E8-321. Common Crop Insurance Regulations; Dry Pea Crop Provisions

AGENCY:

Federal Crop Insurance Corporation, USDA.

ACTION:

Proposed rule.

SUMMARY:

The Federal Crop Insurance Corporation (FCIC) proposes to amend the Common Crop Insurance Regulations; Dry Pea Crop Insurance Provisions to include the insurability of additional types of dry peas, to offer winter coverage, to allow replanting payments, and to make chickpeas insurable under the Dry Pea Crop Provisions rather than the Dry Bean Crop Provisions. The intended effect of this action is to provide policy changes, to clarify existing policy provisions to better meet the needs of the producers, and to reduce vulnerability to program fraud, waste, and abuse. The changes will apply for the 2009 and succeeding crop years.

DATES:

Written comments and opinions on this proposed rule will be accepted until close of business March 18, 2008 and will be considered when the rule is to be made final.

ADDRESSES:

Interested persons are invited to submit written comments, titled “Dry Pea Crop Provisions”, by any of the following methods:

• By Mail to: Director, Product Administration and Standards Division, Risk Management Agency, United States Department of Agriculture, Beacon Facility, Stop 0812, Room 421, PO Box 419205, Kansas City, MO 64141-6205.
• By Express Mail to: Director, Product Administration and Standards Division, Risk Management Agency, United States Department of Agriculture, Beacon Facility, Stop 0812, 9240 Troost Avenue, Kansas City, MO 64131-3055.
• E-mail: [e-mail].
• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

A copy of each response will be available for public inspection and copying from 7 a.m. to 4:30 p.m., CST, Monday through Friday, except holidays, at the above address.

FOR FURTHER INFORMATION CONTACT:

Claire Elsea, Economist, Product Management, Product Administration and Standards Division, Risk Management Agency, at the Kansas City, MO, address listed above, telephone [phone].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

The Office of Management and Budget (OMB) has determined that this rule is non-significant for the purpose of Executive Order 12866 and, therefore, it has not been reviewed by OMB.

Paperwork Reduction Act of 1995

Pursuant to the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the collections of information in this rule have been approved by OMB under control number 0563-0053 through June 30, 2008.

E-Government Act Compliance

FCIC is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 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. Therefore, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

Executive Order 13132

It has been determined under section 1(a) of Executive Order 13132, Federalism, that this rule does not have sufficient implications to warrant consultation with the States. The provisions contained in this rule will not have a substantial direct effect on States, or on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

Regulatory Flexibility Act

FCIC certifies that this regulation will not have a significant economic impact on a substantial number of small entities. Program requirements for the Federal crop insurance program are the same for all producers regardless of the size of their farming operation. For instance, all producers are required to submit an application and acreage report to establish their insurance guarantees and compute premium amounts, and all producers are required to submit a notice of loss and production information to determine the amount of an indemnity payment in the event of an insured cause of crop loss. Whether a producer has 10 acres or 1000 acres, there is no difference in the kind of information collected. To ensure crop insurance is available to small entities, the Federal Crop Insurance Act authorizes FCIC to waive collection of administrative fees from limited resource farmers. FCIC believes this waiver helps to ensure that small entities are given the same opportunities as large entities to manage their risks through the use of crop insurance. A Regulatory Flexibility Analysis has not been prepared since this regulation does not have an impact on small entities, and therefore, this regulation is exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 605).

Federal Assistance Program

This program is listed in the Catalog of Federal Domestic Assistance under No. 10.450.

Executive Order 12372

This program is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. See the Notice related to 7 CFR part 3015, subpart V, published at 48 FR 29115, June 24, 1983.

Executive Order 12988

This proposed rule has been reviewed in accordance with Executive Order 12988 on civil justice reform. The provisions of this rule will not have a retroactive effect. The provisions of this rule will preempt State and local laws to the extent such State and local laws are inconsistent herewith. With respect to any direct action taken by FCIC or to require the insurance provider to take specific action under the terms of the crop insurance policy, the administrative appeal provisions published at 7 CFR part 11 must be exhausted before any action against FCIC for judicial review may be brought.

Environmental Evaluation

This action is not expected to have a significant economic impact on the quality of the human environment, health, or safety. Therefore, neither an Environmental Assessment nor an Environmental Impact Statement is needed.

