[Federal Register Volume 62, Number 1 (Thursday, January 2, 1997)]
[Proposed Rules]
[Pages 48-54]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-33067]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 62, No. 1 / Thursday, January 2, 1997 /
Proposed Rules
[[Page 48]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 443 and 457
RIN 0563-AA78
Hybrid Seed Crop Insurance Regulations; and Common Crop Insurance
Regulations, Hybrid Corn Seed Crop Insurance Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Proposed rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes
specific crop provisions for the insurance of hybrid corn seed. 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 Hybrid Seed Crop Insurance Regulations with the Common Crop
Insurance Policy for ease of use and consistency of terms, and to
restrict the effect of the current hybrid corn seed crop insurance
regulation to the 1997 and prior crop years.
DATES: Written comments, data, and opinions on this proposed rule will
be accepted until close of business March 3, 1997 and will be
considered when the rule is to be made final. The comment period for
information collections under the Paperwork Reduction Act of 1995
continues through March 3, 1997.
ADDRESSES: Interested persons are invited to submit written comments to
the Chief, Product Development Branch, Federal Crop Insurance
Corporation, United States Department of Agriculture, 9435 Holmes Road,
Kansas City, MO 64131. Written comments will be available for public
inspection and copying in room 0324, South Building, United States
Department of Agriculture, 14th and Independence Avenue, S.W.,
Washington, D.C., 8:15 a.m. to 4:45 p.m., est, Monday through Friday,
except holidays.
FOR FURTHER INFORMATION CONTACT: Ron Nesheim, Program Analyst, Research
and Development Division, Product Development Branch, Federal Crop
Insurance Corporation, at the Kansas City, MO, address listed above,
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
The title of this information collection is ``Catastrophic Risk
Protection Plan and Related Requirements including, Common Crop
Insurance Regulations; Hybrid Corn Seed Crop Insurance Provisions.''
The information to be collected includes a crop insurance application
and an acreage report. Information collected from the application and
acreage report is electronically submitted to FCIC by the reinsured
companies. Potential respondents to this information collection are
producers of hybrid corn seed that are eligible for Federal crop
insurance.
The information requested is necessary for the reinsured companies
and FCIC to provide insurance and reinsurance, determine eligibility,
determine the correct parties to the agreement or contract, determine
and collect premiums or other monetary amounts, and pay benefits.
All information is reported annually. The reporting burden for this
collection of information is estimated to average 16.9 minutes per
response for each of the 3.6 responses from approximately 1,755,015
respondents. The total annual burden on the pubic for this information
collection is 2,676,932 hours.
FCIC is requesting comments on the following: (a) Whether the
proposed collection of information is necessary for the proper
performance of the functions of the agency, including whether the
information shall have practical utility; (b) the accuracy of the
agency's estimate of the burden of the proposed collection of
information; (c) ways to enhance the quality, utility, and clarity of
the information to be collected; and (d) ways to minimize the burden of
the collection of information on respondents, including through the use
of automated collection techniques or other forms of information
gathering technology.
Comments regarding paperwork reduction should be submitted to the
Desk Officer of Agriculture, Office of Information and Regulatory
Affairs, Office of Management and Budget, Washington, D.C. 20503.
The Office of Management and Budget (OMB) is required to make a
decision concerning the collections of information contained in these
proposed regulations between 30 and 60 days after submission to OMB.
Therefore, a comment to OMB is best assured of having full effect if
OMB receives it within 30 days of publication. This does not affect the
deadline for the public to comment on the proposed regulation.
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 No. 12612
It has been determined under section 6(a) of Executive Order No.
12612, Federalism, that this rule does not have sufficient federalism
implication to warrant the preparation of a Federalism Assessment. The
provisions contained in this rule will not have a substantial direct
effect on states or their political subdivisions, or on the
distribution of power and responsibilities among the various levels of
government.
