[Federal Register Volume 62, Number 153 (Friday, August 8, 1997)]
[Rules and Regulations]
[Pages 42647-42651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20914]
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Rules and Regulations
Federal Register
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to and codified in the Code of Federal Regulations, which is published
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Federal Register / Vol. 62, No. 153 / Friday, August 8, 1997 / Rules
and Regulations
[[Page 42647]]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 401 and 457
RIN 0563-AA79
General Crop Insurance Regulations, Safflower Seed Crop Insurance
Endorsement; and Common Crop Insurance Regulations, Safflower 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 safflower. 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 safflower
seed crop endorsement under the Common Crop Insurance Policy for ease
of use and consistency of terms, and to restrict the effect of the
current safflower seed crop endorsement to the 1997 and prior crop
years.
EFFECTIVE DATE: August 8, 1997.
FOR FURTHER INFORMATION CONTACT: Ron Nesheim, 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 No. 12866
The Office of Management and Budget (OMB) has determined this rule
to be exempt for the purposes of Executive Order No. 12866, and
therefore, 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 comments and opinions on information collection
requirements currently being reviewed by OMB under OMB control number
0563-0053 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) of
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 No. 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 economic impact on a
substantial number of small entities. The amount of work required of
insurance companies should not increase because the information used to
determine eligibility is already maintained at their office. The amount
of work required of insurance companies may actually be reduced because
verification with FCIC of a producer's compliance with the controlled
substance regulations, currently done manually, will be automated.
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 No. 12372
This program is not subject to the provisions of Executive Order
No. 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 No. 12988
This rule has been reviewed in accordance with Executive Order No.
12988 on civil justice reforms. 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.
Background
On Friday, April 11, 1997, FCIC published a proposed rule in the
Federal Register at 62 FR 17758 to add to the Common Crop Insurance
Regulations (7 CFR part 457) a new section, 7 CFR 457.125, Safflower
Crop Insurance Provisions. The new provisions will be effective for the
1998 and succeeding crop years. These provisions will replace and
supersede the current provisions for insuring safflower found at 7 CFR
401.123 (Safflower Seed Crop Endorsement). FCIC also amends 7 CFR
401.123 to limit its effect to the 1997 and prior crop years.
Following publication of the proposed rule, the public was afforded
30 days to
[[Page 42648]]
submit written comments, data, and opinions. A total of 13 comments
were received from the reinsured companies and an insurance service
organization. The comments received, and FCIC's responses, are as
follows:
Comment: A reinsured company asked why no late planting period or
prevented planting language was put in the policy. The reinsured
company asked whether the old Late Planting Agreement Option must still
be signed.
Response: The Late Planting Agreement Option, found under 7 CFR
Sec. 401.123 that is currently applicable to safflower provisions, will
no longer apply. FCIC intends to revise the Late and Prevented Planting
provisions for the 1998 crop year. Until the revised rule is published,
FCIC will add the Late and Prevented Planting provisions, in effect for
other crops, to safflower.
Comment: An insurance service organization suggested that in the
definitions of ``final planting date'' and ``good farming practices,''
the term ``production guarantee'' be replaced by ``average yield,'' or
``insured's average yield'' (also in provision 2(e)(1)).
Response: The terms ``average yield'' or ``insured's average
yield'' would not be accurate because the insured's approved yield is
multiplied by the coverage level selected to determine the production
guarantee. Good farming practices and final planting date require that
the crop be able to produce the yield, not the production guarantee.
Therefore, no change has been made.
Comment: A reinsured company and an insurance service organization
expressed a concern that the provision in the definition of ``good
farming practices'' stating that, ``recognized by the Cooperative State
Research, Education and Extension Service as compatible * * *'' there
may be accepted practices not so recognized. They also asked that if
this cannot be dropped, it would at least help to say ``generally
recognized * * *''.
Response: FCIC believes that the Cooperative State Research,
Education, and Extension Service (CSREES) recognizes farming practices
that are considered acceptable for producing safflower. If a producer
is following practices currently not recognized as acceptable by the
CSREES, there is no reason why such recognition cannot be sought by
interested parties. CSREES pertains only to specific areas within a
county. No change has been made.
Comment: A reinsured company suggested that in the definition of
``irrigated practice,'' the words ``and quality'' be added after the
words ``* * * providing the quantity.''
Response: FCIC disagrees. There are no clear criteria regarding the
quality of water necessary to produce a crop. The highly variable
factors involved would make such criteria difficult to develop and
administer. The provisions regarding good farming practices can be
applied in situations in which the insured person failed to exercise
due care and diligence. Therefore, no change has been made.
