[Federal Register Volume 62, Number 100 (Friday, May 23, 1997)]
[Rules and Regulations]
[Pages 28308-28314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13656]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 401 and 457
General Crop Insurance Regulations, Rice Endorsement; and Common
Crop Insurance Regulations, Rice Crop Insurance Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes
specific crop provisions for the insurance of rice. The provisions will
be used in conjunction with the Common Crop Insurance Policy Basic
Provisions, which contain standard terms and conditions common to most
crops. The intended effect of this action is to provide policy changes
to better meet the needs of the insured, include the current Rice
Endorsement with the Common Crop Insurance Policy for ease of use and
consistency of terms, and to restrict the effect of the current Rice
Endorsement to the 1997 and prior crop years.
EFFECTIVE DATE: June 23, 1997.
FOR FURTHER INFORMATION CONTACT: Linda Williams, Insurance Management
Specialist, Research and Development, Product Development Division,
Federal Crop Insurance Corporation, United States Department of
Agriculture, 9435 Holmes Road, Kansas City, MO 64131, telephone (816)
926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
The Office of Management and Budget (OMB) has determined this rule
to be exempt for the purposes of Executive Order 12866, and therefore,
this rule has not been reviewed by OMB.
Paperwork Reduction Act of 1995
Following publication of the proposed rule, the public was afforded
60 days to submit written comments on information collection
requirements previously approved by OMB under OMB control number 0563-
003 through September 30, 1998. No public comments were received.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on state, local, and tribal
governments and the private sector. This rule contains no Federal
mandates (under the regulatory provisions of title II of the UMRA) for
state, local, and tribal governments or the private sector. Thus, this
rule is not subject to the requirements of sections 202 and 205 of the
UMRA.
Executive Order 12612
It has been determined under section 6(a) of Executive Order No.
12612, Federalism, that this rule does not have sufficient federalism
implications 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.
Regulatory Flexibility Act
This regulation will not have a significant impact on a substantial
number of small entities. New provisions included in this rule will not
impact small entities to a greater extent than large entities. Under
the current regulations, a producer is required to complete an
application and acreage report. If the crop is damaged or destroyed,
the insured is required to give notice of loss and provide the
necessary information to complete a claim for indemnity.
The insured must also annually certify to the previous years
production if adequate records are available to support the
certification. The producer must maintain the production records to
support the certified information for at least three years. This
regulation does not alter those requirements.
The amount of work required of the insurance companies delivering
and servicing these policies will not increase significantly from the
amount of work currently required. This rule does not have any greater
or lesser impact on the producer. Therefore, this action is determined
to be exempt from the provisions of the Regulatory Flexibility Act (5
U.S.C. 605), and no Regulatory Flexibility Analysis was prepared.
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order 12372
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.
Executive Order 12988
This final rule has been reviewed in accordance with Executive
Order 12988. The provisions of this rule will not have a 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 provisions
published at 7 CFR part 11 must be exhausted before any action for
judicial review may be brought.
Environmental Evaluation
This action is not expected to have a significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
National Performance Review
This regulatory action is being taken as part of the National
Performance Review Initiative to eliminate unnecessary or duplicative
regulations and improve those that remain in force.
[[Page 28309]]
Background
On Wednesday, January 29, 1997, FCIC published a proposed rule in
the Federal Register at 62 FR 4194-4200 to add to the Common Crop
Insurance Regulations (7 CFR part 457), a new section, 7 CFR 457.141,
Rice Crop Insurance Provisions. The new provisions will be effective
for the 1998 and succeeding crop years. These provisions will replace
and supercede the current provisions for insuring rice found at 7 CFR
401.120 (Rice Endorsement). FCIC also amends 7 CFR part 401.120 to
limit its effect to the 1997 and prior crop years.
Following publication of the proposed rule, the public was afforded
60 days to submit written comments and opinions. A total of 14 comments
were received from the crop insurance industry. The comments received
and FCIC's responses, are as follows:
Comment: One comment from the crop insurance industry recommended
adding the words ``and quality'' after the word ``quantity'' in the
definition of ``Irrigated practice.''
Response: Water quality is an important issue. However, since no
standards or procedures have been developed to measure water quality
for insurance purposes, quality cannot be included in the definition.
Therefore, no change will be made.