Background

FCIC proposes to revise 7 CFR part 457, Common Crop Insurance Regulations, by amending § 457.140 Dry Pea Crop Insurance Provisions, to be effective for the 2009 and succeeding crop years. Several requests have been made for changes to improve the coverage offered, address program integrity issues, simplify program administration, and improve clarity of the policy provisions.

The proposed changes are as follows:

1. Section 1—FCIC proposes to revise the definition of “base price” to delete the word “processor” and add “seed company” since the contract is with a seed company, not a processor.

FCIC also proposes to revise the definition of “contract seed peas.” Proposed language makes coverage available to fall and spring planted acreage. FCIC now proposes to insure fall planted acreage. Therefore, it must be included in the definition of “contract seed peas.” FCIC also proposes to remove the requirement that acreage must be enrolled in the seed certification program administered by the state in which the peas are produced because some states no longer administer seed certification programs. Therefore, enforcing this requirement could limit the availability of crop insurance for contract seed pea producers.

FCIC proposes to revise the definition of “dry peas” to allow insurability of additional types of dry peas. Currently, only spring planted smooth green and yellow types of commercial dry peas, peas grown for seed, fall planted types of Austrian Winter peas if provided for in the Special Provisions, all spring planted types of lentils, and all types of contract seed peas are insurable. FCIC proposes to amend these provisions to remove the specific types that are insurable and to specify that the insurable types will be contained in the Special Provisions. FCIC also proposes to insure chickpeas (a.k.a. garbanzo beans) under the Dry Pea Crop Provisions. Chickpeas are currently insurable under the Dry Bean Crop Provisions only. However, the agronomical and physiological traits of chickpeas are more similar to dry peas and lentils than dry beans. This change will also simplify the crop insurance program by allowing producers of dry peas, lentils and chickpeas to purchase coverage for these crops under one policy.

FCIC proposes to clarify the definition of “harvest” by adding the following sentence “Dry peas that are swathed prior to combining are not considered harvested.” Swathing is a step in the harvest process but the seed is not removed from the plant until the crop is combined.

FCIC proposes to revise the definition of “local market price” to specify that factors not associated with grading under United States Standards for Whole Dry Peas, Split Peas and the Lentils will not be considered unless otherwise specified on the Special Provisions. The intent of this change is to standardize the grading standards to be used in quality adjustment, recognizing that there may be circumstances where it may be necessary to deviate from such standards. If such circumstances arise, the proposed change provides the flexibility to make changes through the Special Provisions, if necessary.

FCIC proposes to revise the definition of “nurse crop (companion crop)” for clarity and to be consistent with the definition of “nurse crop (companion crop)” in the Small Grains Crop Provisions.

FCIC proposes to revise the definition of “practical to replant” to reference the addition of fall planted dry peas. As stated above, insurance coverage will now be provided for fall planted dry peas. Therefore, the conditions under which it will not be considered practical to replant fall planted dry peas must be specified because the conditions are not the same as for spring planted dry peas.

FCIC proposes to revise the definition of “price election” to provide clarification that the price election is used to determine premium and any indemnity for contract seed peas under this policy.

FCIC proposes to revise the definition of “seed company contract” to remove the word “varieties” and add the word “types” in both places. This change is necessary because FCIC has proposed to insure categories of dry peas that will be contained in the Special Provisions to allow the flexibility to add new types as appropriate.

FCIC proposes to add a definition of “swathed” to describe the process that is used by producers prior to combining the crop because a crop that has only been swathed is not considered harvested.

FCIC proposes to add a definition of “type” because FCIC has proposed to refer to the categories that may be insured as “types,” and specify that the insured types will be contained in the Special Provisions, which will allow additional types to be quickly added as appropriate.

FCIC proposed to add a definition of “windrow” because the term is used in the definition of “swathed.”

2. Section 2—FCIC proposes to revise the language in section 2 to specify optional units may be established for each type specified in the Special Provisions because different types may have significantly different characteristics and risks, making it more appropriate to have separate guarantees, premium, and loss adjustment for each type.

3. Section 3—FCIC proposes to revise section 3 to allow the insured to select a separate coverage level and price percentage for each insurable type listed on the Special Provisions. Previously, only coverage levels could be selected by type but because the types may have significantly different characteristics with different risks, allowing separate price elections is appropriate.