Comment: An insurance service organization stated that in the
definition of ``practical to replant,'' the addition of marketing
window in several recent proposed rules seems to be applicable to
processor and fresh market crops. It does not appear to be a
consideration for replanting crops like safflower.
Response: FCIC agrees that the concept is most applicable to
processor and fresh market crops. However, the Federal Crop Insurance
Act has mandated that insurance providers consider marketing window,
when determining whether it is practical to replant. Therefore, no
change has been made.
Comment: An insurance service organization suggested that ``value
per pound of damaged safflower'' be changed to read ``value per pound''
since the definition refers to ``damaged safflower.''
Response: FCIC agrees and has made the change.
Comment: An insurance service organization questioned if it is
necessary to include all the language in section 3 (Insurance
Guarantees, Coverage Levels, and Prices) if there are no prices by
type. Since this appears to be standard language for most of the recent
proposed rule crop provisions, perhaps it should be in the Basic
Provisions instead.
Response: While many crops allow separate prices, by type, not all
require the same percentage relationship. The provision is included in
safflower to provide correct coverage as different types are developed.
Therefore, no change has been made.
Comment: An insurance service organization stated that some
policies allow the entire replanting payment to be paid to the person
incurring the entire expense (usually the tenant) when the landlord and
tenant are insured with the same company, but no such language is in
this proposed rule.
Response: It is true that a few Crop Provisions allow the entire
replanting payment to be paid to the person incurring the entire
expense (usually the tenant) when the landlord and tenant are insured
with the same company. However, because of the difficulties of
administering this provision, it is being discontinued as Crop
Provisions are revised. Therefore, no change has been made.
Comment: An insurance service organization suggested that section
12(c)(1)(iv)(A) of the policy should not allow the insured to defer
settlement and wait for a later, generally lower, appraisal, especially
on crops that have a short ``shelf life.''
Response: A later appraisal will be necessary only if the insurance
provider agrees that such an appraisal would result in a more accurate
determination of production to count 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: An insurance service organization stated that section
12(d)(3)(ii) refers to ``net price;'' section 12(d)(4)(ii)(A) refers to
``value per pound;'' and section 12(d)(4)(ii)(B) refers to ``price per
pound.'' All three seem to mean the same thing. Since ``value per
pound'' is defined in the policy, they suggested using it in each item.
Response: FCIC agrees and has made those changes.
Comment: An insurance service organization suggested that in
section 12(d)(4) (i) & (ii), ``qualifying adjustment factor
provisions'' be revised to read ``quality adjustment factors'' in item
(i), and ``quality adjustment factor provisions'' to ``quality
adjustment factors'' in item (ii).
Response: FCIC agrees and has made the changes.
Comment: An insurance service organization suggested that in
section 12(d)(4)(ii)(A), ``local market price of undamaged safflower''
be amended to read ``local market price.''
Response: FCIC agrees and has made the change.
Comment: An insurance service organization and a reinsured company
suggested that written agreements should not be limited to one year.
Written unit agreements are continuous unless there are significant
changes in the farming operation. Some others should also be this way.
Response: Written agreements are intended to change policy terms or
permit insurance in unusual or previously unknown situations. If such
practices continue year to year, they should be incorporated into the
policy or Special Provisions. It is important to keep non-uniform
exceptions to the minimum and to ensure that the insured is well aware
of the specific terms of the policy. Therefore, no change has been
made.
[[Page 42649]]
In addition to the changes described above, FCIC has made minor
editorial changes and has amended the following provisions:
1. The preamble is revised to refer to the Catastrophic Risk
Protection Endorsement for the purpose of clarification.
2. In section 2, the authority to vary the unit structure has been
clarified that only the optional unit guideline, specified in section
2(e)(4) may be revised by written agreement.
3. Section 9(e) has been amended to clarify that wildlife is an
insured cause of loss, unless proper measures to control wildlife have
not been taken to be consistent with other policies.
Good cause is shown to make this rule effective upon publication in
the Federal Register. This rule improves the safflower crop insurance
coverage and brings it under the Common Crop Insurance Policy Basic
Provisions for consistency among policies. The earliest contract change
date that can be met for the 1998 crop year is August 31, 1997, and the
final rule must be published as soon as possible. It is, therefore,
imperative that these provisions be made final so that reinsured
companies may have sufficient time to implement these changes.
Therefore, public interest requires the agency to make the rules
effective upon publication.