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
[[Page 49]]
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 producer 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 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. 12778
The Office of the General Counsel has determined that these
regulations meet the applicable standards provided in sections 2(a) and
2(b)(2) of Executive Order No. 12778. 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 parts 11 and 780 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
FCIC proposes to add to the Common Crop Insurance Regulations (7
CFR part 457), a new section, 7 CFR 457.152, Hybrid Corn Seed 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 hybrid corn seed found at 7 CFR
part 443 (Hybrid Seed Crop Insurance Regulations). FCIC also proposes
to amend 7 CFR part 443 to limit its effect to the 1997 and prior crop
years. FCIC will later publish a regulation to remove part 443 and
reserve that part.
This rule makes minor editorial and format changes to improve the
Hybrid Corn Seed Crop Insurance Regulation's compatibility with the
Common Crop Insurance Policy. In addition, FCIC is proposing
substantive changes in the provisions for insuring hybrid corn seed as
follows:
1. Section 1--Add definitions for the terms adjusted yield, bushel,
certified seed test, county yield, FSA, field run, good farming
practices, hybrid corn seed processor contract, insurable interest,
interplanted, local market price, minimum guaranteed payment, planted
acreage, planting pattern, practical to replant, seed amount, and
written agreement for clarification.
2. Section 2--Unit division provisions are amended to include a
producer's reporting responsibilities to qualify for optional units. In
addition, section 2(e)(4)(ii) clarifies that non-irrigated acreage that
is not part of a field in which a center pivot irrigation system is
used may qualify as a separate optional unit. This makes unit division
consistent with other row crops. Also, clarifies that optional units
are available if the hybrid corn seed processor contract specifies that
it is a specific number of acres that are under contract and not a
specified amount of production.
3. Section 4--Change the contract change date to November 30 in
order to maintain an adequate time period between the contract change
date and the revised cancellation date.
4. Section 5--Change the cancellation and termination dates to
March 15. This change is necessary to standardize the cancellation and
termination dates with the sales closing dates which were changed to 30
days earlier for spring planted crops to comply with the requirements
of the Federal Crop Insurance Reform Act of 1994.
5. Section 6--Require the producer to certify that a hybrid corn
seed processor contract has been executed and certify the amount of any
minimum guaranteed payment from the seed company. Certification of a
hybrid corn seed processor contract on or before the acreage reporting
date is needed to establish insurability of the crop before a loss is
likely and ensures a market for the crop. The producer must also
certify to any minimum guaranteed payment under the contract because a
minimum guaranteed payment will affect insurance premium and the amount
of indemnity.
6. Section 7(c)--Specify conditions under which a seed producer who
is also a seed company can establish an insurable interest in the
insured crop. There is an inherent conflict of interest when the
producer is also the processor who will provide the records of the
producer. These conditions are needed to ensure the eligibility of the
processor for crop insurance.
7. Section 8(c)--Clarify that any acreage damaged prior to the
final planting date must be replanted unless it is not practical to
replant.
8. Section 9(b)--Specify that the calendar date for the end of the
insurance period is October 31. The current policy language refers to
the date contained in the Actuarial Table.
9. Section 11(a)--Clarify the size of representative crop samples
required when damage is discovered.
10. Section 12(e)--Clarify the types of production that will be
considered seed production to count.
11. Section 12(g)--Change the adjustment level for high-moisture
shelled hybrid corn seed from 15.5 percent to 15.0 percent. This change
is consistent with changes in provisions for insuring field corn.
Moisture adjustment calculations for ear corn are also changed. The
current policy states ``the weight of ear corn to equal one bushel of
shelled corn will be increased 2 pounds for each percentage point of
moisture in excess of 14.0 percent.'' This conversion factor is changed
to 1.5 pounds for each percentage point of moisture in excess of 14.0
percent because research has shown the existing formula overcompensates
insureds for high moisture seed corn. The proposed provisions also
allow use of the seed company's moisture conversion charts if the
charts were used to determine the ``approved yield.''
