received from the crop insurance industry
regarding allowing prevented planting payments on double-crop
situations stated that: (1) It will generate additional prevented
planting claims on acreage that would otherwise not be double-cropped.
If these provisions are retained, ``adequate records of acreage and
production in each of the last four years'' must be clearly defined to
assure that the specific acreage has a definite history of double-
cropping; and (2) two prevented planting payments in double cropping
situations may add unwanted incentives to encourage the farming of
fragile and marginal lands in more arid regions.
Response: FCIC does not believe that additional claims will be made
for acreage that would not normally be double-cropped. The crop
provisions clearly indicate that records of both acreage and production
for the previous four crop years must be provided to qualify for
benefits for more than one crop in a crop year. This provision should
discourage claims on acreage that has not been double-cropped in the
past. FCIC does not believe this benefit will encourage tillage of
fragile and marginal lands in more arid regions. Growers will not
double-crop this land for four consecutive years to qualify for
prevented planting benefits in the fifth year.
So that these policy changes can take effect beginning with 1996
spring-planted crops, good cause is shown to make this rule effective
immediately upon filing with the Federal Register and without the 30-
day period required by the Administrative Procedure's Act to avoid the
pressures on FCIC to make changes after the contract change date as a
result of a large number of producers being prevented from planting
such as occurred during the 1995 crop year which resulted in confusion
among producers, insurance companies, and FSA with respect to the
program changes and increased losses.
Prevented planting changes to these policies were made by interim
rule for the 1995 crop year. Experience with those modifications
require certain changes which have been made by this rule. However, the
present policy effective for crop year 1995 fall-planted crops and
scheduled to be effective for 1996 spring-planted crops do not
adequately protect the producer who suffers a prevented planting loss.
The contract change date for 1996 spring-planted crops is November 30,
1995, and this rule must be effective for those crops. Therefore, good
cause is shown to make this rule effective in less than 30 days after
publication.
List of Subjects
7 CFR Part 401
Crop insurance, Hybrid sorghum seed, Reporting and recordkeeping
requirements, Rice.
7 CFR Part 443
Crop insurance, Hybrid seed, Reporting and recordkeeping
requirements.
7 CFR Part 457
Crop insurance, Reporting and recordkeeping requirements, Small
grains, Cotton, ELS cotton, Sunflower seed and coarse grains.
Final Rule
In this document, pursuant to the authority contained in the
Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et seq.), the
Federal Crop Insurance Corporation hereby amends the General Crop
Insurance Regulations (7 CFR part 401) by amending the Hybrid Sorghum
Seed (Sec. 401.109) and Rice (Sec. 401.120) Endorsements; the Hybrid
Seed Crop Insurance Policy (7 CFR 443.7(d)); and the Common Crop
Insurance Regulations (7 CFR part 457) by amending the Small Grains
(Sec. 457.101), Cotton (Sec. 457.104), Extra Long Staple Cotton
(Sec. 457.105), Sunflower Seed (Sec. 457.108), and Coarse Grains
(Sec. 457.113) Crop Insurance Provisions; applicable beginning with the
1996 crop year for spring crops with contract change dates on or after
November 30, 1995.
Accordingly, 7 CFR parts 401, 443, and 457 are amended as follows:
[[Page 62720]]
PART 401--[AMENDED]
1. The authority citation for 7 CFR part 401 is revised to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
2. Section 401.109 is amended by revising paragraphs 12(a)(3),
12(b), and 12(d) of the Hybrid Sorghum Seed Endorsement to read as
follows:
Sec. 401.109 Hybrid sorghum seed endorsement.
* * * * *
12. Late Planting and Prevented Planting
(a) * * *
(3) For prevented planting acreage, multiply the per acre amount
of insurance for timely planted acreage by:
(i) Fifty percent (0.50) and multiply the result by the 50 acres
you were prevented from planting, if the acreage is eligible for
prevented planting coverage, and if the acreage is left idle for the
crop year, or if a cover crop is planted not for harvest. Prevented
planting compensation hereunder will not be denied because the cover
crop is hayed or grazed; or
(ii) Twenty-five percent (0.25) and multiply the result by the
50 acres you were prevented from planting, if the acreage is
eligible for prevented planting coverage, and if you elect to plant
a substitute crop for harvest after the 10th day following the final
planting date for the insured crop. (This subparagraph (ii) is not
applicable, and prevented planting coverage is not available
hereunder, if you elected the Catastrophic Risk Protection
Endorsement or you elected to exclude prevented planting coverage
when a substitute crop is planted (see subparagraph 12(d)(1)(iii))).
The total of the three calculations will be the amount of
insurance for the unit. Your premium will be based on the result of
multiplying the per acre amount of insurance for timely planted
acreage by the 150 insured crop acres in the unit.
(b) If you were prevented from planting, you must provide
written notice to us not later than the acreage reporting date.
* * * * *
(d) Prevented Planting (Including Planting After the Late
Planting Period).
(1) If you were prevented from planting the insured crop (see
subsection 13(o)), you may elect:
(i) To plant the insured crop during the late planting period.
The amount of insurance for such acreage will be determined in
accordance with paragraph 12(c)(1);
(ii) Not to plant this acreage to any crop except a cover crop
not for harvest. You may also elect to plant the insured crop after
the late planting period. In either case, the amount of insurance
for such acreage will be fifty percent (50%) of the amount of
insurance for timely planted acres. For example, if your amount of
insurance for timely planted acreage is 200 dollars per acre, your
prevented planting amount of insurance would be 100 dollars per acre
(200 dollars multiplied by 0.50). If you elect to plant the insured
crop after the late planting period, production to count for such
acreage will be determined in accordance with subsections 8b through
e; or
(iii) Not to plant the intended crop but plant a substitute crop
for harvest, in which case:
(A) No prevented planting amount of insurance will be provided
for such acreage if the substitute crop is planted on or before the
tenth day following the final planting date for the insured crop; or
(B) An amount of insurance equal to twenty-five percent (25%) of
the amount of insurance for timely planted acres will be provided
for such acreage, if the substitute crop is planted after the tenth
day following the final planting date for the insured crop. If you
elected the Catastrophic Risk Protection Endorsement or excluded
this coverage, and plant a substitute crop, no prevented planting
coverage will be provided. For example, if your amount of insurance
for timely planted acreage is 200 dollars per acre, your prevented
planting amount of insurance would be 50 dollars per acre (200
dollars multiplied by 0.25). You may elect to exclude prevented
planting coverage when a substitute crop is planted for harvest and
receive a reduction in the applicable premium rate. If you wish to
exclude this coverage, you must so indicate, on or before the sales
closing date, on your application or on a form approved by us. Your
election to exclude this coverage will remain in effect from year to
year unless you notify us in writing on our form by the applicable
sales closing date for the crop year for which you wish to include
this coverage. All acreage of the crop insured under this policy
will be subject to this exclusion.
(2) Proof may be required that you had the inputs available to
plant and produce the intended crop with the expectation of at least
producing the yield upon which your amount of insurance is based.
(3) In addition to the provisions of section 7 (Insurance
Period) of the General Crop Insurance Policy (Sec. 401.8), the
insurance period for prevented planting coverage begins:
(i) On the sales closing date contained in the Special
Provisions for the insured crop in the county for the crop year the
application for insurance is accepted; or
(ii) For any subsequent crop year, on the sales closing date for
the insured crop in the county for the previous crop year, provided
continuous coverage has been in effect since that date. For example:
If you make application and purchase a hybrid sorghum seed crop
insurance policy for the 1996 crop year, prevented planting coverage
will begin on the 1996 sales closing date for the insured crop in
the county. If the hybrid sorghum seed coverage remains in effect
for the 1997 crop year (is not terminated or cancelled during or
after the 1996 crop year, except the policy may have been cancelled
to transfer the policy to a different insurance provider, if there
is no lapse in coverage), prevented planting coverage for the 1997
crop year began on the 1996 sales closing date.
(4) The acreage to which prevented planting coverage applies
will not exceed the total eligible acreage on all Farm Service
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted
for any reconstitution that may have occurred on or before the sales
closing date. Eligible acreage for each FSA Farm Serial Number is
determined as follows:
(i) Eligible acreage will not exceed the number of acres
required to be grown in the current crop year under a contract
executed with a seed company prior to the acreage reporting date.
(ii) Acreage intended to be planted under an irrigated practice
will be limited to the number of acres for which you had adequate
irrigation facilities prior to the insured cause of loss which
prevented you from planting.
(iii) Prevented planting coverage will not be provided for any
acreage:
(A) That does not constitute at least 20 acres or 20 percent
(20%) of the acreage in the unit, whichever is less (Acreage that is
less than 20 acres or 20 percent of the acreage in the unit will be
presumed to have been intended to be planted to the insured crop
planted in the unit, unless you can show that you had the inputs
available before the final planting date to plant and produce
another insured crop on the acreage);
(B) For which the actuarial table does not designate a premium
rate unless a written agreement designates such premium rate;
(C) Used for conservation purposes or intended to be left
unplanted under any program administered by the United States
Department of Agriculture;
(D) On which another crop is prevented from being planted, if
you have already received a prevented planting indemnity, guarantee
or amount of insurance for the same acreage in the same crop year,
unless you provide adequate records of acreage and production
showing that the acreage has a history of double-cropping in each of
the last four years;
(E) On which the insured crop is prevented from being planted,
if any other crop is planted and fails, or is planted and harvested,
hayed or grazed on the same acreage in the same crop year, (other
than a cover crop as specified in paragraph (a)(3)(i) of this
section, or a substitute crop allowed in paragraph (a)(3)(ii) of
this section) unless you provide adequate records of acreage and
production showing that the acreage has a history of double-cropping
in each of the last four years;
(F) When coverage is provided under the Catastrophic Risk
Protection Endorsement if you plant another crop for harvest on any
acreage you were prevented from planting in the same crop year, even
if you have a history of double cropping. If you have a Catastrophic
Risk Protection Endorsement and receive a prevented planting
indemnity, guarantee, or amount of insurance for a crop and are
prevented from planting another crop on the same acreage, you may
only receive the prevented planting indemnity, guarantee, or amount
of insurance for the crop on which the prevented planting indemnity,
guarantee, or amount of insurance is received; or
(G) For which planting history or conservation plans indicate
that the acreage would have remained fallow for crop rotation
purposes.