List of Subjects in 7 CFR Parts 401 and 457
Crop insurance, Safflower seed.
Final Rule
Accordingly, for the reasons set forth in the preamble, the Federal
Crop Insurance Corporation hereby amends 7 CFR Parts 401 and 457 as
follows:
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(l), 1506(p).
2. In Sec. 401.123, the introductory paragraph is revised to read
as follows:
Sec. 401.123 Safflower seed crop endorsement.
The provisions of the Safflower Seed Crop Insurance Endorsement for
the 1988 through the 1997 crop year.
* * * * *
3. Section 401.8 is amended by revising the introductory text of
paragraph (d) to read as follows:
* * * * *
Sec. 401.8 The application and policy.
* * * * *
(d) The application for the 1988 and succeeding crop years is found
at subpart D of part 400, General Administrative Regulations (7 CFR
400.37 and 400.38). The provisions of the Safflower Insurance Policy
for the 1988 through 1997 crop years are as follows:
* * * * *
PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE
1994 AND SUBSEQUENT CONTRACT YEARS
4. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
5. Section 457.125 is added to read as follows:
Sec. 457.125 Safflower crop insurance provisions.
The Safflower 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:
Safflower Crop Insurance Provisions
If a conflict exists among the Basic Provisions (Sec. 457.8),
these Crop Provisions, the Special Provisions, and the Catastrophic
Risk Protection Endorsement, if applicable, the Special Provisions
will control these Crop Provisions and the Basic Provisions; and
these Crop Provisions will control the Basic Provisions. The
Catastrophic Risk Protection Endorsement, if applicable, will
control all 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.
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. Collecting the safflower seed by combining or
threshing.
Interplanted. Acreage on which two or more crops are planted in
a manner that does not permit separate agronomic maintenance or
harvest of the insured crop.
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.
Local market price. The cash price per pound for undamaged
safflower (test weight of 35 pounds per bushel or higher and seed
damage less than 25 percent) offered by buyers.
Nurse crop (companion crop). A crop planted into the same
acreage as another crop, that is intended to be harvested
separately, and which is planted to improve growing conditions for
the crop with which it is grown.
Planted acreage. Land in which seed has been placed by a machine
appropriate for the insured crop and planting method, at the correct
depth, into a seedbed that has been properly prepared for the
planting method and production practice. Safflower must initially be
planted in rows. Acreage planted in any other manner will not be
insurable unless otherwise provided by the Special Provisions or by
written agreement.
Pound. Sixteen ounces avoirdupois.
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, condition of the
field, time to crop maturity, and marketing window, 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.
Production guarantee (per acre). The number of pounds determined
by multiplying the approved APH yield per acre by the coverage level
percentage you elect.
Replanting. Performing the cultural practices necessary to
replace the safflower seed, including preparing the land and then
replacing the safflower seed in the insured acreage with the
expectation of producing at least the yield used to determine the
production guarantee.
Value per pound. The cash price per pound for damaged safflower
(test weight below 35 pounds per bushel, seed damage in excess of 25
percent, or both).
Written agreement. A written document that alters designated
terms of this policy in accordance with section 13.
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) (a
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 other than as described in this section.
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(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) For each crop year, records of marketed production or
measurement of stored production from each optional unit must be
maintained in such a manner that permits us to verify the production
from each optional unit, or the production from each unit must be
kept separate until loss adjustment is completed by us; and
(4) Each optional unit must meet one or more of the following
criteria, as applicable, unless otherwise specified by written
agreement:
(i) Optional Units by Section, Section Equivalent, or FSA Farm
Serial Number: Optional units may be established if each optional
unit is 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.
(ii) Optional Units on Acreage Including Both Irrigated and Non-
irrigated Practices: Optional units may be based on irrigated
acreage and non-irrigated acreage (in those counties where ``non-
irrigated'' practice is allowed in the actuarial table) if both are
located in the same section, section equivalent, or FSA Farm Serial
Number. To qualify as separate irrigated and non-irrigated optional
units, the non-irrigated acreage may not continue into the irrigated
acreage in the same rows or planting pattern. The irrigated acreage
may not extend beyond the point at which the irrigation system can
deliver the quantity of water needed to produce the yield on which
the guarantee is based, except the corners of a field in which a
center-pivot irrigation system is used will be considered as
irrigated acreage if separate acceptable records of production from
the corners are not provided. If the corners of a field in which a
center-pivot irrigation system is used do not qualify as a separate
non-irrigated optional unit, they will be a part of the unit
containing the irrigated acreage. Non-irrigated acreage that is not
a part of a field in which a center-pivot irrigation system is used
may qualify as a separate optional unit provided that all other
requirements of this section are met.
