[Federal Register Volume 62, Number 176 (Thursday, September 11, 1997)]
[Rules and Regulations]
[Pages 47745-47749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23906]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 62, No. 176 / Thursday, September 11, 1997 /
Rules and Regulations
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 441 and 457
General Crop Insurance Regulations; Table Grape Crop Insurance
Regulations and Common Crop Insurance Regulations; Table Grape 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 table grapes. 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 table grape crop insurance regulations under the Common Crop
Insurance Policy for ease of use and consistency of terms, and to
restrict the effect of the current table grape crop insurance
regulations to the 1997 and prior crop years.
EFFECTIVE DATE: October 14, 1997.
FOR FURTHER INFORMATION CONTACT: John Meyer, Insurance Management
Specialist, Product Development Division, Policy Development and
Standards Branch, 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, this rule has not been reviewed by OMB.
Paperwork Reduction Act of 1995
Following publication of the proposed rule, 62 FR 2059, the public
was afforded 60 days to submit written comments on information
collection requirements currently being reviewed by OMB under OMB
control number 0563-0003. No public comments were received.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.
L. 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 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. New provisions included in this
rule will not impact small entities to a greater extent than large
entities. Under the current regulations, all producers are required to
complete an application and acreage report. If the crop is damaged or
destroyed, insureds are required to give notice of loss and provide the
necessary information to complete a claim for indemnity. 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 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 final rule has been reviewed in accordance with Executive
Order No. 12988 on civil justice reform. 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 Wednesday, January 15, 1997, FCIC published a proposed rule in
the Federal Register at 62 FR 2059 to add to the Common Crop Insurance
Regulations (7 CFR part 457), a new section, 7 CFR 457.149, (Table
Grape Crop Insurance Provisions). The new provisions will replace and
supersede the current provisions for insuring table grapes found at 7
CFR part 441 and will
[[Page 47746]]
be effective for the 1998 and succeeding crop years.
Following publication of the proposed rule, the public was afforded
60 days to submit written comments. A total of 14 comments were
received from reinsured companies and an insurance service
organization. The comments received, and FCIC's responses, follow:
Comment: A reinsured company questioned the need to define ``FSA''
and recommended it be deleted.
Response: FCIC agrees with the comment and has deleted the
definition.
Comment: A reinsured company suggested that in the definition of
``Good farming practices,'' the phrase ``* * * by the Cooperative State
Research, Education, and Extension Service'' be deleted since some
producers carry out practices that are compatible but not ``generally''
recognized by the Extension Service.
Response: FCIC has removed the word ``generally'' from this part of
the definition. However, FCIC believes that the Cooperative State
Research, Education, and Extension Service (CSREES) recognizes farming
practices that are considered acceptable for producing table grapes. If
a producer is following practices currently 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. Such limitations would be considered by FCIC.
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 agrees that 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: An insurance service organization questioned whether the
change in the number of pounds of table grapes in a lug will require a
recalculation of previously certified production history to bring it
up-to-date, or does the change only apply to future production history.
Response: For 1996 and prior years, the certified actual production
history must be adjusted by use of a factor to conform with the new
weight standard for lugs. For all California districts and Arizona, the
adjustment factor is 1.1000.
Comment: An insurance service organization stated that the language
in section 2(a) ``A unit * * * will be divided into basic units * * *''
may be confusing since unit division usually deals with optional units
(as in section 2.(b)). It was suggested this be rewritten to read,
``Basic units as defined in section 1 * * * will be established for
each table grape variety you insure.''
Response: FCIC agrees the provisions may be confusing and has
clarified this section.
Comment: An insurance service organization indicated that section
2(f)(3) states that non-contiguous land qualifies for separate optional
units and that basic units by non-contiguous land are allowed by
current provisions. It was suggested that this policy change be
identified in the Summary of Changes so agents and policyholders are
made aware of the change and can make necessary adjustments.
Response: FCIC agrees that the change from basic to optional unit
status should have been identified in the Summary of Changes. FCIC will
describe this change to insurance providers when the policy is released
for use.
Comment: A reinsured company suggested including the acreage
reporting date in section 6 of the crop provisions.