4. Section 7—FCIC proposes to revise section 7 to add provisions that state dry peas planted to plow down, graze, harvest as hay or to otherwise not harvest as a mature dry pea crop are not insurable. The Dry Pea Crop Provisions allow coverage for dry peas that have reached maturity. These practices do not commonly take place when the dry peas have reached maturity. Also, FCIC has not established premium rates for dry peas that are plowed down, grazed or harvested as hay. Therefore, dry peas that are planted to plow down, graze, harvest as hay or to otherwise not harvest as a mature crop are not insurable under the Dry Pea Crop Provisions.

FCIC also proposes to revise section 7 to allow insurability of fall planted acreage of dry peas, and to allow for coverage for fall seeded acreage of dry peas between the time coverage begins and the spring final planting date under the Winter Coverage Option. More producers are planting in the fall and FCIC has sufficient data to assess the risks and provide appropriate coverage. Without the availability of such coverage, producers who plant in the fall are at risk until the spring coverage takes affect.

5. Section 9—FCIC proposes to add provisions to specify the criteria for insurance coverage when the Special Provisions designate only a spring final planting date or both a fall and spring final planting date. This change is necessary because fall planted acreage is now insurable under the Dry Pea Crop Provisions.

6. Section 11—FCIC proposes to add a new section 11 authorizing replanting payments for dry peas. Adding replanting payments for dry peas makes the Dry Pea Crop Provisions consistent with the coverage available for other similar crops.

7. Redesignated section 13—FCIC proposes to revise the introductory text in 13(a) to be consistent with the provisions in the Small Grain Crop Provisions.

FCIC also proposes to revise redesignated sections 13(c)(1) to add the word “mature.” Adding the word “mature” is necessary because only mature production is eligible for quality adjustments. FCIC also proposes to specify measurable standards in the seed company contract when discussing dry peas that meet or fail to meet the standards in the seed company contract. FCIC has had problems in the past with contract standards that contained standards that were not objective or measurable, which made it very difficult to determine whether the insured crop met such standards. This language will make it clear that FCIC is only providing quality adjustments for dry peas that do not meet the objective measurable standards in the seed company contract.

FCIC proposes to revise redesignated section (d)(1)(iii) to remove the phrase “excluding Austrian Winter Peas” and add the phrase “in accordance with the following unless otherwise specified in the Special Provisions.” Adding the phrase “in accordance with the following unless otherwise specified in the Special Provisions” is necessary because there may be situations where other quality adjustment procedures are more appropriate and this language provides the flexibility to quickly make such changes.

FCIC proposes to revise the introductory text of redesignated section 13(e) by removing the specifically listed types of dry peas. The insured types will now be specified in the Special Provisions to allow the flexibility to add new types, as applicable, more quickly.

FCIC also proposes to revise the introductory text of redesignated section 13(e) by clarifying that seed peas that do not meet the objective, measurable terms of the contract (e.g., size, germination percentage) are eligible for quality adjustment. As stated above, there had been problems in the past with subjective standards in these contracts, which made quality adjustment difficult. This change will clarify that only those objective, measurable standards in the contract will be used to determine whether the dry peas meet the standards in the contract.

FCIC proposes to revise the introductory text of redesignated section 13(e)(1) by allowing deficiencies in quality to be specified in the Special Provisions. This revision is consistent with the proposed change in section 13(d)(1)(iii).

8. Section 15—FCIC proposes to add a new section 15 Winter Coverage Option. This option allows optional coverage during the over-wintering period for fall planted acreage. Currently, there is a period during which the crop may be in the field and coverage is not available. The Winter Coverage Option will permit coverage during this risk period. FCIC proposes the Winter Coverage Option be available in counties for which the actuarial table provides a premium rate. The option provides coverage on fall planted dry peas from the time the insurance attaches until the spring final planting date, unless otherwise provided by a written agreement. This coverage will allow insureds who have winter damage on their fall planted dry peas to continue to care for the crop, replant the crop, or destroy the crop in accordance with the provisions. FCIC proposes the Winter Coverage Option also provides replant payments.