(iv) For the purpose of determining eligible acreage for
prevented planting coverage, acreage for all units will be combined
and be
[[Page 62721]]
reduced by the number of acres of the insured crop timely planted and
late planted. For example, assume you have 100 acres eligible for
prevented planting coverage in which you have a 100 percent (100%)
share. The acreage is located in a single FSA Farm Serial Number
which you insure as two separate optional units consisting of 50
acres each. If you planted 60 acres of the insured crop on one
optional unit and 40 acres of the insured crop on the second
optional unit, your prevented planting eligible acreage would be
reduced to zero (i.e., 100 acres eligible for prevented planting
coverage minus 100 acres planted equals zero).
(5) In accordance with the provisions of section 3 (Report of
Acreage, Share, and Practice (Acreage Report)) of the General Crop
Insurance Policy (Sec. 401.8), you must report by unit any insurable
acreage that you were prevented from planting. This report must be
submitted on or before the acreage reporting date. For the purpose
of determining acreage eligible for a prevented planting amount of
insurance the total amount of prevented planting and planted acres
cannot exceed the maximum number of acres eligible for prevented
planting coverage. Any acreage you report in excess of the number of
acres eligible for prevented planting coverage, or that exceeds the
number of eligible acres physically located in a unit, will be
deleted from your acreage report.
(6) If the amount of premium you are required to pay (gross
premium less our subsidy) for the prevented planting acreage exceeds
the prevented planting liability on a unit, prevented planting
coverage will not be provided for that unit (no premium will be due
and no indemnity will be paid for such acreage).
* * * * *
Sec. 401.109 [Amended].
3. Section 401.109 is amended by revising paragraph 13(o) to read
as follows:
* * * * *
13. Meaning of Terms
* * * * *
(o) Prevented planting--Inability to plant the insured crop with
proper equipment by the final planting date designated in the
Special Provisions for the insured crop in the county or the end of
the late planting period. You must have been unable to plant the
insured crop due to an insured cause of loss that has prevented the
majority of producers in the surrounding area from planting the same
crop.
* * * * *
4. Section 401.120 is amended by revising paragraphs 10(a)(3),
10(b), and 10(d) of the Rice Endorsement to read as follows:
Sec. 401.120 Rice endorsement.
* * * * *
10. Late Planting and Prevented Planting
(a) * * *
(3) For prevented planting acreage, multiply the per acre
production guarantee for timely planted acreage by:
(i) Thirty-five percent (0.35) and multiply the result by the 50
acres you were prevented from planting, if the acreage is eligible
for prevented planting coverage, and if the acreage is left idle for
the crop year, or if a cover crop is planted not for harvest.
Prevented planting compensation hereunder will not be denied because
the cover crop is hayed or grazed; or
(ii) Seventeen and five tenths percent (0.175) and multiply the
result by the 50 acres you were prevented from planting, if the
acreage is eligible for prevented planting coverage, and if you
elect to plant a substitute crop for harvest after the 10th day
following the final planting date for the insured crop. (This
subparagraph (ii) is not applicable, and prevented planting coverage
is not available hereunder, if you elected the Catastrophic Risk
Protection Endorsement or you elected to exclude prevented planting
coverage when a substitute crop is planted (see subparagraph
10(d)(1)(iii))).
The total of the three calculations will be the production
guarantee for the unit. Your premium will be based on the result of
multiplying the per acre production guarantee for timely planted
acreage by the 150 acres in the unit.
(b) If you were prevented from planting, you must provide
written notice to us not later than the acreage reporting date.
* * * * *
(d) Prevented Planting (Including Planting After the Late
Planting Period).
(1) If you were prevented from planting rice (see subsection
11(h)), you may elect:
(i) To plant rice during the late planting period. The
production guarantee for such acreage will be determined in
accordance with paragraph 10(c)(1);
(ii) Not to plant this acreage to any crop except a cover crop
not for harvest. You may also elect to plant the insured crop after
the late planting period. In either case, the production guarantee
for such acreage will be thirty-five percent (35%) of the production
guarantee for timely planted acres. For example, if your production
guarantee for timely planted acreage is 2000 pounds per acre, your
prevented planting production guarantee would be 700 pounds per acre
(2000 pounds multiplied by 0.35). If you elect to plant the insured
crop after the late planting period, production to count for such
acreage will be determined in accordance with subsections 7b and c;
or
(iii) Not to plant the intended crop but plant a substitute crop
for harvest, in which case:
(A) No prevented planting production guarantee will be provided
for such acreage if the substitute crop is planted on or before the
tenth day following the final planting date for the insured crop; or
(B) A production guarantee equal to seventeen and five tenths
percent (17.5%) of the production guarantee for timely planted acres
will be provided for such acreage, if the substitute crop is planted
after the tenth day following the final planting date for the
insured crop. If you elected the Catastrophic Risk Protection
Endorsement or excluded this coverage and plant a substitute crop,
no prevented planting coverage will be provided. For example, if
your production guarantee for timely planted acreage is 2000 pounds
per acre, your prevented planting production guarantee would be 350
pounds per acre (2000 pounds multiplied by 0.175). You may elect to
exclude prevented planting coverage when a substitute crop is
planted for harvest and receive a reduction in the applicable
premium rate. If you wish to exclude this coverage, you must so
indicate, on or before the sales closing date, on your application
or on a form approved by us. Your election to exclude this coverage
will remain in effect from year to year unless you notify us in
writing on our form by the applicable sales closing date for the
crop year for which you wish to include this coverage. All acreage
of the crop insured under this policy will be subject to this
exclusion.
(2) Proof may be required that you had the inputs available to
plant and produce the intended crop with the expectation of at least
producing the production guarantee.
(3) In addition to the provisions of section 7 (Insurance
Period) of the General Crop Insurance Policy (Sec. 401.8), the
insurance period for prevented planting coverage begins:
(i) On the sales closing date contained in the Special
Provisions for rice in the county for the crop year the application
for insurance is accepted; or
(ii) For any subsequent crop year, on the sales closing date for
the insured crop in the county for the previous crop year, provided
continuous coverage has been in effect since that date. For example:
If you make application and purchase a rice crop insurance policy
for the 1996 crop year, prevented planting coverage will begin on
the 1996 sales closing date for the insured crop in the county. If
the rice coverage remains in effect for the 1997 crop year (is not
terminated or cancelled during or after the 1996 crop year, except
the policy may have been cancelled to transfer the policy to a
different insurance provider, if there is no lapse in coverage),
prevented planting coverage for the 1997 crop year began on the 1996
sales closing date.
(4) The acreage to which prevented planting coverage applies
will not exceed the total eligible acreage on all Farm Service
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted
for any reconstitution that may have occurred on or before the sales
closing date. Eligible acreage for each FSA Farm Serial Number is
determined as follows:
(i) If you participate in any program administered by the United
States Department of Agriculture that limits the number of acres
that may be planted for the crop year, the acreage eligible for
prevented planting coverage will not exceed the total acreage
permitted to be planted to the insured crop.
(ii) If you do not participate in any program administered by
the United States Department of Agriculture that limits the number
of acres that may be planted, and unless we agree in writing on or
before the sales closing date, eligible acreage will not exceed the
greater of:
(A) The FSA base acreage for the insured crop, including acres
that could be flexed from another crop, if applicable;
[[Page 62722]]
(B) The number of acres planted to rice on the FSA Farm Serial
Number during the previous crop year; or
(C) One hundred percent (100%) of the simple average of the
number of acres planted to rice during the crop years that you
certified to determine your yield.
(iii) Prevented planting coverage will not be provided for any
acreage:
(A) That does not constitute at least 20 acres or 20 percent
(20%) of the acreage in the unit, whichever is less (Acreage that is
less than 20 acres or 20 percent of the acreage in the unit will be
presumed to have been intended to be planted to the insured crop
planted in the unit, unless you can show that you had the inputs
available before the final planting date to plant and produce
another insured crop on the acreage);
(B) For which the actuarial table does not designate a premium
rate unless a written agreement designates such premium rate;
(C) Used for conservation purposes or intended to be left
unplanted under any program administered by the United States
Department of Agriculture;
(D) On which another crop is prevented from being planted, if
you have already received a prevented planting indemnity, guarantee
or amount of insurance for the same acreage in the same crop year,
unless you provide adequate records of acreage and production
showing that the acreage has a history of double-cropping in each of
the last four years;
(E) On which the insured crop is prevented from being planted,
if any other crop is planted and fails, or is planted and harvested,
hayed or grazed on the same acreage in the same crop year, (other
than a cover crop as specified in paragraph (a)(3)(i) of this
section, or a substitute crop allowed in paragraph (a)(3)(ii) of
this section) unless you provide adequate records of acreage and
production showing that the acreage has a history of double-cropping
in each of the last four years;
(F) When coverage is provided under the Catastrophic Risk
Protection Endorsement if you plant another crop for harvest on any
acreage you were prevented from planting in the same crop year, even
if you have a history of double cropping. If you have a Catastrophic
Risk Protection Endorsement and receive a prevented planting
indemnity, guarantee, or amount of insurance for a crop and are
prevented from planting another crop on the same acreage, you may
only receive the prevented planting indemnity, guarantee, or amount
of insurance for the crop on which the prevented planting indemnity,
guarantee, or amount of insurance is received; or
(G) For which planting history or conservation plans indicate
that the acreage would have remained fallow for crop rotation
purposes.