Response: FCIC believes the acreage reporting date should remain in
the Special Provisions because it could vary by region. Therefore, no
changes have been made to these provisions.
Comment: A reinsured company recommended a new paragraph (7(b)(3))
be added to the policy to read as follows: ``That, after grafting over,
have reached the third growing season or produced at least 150 lugs per
acre, whichever occurs first.''
Response: FCIC agrees that mature grapes ``grafted over'' to
produce a variety other than originally grown tend to produce faster
than normal rootstock that is set out; however, occasionally grafts do
not ``take'' and the vines may never produce 150 lugs per acre. Table
grapes must have produced 150 lugs per acre before they are insurable.
Therefore, no change has been made.
Comment: A reinsured company suggested that the first sentence in
section 9(a)(1) be shortened to read, ``Coverage begins on February 1
of each crop year.'' The industry believes the additional wordage only
adds confusion and suggests a poor producer could avoid an inspection
by sending an application in early. Also, they questioned whether 10
days was sufficient time for insurance providers to send adjusters out
to inspect every table grape vineyard, and stated that section 7(a)(4)
already specifies that the vineyard must be acceptable to the insurance
provider.
Response: The provisions were revised to clarify that late-filed
applications are not allowed. The ten day waiting period is necessary
to prevent insurance against an immediate cause of loss and avoid
unnecessary exposure to uninsured causes of loss. The insurance
provider must expedite its review of the application and any supporting
documentation filed by the producer, determine if a visual inspection
is necessary, and perform any necessary inspections within the 10-day
period. The period of 10 days is believed appropriate to meet the needs
of both the producer and the insurance provider. Section 7(a)(4) does
not require an inspection, it just states, that if there is an
inspection, the orchard must be acceptable. This is unrelated to the
requirement for an inspection during the 10 day period to determine
whether the producer is attempting to insure an existing or probable
loss. Therefore, no change has been made.
Comment: A reinsured company suggested that section 9(a)(2) be
changed to read, ``This policy is continuous after the first year of
application, except the calendar date for the end of the insurance
period (as specified in the Special Provisions) for each crop year, is
the date during the calendar year in which the grapes are normally
harvested.''
Response: Section 2(a) of the Basic Provisions states that the
policy is continuous. Therefore, it is not necessary to repeat this
provision in the Crop Provisions.
Comment: A reinsured company recommended removing the ``end of
insurance period dates'' from the policy since they are currently
listed in the Special Provisions. This would allow the addition of
dates for new varieties or revisions of existing dates to be
accomplished more quickly.
Response: FCIC agrees with this recommendation and has amended the
provisions accordingly.
Comment: A reinsured company stated that phylloxera should not be
excluded as a cause of loss, but should be included under ``Disease or
insect infestation'' referenced in section 10(b)(1). The comment also
stated that it is impossible to determine the amount of loss or damage
attributable specifically to phylloxera and that implementation would
be a loss adjusting nightmare and impossible to audit.
Response: It is widely accepted that Type B phylloxera will
ultimately destroy nearly all vineyards that were planted on non-
resistant root stock. The wine industry has done extensive research and
worked with producers to develop plans to destroy and replace non-
resistant vineyards and some
[[Page 47747]]
vineyards have been destroyed immediately after finding infestations.
Providing coverage for phylloxera related losses may inhibit the
efforts being made to stop the spread of this pest and may be
considered to promote poor pest management practices. Attributing
losses to phylloxera should be no more difficult than attributing
losses to any other uninsurable cause of loss. Therefore, no changes
have been made.
Comment: An insurance service organization suggested combining the
provisions contained in section 13(e) with the provisions in section
13(a).
Response: The requirement that requests for written agreement be
executed by the sales closing date is intended to be the rule and the
application submitted after the sales closing date will only be an
exception to this rule in limited circumstances. Therefore, no change
will be made.
Comment: Two reinsured companies and an insurance service
organization suggested the provision in section 13(d) stating ``Each
written agreement will only be valid for one year'' be deleted. The
valid period should be stated in the wording of the agreement. In most
cases, written agreements should be continuous, like policies. Limiting
written agreements to one year only increases administrative cost,
complexity and opportunity for misunderstanding and error.