12. Section 14. Add provisions for providing insurance coverage by
written agreement. FCIC has a longstanding policy of permitting certain
modification of the insurance contract by written agreement for some
policies.
[[Page 50]]
This amendment allows FCIC to tailor the policy to a specific insured
in certain instances. The new section will cover application for, and
duration of, written agreements.
List of Subjects in 7 CFR Parts 443 and 457
Crop insurance, Hybrid seed crop insurance regulations, Hybrid corn
seed.
Proposed Rule
Accordingly, for the reasons set forth in the preamble, the Federal
Crop Insurance Corporation hereby proposes to amend 7 CFR parts 443 and
457 as follows:
PART 443--HYBRID SEED CROP INSURANCE REGULATIONS
1. The authority citation for 7 CFR part 443 continues to read as
follows:
Authority: 7 U.S.C 1506(l) and 1506(p).
2. The subpart heading preceding Sec. 443.1 is revised to read as
follows:
Subpart--Regulations for the 1986 through 1997 Crop Years.
3. Section 443.7 is amended by revising the introductory text of
paragraph (d) to read as follows:
Sec. 443.7 The application and policy
* * * * *
(d) The application for the 1986 through 1997 crop years is found
at subpart D of part 400, General Administrative Regulations (7 CFR
400.37 and 400.38). The provisions of the Hybrid Seed Crop Insurance
Regulations for the 1986 through 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) and 1506(p).
4. 7 CFR part 457 is amended by adding a new Sec. 457.152 to read
as follows:
Sec. 457.152 Hybrid Corn Seed Crop Insurance Provisions
The Hybrid Corn Seed Crop Insurance Provisions for the 1998 and
succeeding crop years are as follows:
FCIC policies:
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Reinsured policies:
(Appropriate title for insurance provider)
Both FCIC and reinsured policies:
Hybrid Corn Seed 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
Adjusted yield--The yield per acre that results from multiplying
the approved yield by the coverage level percentage.
Amount of insurance per acre--The number of dollars determined
by multiplying the county yield for the coverage level you select by
the price election you select, and subtracting any minimum
guaranteed payment. If the minimum guaranteed payment is stated in a
unit of measure other than dollars, it will be converted to a dollar
amount by multiplying the number of bushels guaranteed by the price
election you selected.
Approved yield--The yield per acre that a specific type or
variety is expected to produce determined from yield records
provided by the seed company or other acceptable information.
Bushel--Fifty-six pounds avoirdupois of shelled corn, 70 pound
avoirdupois of ear corn, or the number of pounds determined under
the seed company's normal conversion chart when the company's
conversion chart is used to determine the approved yield and the
claim for indemnity.
Certified seed test--A warm germination test performed according
to specifications of the ``Rules for Testing Seeds'' of the
Association of Official Seed Analysts.
Commercial hybrid corn seed--The offspring produced by crossing
a male and female parent plant, each having a different genetic
character. This offspring is the product intended for use by an
agricultural producer to produce a commercial field corn crop for
grain.
County yield--A yield contained in the Actuarial Table that is
used to calculate your amount of insurance.
Days--Calendar days.
Dollar value per bushel--The value determined by dividing your
amount of insurance for timely planted acreage by the adjusted
yield.
FSA--The Farm Service Agency, an agency of the United States
Department of Agriculture, or a successor agency.
Female parent plants--Corn plants that are grown for the purpose
of producing commercial hybrid corn seed and have had their stamens
removed.
Field run--Commercial hybrid corn seed production before it has
been processed or screened.
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 amount of insurance per
acre.
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 amount of
insurance, or are required by the hybrid corn seed processor
contract and recognized by the Cooperative State Research,
Education, and Extension Service as compatible with agronomic and
weather conditions in the county.
Harvest--Combining, threshing or picking of the female parent
plants to obtain commercial hybrid corn seed.