9. FCIC also proposes to remove those provisions that are now duplicative of provisions contained in the Common Crop Insurance Policy Basic Provisions and revise certain provisions for clarity. No substantive changes are made to such provisions.

List of Subjects in 7 CFR Part 457

• Crop insurance
• Dry peas
• Reporting and recordkeeping requirements
• Proposed Rule

Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation proposes to amend 7 CFR part 457 effective for the 2009 and succeeding crop years as follows:

PART 457—COMMON CROP INSURANCE REGULATIONS

1. The authority citation for 7 CFR part 457 continues to read as follows:

Authority: 7 U.S.C. 1506(1), 1506(p).

2. Amend § 457.140 as follows:

a. Revise the introductory text:

b. Remove the paragraph immediately preceding section 1;

c. Amend section 1 by revising the definitions of “base price,” “contract seed peas,” “dry peas,” “harvest,” “local market price,” “nurse crop (companion crop),” “practical to replant,” “price election,” “seed company contract,” and add definitions of “swathed,” “type,” and “windrow;”

d. Revise section 2;

e. Revise section 3;

f. Revise section 7;

g. Revise section 9;

h. Redesignate sections 11 through 13 as 12 through 14, respectively, and add a new section 11;

i. Revise redesignated section 12;

j. Amend redesignated section 13 by removing the phrase “section 12” and adding the phrase “section 13” in its place everywhere it appears;

k. Revise redesignated section 13(a) introductory text, (a)(1), and (a)(2);

l. Revise the introductory text in redesignated section 13(c)(1);

m. Revise redesignated section 13(d)(1)(iii);

n. Revise the introductory text of redesignated sections 13(e) and 13(e)(1); and

o. Add a new section 15.

The revised and added text reads as follows:

§ 457.140

Dry Pea Crop Insurance Provisions.

The Dry Pea Crop Insurance Provisions for the 2009 and succeeding crop years are as follows:

* * * * *

1. Definitions

* * * * *

Base contract price. The price per pound stipulated in the seed company contract without regard to discounts or incentives that may apply, and that will be paid to the producer for at least 50 percent of the total production under contract with the seed company.

* * * * *

Contract seed peas. Dry peas grown under the terms of a seed company contract for the purpose of producing seed to be used for producing dry pea crops in a future crop year.

Dry peas. Peas (Pisum sativum L.), Austrian peas (Pisum sativum spp arvense), lentils (Lens culinaris Medik.) and chickpeas (Cicer arietinum L.) and those types listed on the Special Provisions.

Harvest. Combining of dry peas. Dry peas that are swathed prior to combining are not considered harvested.

Local market price. The cash price per pound for the U.S. No. 1 grade of dry peas as determined by us. Such price will be the prevailing dollar amount buyers are willing to pay for dry peas containing the maximum limits of quality deficiencies allowable for the U.S. No. 1 grade. Factors not associated with grading under the United States Standards for Whole Dry Peas, Split Peas and Lentils will not be considered, unless otherwise specified in the Special Provisions.

Nurse crop (companion crop). A crop planted into the same acreage as another crop to improve the growing conditions for the crop with which it is grown, and that is intended to be harvested separately.

* * * * *

Practical to replant. In addition to the definition contained in the Basic Provisions, it will not be considered practical to replant dry peas, except for seed peas and fall planted dry peas, more than 25 days after the final planting date unless replanting is generally occurring in the area. For seed peas, it will not be considered practical to replant unless the seed company will accept the production under the terms of the seed company contract. For fall planted dry peas, it will not be considered practical to replant more than 25 days after the final planting date for the corresponding spring planted type of dry pea.

Price election. In addition to the provisions of the definition contained in the Basic Provisions, the price election for contract seed peas will be the percentage you elect (not to exceed 100 percent) of the base price and used for the purposes of determining premium and indemnity for contract seed peas under this policy.

* * * * *

Seed company contract. A written agreement between the producer and the seed company, executed by the acreage reporting date, containing at a minimum:

(a) The producer's promise to plant and grow one or more specific types of contract seed peas, and deliver the production from those types to the seed company;

(b) The seed company's promise to purchase all the production stated in the contract; and

(c) A fixed price, or a method to determine such price based on published information compiled by a third party, that will be paid to the producer for at least 50 percent of the production stated in the contract.