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 insure that the insured is well aware
of the specific terms of the policy. Therefore, no change will be made.
In addition to the changes indicated above, FCIC has made the
following changes:
1. Preamble--Include the Catastrophic Risk Protection Endorsement
for clarification.
2. Section 1--Add a definition for ``adapted'' to clarify the
provisions that identify the insured crop (section 7(a)), and change
the lug (box) weight in Arizona from 22 pounds to 20 pounds to be
consistent with comparable marketing areas in Riverside and Imperial
Counties, California (Coachella Valley).
3. Section 2--Clarify that written agreements may only be used to
obtain optional units on other than non-contiguous land.
4. Section 11(c)--Clarify that the damaged crop must not be
destroyed until the earlier of 15 days from the date notice of loss was
given or after the insurance provider gives written consent to do so.
Failure to meet this requirement will result in all such production to
be considered undamaged and included as production to count.
List of Subjects in 7 CFR Parts 441 and 457
Crop insurance, Table grape, Table grape crop insurance
regulations.
Final Rule
Accordingly, for the reasons set forth in the preamble, the Federal
Crop Insurance Corporation hereby amends 7 CFR parts 441 and 457, as
follows:
PART 441--TABLE GRAPE CROP INSURANCE REGULATIONS FOR THE 1987
THROUGH 1997 CROP YEARS
1. The authority citation for 7 CFR part 441 is amended to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
2. The part heading is revised to read as set forth above.
3. Subpart heading ``Subpart--Regulations for the 1987 and
Succeeding Crop Years'' is removed.
4. Section 441.7 is amended by revising the introductory text of
paragraph (d) to read as follows:
Sec. 441.7 The application and policy.
* * * * *
(d) The application for the 1987 and succeeding crop years is found
at subpart D of part 400, General Administrative Regulations (7 CFR
400.37, 400.38). The provisions of the Table Grape Insurance Policy for
the 1987 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 457.149 is added to read as follows:
Sec. 457.149 Table grape crop insurance provisions.
The Table Grape Crop Insurance Provisions for the 1998 and
succeeding crop years are as follows:
For FCIC policies:
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
For reinsured policies:
(Insurance provider's name or other appropriate heading)
For both FCIC and reinsured policies:
TABLE GRAPE CROP 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 other provisions.
1. Definitions
Adapted. Varieties that are recognized by the Cooperative State
Research, Education, and Extension Service as compatible with
agronomic and weather conditions in the county.
Cluster thinning and removal. Removing parts of an immature
cluster or the entire cluster of grapes.
Days. Calendar days.
Direct marketing. Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper or buyer. Examples of direct
marketing include selling through an on-farm or roadside stand,
farmer's market, and permitting the general public to enter the
field for the purpose of picking all or a portion of the crop.
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 recognized by the Cooperative State Research,
Education, and Extension Service as compatible with agronomic and
weather conditions in the area.
Graft. To unite a shoot or bud (scion) with a rootstock or an
existing vine in accordance with recommended practices to form a
living union.
Harvest. Severing the clusters of mature grapes from the vine.
Interplanted. Acreage on which two or more crops are planted in
any form of alternating or mixed pattern.
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.
Lug. Twenty pounds of table grapes in the Coachella Valley,
California district; 21 pounds in all other California districts;
and 20 pounds in Arizona.
Non-contiguous. Any two or more tracts of land whose boundaries
do not touch at any point, except that land separated only by a
public or private right-of-way, waterway, or an irrigation canal
will be considered as contiguous.
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Production guarantee (per acre). The number of lugs of grapes
determined by multiplying the approved APH yield per acre by the
coverage level percentage you elect.
Set out. Physically planting the grape plant in the vineyard.
Table grapes. Grapes that are grown for commercial sale for
human consumption as fresh fruit on acreage where the cultural
practices to produce fresh marketable grapes are carried out.
Written agreement. A written document that alters designated
terms of this policy in accordance with section 13.
2. Unit Division
(a) In addition to the provisions of crop definition of unit
contained in section 1 (Definitions) of the Basic Provisions
(Sec. 457.8), a basic unit will also be established for each table
grape variety you insure.
