[Federal Register Volume 61, Number 224 (Tuesday, November 19, 1996)]
[Proposed Rules]
[Pages 58786-58790]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29559]
========================================================================
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.
========================================================================
Federal Register / Vol. 61, No. 224 / Tuesday, November 19, 1996 /
Proposed Rules
[[Page 58786]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 403 and 457
Common Crop Insurance Regulations; Peach Crop Insurance
Provisions and Peach Crop Insurance Regulations
AGENCY: Federal Crop Insurance Corporation.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes
specific crop provisions for the insurance of peaches. 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 peach
(fresh) crop insurance regulations with the Common Crop Insurance
Policy for ease of use and consistency of terms, and to restrict the
effect to the current peach crop insurance regulations to the 1997 and
prior crop years.
DATES: Written comments, data, and opinions on this proposed rule will
be accepted until close of business January 21, 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 January 17, 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, USDA, 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: Richard Brayton, Program Analyst,
Research and Development Division, Product Development Branch, FCIC, at
the Kansas City, MO, address listed above, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order No. 12866
This action has been reviewed under United States Department of
Agriculture (USDA) procedures established by Executive Order No. 12866.
This action constitutes a review as to the need, currency, clarity, and
effectiveness of these regulations under those procedures. The sunset
review date established for these regulations is August 31, 2002.
This rule has been determined to be not significant for the
purposes of Executive Order No. 12866 and, therefore, has not been
reviewed by the Office of Management and Budget (OMB).
Paperwork Reduction Act of 1995
The information collection requirements contained in these
regulations were previously approved by OMB pursuant to the Paperwork
Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB control number
0563-0003 through September 30, 1998.
Section 7 of the 1998 Peach Crop Provisions adds interplanting as
an insurable farming practice as long as it is interplanted with
another perennial crop. This practice was not an insurable under the
previous Peach Crop Insurance Policy to which it attached.
Consequently, interplanting information will need to be collected using
the FCI-12-P Pre-Acceptance Perennial Crop Inspection Report form for
approximately 0.5 percent of the 46 insureds who interplant their peach
crop. Standard interplanting language has been added to most perennial
crops. Interplanting is an insurable practice as long as it does not
adversely affect the insured crop. This is a benefit to agriculture
because insurance is now available for more perennial crop producers
and, as a result, less acreage will need to be placed into the
noninsured crop disaster assistance program (NAP).
The amendments set forth in this proposed rule do not contain
additional information collections that require clearance by OMB under
the provisions of 44 U.S.C. chapter 35.
The title of this information collection is ``Catastrophic Risk
Protection Plan and Related Requirements including, Common Crop
Insurance Regulations; Peach Crop Insurance Provisions.'' The
information to be collected includes: a crop insurance application and
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
peaches 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 public for this information
collection is 2,669,970 hours.
Comments should be submitted for 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 for Agriculture, Office of Information and Regulatory
Affairs, Office of Management and Budget, Washington, D.C. 20503 and to
Bonnie Hart, USDA, FSA, Advisory and Corporate Operations Staff,
Regulatory Review Group, P.O. Box 2415, STOP 0572, Washington, D.C.
20013-2415, telephone (202) 690-2857. Copies of the
[[Page 58787]]
information collection may be obtained from Bonnie Hart at the above
address.
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 Mandate 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
implications to warrant the preparation of a Federalism Assessment. The
provisions contained in this rule will not have a substantial direct
effect on States or their political subdivisions, or on the
distribution of power and responsibilities among the various levels of
government.
Regulatory Flexibility Act
This regulation will not have a significant impact on a substantial
number of small entities. New provisions included in this rule will not
impact small entities to a greater extent than large entities. Under
the current regulations, a producer is required to complete an
application and acreage report. If the crop is damaged or destroyed,
the insured is required to give notice of loss and provide the
necessary information to complete a claim for indemnity. The insured
must also annually certify to the previous years production or receive
an assigned yield. The producer must maintain the production records to
support the certified information for at least 3 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 the 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 457.153, Peach 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 peaches found at 7 CFR part 403 (Peach
Crop Insurance Regulation). FCIC also proposes to amend 7 CFR 403 to
limit its effect to the 1997 and prior crop years. FCIC will later
publish a regulation to remove and reserve part 403.
This rule makes minor editorial and format changes to improve the
Peach Crop Insurance Regulations compatibility with the Common Crop
Insurance Policy. In addition, FCIC is proposing substantive changes in
the provisions for insuring peaches as follows:
1. Section 1--Add definition for the terms ``actual price per
bushel,'' ``bushel,'' ``crop year,'' ``direct marketing,'' ``freight on
board (FOB),'' ``good farming practices,'' ``harvest,''
``interplanted,'' ``irrigated practice,'' ``production guarantee,'' and
``written agreement'' for clarification.
2. Section 3(a)--Specify that the insured may select only one price
election for all the peaches in the county insured under the policy,
unless the Special Provisions provide different price elections by
type, in which case the insured may select one price election for each
peach type designated in the Special Provisions.