(iv) For the purpose of determining eligible acreage for
prevented planting coverage, acreage for all units will be combined
and be reduced by the number of rice acres timely planted and late
planted. For example, assume you have 100 acres eligible for
prevented planting coverage in which you have a 100 percent (100%)
share. The acreage is located in a single FSA Farm Serial Number
which you insure as two separate optional units consisting of 50
acres each. If you planted 60 acres of rice on one optional unit and
40 acres of rice on the second optional unit, your prevented
planting eligible acreage would be reduced to zero (i.e., 100 acres
eligible for prevented planting coverage minus 100 acres planted
equals zero).
(5) In accordance with the provisions of section 3 (Report of
Acreage, Share, and Practice (Acreage Report) of the General Crop
Insurance Policy (Sec. 401.8), you must report by unit any insurable
acreage that you were prevented from planting. This report must be
submitted on or before the acreage reporting date. For the purpose
of determining acreage eligible for a prevented planting production
guarantee the total amount of prevented planting and planted acres
cannot exceed the maximum number of acres eligible for prevented
planting coverage. Any acreage you report in excess of the number of
acres eligible for prevented planting coverage, or that exceeds the
number of eligible acres physically located in a unit, will be
deleted from your acreage report.
(6) If the amount of premium you are required to pay (gross
premium less our subsidy) for the prevented planting acreage exceeds
the prevented planting liability on a unit, prevented planting
coverage will not be provided for that unit (no premium will be due
and no indemnity will be paid for such acreage).
* * * * *
5. Section 401.120 is amended by revising paragraph 11(h) to read
as follows:
* * * * *
11. Meaning of Terms
* * * * *
(h) Prevented planting--Inability to plant the insured crop with
proper equipment by the final planting date designated in the
Special Provisions for the insured crop in the county or the end of
the late planting period. You must have been unable to plant the
insured crop due to an insured cause of loss that has prevented the
majority of producers in the surrounding area from planting the same
crop.
* * * * *
PART 443--[AMENDED]
6. The authority citation for 7 CFR part 443 is revised to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
7. Section 443.7(d) is amended by revising paragraphs 17(a)(3),
17(b), and 17(d) of the Hybrid Seed Crop Insurance Policy to read as
follows:
Sec. 443.7 The application and policy.
* * * * *
(d) * * *
17. Late Planting and Prevented Planting
(a) * * *
(3) For prevented planting acreage, multiply the per acre amount
of insurance for timely planted acreage by:
(i) Forty percent (0.40) and multiply the result by the 50 acres
you were prevented from planting, if the acreage is eligible for
prevented planting coverage, and if the acreage is left idle for the
crop year, or if a cover crop is planted not for harvest. Prevented
planting compensation hereunder will not be denied because the cover
crop is hayed or grazed; or
(ii) Twenty percent (0.20) and multiply the result by the 50
acres you were prevented from planting, if the acreage is eligible
for prevented planting coverage, and if you elect to plant a
substitute crop for harvest after the 10th day following the final
planting date for the insured crop. (This subparagraph (ii) is not
applicable, and prevented planting coverage is not available
hereunder, if you elected the Catastrophic Risk Protection
Endorsement or you elected to exclude prevented planting coverage
when a substitute crop is planted (see subparagraph 17(d)(1)(iii))).
The total of the three calculations will be the amount of
insurance for the unit. Your premium will be based on the result of
multiplying the per acre amount of insurance for timely planted
acreage by the 150 insured crop acres in the unit.
(b) If you were prevented from planting, you must provide
written notice to us not later than the acreage reporting date.
* * * * *
(d) Prevented Planting (Including Planting After the Late
Planting Period).
(1) If you were prevented from planting the insured crop (see
subsection 18(w)), you may elect:
(i) To plant the insured crop during the late planting period.
The amount of insurance for such acreage will be determined in
accordance with paragraph 17(c)(1);
(ii) Not to plant this acreage to any crop except a cover crop
not for harvest. You may also elect to plant the insured crop after
the late planting period. In either case, the amount of insurance
for such acreage will be forty percent (40%) of the amount of
insurance for timely planted acres. For example, if your amount of
insurance for timely planted acreage is 200 dollars per acre, your
prevented planting amount of insurance would be 80 dollars per acre
(200 dollars multiplied by 0.40). If you elect to plant the insured
crop after the late planting period, production to count for such
acreage will be determined in accordance with subsection 9e.; or
(iii) Not to plant the intended crop but plant a substitute crop
for harvest, in which case:
(A) No prevented planting amount of insurance will be provided
for such acreage if the substitute crop is planted on or before the
tenth day following the final planting date for the insured crop; or
(B) An amount of insurance equal to twenty percent (20%) of the
amount of insurance for timely planted acres will be provided for
such acreage, if the substitute crop is planted after the tenth day
following the final planting date for the insured crop. If you
elected the Catastrophic Risk Protection Endorsement or excluded
this coverage, and plant a substitute crop, no prevented planting
coverage will be provided. For example, if your amount of insurance
for timely planted acreage is 200
[[Page 62723]]
dollars per acre, your prevented planting amount of insurance would be
40 dollars per acre (200 dollars multiplied by 0.20). You may elect
to exclude prevented planting coverage when a substitute crop is
planted for harvest and receive a reduction in the applicable
premium rate. If you wish to exclude this coverage, you must so
indicate, on or before the sales closing date, on your application
or on a form approved by us. Your election to exclude this coverage
will remain in effect from year to year unless you notify us in
writing on our form by the applicable sales closing date for the
crop year for which you wish to include this coverage. All acreage
of the crop insured under this policy will be subject to this
exclusion.
(2) Proof may be required that you had the inputs available to
plant and produce the intended crop with the expectation of at least
producing the yield upon which your amount of insurance is based.
(3) In addition to the provisions of section 7 (Insurance
Period), the insurance period for prevented planting coverage
begins:
(i) On the sales closing date contained in the Special
Provisions for the insured crop in the county for the crop year the
application for insurance is accepted; or
(ii) For any subsequent crop year, on the sales closing date for
the insured crop in the county for the previous crop year, provided
continuous coverage has been in effect since that date. For example:
If you make application and purchase a hybrid seed crop insurance
policy for the 1996 crop year, prevented planting coverage will
begin on the 1996 sales closing date for the insured crop in the
county. If the hybrid seed coverage remains in effect for the 1997
crop year (is not terminated or canceled during or after the 1996
crop year, except the policy may have been canceled to transfer the
policy to a different insurance provider, if there is no lapse in
coverage), prevented planting coverage for the 1997 crop year began
on the 1996 sales closing date.
(4) The acreage to which prevented planting coverage applies
will not exceed the total eligible acreage on all Farm Service
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted
for any reconstitution that may have occurred on or before the sales
closing date. Eligible acreage for each FSA Farm Serial Number is
determined as follows:
(i) Eligible acreage will not exceed the number of acres
required to be grown in the current crop year under a contract
executed with a seed company prior to the acreage reporting date.
(ii) Acreage intended to be planted under an irrigated practice
will be limited to the number of acres for which you had adequate
irrigation facilities prior to the insured cause of loss which
prevented you from planting.
(iii) Prevented planting coverage will not be provided for any
acreage:
(A) That does not constitute at least 20 acres or 20 percent
(20%) of the acreage in the unit, whichever is less (Acreage that is
less than 20 acres or 20 percent of the acreage in the unit will be
presumed to have been intended to be planted to the insured crop
planted in the unit, unless you can show that you had the inputs
available before the final planting date to plant and produce
another insured crop on the acreage);
(B) For which the actuarial table does not designate a premium
rate unless a written agreement designates such premium rate;
(C) Used for conservation purposes or intended to be left
unplanted under any program administered by the United States
Department of Agriculture;
(D) On which another crop is prevented from being planted, if
you have already received a prevented planting indemnity, guarantee
or amount of insurance for the same acreage in the same crop year,
unless you provide adequate records of acreage and production
showing that the acreage has a history of double-cropping in each of
the last four years;
(E) On which the insured crop is prevented from being planted,
if any other crop is planted and fails, or is planted and harvested,
hayed or grazed on the same acreage in the same crop year, (other
than a cover crop as specified in paragraph (a)(3)(i) of this
section, or a substitute crop allowed in paragraph (a)(3)(ii) of
this section) unless you provide adequate records of acreage and
production showing that the acreage has a history of double-cropping
in each of the last four years;
(F) When coverage is provided under the Catastrophic Risk
Protection Endorsement if you plant another crop for harvest on any
acreage you were prevented from planting in the same crop year, even
if you have a history of double cropping. If you have a Catastrophic
Risk Protection Endorsement and receive a prevented planting
indemnity, guarantee, or amount of insurance for a crop and are
prevented from planting another crop on the same acreage, you may
only receive the prevented planting indemnity, guarantee, or amount
of insurance for the crop on which the prevented planting indemnity,
guarantee, or amount of insurance is received; or
(G) For which planting history or conservation plans indicate
that the acreage would have remained fallow for crop rotation
purposes.