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 safflower 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 safflower 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 August 31
preceding the cancellation date for California, and December 31
preceding the cancellation date for all other states.
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 dates
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California............................. December 31.
All other states....................... March 15.
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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 safflower 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 safflower seed;
(c) That is not (unless allowed by the Special Provisions or by
written agreement):
(1) Interplanted with another crop; or
(2) Planted into an established grass or legume.
7. Insurable Acreage
In addition to the provisions of section 9 (Insurable Acreage)
of the Basic Provisions (Sec. 457.8), we will not insure:
(a) Safflower planted on land on which safflower, sunflower
seed, any variety of dry beans, soybeans, mustard, rapeseed, or
lentils were grown the preceding crop year, unless other rotation
requirements are specified in the Special Provisions or we agree in
writing to insure such acreage; or
(b) Any acreage of safflower damaged before the final planting
date, to the extent that the majority of producers in the area would
normally not further care for the crop, unless the crop is replanted
or 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
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:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage due to insufficient or improper
application of pest control measures;
(d) Plant disease, but not damage due to insufficient or
improper application of disease control measures;
(e) Wildlife, unless proper measures to control wildlife have
not been taken;
(f) Earthquake;
(g) Volcanic eruption; or
(h) Failure of the irrigation water supply, if caused by an
insured cause of loss that occurs during the insurance period.
10. Replanting Payment
(a) In accordance with section 13 (Replanting Payment) of the
Basic Provisions (Sec. 457.8), a replanting payment is allowed if
the crop is 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 it is practical to replant.
(b) The maximum amount of the replanting payment per acre will
be the lesser of 20 percent of the production guarantee or 160
pounds, multiplied by your price election, multiplied by your
insured share.
(c) When safflower is replanted using a practice that is
uninsurable as an original planting, the liability on 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 unit, we will combine all optional units
for which such production records were not provided; or
[[Page 42651]]
(2) For any basic unit, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for the unit.
(b) In the event of loss or damage covered by this policy, we
will settle your claim by:
(1) Multiplying the insured acreage by its respective production
guarantee;
(2) Multiplying each result in section 12(b)(1) by the
respective price election;
(3) Totaling the results in section 12(b)(2);
(4) Multiplying the total production to be counted of each type
if applicable, (see section 12(c)) by the respective price election;
(5) Totaling the results in section 12(b)(4);
(6) Subtracting the results from the total in section 12(b)(5)
from the results in section 12(b)(3); and
(7) Multiplying the result in 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 per acre for the
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)); and
(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 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
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.
(d) Mature safflower 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 8 percent. We may obtain
samples of the production to determine the moisture content.
(2) Production will be eligible for quality adjustment if such
production:
(i) Has a test weight below 35 pounds per bushel;
(ii) Has seed damage in excess of 25 percent; or
(iii) Contains substances or conditions 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 resulted from a
cause of loss against which insurance is provided under these crop
provisions and that occurred within the insurance period;
(ii) The deficiencies, substances, or conditions result in a
value per pound that is less than the local market price;
(iii) All determinations of these deficiencies, substances, or
conditions 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
safflower under the authority of the Agricultural 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. Test weight for
quality adjustment purposes may be determined by our loss adjuster.
(4) Safflower 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 the quality adjustment factors contained
in the Special Provisions; or
(ii) If quality adjustment factors are not contained in the
Special Provisions:
(A) By determining the value per pound and the local market
price on the earlier of the date such quality adjusted production is
sold or the date of final inspection for the unit. Discounts used to
establish the value per pound will be limited to those which are
usual, customary, and reasonable. The value per pound 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 safflower. We may
obtain values per pound from any buyer of our choice. If we obtain
values per pound from one or more buyers located outside your local
market area, we will reduce such values per pound by the additional
costs required to deliver the production to those buyers.
(B) Divide the value per pound by the local market price to
determine the quality adjustment factor; and
(C) Multiply the adjustment factor by the number of pounds of
the damaged production remaining after any reduction due to
excessive moisture to determine the net production to count.
(e) Any production harvested from other plants growing in the
insured crop may be counted as production of the insured crop on a
weight basis.
3. Written Agreement
Terms of this policy which are specifically designated for the
use of written agreement 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
13(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 by us, 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 only 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 August 4, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-20914 Filed 8-7-97; 8:45 am]
BILLING CODE 3410-08-P