(b) Unless limited by the Special Provisions, these basic units
may be divided into optional units if, for each optional unit, you
meet all the conditions of this section.
(c) Basic units may not be divided into optional units on any
basis including, but not limited to, production practice, type, and
variety, other than as described in this section.
(d) 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 premium
paid for the purpose of electing optional units will be refunded to
you for the units combined.
(e) All optional units that you elect must be identified on the
acreage report for that crop year.
(f) The following requirements must be met for each optional
unit:
(1) You must have records, which can be independently verified,
of acreage and production for each optional unit for at least the
last crop year used to determine your production guarantee;
(2) 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
unit, or the production from each unit must be kept separate until
loss adjustment is completed by us; and
(3) Unless otherwise allowed by a written agreement, each
optional unit must be located on non-contiguous land.
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):
(a) You may select only one price election and coverage level
for each table grape variety in the county insured under this
policy.
(b) You must report, by the production reporting date designated
in section 3 (Insurance Guarantees, Coverage Levels, and Prices for
Determining Indemnities) of the Basic Provisions (Sec. 457.8), by
variety if applicable:
(1) Any damage, removal of bearing vines, change in practices,
or any other circumstance that may reduce the expected yield below
the yield upon which the insurance guarantee is based, and the
number of affected acres;
(2) The number of bearing vines on insurable and uninsurable
acreage;
(3) The age of the vines and the planting pattern; and
(4) For the first year of insurance for acreage interplanted
with another perennial crop, and any time the planting pattern of
such acreage is changed:
(i) The age of the interplanted crop, and type if applicable;
(ii) The planting pattern; and
(iii) Any other information that we request in order to
establish your approved yield.
We will reduce the yield used to establish your production
guarantee as necessary, based on our estimate of the effect of the
following: Interplanting perennial crop, removal of vines, damage,
change in practices and any other circumstance that may affect the
yield potential of the insured crop. If you fail to notify us of any
circumstance that may reduce your yields from previous levels, we
will reduce your production guarantee as necessary at any time we
become aware of the circumstance.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is October 31
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 January 31.
6. Report of Acreage
In addition to the requirements of section 6 (Report of Acreage)
of the Basic Provisions (Sec. 457.8), you must report the acreage of
table grapes in the county by variety.
7. Insured Crop
(a) In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be any insurable
variety of grapes in the county that you elect and for which a
premium rate is provided by the actuarial table:
(1) In which you have a share;
(2) That are grown for harvest as table grapes;
(3) That are adapted to the area; and
(4) That are grown in a vineyard that, if inspected, is
considered acceptable by us.
(b) In addition to table grapes not insurable under section 8
(Insured Crop) of the Basic Provisions (Sec. 457.8), we do not
insure any table grapes grown on vines:
(1) That, after being set out or grafted, have not reached the
number of growing seasons designated by the Special Provisions; or
(2) That have not produced an average of at least 150 lugs of
table grapes per acre in at least one of the most recent three crop
years in your actual production history base period. However, we may
inspect and agree in writing to insure acreage that has not produced
this amount.
8. Insurable Acreage
In lieu of the provisions in section 9 (Insurable Acreage) of
the Basic Provisions (Sec. 457.8) that prohibit insurance attaching
to a crop planted with another crop, table grapes interplanted with
another perennial crop are insurable unless we inspect the acreage
and determine that it does not meet the requirements contained in
your policy.
9. Insurance Period
(a) In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(1) Coverage begins on February 1 of each crop year, except that
for the year of application, if your application is received after
January 22 but prior to February 1, insurance will attach on the
10th day after your properly completed application is received in
our local office, unless we inspect the acreage during the 10-day
period and determine that it does not meet insurability
requirements. You must provide any information that we require for
the crop or to determine the condition of the vineyard.
(2) The calendar date for the end of the insurance period for
each crop year is the date during the calendar year in which the
grapes are normally harvested or contained in the Special Provisions
as provided to you on or before the contract change date.
(b) In addition to the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(1) If you acquire an insurable share in any insurable acreage
after coverage begins but on or before the acreage reporting date
for the crop year, and after an inspection we consider the acreage
acceptable, insurance will be considered to have attached to such
acreage on the calendar date for the beginning of the insurance
period.