(iv) For the purpose of determining eligible acreage for
prevented planting coverage, acreage for all units will be combined
and be reduced by the number of acres of the insured crop timely
planted and late planted. For example, assume you have 100 acres
eligible for prevented planting coverage in which you have a 100
percent (100%) share. The acreage is located in a single FSA Farm
Serial Number which you insure as two separate optional units
consisting of 50 acres each. If you planted 60 acres of the insured
crop on one optional unit and 40 acres of the insured crop on the
second optional unit, your prevented planting eligible acreage would
be reduced to zero (i.e., 100 acres eligible for prevented planting
coverage minus 100 acres planted equals zero).
(5) In accordance with the provisions of section 3 (Report of
Acreage, Share, Type and Practice), you must report by unit any
insurable acreage that you were prevented from planting. This report
must be submitted on or before the acreage reporting date. For the
purpose of determining acreage eligible for a prevented planting
amount of insurance the total amount of prevented planting and
planted acres cannot exceed the maximum number of acres eligible for
prevented planting coverage. Any acreage you report in excess of the
number of acres eligible for prevented planting coverage, or that
exceeds the number of eligible acres physically located in a unit,
will be deleted from your acreage report.
(6) If the amount of premium you are required to pay (gross
premium less our subsidy) for the prevented planting acreage exceeds
the prevented planting liability on a unit, prevented planting
coverage will not be provided for that unit (no premium will be due
and no indemnity will be paid for such acreage).
* * * * *
8. Section 443.7(d) is amended by revising paragraph 18(w) to read
as follows:
* * * * *
18. Meaning of Terms
* * * * *
(w) Prevented planting--Inability to plant the insured crop with
proper equipment by the final planting date designated in the
Special Provisions for the insured crop in the county or the end of
the late planting period. You must have been unable to plant the
insured crop due to an insured cause of loss that has prevented the
majority of producers in the surrounding area from planting the same
crop.
* * * * *
PART 457--[AMENDED]
9. The authority citation for 7 CFR part 457 is revised to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
10. Section 457.101 is amended by revising paragraph l(p) of the
Small Grains Crop Provisions to read as follows:
Sec. 457.101 Small Grains Crop Insurance.
* * * * *
1. Definitions
* * * * *
(p) Prevented planting--Inability to plant the insured crop with
proper equipment by the latest final planting date designated in the
Special Provisions for the insured crop in the county or the end of
the late planting period. You must have been unable to plant the
insured crop due to an insured cause of loss that has prevented the
majority of producers in the surrounding area from planting the same
crop.
* * * * *
11. Section 457.101 is amended by revising paragraphs 12(a)(3),
12(b), and 12(d) to read as follows:
* * * * *
12. Late Planting and Prevented Planting
(a) * * *
(3) For prevented planting acreage, multiply the per acre
production guarantee for timely planted acreage by:
(i) Fifty percent (0.50) and multiply the result by the 50 acres
you were prevented
[[Page 62724]]
from planting, if the acreage is eligible for prevented planting
coverage, and if the acreage is left idle for the crop year, or if a
cover crop is planted not for harvest. Prevented planting
compensation hereunder will not be denied because the cover crop is
hayed or grazed; or
(ii) Twenty-five percent (0.25) and multiply the result by the
50 acres you were prevented from planting, if the acreage is
eligible for prevented planting coverage, and if you elect to plant
a substitute crop for harvest after the 10th day following the
latest final planting date for the insured crop. (This subparagraph
(ii) is not applicable, and prevented planting coverage is not
available hereunder, if you elected the Catastrophic Risk Protection
Endorsement or you elected to exclude prevented planting coverage
when a substitute crop is planted (see subparagraph 12(d)(1)(iii))).
The total of the three calculations will be the production
guarantee for the unit. Your premium will be based on the result of
multiplying the per acre production guarantee for timely planted
acreage by the 150 acres in the unit.
(b) If you were prevented from planting, you must provide
written notice to us not later than the acreage reporting date.
* * * * *
(d) Prevented Planting (Including Planting After the Late
Planting Period).
(1) If you were prevented from planting the insured crop (see
subsection 1(p)), you may elect:
(i) To plant the insured crop during the late planting period.
The production guarantee for such acreage will be determined in
accordance with paragraph 12(c)(1);
(ii) Not to plant this acreage to any crop except a cover crop
not for harvest. You may also elect to plant the insured crop after
the late planting period. In either case, the production guarantee
for such acreage will be 50 percent (50%) of the production
guarantee for timely planted acres. In counties for which the
Special Provisions designate a spring final planting date, the
prevented planting guarantee will be based on your approved yield
for spring-planted acreage of the insured crop. For example, if your
production guarantee for timely planted acreage is 30 bushels per
acre, your prevented planting production guarantee would be 15
bushels per acre (30 bushels multiplied by 0.50). If you elect to
plant the insured crop after the late planting period, production to
count for such acreage will be determined in accordance with
subsections 11(c) through (e); or
(iii) Not to plant the intended crop but plant a substitute crop
for harvest, in which case:
(A) No prevented planting production guarantee will be provided
for such acreage if the substitute crop is planted on or before the
tenth day following the latest final planting date for the insured
crop; or
(B) A production guarantee equal to twenty-five percent (25%) of
the production guarantee for timely planted acres will be provided
for such acreage, if the substitute crop is planted after the tenth
day following the latest final planting date for the insured crop.
If you elected the Catastrophic Risk Protection Endorsement or
excluded this coverage, and plant a substitute crop, no prevented
planting coverage will be provided. For example, if your production
guarantee for timely planted acreage is 30 bushels per acre, your
prevented planting production guarantee would be 7.5 bushels per
acre (30 bushels multiplied by 0.25). You may elect to exclude
prevented planting coverage when a substitute crop is planted for
harvest and receive a reduction in the applicable premium rate. If
you wish to exclude this coverage, you must so indicate, on or
before the sales closing date, on your application or on a form
approved by us. Your election to exclude this coverage will remain
in effect from year to year unless you notify us in writing on our
form by the applicable sales closing date for the crop year for
which you wish to include this coverage. All acreage of the crop
insured under this policy will be subject to this exclusion.
(2) Proof may be required that you had the inputs available to
plant and produce the intended crop with the expectation of at least
producing the production guarantee.
(3) In addition to the provisions of section 11 (Insurance
Period) of the Common Crop Insurance Policy (Sec. 457.8), the
insurance period for prevented planting coverage begins:
(i) On the sales closing date contained in the Special
Provisions for the insured crop in the county for the crop year the
application for insurance is accepted; or
(ii) For any subsequent crop year, on the sales closing date for
the insured crop in the county for the previous crop year, provided
continuous coverage has been in effect since that date. For example:
If you make application and purchase insurance for wheat for the
1996 crop year, prevented planting coverage will begin on the 1996
sales closing date for the insured crop in the county. If the wheat
coverage remains in effect for the 1997 crop year (is not terminated
or cancelled during or after the 1996 crop year, except the policy
may have been cancelled to transfer the policy to a different
insurance provider, if there is no lapse in coverage), prevented
planting coverage for the 1997 crop year began on the 1996 sales
closing date.
(4) The acreage to which prevented planting coverage applies
will not exceed the total eligible acreage on all Farm Service
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted
for any reconstitution that may have occurred on or before the sales
closing date. Eligible acreage for each FSA Farm Serial Number is
determined as follows:
(i) If you participate in any program administered by the United
States Department of Agriculture that limits the number of acres
that may be planted for the crop year, the acreage eligible for
prevented planting coverage will not exceed the total acreage
permitted to be planted to the insured crop.
(ii) If you do not participate in any program administered by
the United States Department of Agriculture that limits the number
of acres that may be planted, and unless we agree in writing on or
before the sales closing date, eligible acreage will not exceed the
greater of:
(A) The FSA base acreage for the insured crop, including acres
that could be flexed from another crop, if applicable;
(B) The number of acres planted to the insured crop on the FSA
Farm Serial Number during the previous crop year; or
(C) One hundred percent (100%) of the simple average of the
number of acres planted to the insured crop during the crop years
that you certified to determine your yield.
(iii) Acreage intended to be planted under an irrigated practice
will be limited to the number of acres for which you had adequate
irrigation facilities prior to the insured cause of loss which
prevented you from planting.
(iv) Prevented planting coverage will not be provided for any
acreage:
(A) That does not constitute at least 20 acres or 20 percent
(20%) of the acreage in the unit, whichever is less (Acreage that is
less than 20 acres or 20 percent of the acreage in the unit will be
presumed to have been intended to be planted to the insured crop
planted in the unit, unless you can show that you had the inputs
available before the final planting date to plant and produce
another insured crop on the acreage);
(B) For which the actuarial table does not designate a premium
rate unless a written agreement designates such premium rate;
(C) Used for conservation purposes or intended to be left
unplanted under any program administered by the United States
Department of Agriculture;
(D) On which another crop is prevented from being planted, if
you have already received a prevented planting indemnity, guarantee
or amount of insurance for the same acreage in the same crop year,
unless you provide adequate records of acreage and production
showing that the acreage has a history of double-cropping in each of
the last four years;
(E) On which the insured crop is prevented from being planted,
if any other crop is planted and fails, or is planted and harvested,
hayed or grazed on the same acreage in the same crop year, (other
than a cover crop as specified in paragraph (a)(3)(i) of this
section, or a substitute crop allowed in paragraph (a)(3)(ii) of
this section) unless you provide adequate records of acreage and
production showing that the acreage has a history of double-cropping
in each of the last four years;
(F) When coverage is provided under the Catastrophic Risk
Protection Endorsement if you plant another crop for harvest on any
acreage you were prevented from planting in the same crop year, even
if you have a history of double cropping. If you have a Catastrophic
Risk Protection Endorsement and receive a prevented planting
indemnity, guarantee, or amount of insurance for a crop and are
prevented from planting another crop on the same acreage, you may
only receive the prevented planting indemnity, guarantee, or amount
of insurance for the crop on which the prevented planting indemnity,
guarantee, or amount of insurance is received; or
(G) For which planting history or conservation plans indicate
that the acreage would have remained fallow for crop rotation
purposes.