Swathed. Severance of the stem and pods from the ground without removal of the seeds from the pods and placing such into a windrow.

Type. A category of dry peas identified as a type in the Special Provisions.

Windrow. Dry peas where the plants are cut and placed in a row.

2. Unit Division

In addition to, or instead of, establishing optional units by section, section equivalent, or FSA farm serial number and by irrigated and non-irrigated acreage as provided in the unit division provisions contained in the Basic Provisions, separate optional units may be established for each dry pea type as specified on the Special Provisions.

3. Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities

(a) In lieu of the requirements of section 3 of the Basic Provisions, you may select only one coverage level for each type listed on the Special Provisions.

(b) In addition to the requirements of section 3 of the Basic Provisions, you may select only one price election for all dry peas in the county insured under this policy unless the Special Provisions provide different price elections for a particular type, in which case you may select one price election for each dry pea type so designated in the Special Provisions.

(1) If the Special Provisions designate different price elections by type, the price elections you choose for each type are not required to have the same percentage relationship to the maximum price offered by us for each type. For example, if you choose 100 percent of the maximum price for one type, you may also choose 75 percent of the maximum price for another type;

(2) If you elect the Catastrophic Risk Protection level of insurance for any of the above, the same level of coverage will be applicable to all insured dry pea acreage in the county;

(3) If the Special Provisions do not designate different price elections by type, the price election you choose for each type is required to have the same percentage relationship to the maximum price offered by us for each price. For example, if you choose 100 percent of the maximum price election for one type, the 100 percent election will apply to all other types you produce.

* * * * *

7. Insured Crop

(a) In accordance with section 8 of the Basic Provisions, the crop insured will be all the dry pea types in the county for which a premium rate is provided by the actuarial documents:

(1) In which you have a share;

(2) That are planted for harvesting once maturity is reached as:

(i) Dry peas; or

(ii) Contract seed peas, if a seed company contract is executed on or before the acreage reporting date; and

(3) That are not (unless allowed by the Special Provisions or by written agreement):

(i) Interplanted with another crop;

(ii) Planted into an established grass or legume;

(iii) Planted as a nurse crop; or

(iv) Planted to plow down, graze, harvest as hay, or to otherwise not harvest as a mature dry pea crop.

(b) You will be considered to have a share in the insured crop if, under the seed company contract, you retain control of the acreage on which the dry peas are grown, you are at risk of loss (i.e., if there is a reduction in quantity or quality of your dry pea production, you will receive less income under the contract), and the seed company contract is in effect for the entire insurance period.

(c) In counties for which the actuarial documents provide premium rates for the Winter Coverage Option (see section 15), coverage is available for dry peas between the time coverage begins and the spring final planting date. Coverage under the option is effective only if you qualify under the terms of the option and you elect the option by the sales closing date.

* * * * *

9. Insurance Period

In accordance with the provisions of section 11 of the Basic Provisions and subject to provisions provided by the Winter Coverage Option (see section 15) if you elect such option, the insurance period is as follows:

(a) Coverage for fall planted dry peas not covered by the Winter Coverage Option will begin on the earlier of April 15 or the date we agree to accept the acreage for insurance, but not before March 1, unless otherwise specified on the Special Provisions.

(b) The calendar date for the end of the insurance period for all insurable types of dry peas in the county is September 30 of the crop year in which the crop is normally harvested, unless otherwise specified in the Special Provisions.

(c) Any acreage of the insured crop damaged before the final planting date, to the extent that producers in the surrounding area would not further care for the crop, must be replanted unless we agree that it is not practical to replant.

(d) Whenever the Special Provisions designate both fall and spring final planting dates:

(1) Any fall planted dry peas that are damaged before the spring final planting date, to the extent that growers in the area would normally not further care for the crop, must be replanted to a fall planted type of dry peas to maintain insurance based on the fall planted type unless we agree that replanting is not practical. If it is not practical to replant to a fall planted type of dry peas but it is practical to replant to a spring planted type, you must replant to a spring planted type to keep your insurance coverage based on the fall planted type in force.

(2) Any fall planted dry pea acreage that is replanted to a spring planted type when it was practical to replant the fall planted type will be insured as the spring planted type and the production guarantee, premium and price election applicable to the spring planted type will be used. In this case, the acreage will be considered to be initially planted to the spring planted type.