Hybrid corn seed processor contract--A written agreement between
the hybrid corn seed crop producer and a seed company containing, at
a minimum:
(a) The producer's promise to plant and grow male and female
parent plants, and to deliver all commercial hybrid corn seed
produced from such plants to the seed company;
(b) The seed company's promise to purchase all the commercial
hybrid corn seed produced by the producer; and
(c) Either a fixed price per unit of measure (bushels,
hundredweight, etc.) of the commercial hybrid corn seed or a formula
to determine the value of such seed. Any formula for establishing
the value must be based on data provided by a public third party
that establishes or provides pricing information to the general
public, based on prices paid in the open market (e.g., commodity
futures exchanges) to be acceptable for the purpose of this policy.
Inadequate germination--Germination of less than 80 percent of
the commercial hybrid corn seed as determined by using a certified
seed test on clean seed.
Insurable interest--Your share of the financial loss that occurs
in the event seed production is reduced by a cause of loss defined
under this crop insurance contract.
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 amount of insurance 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 offered by buyers in the area
for any production from the female parent plants that is not
considered commercial hybrid corn seed under the terms of this
policy.
Male parent plants--Corn plants grown for the purpose of
pollinating female parent plants.
Minimum guaranteed payment--A minimum amount (usually stated in
dollars or bushels) specified in your hybrid corn seed processor
contract that will be paid or credited to you by the seed company
regardless of the quantity of seed produced.
Non-seed amount--The dollar amount obtained by multiplying the
number of bushels of non-seed production to count by
[[Page 51]]
the local market price determined on the earlier of the date the
non-seed production is sold or the date of final inspection for the
unit.
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. The insured crop must be
planted in rows wide enough to permit mechanical cultivation.
Acreage planted in any other manner will not be insurable unless
otherwise provided by the Special Provisions or by written
agreement.
Planting pattern--The arrangement of the rows of the male and
female parent plants in a field. An example of a planting pattern is
four consecutive rows of female parent plants, two consecutive rows
of male parent plants.
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
to the insured crop will allow the crop to adequately pollinate and
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. Determinations of practical to
replant will take into consideration the planting dates specified in
the hybrid corn seed processor contract in accordance with section
8(c).
Prevented planting--Inability to plant:
(a) The female parent plant seed with proper equipment by:
(1) The final planting date designated in the Special Provisions
for the insured crop in the county; or
(2) The end of the late planting period; or
(b) The male parent plant seed with proper equipment at a time
sufficient to assure adequate pollination of the female parent
plants in accordance with the production management practices of the
seed company.
You must have been unable to plant the female or male parent
plant seed due to an insured cause of loss that has prevented the
majority of producers in the surrounding area from planting the same
crop.
Sample--For the purpose of the certified seed test, at least 3
pounds of field run shelled corn for each variety of commercial
hybrid corn seed grown on the unit.
Seed amount--The dollar amount obtained by multiplying the
number of bushels of seed production to count for each type or
variety of commercial hybrid corn seed grown on the unit by the
applicable dollar value per bushel for that type or variety, and
totaling the products of each type or variety.
Seed company--A corporation that possesses all licenses for
marketing commercial hybrid corn seed required by the state in which
it is domiciled or operates, and which possesses or has contracted
facilities with enough storage and drying capacity to accept and
process the insured crop within a reasonable amount of time after
harvest.
Seed production--All seed produced by female parent plants with
a germination rate of at least 80 percent, as determined by a
certified seed test.
Shelled corn--Kernels that have been removed from the cob.
Timely planted--Planted on or before the final planting date
designated in the Special Provisions for the insured crop in the
county.
Variety--The name, number or code assigned to a specific genetic
cross by the seed company or the Special Provisions for the insured
crop in the county.
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 only if, for each
optional unit, you meet all the conditions of this section or if a
written agreement to such division exists.
(b) Optional units are available if the hybrid corn seed
processor contract specifies that it is a specific number of acres
that are under contract and not a specified amount of production.
(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 amount of insurance.
(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
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:
(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
unique FSA Farm Serial Number.