Comment: One comment received from the crop insurance industry
recommended combining the definitions of ``irrigated practice'' and
``flood irrigation.'' The only crop provision reference to ``irrigated
practice'' is in the definition of ``flood irrigated.'' The commenter
suggested as an alternative, add ``An irrigated practice commonly used*
* *'' to the definition of ``flood irrigation.''
Response: FCIC agrees with the comment and has revised the
definition of flood irrigation to reference the term irrigated
practice.
Comment: One comment received from the crop insurance industry
recommended changing the definition of ``production guarantee'' by
referring to ``your approved APH yield.'' The commenter stated the
current provision implies there is only one APH yield.
Response: There is only one APH yield for each unit. Therefore, no
change will be made.
Comment: Two comments from the crop insurance industry stated that
the definition of ``replanting'' is confusing and awkward. One of the
commenters recommended revising the definition to specify ``* *
*growing a successful rice crop.''
Response: FCIC agrees that the definition was confusing and has
amended the definition of replanting for clarification.
Comment: The crop insurance industry recommended that FCIC provide
the statements contained in the Special Provisions at the time the crop
provisions are published as proposed rule. The commenter suggested that
it would be helpful to review the Special Provisions statement
regarding the rotation requirements referred to in section 7.
Response: The Special Provisions contain those policy terms which
are specific to a county. These are not included in FCIC's regulatory
process because publication of each county and each crop would be
voluminous. Further, the information contained in the Special
Provisions is not developed until after the Crop Provisions become a
final rule. The statements are released with the filing of actuarial
documents for the insured crop. Therefore, no change will be made.
Comment: One comment received from the crop insurance industry
recommended revising the cause of loss in section 9(a)(1) to state
``adverse weather conditions (except drought).'' This change would
conform FCIC's crop provisions to the current NCIS-716 provisions.
Response: FCIC agrees and will amend the provision accordingly.
Comment: One comment received from the crop insurance industry
stated that the crop provisions should not allow the insured to defer
settlement of a claim for indemnity as provided in section
12(c)(1)(iv). The commenter stated deferring settlement and waiting for
a later appraisal usually results in a lower amount of appraised
production.
Response: A later appraisal will only be necessary if the insurance
provider agrees that such an appraisal would result in a more accurate
determination and if the producer continues to care for the crop. If
the producer does not care for the crop, the original appraisal will be
used. Therefore, no change will be made to these provisions.
Comment: The crop insurance industry recommended that the
provisions contained in section 13(d)(1)(iii)(B) regarding prevented
planting coverage for a substitute crop be eliminated.
Response: FCIC intends to address this issue for all crops with
prevented planting coverage and is currently working on a regulation
that will propose substantive changes in this coverage. Therefore, no
changes will be made to these rice crop provisions.
Comment: One comment from the crop insurance industry questioned if
the provisions contained in section 13(d)(5)(iii)(D) were intended to
be less restrictive by changing the double-cropping requirement to
state ``* * *in each of the last 4 years in which the insured crop was
grown on the acreage.'' The commenter suggested this change should be
included in the summary of changes so that agents and producers were
aware of the change.
Response: The proposed language allows additional acreage to be
considered ``double-cropped.'' The previous provisions require eight
crops to have been produced on the same acreage in the previous four
years to qualify for double-cropped acreage. The intent of this change
is to recognize rotation practices used for double-cropped acreage.
Comment: One comment from the crop insurance industry suggested
combining the provisions in section 14(c) with the provisions in 14(a).
Response: Approval of written agreements requested after the sales
closing date is the exception, not the rule. Therefore, these
provisions should be kept separate and no changes have been made.
Comment: Three comments from the crop insurance industry
recommended the requirement for a written agreement to be renewed each
year be removed. Terms of the agreement should be continuous if no
substantive changes occur from one year to the next. One commenter
stated that limiting written agreements to one year only increases
administrative cost and allows the opportunity for misunderstanding and
error.
Response: Written agreements are intended to permit insurance
coverage in unusual or previously unknown situations. If the situation
continues year to year, it should be incorporated into the policy or
Special Provisions. It is important to minimize exceptions to assure
that the insured is well aware of the specific terms of the policy.
Therefore, no change will be made.
List of Subjects in 7 CFR Parts 401 and 457
Crop insurance, Rice endorsement, Rice.