3. Section 3(b)--Amend the provisions to include any circumstance
that may reduce the expected yield below the yield upon which the
guarantee is based. The proposed rule requires an insured to report
damage, removal of or addition of trees, and change in practices that
may reduce yields. If the insured fails to notify the insurance
provider of factors that may reduce yields from previous levels, the
production guarantee will be reduced at any time the insurance provider
becomes aware of any circumstance that may effect the yield.
4. Section 5--Change the cancellation and termination dates to
November 20. Currently, the policy States November 30. This change
standardizes the perennial crop policies.
5. Section 7--Allow insurance for peaches interplanted with another
perennial crop subject to a pre-acceptance inspection and Regional
Service Office (RSO) approved yield. Currently the peach policy does
not allow coverage on interplanted acreage. This change standardizes
the perennial crop policies and will have no adverse actuarial effect.
6. Section 8(a)(1)--Specify that insurance coverage begins on
November 21 of each crop year, except that for the year of application,
if the application is received after November 11, but prior to November
21, insurance will attach on the 10th day after the properly completed
application is received in the insurer's local office.
7. Section 8(b)(2)--Add provisions to clarify that insurance will
not be considered to attach and no premium
[[Page 58788]]
will be due if an insurable interest on any acreage of peaches is
relinquished on or before the acreage reporting date for the crop year.
8. Section 9(a)(1)--Add adverse weather conditions as a cause of
loss. Delete freeze, frost, hail, drought, wind and lightning because
they are included in the term adverse weather. This change standardizes
the perennial crop policies.
9. Section 9(b)(1)--Clarify that disease and insect infestation are
excluded as causes of loss unless adverse weather prevents the proper
application of control measures, causes control measures to be
ineffective when properly applied, or causes disease or insect
infestation for which no effective control mechanism is available.
10. Section 10(b)--Require the producer to give notice at least 15
days before any production from a unit will be sold by direct
marketing.
11. Section 11(b)--Add provisions specifying the total production
to be counted will be multiplied by the price election. The current
policy multiplies the total production to be counted by the actual
price per bushel Freight on Board (FOB) or by the price election,
whichever is larger. This change standardizes the perennial crop
policies.
12. Section 11(c)(3)--Add provisions to extend quality adjustment
to all insurable perils. Currently the policy only allows quality
adjustment for damage due to frost, freeze, and misshapen fruit.
13. Section 11(c)(3)(i)--Add provisions which allow Freight on
Board (FOB) peach prices in the absence of the Market News Service
prices. Currently the policy does not allow for FOB prices when the
Market New Services does not establish a price.
14. Section 12--Add provisions for providing insurance coverage by
written agreement. FCIC has a long standing policy of permitting
certain modifications of the insurance contract by written agreement
for some policies. This amendment allows FCIC to tailor the policy to a
specific insured in certain instances. The new section will cover the
procedures for and duration of written agreements.
List of Subjects
7 CFR Part 403
Crop Insurance, Peaches.
7 CFR Part 457
Crop Insurance, Peaches.
Pursuant to the authority contained in the Federal Crop Insurance
Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance
Corporation hereby proposes to amend the Common Crop Insurance
Regulations (7 CFR part 457) and the Peach Crop Insurance Regulations
(7 CFR part 403) effective for the 1998 and succeeding crop years, to
read as follows:
PART 403--[AMENDED]
1. The authority citation for 7 CFR part 403 is amended to read as
follows:
Authority: 7 U.S.C. 1506(1), 1506(p).
2. The heading of the subpart in part 403 is revised to read as
follows:
``Subpart--Regulations for the 1986 through 1997 Crop Years.''
3. Section 403.7 is amended by revising the introductory text of
paragraph (d) to read as follows:
Sec. 403.7 The application and policy.
* * * * *
(d) The application for the 1985 and succeeding crop years is found
at subpart D of part 400, General Administrative Regulations (7 CFR
400.37, 400.38). The provisions of the Peach Insurance Policy for the
1985 through 1997 crop years are as follows:
* * * *
PART 457--[AMENDED]
4. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(1), 1506(p).
5. 7 CFR part 457 is amended by adding a new Sec. 457.153 to read
as follows:
Sec. 457.153 Peach Crop Insurance Provisions
The Peach Crop Insurance Provisions for the 1998 and succeeding
crop years are as follows:
United States Department of Agriculture
Federal Crop Insurance Corporation
Peach 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
Actual price per bushel for :
(a) Fresh peaches means the average price per three-quarter (\3/
4\) bushel carton of U.S. Extra No. 1 ``2 inch'' peaches (if not
available, the next larger size for which a price is available)
determined from applicable prices reported by the Market News
Service of the United States Department of Agriculture for seven
consecutive marketing days, commencing with the day harvest of the
variety begins, less the allowable cost designated by the actuarial
table. In the absence of FOB shipping point price from the Market
News Service, the price per three-quarter (\3/4\) bushel carton of
U.S. Extra No. 1 ``two-inch'' peaches will be the sum of the price
election for the damaged peaches and the allowable cost as shown in
the actuarial documents for the county; and
(b) Processing peaches means the average price per bushel for
that applicable variety determined for seven consecutive marketing
days, commencing with the day harvest of the variety begins, less
the allowable cost designated by the actuarial table.