(ii) Optional Units on Acreage Including Both Irrigated and Non-
irrigated Practices: In addition to, or instead of, establishing
optional units by section, section equivalent, or FSA Farm Serial
Number, optional units may be based on irrigated acreage or non-
irrigated acreage 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.
However, 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 requirements of this
section are met.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) 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 hybrid corn seed in the county insured under
this policy unless the Special Provisions provide different price
elections by type or variety, in which case you may select one price
election for each hybrid corn seed type or variety designated in the
Special Provisions. The price election you choose for each type or
variety must have the same percentage relationship to the maximum
price offered by us for each type or variety. For example, if you
choose 100 percent of the maximum price election for one specific
type or variety, you must also choose 100 percent of the maximum
price election for all other types or varieties.
(b) The production reporting requirements contained in section 3
(Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities) of the Basic Provisions (Sec. 457.8) are not applicable
to this contract.
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
[[Page 52]]
Basic Provisions (Sec. 457.8), the cancellation and termination
dates are March 15.
6. Report of Acreage
In addition to the requirements of section 6 (Report of Acreage)
of the Basic Provisions (Sec. 457.8), you must:
(a) Report, by type and variety, the location and insurable
acreage of the insured crop;
(b) Report any acreage that is uninsured, including that portion
of the total acreage occupied by male parent plants; and
(c) Certify that you have a hybrid corn seed processor contract
and, if applicable, report the amount of any minimum guaranteed
payment.
7. Insured Crop
(a) In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all the female
parent plants in the county for which a premium rate is provided by
the actuarial table:
(1) In which you have a share;
(2) That are grown under a hybrid corn seed processor contract
executed before the acreage reporting date;
(3) That are planted for harvest as commercial hybrid corn seed
in accordance with the requirements of the hybrid corn seed
processor contract; and
(4) That are not (unless allowed by the Special Provisions or by
written agreement):
(i) Planted with a mixture of female and male parent seed in the
same row;
(ii) Planted for any purpose other than for commercial hybrid
corn seed;
(iii) Interplanted with another crop; or
(iv) Planted into an established grass or legume.
(b) An instrument in the form of a ``lease'' under which you
retain control of the acreage on which the insured crop is grown and
that provides for delivery of the crop under substantially the same
terms as a hybrid corn seed processor contract will be treated as a
contract under which you have an insurable interest in the crop.
(c) A commercial hybrid corn seed producer who is also a
commercial hybrid corn seed company may be able to establish an
insurable interest if the following requirements are met:
(1) The seed company must be a corporation and have an insurable
interest in the hybrid corn seed crop;
(2) The Board of Directors of the seed company must have
instituted a corporate resolution that sets forth essentially the
same terms as a hybrid corn seed processor contract. Such corporate
resolution will be considered a contract under the terms of the
hybrid corn seed crop insurance policy;
(3) Sales records for at least the previous years' seed
production must be provided to confirm that the seed company has
produced and sold seed. If such records are not available, the crop
may only be insured under the Coarse Grains Crop Provisions; and
(4) Our inspection of the storage and drying facilities
determines that they satisfy the requirements for a seed company.
8. Insurable Acreage
In addition to the provisions of section 9 (Insurable Acreage)
of the Basic Provisions (Sec. 457.8), we will not insure any
acreage:
(a) Planted and occupied exclusively by male parent plants;
(b) Not in compliance with the rotation requirements contained
in the Special Provisions or, if applicable, required by the hybrid
corn seed processor contract; or
(c) Of the insured crop damaged before the final planting date,
to the extent that the remaining stand will not produce at least 90
percent of the adjusted yield, unless such acreage is replanted or
we agree that it is not practical to replant. If we determine that
it is practical to replant and the seed company will not extend the
planting date stipulated in the hybrid corn seed processor contract,
we will delete the affected acreage from your report of acreage, and
that acreage will not be insured under these crop provisions.