(2) If you relinquish your insurable share on any insurable
acreage of table grapes on or before the acreage reporting date for
the crop year, insurance will not be considered to have attached to,
and no premium will be due or indemnity paid for such acreage for
that crop year unless:
(i) A transfer of coverage and right to an indemnity, or a
similar form approved by us, is completed by all affected parties;
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date; and
(iii) The transferee is eligible for crop insurance.
10. 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;
(2) Fire, unless weeds and other forms of undergrowth have not
been controlled or pruning debris has not been removed from the
vineyard;
(3) Wildlife;
(4) Earthquake;
(5) Volanic eruption; or
[[Page 47749]]
(6) Failure of irrigation water supply, if caused by an insured
cause of loss ((a)(1) through (5) of this section) that occurs
during the insurance period.
(b) In addition to the causes of loss excluded in section 12
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not
insure against damage or loss of production due to:
(1) Disease or insect infestation, unless adverse weather:
(i) Prevents the proper application of control measures or
causes properly applied control measures to be ineffective; or
(ii) Causes disease or insect infestation for which no effective
control mechanism is available;
(2) Phylloxera, regardless of cause; or
(3) Inability to market the table grapes for any reason other
than actual physical damage from an insurable cause specified in
this section. For example, we will not pay you an indemnity if you
are unable to market due to quarantine, boycott, or refusal of any
person to accept production.
11. Duties In the Event of Damage or Loss
In addition to the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the
following will apply:
(a) You must notify us within 3 days after the date harvest
should have started if the crop will not be harvested.
(b) You must notify us at least 15 days before any production
from any unit will be sold by direct marketing. We will conduct an
appraisal that will be used to determine your production to count
for production that is sold by direct marketing. If damage occurs
after this appraisal, we will conduct an additional appraisal. These
appraisals, and any acceptable records provided by you, will be used
to determine your production to count. Failure to give timely notice
that production will be sold by direct marketing will result in an
appraised amount of production to count of not less than the
production guarantee per acre if such failure results in our
inability to make the required appraisal.
(c) If the crop has been damaged during the growing season, you
must provide notice at least 15 days prior to the beginning of
harvest if you intend to claim an indemnity as a result of the
damage previously reported. You must not destroy the damaged crop
until the earlier of 15 days from the date you gave notice of loss,
or our written consent to do so. If you fail to meet the
requirements of this section all such production will be considered
undamaged and included as production to count.
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
(2) For any basic unit, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for each 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 the result in section 12(b)(1) by the respective
price election for the variety;
(3) Totaling the results in section 12(b)(2);
(4) Multiplying the total production to be counted of the
variety (see section 12(c)) by the respective price election;
(5) Totaling the results in section 12(b)(4);
(6) Subtracting the result of section 12(b)(5) from the result
in section 12(b)(3); and
(7) Multiplying the result of section 12(b)(6) by your share.
(c) The total production to count (in lugs) 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 acreage:
(A) That is abandoned;
(B) That is sold by direct marketing if you fail to meet the
requirements in section 11(b);
(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 that meets, or would meet if
properly handled, the California Department of Food and Agriculture
minimum standards for table grapes; and
(iv) Potential production on insured acreage that you intend to
abandon or no longer care for, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for
that acreage will end. If you do not agree with our appraisal, we
may defer the claim only if you agree to continue to care for the
crop. We will then make another appraisal when you notify us of
further damage or that harvest is general in the area unless you
harvested the crop, in which case we will use the harvested
production. If you do not continue to care for the crop, our
appraisal made prior to deferring the claim will be used to
determine the production to count; and
(2) All harvested production from insurable acreage regardless
of condition or disposition. The quantity of production to count for
table grape production damaged by insurable causes within the
insurance period that is marketed for any use other than table
grapes will be determined by multiplying the greater of (1) the
value of the table grapes per ton or (2) $50, by the number of tons
and dividing that result by the highest price election available for
the insured unit. This result will be the number of lugs to count.
13. Written Agreement
Terms of this policy which are specifically designated as
allowing the use of a 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, 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, DC, on September 4, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-23906 Filed 9-10-97; 8:45 am]
BILLING CODE 3410-08-P