Final Rule
Accordingly, for the reasons set forth in the preamble, the Federal
Crop Insurance Corporation hereby amends 7 CFR parts 401 and 457
effective for the 1998 and succeeding crop years to read as follows:
[[Page 28310]]
PART 401--GENERAL CROP INSURANCE REGULATIONS--REGULATIONS FOR THE
1988 AND SUBSEQUENT CONTRACT YEARS
1. The authority citation for 7 CFR part 401 continues to read as
follows:
Authority: 7 U.S.C. 1506(1), 1506(p).
2. The introductory text of Sec. 401.120 is revised to read as
follows:
Sec. 401.120 Rice endorsement.
The provisions of the Rice Crop Insurance Endorsement for the 1988
through the 1997 crop years are as follows:
* * * * *
PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE
1994 AND SUBSEQUENT CONTRACT YEARS
3. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
Section 457.141 is added to read as follows:
Sec. 457.141 Rice crop insurance provisions.
The Rice Crop Insurance Provisions for the 1998 and succeeding crop
years are as follows:
FCIC policies:
United States Department of Agriculture
Federal Crop Insurance Corporation
Reinsured policies:
(Appropriate title for insurance provider)
Both FCIC and reinsured policies:
Rice Crop Provisions
If a conflict exists among the Basic Provisions (Sec. 457.8),
these Crop Provisions, and the Special Provisions; the Special
Provisions will control these Crop Provisions and the Basic
Provisions; and these Crop Provisions will control the Basic
Provisions.
1. Definitions
Days. Calendar days.
FSA. The Farm Service Agency, an agency of the United States
Department of Agriculture, or a successor agency.
Final planting date. The date contained in the Special
Provisions for the insured crop by which the crop must initially be
planted in order to be insured for the full production guarantee.
Flood irrigation. An irrigated practice commonly used for rice
production whereby the planted acreage is intentionally covered with
water that is maintained at a uniform and shallow depth throughout
the growing season.
Good farming practices. The cultural practices generally in use
in the county for the crop to make normal progress toward maturity
and produce at least the yield used to determine the production
guarantee, and are those recognized by the Cooperative State
Research, Education, and Extension Service as compatible with
agronomic and weather conditions in the county.
Harvest. Combining or threshing the rice for grain. A crop that
is swathed prior to combining is not considered harvested.
Irrigated practice. A method of producing a crop by which water
is artificially applied during the growing season by appropriate
systems and at the proper times, with the intention of providing the
quantity of water needed to produce at least the yield used to
establish the irrigated production guarantee on the irrigated
acreage planted to the insured crop.
Late planted. Acreage planted to the insured crop during the
late planting period.
Late planting period. The period that begins the day after the
final planting date for the insured crop and ends 25 days after the
final planting date.
Local market price. The cash price per pound for the U.S. No. 3
grade of rough rice offered by buyers in the area in which you
normally market the rice. Factors not associated with grading under
the United States Standards for Rice including, but not limited to,
protein and oil content or milling quality will not be considered.
Planted. The uniform placement of an adequate amount of rice
seed into a prepared seedbed by one of the following methods:
(a) Drill seeding--Using a grain drill to incorporate the seed
to a proper soil depth;
(b) Broadcast seeding--Distributing seed evenly onto the surface
of an un-flooded seedbed followed by either timely mechanical
incorporation of the seed to a proper soil depth in the seedbed or
flushing the seedbed with water; or
(c) Broadcast seeding into a controlled flood--Distributing the
rice seed onto a prepared seedbed that has been intentionally
covered to a proper depth by water. The water must be free of
movement and be completely contained on the acreage by properly
constructed levees and gates.
Acreage seeded in any other manner will not be insurable unless
otherwise provided by the Special Provisions or by written
agreement.
Practical to replant. In lieu of the definition of ``Practical
to replant'' contained in section 1 of the Basic Provisions
(Sec. 457.8), practical to replant is defined as our determination,
after loss or damage to the insured crop, based on factors,
including but not limited to moisture availability, marketing
windows, condition of the field, and time to crop maturity, that
replanting the insured crop will allow the crop to attain maturity
prior to the calendar date for the end of the insurance period. It
will not be considered practical to replant after the end of the
late planting period unless replanting is generally occurring in the
area.
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.
Production guarantee (per acre). The number of pounds determined
by multiplying the approved Actual Production History (APH) yield
per acre by the coverage level percentage you elect.
Replanting. Performing the cultural practices necessary to
replace the rice seed and then replacing the rice seed in the
insured acreage with the expectation of growing a rice crop that
will at least produce the approved APH yield.