(3) Notwithstanding sections 9(d)(1) and (2), if you have elected coverage under the Winter Coverage Option (if available in the county), insurance will be in accordance with the option.

(e) Whenever the Special Provisions designate only a spring final planting date, any acreage of a fall planted dry pea crop is not insured unless you request such coverage on or before the spring sales closing date, and we agree in writing that the acreage has an adequate stand in the spring to produce the yield used to determine your production guarantee.

(1) The fall planted dry pea crop will be insured as a spring planted type for the purpose of the production guarantee, premium and price election.

(2) Insurance will attach to such acreage on the date we determine an adequate stand exists or on the spring final planting date if we do not determine adequacy of the stand prior to the spring final planting date.

(3) Any acreage of such fall planted dry peas that is damaged after it is accepted for insurance but before the spring final planting date, to the extent that growers in the area would normally not further care for the crop, must be replanted to a spring planted type of dry pea unless we agree it is not practical to replant.

(4) If fall planted acreage is not to be insured it must be recorded on the acreage report as uninsured fall planted acreage.

* * * * *

11. Replanting Payments

(a) A replanting payment is allowed as follows:

(1) In lieu of provisions in section 13 of the Basic Provisions that limit the amount of a replant payment to the actual cost of replanting, the amount of any replanting payment will be determined in accordance with these Crop Provisions;

(2) You must comply with all requirements regarding replanting payments contained in section 13 of the Basic Provisions (except as allowed in section 11(a)(1)) and in the Winter Coverage Option for which you are eligible and which you have elected;

(3) The insured crop must be damaged by an insurable cause of loss to the extent that the remaining stand will not produce at least 90 percent of the production guarantee for the acreage.

(4) The acreage must have been initially planted to a spring type of the insured crop in those counties with only a spring final planting date;

(5) Damage must occur after the fall final planting date in those counties where both a fall and spring final planting date is designated (if the Special Provisions provide more than one fall final planting date, the fall final planting date applicable to policies with the Winter Coverage Option (see section 15) will be used for this purpose, regardless of whether or not the option is actually in effect); and

(6) The replanted crop must be seeded at a rate sufficient to achieve a total (undamaged and new seeding) plant population that will produce at least the yield used to determine your production guarantee.

(b) The maximum amount of the replanting payment per acre will be the lesser of 20.0 percent of the production guarantee or 200 pounds, multiplied by your price election, multiplied by your share, unless otherwise stated in the Special Provisions.

(c) When the crop is replanted using a practice that is uninsurable for an original planting, the liability on the unit will be reduced by the amount of the replanting payment. The premium amount will not be reduced.

(d) Replanting payments will be calculated using the price election and production guarantee for the dry pea type that is replanted and insured. For example, if damaged smooth green and yellow pea acreage is replanted to lentils, the price election and production guarantee applicable to lentils will be used to calculate any replanting payment that may be due. A revised acreage report will be required to reflect the replanted type. Notwithstanding the previous two sentences, the following will have a replanting payment based on the guarantee and price election for the crop type initially planted:

(1) Any damaged fall planted crop type replanted to a spring planted type that retains insurance based on the production guarantee and price election for the fall planted type; and

(2) Any acreage replanted at a reduced seeding rate into a partially damaged stand of the insured crop.

12. Duties in the Event of Damage or Loss

Representative samples are required in accordance with section 14 of the Basic Provisions.

13. Settlement of Claim

(a) We will determine your loss on a unit basis. In the event you are unable to provide records of production that are acceptable to us for any:

(1) Optional units, we will combine all optional units for which acceptable records of production were not provided; or

(2) Basic units, we will allocate any commingled production to such units in proportion to our liability on the harvested acreage for each unit.

* * * * *

(c) * * *

(1) For mature production meeting the objective, measurable minimum quality requirements (e.g., size, germination percentage) contained in the seed company contract, and for production that does not meet such requirements due to uninsured causes:

* * * * *

(d) * * *

(1) * * *

(iii) Unharvested production (mature unharvested production of dry peas may be adjusted for quality deficiencies in accordance with section 13I or (e), or as specified in the Special Provisions); and

* * * * *

(e) Mature dry pea production that does not qualify as contract seed peas under the policy terms or does not meet the objective, measurable terms of the contract (e.g., size, germination percentage), may be adjusted for quality deficiencies.