(v) For the purpose of determining eligible acreage for
prevented planting coverage,
[[Page 62725]]
acreage for all units will be combined and be reduced by the number of
acres of the insured crop that are timely planted and late planted,
if the late planting period is applicable. For example, assume you
have 100 acres eligible for prevented planting coverage in which you
have a 100 percent (100%) share. The acreage is located in a single
FSA Farm Serial Number which you insure as two separate optional
units consisting of 50 acres each. If you planted 60 acres of the
insured crop on one optional unit and 40 acres of the insured crop
on the second optional unit, your prevented planting eligible
acreage would be reduced to zero (i.e., 100 acres eligible for
prevented planting coverage minus 100 acres planted equals zero).
(5) In accordance with the provisions of section 6 (Report of
Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must
report by unit any insurable acreage that you were prevented from
planting. This report must be submitted on or before the acreage
reporting date for spring-planted acreage of the insured crop in
counties for which the Special Provisions designates a spring final
planting date, or the acreage reporting date for fall-planted
acreage of the insured crop in counties for which the Special
Provisions designates a fall final planting date only. For the
purpose of determining acreage eligible for a prevented planting
production guarantee the total amount of prevented planting and
planted acres cannot exceed the maximum number of acres eligible for
prevented planting coverage. Any acreage you report in excess of the
number of acres eligible for prevented planting coverage, or that
exceeds the number of eligible acres physically located in a unit,
will be deleted from your acreage report.
* * * * *
12. Section 457.104 is amended by revising paragraph 1(n) of the
Cotton Crop Provisions to read as follows:
Sec. 457.104 Cotton crop insurance provisions.
* * * * *
1. Definitions
* * * * *
(n) Prevented planting--Inability to plant the insured crop with
proper equipment by the final planting date designated in the
Special Provisions for the insured crop in the county or the end of
the late planting period. You must have been unable to plant the
insured crop due to an insured cause of loss that has prevented the
majority of producers in the surrounding area from planting the same
crop.
* * * * *
13. Section 457.104 is amended by revising paragraphs 12(a)(3),
12(b), and 12(d) to read as follows:
* * * * *
12. Late Planting and Prevented Planting
(a) * * *
(3) For prevented planting acreage, multiply the per acre
production guarantee for timely planted acreage by:
(i) Thirty-five percent (0.35) and multiply the result by the 50
acres you were prevented from planting, if the acreage is eligible
for prevented planting coverage, and if the acreage is left idle for
the crop year, or if a cover crop is planted not for harvest.
Prevented planting compensation hereunder will not be denied because
the cover crop is hayed or grazed; or
(ii) Seventeen and five tenths percent (0.175) and multiply the
result by the 50 acres you were prevented from planting, if the
acreage is eligible for prevented planting coverage, and if you
elect to plant a substitute crop for harvest after the 10th day
following the final planting date for the insured crop. (This
subparagraph (ii) is not applicable, and prevented planting coverage
is not available hereunder, if you elected the Catastrophic Risk
Protection Endorsement or you elected to exclude prevented planting
coverage when a substitute crop is planted (see subparagraph
12(d)(1)(iii))).
The total of the three calculations will be the production
guarantee for the unit. Your premium will be based on the result of
multiplying the per acre production guarantee for timely planted
acreage by the 150 acres in the unit.
(b) If you were prevented from planting, you must provide
written notice to us not later than the acreage reporting date.
* * * * *
(d) Prevented Planting (Including Planting After the Late
Planting Period).
(1) If you were prevented from planting cotton (see subsection
1(n)), you may elect:
(i) To plant cotton during the late planting period. The
production guarantee for such acreage will be determined in
accordance with paragraph 12(c)(1);
(ii) Not to plant this acreage to any crop except a cover crop
not for harvest. You may also elect to plant the insured crop after
the late planting period. In either case, the production guarantee
for such acreage will be thirty-five percent (35%) of the production
guarantee for timely planted acres. For example, if your production
guarantee for timely planted acreage is 700 pounds per acre, your
prevented planting production guarantee would be 245 pounds per acre
(700 pounds multiplied by 0.35). If you elect to plant the insured
crop after the late planting period, production to count for such
acreage will be determined in accordance with subsections 11 (c) and
(d); or
(iii) Not to plant the intended crop but plant a substitute crop
for harvest, in which case:
(A) No prevented planting production guarantee will be provided
for such acreage if the substitute crop is planted on or before the
tenth day following the final planting date for the insured crop; or
(B) A production guarantee equal to seventeen and five tenths
percent (17.5%) of the production guarantee for timely planted acres
will be provided for such acreage, if the substitute crop is planted
after the tenth day following the final planting date for the
insured crop. If you elected the Catastrophic Risk Protection
Endorsement or excluded this coverage, and plant a substitute crop,
no prevented planting coverage will be provided. For example, if
your production guarantee for timely planted acreage is 700 pounds
per acre, your prevented planting production guarantee would be
122.5 pounds per acre (700 pounds multiplied by 0.175). You may
elect to exclude prevented planting coverage when a substitute crop
is planted for harvest and receive a reduction in the applicable
premium rate. If you wish to exclude this coverage, you must so
indicate, on or before the sales closing date, on your application
or on a form approved by us. Your election to exclude this coverage
will remain in effect from year to year unless you notify us in
writing on our form by the applicable sales closing date for the
crop year for which you wish to include this coverage. All acreage
of the crop insured under this policy will be subject to this
exclusion.
(2) Proof may be required that you had the inputs available to
plant and produce the intended crop with the expectation of at least
producing the production guarantee.
(3) In addition to the provisions of section 11 (Insurance
Period) of the Common Crop Insurance Policy (Sec. 457.8), the
insurance period for prevented planting coverage begins:
(i) On the sales closing date contained in the Special
Provisions for the insured crop in the county for the crop year the
application for insurance is accepted; or
(ii) For any subsequent crop year, on the sales closing date for
the insured crop in the county for the previous crop year, provided
continuous coverage has been in effect since that date. For example:
If you make application and purchase a cotton crop insurance policy
for the 1996 crop year, prevented planting coverage will begin on
the 1996 sales closing date for the cotton crop in the county. If
the cotton coverage remains in effect for the 1997 crop year (is not
terminated or cancelled during or after the 1996 crop year, except
the policy may have been cancelled to transfer the policy to a
different insurance provider, if there is no lapse in coverage),
prevented planting coverage for the 1997 crop year began on the 1996
sales closing date.
(4) The acreage to which prevented planting coverage applies
will not exceed the total eligible acreage on all Farm Service
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted
for any reconstitution that may have occurred on or before the sales
closing date. Eligible acreage for each FSA Farm Serial Number is
determined as follows:
(i) If you participate in any program administered by the United
States Department of Agriculture that limits the number of acres
that may be planted for the crop year, the acreage eligible for
prevented planting coverage will not exceed the total acreage
permitted to be planted to the insured crop.
(ii) If you do not participate in any program administered by
the United States Department of Agriculture that limits the number
of acres that may be planted, and unless we agree in writing on or
before the sales closing date, eligible acreage will not exceed the
greater of:
(A) The FSA base acreage for the insured crop, including acres
that could be flexed from another crop, if applicable;
(B) The number of acres planted to cotton on the FSA Farm Serial
Number during the previous crop year; or
[[Page 62726]]
(C) One hundred percent (100%) of the simple average of the
number of acres planted to cotton during the crop years that you
certified to determine your yield.
(iii) Acreage intended to be planted under an irrigated practice
will be limited to the number of acres for which you had adequate
irrigation facilities prior to the insured cause of loss which
prevented you from planting.
(iv) Prevented planting coverage will not be provided for any
acreage:
(A) That does not constitute at least 20 acres or 20 percent
(20%) of the acreage in the unit, whichever is less (Acreage that is
less than 20 acres or 20 percent of the acreage in the unit will be
presumed to have been intended to be planted to the insured crop
planted in the unit, unless you can show that you had the inputs
available before the final planting date to plant and produce
another insured crop on the acreage);
(B) For which the actuarial table does not designate a premium
rate unless a written agreement designates such premium rate;
(C) Used for conservation purposes or intended to be left
unplanted under any program administered by the United States
Department of Agriculture;
(D) On which another crop is prevented from being planted, if
you have already received a prevented planting indemnity, guarantee
or amount of insurance for the same acreage in the same crop year,
unless you provide adequate records of acreage and production
showing that the acreage has a history of double-cropping in each of
the last four years;
(E) On which the insured crop is prevented from being planted,
if any other crop is planted and fails, or is planted and harvested,
hayed or grazed on the same acreage in the same crop year, (other
than a cover crop as specified in paragraph (a)(3)(i) of this
section, or a substitute crop allowed in paragraph (a)(3)(ii) of
this section) unless you provide adequate records of acreage and
production showing that the acreage has a history of double-cropping
in each of the last four years;
(F) When coverage is provided under the Catastrophic Risk
Protection Endorsement if you plant another crop for harvest on any
acreage you were prevented from planting in the same crop year, even
if you have a history of double cropping. If you have a Catastrophic
Risk Protection Endorsement and receive a prevented planting
indemnity, guarantee, or amount of insurance for a crop and are
prevented from planting another crop on the same acreage, you may
only receive the prevented planting indemnity, guarantee, or amount
of insurance for the crop on which the prevented planting indemnity,
guarantee, or amount of insurance is received; or
(G) For which planting history or conservation plans indicate
that the acreage would have remained fallow for crop rotation
purposes.