Saline water. Water that contains a concentration of salt
sufficient to cause damage to the insured crop.
Second crop rice. The regrowth of a stand of rice following
harvest of the initially insured rice crop that can be harvested in
the same crop year.
Swathed. Severance of the stem and grain head from the ground
without removal of the rice kernels from the plant and placing in a
windrow.
Timely planted. Planted on or before the final planting date
designated in the Special Provisions for the insured crop in the
county.
Total milling yield. Rice production consisting of heads, second
heads, screenings, and brewer's rice as defined by the official
United States Standards for Rice.
Written agreement. A written document that alters designated
terms of this policy in accordance with section 14.
2. Unit Division
(a) Unless limited by the Special Provisions, a unit as defined
in section 1 (Definitions) of the Basic Provisions (Sec. 457.8),
(basic unit) may be divided into optional units if, for each
optional unit, you meet all the conditions of this section.
(b) Basic units may not be divided into optional units on any
basis including, but not limited to, production practice, type,
variety, and planting period, other than as described in this
section.
(c) If you do not comply fully with these provisions, we will
combine all optional units that are not in compliance with these
provisions into the basic unit from which they were formed. We will
combine the optional units at any time we discover that you have
failed to comply with these provisions. If failure to comply with
these provisions is determined to be inadvertent, and the optional
units are combined into a basic unit, that portion of the additional
premium paid for the optional units that have been combined will be
refunded to you.
(d) All optional units you selected for the crop year must be
identified on the acreage report for that crop year.
(e) The following requirements must be met for each optional
unit:
(1) You must have records, which can be independently verified,
of planted acreage and production for each optional unit for at
least the last crop year used to determine your production
guarantee;
(2) You must plant the crop in a manner that results in a clear
and discernable break in the planting pattern at the boundaries of
each optional unit;
(3) You must have records of marketed production or measurement
of stored production from each optional unit maintained in such a
manner that permits us to verify the production from each optional
[[Page 28311]]
unit, or the production from each unit must be kept separate until
loss adjustment is completed by us; and
(4) Each optional unit must be located in a separate legally
identified section. In the absence of sections, we may consider
parcels of land legally identified by other methods of measure
including, but not limited to Spanish grants, railroad surveys,
leagues, labors, or Virginia Military Lands, as the equivalent of
sections for unit purposes. In areas that have not been surveyed
using the systems identified above, or another system approved by
us, or in areas where such systems exist but boundaries are not
readily discernable, each optional unit must be located in a
separate farm identified by a single FSA Farm Serial Number unless
otherwise specified by a written agreement.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities)
of the Basic Provisions (Sec. 457.8), you may select only one price
election for all the rice in the county insured under this policy
unless the Special Provisions provide different price elections by
type, in which case you may select one price election for each rice
type designated in the Special Provisions. The price elections you
choose for each type must have the same percentage relationship to
the maximum price offered by us for each type. For example, if you
choose 100 percent of the maximum price election for one type, you
must also choose 100 percent of the maximum price election for all
other types.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is November 30
preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation
and termination dates are:
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Cancellation and termination
State and county date
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Jackson, Victoria, Goliad, Bee, Live Oak, January 15.
McMullen, La Salle, and Dimmit Counties,
Texas; and all Texas counties south
thereof.
Florida.................................. February 15.
All other Texas counties and all other February 28.
states.
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6. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all the rice in
the county for which a premium rate is provided by the actuarial
table:
(a) In which you have a share;
(b) That is planted for harvest as grain;
(c) That is flood irrigated; and
(d) That is not wild rice.
7. Insurable Acreage
In addition to the provisions of section 9 (Insurable Acreage)
of the Basic Provisions (Sec. 457.8):
(a) We will not insure any acreage planted to rice:
(1) The preceding crop year unless allowed by the Special
Provisions; or
(2) That does not meet the rotation requirements shown in the
Special Provisions; and
(b) Any acreage of the insured crop damaged before the final
planting date, to the extent that producers in the area would
normally not further care for the crop, must be replanted unless we
agree that it is not practical to replant.
8. Insurance Period
In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8), the calendar date for
the end of the insurance period is October 31 immediately following
planting.