9. Insurance Period
(a) In addition to the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8), insurance attaches
after:
(1) The female parent plant seed is completely planted in
accordance with the hybrid corn seed processor contract and the
production practices of the seed company, on or before the final
planting date designated in the Hybrid Corn Seed Special Provisions,
except as allowed in section 13(c); and
(2) The male parent plant seed is completely planted in
accordance with production practices for the variety being produced.
(b) 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 the October 31 immediately
following planting.
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 within the
insurance period:
(1) Adverse weather conditions;
(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 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 under
section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), we
will not insure against any loss of production due to:
(1) The use of unadapted, incompatible, or genetically deficient
male or female parent plant seed;
(2) Frost or freeze after the date set by the Special
Provisions;
(3) Failure to follow the requirements stated in the hybrid corn
seed processor contract or production management practices of the
seed company;
(4) Inadequate germination, even if it's the result of an
insured cause of loss, unless you have provided adequate notice
under section 11(b)(1) and the crop is inspected and the loss is
appraised by us before harvest is completed; or
(5) Failure to plant the male parent plant seed at a time or in
a manner sufficient to assure adequate pollination of the female
parent plants, unless you are prevented from planting the male
parent plant seed.
11. Duties in the Event of Damage or Loss
(a) 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
one complete planting pattern of the male and female parent plant
rows, 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.
(b) In addition to your duties under section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8):
(1) You must give us notice of probable loss at least 15 days
before the beginning of harvest if you anticipate inadequate
germination on any unit; and
(2) You must provide a completed copy of your hybrid corn seed
processor contract.
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) You will not receive an indemnity payment on a unit if the
seed company refuses to provide us with records we require to
determine the dollar value per bushel of production for each
variety.
(c) 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 amount of
insurance per acre;
(2) Subtracting the total of production to count for the seed
amount and the non-seed amount from the result of section 12(c)(1);
and
(3) Multiplying the result of section 12(c)(2) by your share.
(d) The total production (bushels) to count from all insurable
acreage on the unit will include all seed and non-seed production as
specified in section 12 (e) through (g) below.
(e) Production to be counted as seed production will include:
(1) All appraised production as follows:
(i) Not less than the adjusted yield 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) Mature unharvested production with a germination rate of
at least 80 percent of the
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commercial hybrid corn seed as determined by a certified seed test.
Any such production may be adjusted in accordance with section
12(g);
(iv) Immature appraised production;
(v) 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 if 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) Harvested production that you deliver as commercial hybrid
corn seed to the seed company stated in your hybrid corn seed
processor contract, regardless of quality, unless the production has
inadequate germination.
(f) Production to be counted as non-seed production will include
all harvested or mature appraised production that does not qualify
as seed production to count as specified in section 12(e). Any such
production may be adjusted in accordance with section 12(g).
(g) For the purpose of determining the quantity of mature
production:
(1) Shelled commercial hybrid corn seed will be:
(i) Increased 0.12 percent for each 0.1 percentage point of
moisture below 15 percent; or
(ii) Decreased 0.12 percent for each 0.1 percentage point of
moisture in excess of 15 percent.
(2) The weight of ear corn required to equal one bushel of
shelled corn seed will be increased 1.5 pounds for each full
percentage point of moisture in excess of 14 percent, and any
portion of a percentage point will be disregarded. The moisture
content of ear corn will be determined from a shelled sample of the
ear corn.
(3) When records of commercial hybrid corn seed production
provided by the seed company have been adjusted to a shelled corn
basis of 15.0 percent moisture and 56 pound avoirdupois bushels,
sections 12(g) (1) and (2) above will not apply to harvested
production. In such cases, records of the seed company used for
determining the next year's approved yield will be used to determine
the amount of production to count; provided, such production records
are calculated on the same basis as that used to determine the
approved yield.
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 amounts of insurance. 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) You must provide written notice to us not later than the
acreage reporting date if you were prevented from planting.