(v) For the purpose of determining eligible acreage for
prevented planting coverage, acreage for all units will be combined
and be reduced by the number of cotton acres timely planted and late
planted. For example, assume you have 100 acres eligible for
prevented planting coverage in which you have a 100 percent (100%)
share. The acreage is located in a single FSA Farm Serial Number
which you insure as two separate optional units consisting of 50
acres each. If you planted 60 acres of cotton on one optional unit
and 40 acres of cotton on the second optional unit, your prevented
planting eligible acreage would be reduced to zero (i.e., 100 acres
eligible for prevented planting coverage minus 100 acres planted
equals zero).
(5) In accordance with the provisions of section 6 (Report of
Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must
report by unit any insurable acreage that you were prevented from
planting. This report must be submitted on or before the acreage
reporting date. For the purpose of determining acreage eligible for
a prevented planting production guarantee the total amount of
prevented planting and planted acres cannot exceed the maximum
number of acres eligible for prevented planting coverage. Any
acreage you report in excess of the number of acres eligible for
prevented planting coverage, or that exceeds the number of eligible
acres physically located in a unit, will be deleted from your
acreage report.
* * * * *
14. Section 457.105 is amended by revising paragraph 1(l) of the
ELS Cotton Crop Provisions to read as follows:
Sec. 457.105 Extra long staple cotton crop insurance provisions.
* * * * *
1. Definitions
* * * * *
(l) Prevented planting--Inability to plant the insured crop with
proper equipment by the final planting date designated in the
Special Provisions for the insured crop in the county. You must have
been unable to plant the insured crop due to an insured cause of
loss that has prevented the majority of producers in the surrounding
area from planting the same crop.
* * * * *
15. Section 457.105 is amended by revising paragraphs 12(a)(2) and
12 (b) through (h) to read as follows:
* * * * *
12. Prevented Planting
(a) * * *
(2) For prevented planting acreage, multiply the per acre
production guarantee for timely planted acreage by:
(i) Thirty-five percent (0.35) and multiply the result by the 50
acres you were prevented from planting, if the acreage is eligible
for prevented planting coverage, and if the acreage is left idle for
the crop year, or if a cover crop is planted not for harvest.
Prevented planting compensation hereunder will not be denied because
the cover crop is hayed or grazed; or
(ii) Seventeen and five tenths percent (0.175) and multiply the
result by the 50 acres you were prevented from planting, if the
acreage is eligible for prevented planting coverage, and if you
elect to plant a substitute crop for harvest after the 10th day
following the final planting date for the insured crop. (This
subparagraph (ii) is not applicable, and prevented planting coverage
is not available hereunder, if you elected the Catastrophic Risk
Protection Endorsement or you elected to exclude prevented planting
coverage when a substitute crop is planted (see subsection
12(b)(2))).
The total of the two calculations will be the production
guarantee for the unit. Your premium will be based on the result of
multiplying the per acre production guarantee for timely planted
acreage by the 100 acres in the unit.
(b) If you were prevented from planting ELS cotton (see
subsection 1(l)), you may elect:
(1) Not to plant this acreage to any crop except a cover crop
not for harvest. You may also elect to plant the insured crop after
the final planting date. In either case, the production guarantee
for such acreage will be thirty-five percent (35%) of the production
guarantee for timely planted acres. For example, if your production
guarantee for timely planted acreage is 600 pounds per acre, your
prevented planting production guarantee would be 210 pounds per acre
(600 pounds multiplied by 0.35). If you elect to plant the insured
crop after the final planting date, production to count for such
acreage will be determined in accordance with subsections 11(c)
through (f); or
(2) Not to plant the intended crop but plant a substitute crop
for harvest, in which case:
(A) No prevented planting production guarantee will be provided
for such acreage if the substitute crop is planted on or before the
tenth day following the final planting date for the insured crop; or
(B) A production guarantee equal to seventeen and five tenths
percent (17.5%) of the production guarantee for timely planted acres
will be provided for such acreage, if the substitute crop is planted
after the tenth day following the final planting date for the
insured crop. If you elected the Catastrophic Risk Protection
Endorsement or excluded this coverage, and plant a substitute crop,
no prevented planting coverage will be provided. For example, if
your production guarantee for timely planted acreage is 700 pounds
per acre, your prevented planting production guarantee would be
122.5 pounds per acre (700 pounds multiplied by 0.175). You may
elect to exclude prevented planting coverage when a substitute crop
is planted for harvest and receive a reduction in the applicable
premium rate. If you wish to exclude this coverage, you must so
indicate, on or before the sales closing date, on your application
or on a form approved by us. Your election to exclude this coverage
will remain in effect from year to year unless you notify us in
writing on our form by the applicable sales closing date for the
crop year for which you wish to include this coverage. All acreage
of the crop insured under this policy will be subject to this
exclusion.
(c) Proof may be required that you had the inputs available to
plant and produce the intended crop with the expectation of at least
producing the production guarantee.
(d) In addition to the provisions of section 11 (Insurance
Period) of the Common Crop Insurance Policy (Sec. 457.8), the
insurance
[[Page 62727]]
period for prevented planting coverage begins:
(i) On the sales closing date contained in the Special
Provisions for the insured crop in the county for the crop year the
application for insurance is accepted; or
(ii) For any subsequent crop year, on the sales closing date for
the insured crop in the county for the previous crop year, provided
continuous coverage has been in effect since that date. For example:
If you make application and purchase an ELS cotton crop insurance
policy for the 1996 crop year, prevented planting coverage will
begin on the 1996 sales closing date for the insured crop in the
county. If the ELS cotton coverage remains in effect for the 1997
crop year (is not terminated or cancelled during or after the 1996
crop year, except the policy may have been cancelled to transfer the
policy to a different insurance provider, if there is no lapse in
coverage), prevented planting coverage for the 1997 crop year began
on the 1996 sales closing date.
(e) If you were prevented from planting, you must provide
written notice to us not later than the acreage reporting date.
(f) The acreage to which prevented planting coverage applies
will not exceed the total eligible acreage on all Farm Service
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted
for any reconstitution that may have occurred on or before the sales
closing date. Eligible acreage for each FSA Farm Serial Number is
determined as follows:
(1) If you participate in any program administered by the United
States Department of Agriculture that limits the number of acres
that may be planted for the crop year, the acreage eligible for
prevented planting coverage will not exceed the total acreage
permitted to be planted to the insured crop.
(2) If you do not participate in any program administered by the
United States Department of Agriculture that limits the number of
acres that may be planted, and unless we agree in writing on or
before the sales closing date, eligible acreage will not exceed the
greater of:
(i) The FSA base acreage for the insured crop, including acres
that could be flexed from another crop, if applicable;
(ii) The number of acres planted to ELS cotton on the FSA Farm
Serial Number during the previous crop year; or
(iii) One hundred percent (100%) of the simple average of the
number of acres planted to ELS cotton during the crop years that you
certified to determine your yield.
(3) Acreage intended to be planted under an irrigated practice
will be limited to the number of acres for which you had adequate
irrigation facilities prior to the insured cause of loss which
prevented you from planting.
(4) Prevented planting coverage will not be provided for any
acreage:
(i) That does not constitute at least 20 acres or 20 percent
(20%) of the acreage in the unit, whichever is less (Acreage that is
less than 20 acres or 20 percent of the acreage in the unit will be
presumed to have been intended to be planted to the insured crop
planted in the unit, unless you can show that you had the inputs
available before the final planting date to plant and produce
another insured crop on the acreage);
(ii) For which the actuarial table does not designate a premium
rate unless a written agreement designates such premium rate;
(iii) Used for conservation purposes or intended to be left
unplanted under any program administered by the United States
Department of Agriculture;
(iv) On which another crop is prevented from being planted, if
you have already received a prevented planting indemnity, guarantee
or amount of insurance for the same acreage in the same crop year;
(v) On which the insured crop is prevented from being planted,
if any other crop is planted and fails, or is planted and harvested,
hayed or grazed on the same acreage in the same crop year, (other
than a cover crop as specified in paragraph (a)(2)(i) of this
section, or a substitute crop allowed in paragraph (a)(2)(ii) of
this section);
(vi) When coverage is provided under the Catastrophic Risk
Protection Endorsement if you plant another crop for harvest on any
acreage you were prevented from planting in the same crop year. If
you have a Catastrophic Risk Protection Endorsement and receive a
prevented planting indemnity, guarantee, or amount of insurance for
a crop and are prevented from planting another crop on the same
acreage, you may only receive the prevented planting indemnity,
guarantee, or amount of insurance for the crop on which the
prevented planting indemnity, guarantee, or amount of insurance is
received; or
(vii) For which planting history or conservation plans indicate
that the acreage would have remained fallow for crop rotation
purposes.
(5) For the purpose of determining eligible acreage for
prevented planting coverage, acreage for all units will be combined
and be reduced by the number of ELS cotton acres timely planted. For
example, assume you have 100 acres eligible for prevented planting
coverage in which you have a 100 percent (100%) share. The acreage
is located in a single FSA Farm Serial Number which you insure as
two separate optional units consisting of 50 acres each. If you
planted 60 acres of ELS cotton on one optional unit and 40 acres of
ELS cotton on the second optional unit, your prevented planting
eligible acreage would be reduced to zero. (i.e., 100 acres eligible
for prevented planting coverage minus 100 acres planted equals
zero).