9. Causes of Loss
(a) In accordance with the provisions of section 12 (Causes of
Loss) of the Basic Provisions (Sec. 457.8), insurance is provided
only against the following causes of loss that occur during the
insurance period:
(1) Adverse weather conditions (except drought);
(2) Fire;
(3) Insects, but not damage due to insufficient or improper
application of pest control measures;
(4) Plant disease, but not damage due to insufficient or
improper application of disease control measures;
(5) Wildlife;
(6) Earthquake;
(7) Volcanic eruption; or
(8) Failure of the irrigation water supply, if caused by an
insured peril that occurs during the insurance period.
(b) In addition to the causes of loss not insured against in
section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), we
will not insure against any loss of production due to the
application of saline water.
10. Replanting Payment
(a) A replanting payment for rice is allowed as follows:
(1) You must comply with all requirements regarding replanting
payments contained under section 13 (Replanting Payment) of the
Basic Provisions (Sec. 457.8);
(2) The rice must be damaged by an insurable cause of loss to
the extent that the remaining stand will not produce at least 90
percent of the production guarantee for the acreage; and
(3) The replanted rice must be seeded at a rate that is normal
for initially planted rice (if new seed is planted at a reduced
seeding rate into a partially damaged stand of rice, the acreage
will not be eligible for a replanting payment).
(b) In accordance with the provisions of section 13 (Replanting
Payment) of the Basic Provisions (Sec. 457.8), the maximum amount of
the replanting payment per acre will be the lesser of 20 percent of
the production guarantee or 400 pounds, multiplied by your price
election, multiplied by your insured share.
(c) When rice is replanted using a practice that is uninsurable
for an original planting, the liability for the unit will be reduced
by the amount of the replanting payment. The premium amount will not
be reduced.
11. Duties in the Event of Damage or Loss
In accordance with the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the
representative samples of the unharvested crop must be at least 10
feet wide and extend the entire length of each field in the unit.
The samples must not be harvested or destroyed until the earlier of
our inspection or 15 days after harvest of the balance of the unit
is completed.
12. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event
you are unable to provide separate acceptable production records:
(1) For any optional units, we will combine all optional units
for which such production records were not provided; or
(2) For any basic units, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for the units.
(b) In the event of loss or damage covered by this policy, we
will settle your claim on any unit by:
(1) Multiplying the insured acreage by its respective production
guarantee by type, if applicable;
(2) Multiplying each result in section 12(b)(1) by the
respective price election by type, if applicable;
(3) Totaling the results of section 12(b)(2);
(4) Multiplying the total production to be counted by type, if
applicable, (see section 12(c) through (e)) by the respective price
election;
(5) Totaling the results of section 12(b)(4);
(6) Subtracting the result of section 12(b)(5) from the result
of section 12(b)(3); and
(7) Multiplying the result of section 12(b)(6) by your share.
(c) The total production to count (in pounds) from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide acceptable production records;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (mature unharvested production may
be adjusted for quality deficiencies and excess moisture in
accordance with section 12(d));
(iv) Potential production on insured acreage that you intend to
put to another use or abandon, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for
that acreage will end when you put the acreage to another use or
abandon the crop. If agreement on the appraised amount of production
is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put
[[Page 28312]]
the acreage to another use if you agree to leave intact, and provide
sufficient care for, representative samples of the crop in locations
acceptable to us (The amount of production to count for such acreage
will be based on the harvested production or appraisals from the
samples at the time harvest should have occurred. If you do not
leave the required samples intact, or you fail to provide sufficient
care for the samples, our appraisal made prior to giving you consent
to put the acreage to another use will be used to determine the
amount of production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested
production, or our reappraisal if additional damage occurs and the
crop is not harvested; and
(2) All harvested production from the insurable acreage,
including any production from a second rice crop harvested in the
same crop year.
(d) Mature rough rice may be adjusted for excess moisture and
quality deficiencies. If moisture adjustment is applicable, it will
be made prior to any adjustment for quality.
(1) Production will be reduced by 0.12 percent for each 0.1
percentage point of moisture in excess of 12 percent. We may obtain
samples of the production to determine the moisture content.
(2) Production will be eligible for quality adjustment if:
(i) Deficiencies in quality, in accordance with the Official
United States Standards for Rice, result in rice not meeting the
grade requirements for U.S. No. 3 (grades U.S. No. 4 or worse)
because of red rice, chalky kernels or damaged kernels;
(ii) The rice has a total milling yield of less than 68 pounds
per hundredweight;
(iii) The whole kernel weight is less than 55 pounds per
hundredweight of milled rice for medium and short grain varieties;
(iv) The whole kernel weight is less than 48 pounds per
hundredweight of milled rice for long grain varieties; or
(v) Substances or conditions are present that are identified by
the Food and Drug Administration or other public health
organizations of the United States as being injurious to human or
animal health.