(1) Production will be eligible for quality adjustment in accordance with the following, unless otherwise specified in the Special Provisions:

* * * * *

15. Winter Coverage Option

(This is a continuous endorsement)

(a) In the event of a conflict between this section and sections 1-14 of these Crop Provisions, this section will control.

(b) Catastrophic Risk Protection Coverage is not available under this option.

(c) In return for payment of the additional premium designated in the actuarial documents, this option is available in counties for which the actuarial documents provide premium rates for the winter coverage option, coverage is available for dry peas between the time coverage begins and the spring final planting date.

(d) You must have a Dry Pea Crop Insurance Policy in effect and elect to insure the dry pea type under such policy.

(e) You must select this coverage on your application for insurance on or before the sales closing date. Failure to do so means you have rejected this coverage for the dry pea crop planted in the fall and this option is void.

(f) Coverage under this option begins on the later of the date we accept your application for coverage or on the fall final planting date designated in the Special Provisions. Coverage ends on the spring final planting date designated in the Special Provisions.

(g) In addition to the provisions of section 34(b) of the Basic Provisions and section 2 of the Dry Pea Crop Provisions, optional units may be established for dry peas if each optional unit contains only dry peas initially planted in the fall or only dry peas initially planted in the spring.

(h) In lieu of sections 4 and 5 of these Crop Provisions, if you elect this option for the dry pea crop initially planted in the fall, the following dates will be applicable to all your fall planted and spring planted dry pea crop in the county:

(1) Contract change date is June 30 preceding the cancellation date;

(2) Cancellation date is September 30; and

(3) Termination date is November 30.

(i) In lieu of the provisions in section 14 of the Basic Provisions, all notices of damage must be provided to us not later than 15 days after the spring final planting date designated in the Special Provisions.

(j) All insurable acreage of each fall planted dry pea type covered under this option must be insured.

(k) The amount of any indemnity paid under the terms of this option will be subject to any reduction specified in the Basic Provisions for multiple crop benefits in the same crop year.

(l) Whenever any acreage of a dry pea crop planted in the fall is damaged during the insurance period and at least 20 acres or 20 percent of the insured planted acreage in the unit, whichever is less, does not have an adequate stand to produce at least 90 percent of the production guarantee for the acreage, you may, at your option, take one of the following actions:

(1) Continue to care for the damaged crop. By doing so, coverage will continue under the terms of the Basic Provisions, the Dry Pea Crop Insurance Provisions and this option;

(2) Replant the acreage to an appropriate type of the insured crop, if it is practical, and receive a replanting payment in accordance with the terms of section 11. By doing so, coverage will continue under the terms of the Basic Provisions, the Dry Pea Crop Insurance Provisions and this option, and the production guarantee for the dry pea type planted in the fall will remain in effect; or

(3) Destroy the remaining crop on such acreage:

(i) By destroying the remaining crop, you agree to accept an appraised amount of production determined in accordance with section 13(d)(1) of the Dry Pea Crop Insurance Provisions to count against the unit production guarantee. This amount will be considered production to count in determining any final indemnity on the unit and will be used to settle your claim as described in section 13.

(ii) You may use such acreage for any purpose, including planting and separately insuring any other crop if such insurance is available.

(iii) If you elect to plant and elect to insure spring planted acreage of the same dry pea type (you must elect whether or not you want insurance on the spring planted acreage of the same dry pea type at the time we release the fall planted acreage), you must pay additional premium for the insurance. Such acreage will be insured in accordance with the policy provisions that are applicable to acreage that is initially planted in the spring to the same dry pea type, and you must:

(A) Plant the spring planted acreage in a manner which results in a clear and discernible break in the planting pattern at the boundary between it and any remaining acreage of the fall planted dry pea acreage; and

(B) Store or market the production in a manner which permits us to verify the amount of spring planted production separately from any fall planted production. In the event you are unable to provide records of production that are acceptable to us, the spring planted acreage will be considered to be a part of the original fall planted unit.

* * * * *

Signed in Washington, DC, on January 7, 2008.

Eldon Gould,

Manager, Federal Crop Insurance Corporation.