(g) In accordance with the provisions of section 6 (Report of
Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must
report by unit any insurable acreage that you were prevented from
planting. This report must be submitted on or before the acreage
reporting date. For the purpose of determining acreage eligible for
a prevented planting production guarantee the total amount of
prevented planting and planted acres cannot exceed the maximum
number of acres eligible for prevented planting coverage. Any
acreage you report in excess of the number of acres eligible for
prevented planting coverage, or that exceeds the number of eligible
acres physically located in a unit, will be deleted from your
acreage report.
(h) Late planting provisions are not available under these crop
provisions.
* * * * *
16. Section 457.108 is amended by revising paragraph 1(l) of the
Sunflower Seed Crop Provisions to read as follows:
Sec. 457.108 Sunflower seed crop insurance provisions.
* * * * *
1. Definitions
* * * * *
(1) Prevented planting--Inability to plant the insured crop with
proper equipment by the final planting date designated in the
Special Provisions for the insured crop in the county or the end of
the late planting period. You must have been unable to plant the
insured crop due to an insured cause of loss that has prevented the
majority of producers in the surrounding area from planting the same
crop.
* * * * *
17. Section 457.108 is amended by revising paragraphs 13(a)(3),
13(b), and 13(d) to read as follows:
* * * * *
13. Late Planting and Prevented Planting
(a) * * *
(3) For prevented planting acreage, multiply the per acre
production guarantee for timely planted acreage by:
(i) Fifty percent (0.50) and multiply the result by the 50 acres
you were prevented from planting, if the acreage is eligible for
prevented planting coverage, and if the acreage is left idle for the
crop year, or if a cover crop is planted not for harvest. Prevented
planting compensation hereunder will not be denied because the cover
crop is hayed or grazed; or
(ii) Twenty-five percent (0.25) and multiply the result by the
50 acres you were prevented from planting, if the acreage is
eligible for prevented planting coverage, and if you elect to plant
a substitute crop for harvest after the 10th day following the final
planting date for the insured crop. (This subparagraph (ii) is not
applicable, and prevented planting coverage is not available
hereunder, if you elected the Catastrophic Risk Protection
Endorsement or you elected to exclude prevented planting coverage
when a substitute crop is planted (see subsection 13(d)(1)(iii))).
The total of the three calculations will be the production
guarantee for the unit. Your premium will be based on the result of
multiplying the per acre production guarantee for timely planted
acreage by the 150 acres in the unit.
(b) If you were prevented from planting, you must provide
written notice to us not later than the acreage reporting date .
* * * * *
(d) Prevented Planting (Including Planting After the Late
Planting Period)
(1) If you were prevented from planting sunflowers (see
subsection 1(l)), you may elect:
(i) To plant sunflower seed during the late planting period. The
production guarantee for such acreage will be determined in
accordance with paragraph 13(c)(1);
[[Page 62728]]
(ii) Not to plant this acreage to any crop except a cover crop
not for harvest. You may also elect to plant the insured crop after
the late planting period. In either case, the production guarantee
for such acreage will be fifty percent (50%) of the production
guarantee for timely planted acres. For example, if your production
guarantee for timely planted acreage is 900 pounds per acre, your
prevented planting production guarantee would be 450 pounds per acre
(900 pounds multiplied by 0.50). If you elect to plant the insured
crop after the late planting period, production to count for such
acreage will be determined in accordance with subsections 12 (c)
through (e); or
(iii) Not to plant the intended crop but plant a substitute crop
for harvest, in which case:
(A) No prevented planting production guarantee will be provided
for such acreage if the substitute crop is planted on or before the
tenth day following the final planting date for the insured crop; or
(B) A production guarantee equal to twenty-five percent (25%) of
the production guarantee for timely planted acres will be provided
for such acreage, if the substitute crop is planted after the tenth
day following the final planting date for the insured crop. If you
elected the Catastrophic Risk Protection Endorsement or excluded
this coverage, and plant a substitute crop, no prevented planting
coverage will be provided. For example, if your production guarantee
for timely planted acreage is 900 pounds per acre, your prevented
planting production guarantee would be 225 pounds per acre (900
pounds multiplied by 0.25). You may elect to exclude prevented
planting coverage when a substitute crop is planted for harvest and
receive a reduction in the applicable premium rate. If you wish to
exclude this coverage, you must so indicate, on or before the sales
closing date, on your application or on a form approved by us. Your
election to exclude this coverage will remain in effect from year to
year unless you notify us in writing on our form by the applicable
sales closing date for the crop year for which you wish to include
this coverage. All acreage of the crop insured under this policy
will be subject to this exclusion.
(2) Proof may be required that you had the inputs available to
plant and produce the intended crop with the expectation of at least
producing the production guarantee.
(3) In addition to the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8), the insurance period
for prevented planting coverage begins:
(i) On the sales closing date contained in the Special
Provisions for the insured crop in the county for the crop year the
application for insurance is accepted; or
(ii) For any subsequent crop year, on the sales closing date for
the insured crop in the county for the previous crop year, provided
continuous coverage has been in effect since that date. For example:
If you make application and purchase a sunflower seed crop insurance
policy for the 1996 crop year, prevented planting coverage will
begin on the 1996 sales closing date for the insured crop in the
county. If the sunflower seed coverage remains in effect for the
1997 crop year (is not terminated or cancelled during or after the
1996 crop year, except the policy may have been cancelled to
transfer the policy to a different insurance provider, if there is
no lapse in coverage), prevented planting coverage for the 1997 crop
year began on the 1996 sales closing date.
(4) The acreage to which prevented planting coverage applies
will not exceed the total eligible acreage on all Farm Service
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted
for any reconstitution that may have occurred on or before the sales
closing date. Eligible acreage for each FSA Farm Serial Number is
determined as follows:
(i) If you participate in any program administered by the United
States Department of Agriculture that limits the number of acres
that may be planted for the crop year, the acreage eligible for
prevented planting coverage will not exceed the total acreage
permitted to be planted to the insured crop.
(ii) If you do not participate in any program administered by
the United States Department of Agriculture that limits the number
of acres that may be planted, and unless we agree in writing on or
before the sales closing date, eligible acreage will not exceed the
greater of:
(A) The FSA base acreage for the insured crop, including acres
that could be flexed from another crop, if applicable;
(B) The number of acres planted to sunflower seed on the FSA
Farm Serial Number during the previous crop year; or
(C) One hundred percent (100%) of the simple average of the
number of acres planted to sunflower seed during the crop years that
you certified to determine your yield.
(iii) Acreage intended to be planted under an irrigated practice
will be limited to the number of acres for which you had adequate
irrigation facilities prior to the insured cause of loss which
prevented you from planting.
(iv) Prevented planting coverage will not be provided for any
acreage:
(A) That does not constitute at least 20 acres or 20 percent
(20%) of the acreage in the unit, whichever is less (Acreage that is
less than 20 acres or 20 percent of the acreage in the unit will be
presumed to have been intended to be planted to the insured crop
planted in the unit, unless you can show that you had the inputs
available before the final planting date to plant and produce
another insured crop on the acreage);
(B) For which the actuarial table does not designate a premium
rate unless a written agreement designates such premium rate;
(C) Used for conservation purposes or intended to be left
unplanted under any program administered by the United States
Department of Agriculture;
(D) On which another crop is prevented from being planted, if
you have already received a prevented planting indemnity, guarantee
or amount of insurance for the same acreage in the same crop year,
unless you provide adequate records of acreage and production
showing that the acreage has a history of double-cropping in each of
the last four years;
(E) On which the insured crop is prevented from being planted,
if any other crop is planted and fails, or is planted and harvested,
hayed or grazed on the same acreage in the same crop year, (other
than a cover crop as specified in paragraph (a)(3)(i) of this
section, or a substitute crop allowed in paragraph (a)(3)(ii) of
this section), unless you provide adequate records of acreage and
production showing that the acreage has a history of double-cropping
in each of the last four years;
(F) When coverage is provided under the Catastrophic Risk
Protection Endorsement if you plant another crop for harvest on any
acreage you were prevented from planting in the same crop year, even
if you have a history of double cropping. If you have a Catastrophic
Risk Protection Endorsement and receive a prevented planting
indemnity, guarantee, or amount of insurance for a crop and are
prevented from planting another crop on the same acreage, you may
only receive the prevented planting indemnity, guarantee, or amount
of insurance for the crop on which the prevented planting indemnity,
guarantee, or amount of insurance is received; or
(G) For which planting history or conservation plans indicate
that the acreage would have remained fallow for crop rotation
purposes.
(v) For the purpose of determining eligible acreage for
prevented planting coverage, acreage for all units will be combined
and be reduced by the number of sunflower acres timely planted and
late planted. For example, assume you have 100 acres eligible for
prevented planting coverage in which you have a 100 percent (100%)
share. The acreage is located in a single FSA Farm Serial Number
which you insure as two separate optional units consisting of 50
acres each. If you planted 60 acres of sunflower seed on one
optional unit and 40 acres of sunflower seed on the second optional
unit, your prevented planting eligible acreage would be reduced to
zero (i.e.,100 acres eligible for prevented planting coverage minus
100 acres planted equals zero).
(5) In accordance with the provisions of section 6 (Report of
Acreage) of the Basic Provisions (Sec. 457.8), you must report by
unit any insurable acreage that you were prevented from planting.