(3) Quality will be a factor in determining your loss only if:
(i) The deficiencies, substances, or conditions specified in
section 12(d)(2) resulted from a cause of loss against which
insurance is provided under these crop provisions and which occurs
within the insurance period;
(ii) The deficiencies, substances, or conditions specified in
section 12(d)(2) result in a net price for the damaged production
that is less than the local market price;
(iii) All determinations of these deficiencies, substances, or
conditions specified in section 12(d)(2) are made using samples of
the production obtained by us or by a disinterested third party
approved by us; and
(iv) The samples are analyzed by a grader licensed to grade rice
under the authority of the United States Agriculture Marketing Act
or the United States Warehouse Act with regard to deficiencies in
quality, or by a laboratory approved by us with regard to substances
or conditions injurious to human or animal health. Notwithstanding
the preceding sentence, test weight for quality adjustment purposes
may be determined by our loss adjuster.
(4) Rice production that is eligible for quality adjustment, as
specified in sections 12(d)(2) and (3), will be reduced as follows:
(i) In accordance with quality adjustment factors contained in
the Special Provisions; or
(ii) If quality adjustment factors are not contained in the
Special Provisions, as follows:
(A) The market price of the qualifying damaged production and
the local market price will be determined on the earlier of the date
such quality adjusted production is sold or the date of final
inspection for the unit. The price for the qualifying damaged
production will be the market price for the local area to the extent
feasible. Discounts used to establish the net price of the damaged
production will be limited to those that are usual, customary, and
reasonable. The price will not be reduced for:
(1) Moisture content;
(2) Damage due to uninsured causes; or
(3) Drying, handling, processing, or any other costs associated
with normal harvesting, handling, and marketing of the rice; except,
if the price of the damaged production can be increased by
conditioning, we may reduce the price of the production after it has
been conditioned by the cost of conditioning but not lower than the
value of the production before conditioning,
(We may obtain prices from any buyer of our choice. If we obtain
prices from one or more buyers located outside your local market
area, we will reduce such prices by the additional costs required to
deliver the rice to those buyers.);
(B) The value of the damaged or conditioned production will be
divided by the local market price to determine the quality
adjustment factor; and
(C) The number of pounds remaining after any reduction due to
excessive moisture (the moisture-adjusted gross pounds (if
appropriate)) of the damaged or conditioned production will then be
multiplied by the quality adjustment factor to determine the net
production to count.
(e) Any production harvested from plants growing in the insured
crop may be counted as production of the insured crop on a weight
basis.
13. Late Planting and Prevented Planting
(a) In lieu of provisions contained in the Basic Provisions
(Sec. 457.8) regarding acreage initially planted after the final
planting date and the applicability of a Late Planting Agreement
Option, insurance will be provided for acreage planted to the
insured crop during the late planting period (see section 13(c)),
and acreage you were prevented from planting (see section 13(d)).
These coverages provide reduced production guarantees. The premium
amount for late planted acreage and eligible prevented planting
acreage will be the same as that for timely planted acreage. If the
amount of premium you are required to pay (gross premium less our
subsidy) for late planted acreage or prevented planting acreage
exceeds the liability on such acreage, coverage for those acres will
not be provided, no premium will be due, and no indemnity will be
paid for such acreage.
(b) If you were prevented from planting, you must provide
written notice to us not later than the acreage reporting date.
(c) Late Planting
(1) For rice acreage planted during the late planting period,
the production guarantee for each acre will be reduced for each day
planted after the final planting date by:
(i) One percent (1%) per day for the 1st through the 10th day;
and
(ii) Two percent (2%) per day for the 11th through the 25th day.
(2) In addition to the requirements of section 6 (Report of
Acreage) of the Basic Provisions (Sec. 457.8), you must report the
dates the acreage is planted within the late planting period.
(3) If planting of rice continues after the final planting date,
or you are prevented from planting during the late planting period,
the acreage reporting date will be the later of:
(i) The acreage reporting date contained in the Special
Provisions for the insured crop; or
(ii) Five (5) days after the end of the late planting period.