(c) Late Planting
(1) For hybrid corn seed acreage planted during the late
planting period, the amount of insurance for each acre will be
reduced for each day planted after the final planting date by:
(i) One percent per day for the 1st through the 10th day; and
(ii) Two percent 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 hybrid corn seed 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 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 hybrid corn seed,
you may elect:
(i) To plant hybrid corn seed during the late planting period.
The amount of insurance 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 amount of insurance
for such acreage will be 40 percent of the amount of insurance for
timely planted acres. For example, if your amount of insurance for
timely planted acreage is $300 per acre, your prevented planting
amount of insurance would be $120 per acre ($300 multiplied by
0.40). If you elect to plant the insured crop after the late
planting period, production to count for such acreage will be
determined in accordance with section 12; or
(iii) Not to plant the intended crop but plant a substitute crop
for harvest, in which case:
(A) No prevented planting amount of insurance will be provided
for such acreage if the substitute crop is planted on or before the
10th day following the final planting date for the insured crop; or
(B) An amount of insurance equal to 20 percent of the amount of
insurance 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 amount of insurance
for timely planted acreage is $300 per acre, your prevented planting
amount of insurance would be $60 per acre ($300 multiplied by 0.20).
You may elect to exclude prevented planting coverage when a
substitute crop is planted for harvest and receive a reduction in
the applicable premium rate. If you wish to exclude this coverage,
you must so indicate, on or before the sales closing date, on your
application or on a form approved by us. Your election to exclude
this coverage will remain in effect from year to year unless you
notify us in writing on our form by the applicable sales closing
date for the crop year for which you wish to include this coverage.
All acreage of the crop insured under this policy will be subject to
this exclusion.
(2) Amounts of insurance for timely, late, and prevented
planting acreage within a unit will be combined to determine the
amount of insurance for the unit. For example, assume you insure one
unit in which you have a 100 percent share. The unit consists of 185
acres of the same type and variety of which 150 acres are occupied
by the female parent plants. (The acreage occupied by the male
parent plants (35 acres) is not insurable, and is not eligible for
coverage under this section.) 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 amount of
insurance. The amount of insurance for the unit will be computed as
follows:
(i) For the timely planted acreage, multiply the per acre amount
of insurance for timely planted acreage by the 50 acres planted
timely;
(ii) For the late planted acreage, multiply the per acre amount
of insurance 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
amount of insurance for timely planted acreage by:
(A) Forty percent 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
[[Page 54]]
(B) Twenty percent 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 amount of insurance 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
approved yield. 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 hybrid corn seed
for the 1998 crop year, prevented planting coverage will begin on
the 1998 sales closing date for hybrid corn seed in the county. If
the 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 number of acres planted to hybrid corn seed on the FSA
Farm Serial Number during the previous crop year; or
(B) One-hundred percent of the simple average of the number of
acres planted to hybrid corn seed during the crop years that you
certified to determine your yield.
(iii) Acreage intended to be planted under an irrigated practice
will be limited to the number of acres for which you had adequate
irrigation facilities prior to the insured cause of loss which
prevented you from planting.
(iv) A prevented planting amount of insurance 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 paragraph (d)(2)(iii)(A) of this
section, or a substitute crop allowed in paragraph (d)(2)(iii)(B) of
this section), 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.
(v) For the purpose of determining eligible acreage for
prevented planting coverage, acreage for all units will be combined
and be reduced by the number of hybrid corn seed 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 hybrid corn seed on one
optional unit and 40 acres of hybrid corn seed on the second
optional unit, your prevented planting eligible acreage would be
reduced to zero (i.e., 100 acres eligible for prevented planting
coverage minus 100 acres planted equals zero).
(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 amount of insurance, the total amount of
prevented planting and planted acres cannot exceed the maximum
number of acres eligible for prevented planting coverage. Any
acreage you report in excess of the number of acres eligible for
prevented planting coverage, or that exceeds the number of eligible
acres physically located in a unit, will be deleted from your
acreage report.
14. Written Agreement
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 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 December 20, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-33067 Filed 12-31-96; 8:45 am]
BILLING CODE 3410-FA-P