This report must be submitted on or before the acreage reporting
date. For the purpose of determining acreage eligible for a
prevented planting production guarantee the total amount of
prevented planting and planted acres cannot exceed the maximum
number of acres eligible for prevented planting coverage. Any
acreage you report in excess of the number of acres eligible for
prevented planting coverage, or that exceeds the number of eligible
acres physically located in a unit, will be deleted from your
acreage report.
* * * * *
18. Section 457.113 is amended by revising paragraph 1(n) of the
Coarse Grains Crop Provisions to read as follows:
Sec. 457.113 Coarse grains crop insurance provisions.
* * * * *
1. Definitions
* * * * *
[[Page 62729]]
(n) Prevented planting--Inability to plant the insured crop with
proper equipment by the final planting date designated in the
Special Provisions for the insured crop in the county or the end of
the late planting period. You must have been unable to plant the
insured crop due to an insured cause of loss that has prevented the
majority of producers in the surrounding area from planting the same
crop.
* * * * *
19. Section 457.113 is amended by revising paragraphs 13(a)(3),
13(b), and 13(d) to read as follows:
* * * * *
13. Late Planting and Prevented Planting
(a) * * *
(3) For prevented planting acreage, multiply the per acre
production guarantee for timely planted acreage by:
(i) Fifty percent (0.50) and multiply the result by the 50 acres
you were prevented from planting, if the acreage is eligible for
prevented planting coverage, and if the acreage is left idle for the
crop year, or if a cover crop is planted not for harvest. Prevented
planting compensation hereunder will not be denied because the cover
crop is hayed or grazed; or
(ii) Twenty-five percent (0.25) and multiply the result by the
50 acres you were prevented from planting, if the acreage is
eligible for prevented planting coverage, and if you elect to plant
a substitute crop for harvest after the 10th day following the final
planting date for the insured crop. (This subparagraph (ii) is not
applicable, and prevented planting coverage is not available
hereunder, if you elected the Catastrophic Risk Protection
Endorsement or you elected to exclude prevented planting coverage
when a substitute crop is planted (see subsection 13(d)(1)(iii)).)
The total of the three calculations will be the production
guarantee for the unit. Your premium will be based on the result of
multiplying the per acre production guarantee for timely planted
acreage by the 150 acres in the unit.
(b) If you were prevented from planting, you must provide
written notice to us not later than the acreage reporting date.
* * * * *
(d) Prevented Planting (Including Planting After the Late
Planting Period).
(1) If you were prevented from planting the insured crop (see
subsection 1(n)), you may elect:
(i) To plant the insured crop during the late planting period.
The production guarantee for such acreage will be determined in
accordance with paragraph 13(c)(1);
(ii) Not to plant this acreage to any crop except a cover crop
not for harvest. You may also elect to plant the insured crop after
the late planting period. In either case, the production guarantee
for such acreage will be fifty percent (50%) of the production
guarantee for timely planted acres. For example, if your production
guarantee for timely planted acreage is 30 bushels per acre, your
prevented planting production guarantee would be 15 bushels per acre
(30 bushels multiplied by 0.50). If you elect to plant the insured
crop after the late planting period, production to count for such
acreage will be determined in accordance with subsections 12(c)
through (g); or
(iii) Not to plant the intended crop but plant a substitute crop
for harvest, in which case:
(A) No prevented planting production guarantee will be provided
for such acreage if the substitute crop is planted on or before the
tenth day following the final planting date for the insured crop; or
(B) A production guarantee equal to twenty-five percent (25%) of
the production guarantee for timely planted acres will be provided
for such acreage, if the substitute crop is planted after the tenth
day following the final planting date for the insured crop. If you
elected the Catastrophic Risk Protection Endorsement or excluded
this coverage, and plant a substitute crop, no prevented planting
coverage will be provided. For example, if your production guarantee
for timely planted acreage is 30 bushels per acre, your prevented
planting production guarantee would be 7.5 bushels per acre (30
bushels multiplied by 0.25). You may elect to exclude prevented
planting coverage when a substitute crop is planted for harvest and
receive a reduction in the applicable premium rate. If you wish to
exclude this coverage, you must so indicate, on or before the sales
closing date, on your application or on a form approved by us. Your
election to exclude this coverage will remain in effect from year to
year unless you notify us in writing on our form by the applicable
sales closing date for the crop year for which you wish to include
this coverage. All acreage of the crop insured under this policy
will be subject to this exclusion.
(2) Proof may be required that you had the inputs available to
plant and produce the intended crop with the expectation of at least
producing the production guarantee.
(3) In addition to the provisions of section 11 (Insurance
Period) of the Common Crop Insurance Policy (Sec. 457.8), the
insurance period for prevented planting coverage begins:
(i) On the sales closing date contained in the Special
Provisions for the insured crop in the county for the crop year the
application for insurance is accepted; or
(ii) For any subsequent crop year, on the sales closing date for
the insured crop in the county for the previous crop year, provided
continuous coverage has been in effect since that date. For example:
If you make application and purchase insurance for corn for the 1996
crop year, prevented planting coverage will begin on the 1996 sales
closing date for corn in the county. If the corn coverage remains in
effect for the 1997 crop year (is not terminated or canceled during
or after the 1996 crop year, except the policy may have been
canceled to transfer the policy to a different insurance provider,
if there is no lapse in coverage), prevented planting coverage for
the 1997 crop year began on the 1996 sales closing date.
(4) The acreage to which prevented planting coverage applies
will not exceed the total eligible acreage on all Farm Service
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted
for any reconstitution that may have occurred on or before the sales
closing date. Eligible acreage for each FSA Farm Serial Number is
determined as follows:
(i) If you participate in any program administered by the United
States Department of Agriculture that limits the number of acres
that may be planted for the crop year, the acreage eligible for
prevented planting coverage will not exceed the total acreage
permitted to be planted to the insured crop.
(ii) If you do not participate in any program administered by
the United States Department of Agriculture that limits the number
of acres that may be planted, and unless we agree in writing on or
before the sales closing date, eligible acreage will not exceed the
greater of:
(A) The FSA base acreage for the insured crop, including acres
that could be flexed from another crop, if applicable;
(B) The number of acres planted to the insured crop on the FSA
Farm Serial Number during the previous crop year; or
(C) One hundred percent (100%) of the simple average of the
number of acres planted to the insured crop during the crop years
that you certified to determine your yield.
(iii) Acreage intended to be planted under an irrigated practice
will be limited to the number of acres for which you had adequate
irrigation facilities prior to the insured cause of loss which
prevented you from planting.
(iv) Prevented planting coverage will not be provided for any
acreage:
(A) That does not constitute at least 20 acres or 20 percent
(20%) of the acreage in the unit, whichever is less (Acreage that is
less than 20 acres or 20 percent of the acreage in the unit will be
presumed to have been intended to be planted to the insured crop
planted in the unit, unless you can show that you had the inputs
available before the final planting date to plant and produce
another insured crop on the acreage);
(B) For which the actuarial table does not designate a premium
rate unless a written agreement designates such premium rate;
(C) Used for conservation purposes or intended to be left
unplanted under any program administered by the United States
Department of Agriculture;
(D) On which another crop is prevented from being planted, if
you have already received a prevented planting indemnity, guarantee
or amount of insurance for the same acreage in the same crop year,
unless you provide adequate records of acreage and production
showing that the acreage has a history of double-cropping in each of
the last four years;
(E) On which the insured crop is prevented from being planted,
if any other crop is planted and fails, or is planted and harvested,
hayed or grazed on the same acreage in the same crop year, (other
than a cover crop as specified in paragraph (a)(3)(i) of this
section, or a substitute crop allowed in paragraph (a)(3)(ii) of
this section), unless you provide adequate records of acreage and
production showing that the acreage has a history of double-cropping
in each of the last four years;
(F) When coverage is provided under the Catastrophic Risk
Protection Endorsement if
[[Page 62730]]
you plant another crop for harvest on any acreage you were prevented
from planting in the same crop year, even if you have a history of
double cropping. If you have a Catastrophic Risk Protection
Endorsement and receive a prevented planting indemnity, guarantee,
or amount of insurance for a crop and are prevented from planting
another crop on the same acreage, you may only receive the prevented
planting indemnity, guarantee, or amount of insurance for the crop
on which the prevented planting indemnity, guarantee, or amount of
insurance is received; or
(G) For which planting history or conservation plans indicate
that the acreage would have remained fallow for crop rotation
purposes.
(v) For the purpose of determining eligible acreage for
prevented planting coverage, acreage for all units will be combined
and be reduced by the number of acres of the insured crop timely
planted and late planted. For example, assume you have 100 acres
eligible for prevented planting coverage in which you have a 100
percent (100%) share. The acreage is located in a single FSA Farm
Serial Number which you insure as two separate optional units
consisting of 50 acres each. If you planted 60 acres of the insured
crop on one optional unit and 40 acres of the insured crop on the
second optional unit, your prevented planting eligible acreage would
be reduced to zero (i.e.,100 acres eligible for prevented planting
coverage minus 100 acres planted equals zero).
(5) In accordance with the provisions of section 6 (Report of
Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must
report by unit any insurable acreage that you were prevented from
planting. This report must be submitted on or before the acreage
reporting date. For the purpose of determining acreage eligible for
a prevented planting production guarantee the total amount of
prevented planting and planted acres cannot exceed the maximum
number of acres eligible for prevented planting coverage. Any
acreage you report in excess of the number of acres eligible for
prevented planting coverage, or that exceeds the number of eligible
acres physically located in a unit, will be deleted from your
acreage report.
Done in Washington, DC, on November 27, 1995.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 95-29606 Filed 11-30-95; 4:56 pm]
BILLING CODE 3410-08-P