(d) Prevented Planting (Including Planting After the Late
Planting Period)
(1) If you were prevented from timely planting rice, you may
elect:
(i) To plant rice during the late planting period. The
production guarantee for such acreage will be determined in
accordance with section 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 thirty-five percent (35%) of the production
guarantee for timely planted acres. For example, if your production
guarantee for timely planted acreage is 2,000 pounds per acre, your
prevented planting production guarantee would be 700 pounds per acre
(2,000 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 sections 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
10th day following the final planting date for the insured crop; or
(B) A production guarantee equal to 17.5 percent of the
production guarantee for timely planted acres will be provided for
such acreage, if the substitute crop is planted after the 10th 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 2,000 pounds per acre, your prevented
planting production guarantee would be 350 pounds
[[Page 28313]]
per acre (2,000 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) Production guarantees for timely, late, and prevented
planting acreage within a unit will be combined to determine the
production guarantee for the unit. For example, assume you insure
one unit in which you have a 100 percent share. The unit consists of
150 acres, of which 50 acres were planted timely, 50 acres were
planted 7 days after the final planting date (late planted), and 50
acres were not planted but are eligible for a prevented planting
production guarantee. The production guarantee for the unit will be
computed as follows:
(i) For the timely planted acreage, multiply the per acre
production guarantee for timely planted acreage by the 50 acres
planted timely;
(ii) For the late planted acreage, multiply the per acre
production guarantee for timely planted acreage by 93 percent and
multiply the result by the 50 acres planted late; and
(iii) For prevented planting acreage, multiply the per acre
production guarantee for timely planted acreage by:
(A) Thirty-five percent (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
(B) Seventeen and five tenths percent (17.5%) 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
paragraph (B) is not applicable, and prevented planting coverage is
not available under these crop provisions, if you elected the
Catastrophic Risk Protection Endorsement or you elected to exclude
prevented planting coverage when a substitute crop is planted (see
section 13 (d)(1)(iii))).
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.
(3) You must have the inputs available to plant and produce the
intended crop with the expectation of at least producing the
production guarantee. Proof that these inputs were available may be
required.
(4) 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 insurance for rice for the 1998
crop year, prevented planting coverage will begin on the 1998 sales
closing date for rice in the county. If the rice coverage remains in
effect for the 1999 crop year (is not terminated or canceled during
or after the 1998 crop year), prevented planting coverage for the
1999 crop year began on the 1998 sales closing date. Cancellation
for the purpose of transferring the policy to a different insurance
provider when there is no lapse in coverage will not be considered
terminated or canceled coverage for the purpose of the preceding
sentence.
(5) The acreage to which prevented planting coverage applies
will not exceed the total eligible acreage on all 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 rice on the FSA Farm Serial
Number during the previous crop year; or
(C) One-hundred percent of the simple average of the number of
acres planted to rice during the crop years that you certified to
determine your yield.
(iii) A prevented planting production guarantee will not be
provided for any acreage:
(A) That does not constitute at least 20 acres or 20 percent 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 was double-cropped in each of the last 4
years in which the insured crop was grown on the acreage;
(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 section 13(d)(2)(iii)(A) or a
substitute crop allowed in section 13(d)(2)(iii)(B)) unless you
provide adequate records of acreage and production showing that the
acreage was double-cropped in each of the last 4 years in which the
insured crop was grown on the acreage;
(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 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
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).
(6) 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.
[[Page 28314]]
14. Written Agreements
Designated terms of this policy may be altered by written
agreement in accordance with the following:
(a) You must apply in writing for each written agreement no
later than the sales closing date, except as provided in section
14(e);
(b) The application for a written agreement must contain all
variable terms of the contract between you and us that will be in
effect if the written agreement is not approved;
(c) If approved, the written agreement will include all variable
terms of the contract, including, but not limited to, crop type or
variety, the guarantee, premium rate, and price election;
(d) Each written agreement will be valid for one year (If the
written agreement is not specifically renewed the following year,
insurance coverage for subsequent crop years will be in accordance
with the printed policy); and
(e) An application for a written agreement submitted after the
sales closing date may be approved if, after a physical inspection
of the acreage, it is determined that no loss has occurred and the
crop is insurable in accordance with the policy and written
agreement provisions.
Signed in Washington, D.C., on May 19, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-13656 Filed 5-22-97; 8:45 am]
BILLING CODE 3401-08-P