Bushel--Forty-eight pounds of ungraded peaches. A three-quarter
(\3/4\) bushel of graded peaches is considered equivalent to a
forty-eight pound bushel of ungraded peaches.
Crop year--The period beginning November 21 and extending
through September 30 of the following year, which is designated by
the calendar year in which the period ends.
Days--Calendar days.
Direct marketing--Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper or buyer. Examples of direct
marketing include selling through an on-farm or roadside stand,
farmer's market, or permitting the general public to enter the field
for the purpose of picking all or a portion of the crop.
Freight on board (FOB)--A shipping point price reported by the
Market News Service.
FSA--The Farm Service Agency, an agency of the United States
Department of Agriculture, or any successor agency.
Good farming practices--The cultural practices generally in use
in the county for the crop to make normal progress toward maturity
and produce at least the yield used to determine the production
guarantee, and recognized by the USDA & Cooperative State Research,
Education, and Extension Service as compatible with agronomic and
weather conditions in the county.
Harvest--The picking or removal of mature peaches from the trees
either by hand or machine.
Interplanted--Acreage on which two or more crops are planted in
any form of alternating or mixed pattern.
Irrigated practice--A method of producing a crop by which water
is artificially applied during the growing season by appropriate
systems and at the proper times, with the intention of providing the
quantity of water needed to produce at least the yield used to
establish the irrigated production guarantee on the irrigated
acreage planted to the insured crop.
Production guarantee (per acre)--The quantity of peaches
(bushels) determined by multiplying the approved Actual Production
History (APH) yield per acre by the coverage level percentage you
elect.
Written agreement--A written document that alters designated
terms of this policy in accordance with section 12.
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 units) may be divided into optional units if, for each
optional unit, you meet all
[[Page 58789]]
the conditions of this section, or if a written agreement to such
division exists.
(b) Basic units may not be divided into optional units on any
basis including, but not limited to, production practice, type, and
variety, other than as described in this section.
(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 premium
paid for the purpose of electing optional units will be refunded to
you for the units combined.
(d) All optional units established for a 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 acreage and production for each optional unit for at least the
last crop year used to determine your production guarantee; and
(2) You must have records of marketed 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.
(3) 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
single 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. The irrigated acreage may not
extend beyond the point at which your irrigation system can deliver
the quantity of water needed to produce the yield on which the
guarantee is based and you may not continue into non-irrigated
acreage in the same rows or planting pattern.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities)
of the Basic Provisions (Sec. 457.8):
(a) You may select only one price election for all the peaches
in the county insured under this policy unless the Special
Provisions provide different price elections by type, in which case
you may select one price election for each peach type designated in
the Special Provisions. The price elections you choose for each type
must have the same percentage relationship to the maximum price
offered by us for each type. For example, if you choose 100 percent
(100%) of the maximum price election for one type, you must choose
100 percent (100%) of the maximum price election for all other
types.
(b) You must report, by the production reporting date designated
in section 3 (Insurance Guarantees, Coverage Levels, and Prices for
Determining Indemnities) of the Basic Provisions (Sec. 457.8), by
type if applicable:
(1) Any damage, removal of or addition of trees, or change in
practices, or any other circumstance that may reduce the expected
yield below the yield upon which the insurance guarantee is based,
and the number of affected acres;
(2) The number of bearing and nonbearing trees on insurable and
uninsurable acreage;
(3) The age of the trees, variety, type, and the planting
pattern; and
(4) For the first year of insurance, acreage interplanted with
another perennial crop, and anytime the planting pattern of such
acreage is changed:
(i) The age of the interplanted crop;
(ii) The variety, and type if applicable;
(iii) The planting pattern; and
(iv) Any other information that we request in order to establish
your approved yield. We will adjust the yield used to establish your
production guarantee as necessary, based on our estimate of the
effect on the following: interplanted perennial crop; removal or
addition of trees or varieties of trees; physical or structural tree
damage; change in practices or changes in tree population and
density, and any other circumstance affecting the yield potential of
the insured crop. If you fail to notify us of any circumstance that
may affect your yields from previous levels, we will adjust your
production guarantee as necessary at any time we become aware of the
circumstance.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is August 31
preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation
and termination dates are November 20.
6. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all the peaches in
the county for which a premium rate is provided by the actuarial
table:
(a) In which you have a share;
(b) That are grown on tree varieties that:
(1) Were commercially available when the trees were set out;
(2) Are a sufficient chilling hour variety;
(3) Are grown on a root stock that is adapted to the area.
(c) That are grown in an orchard that, if inspected, is
considered acceptable by us; and
(d) That have reached at least the fourth growing season after
set out. However, we may agree in writing to insure acreage that has
not reached this age if it has produced at least 100 bushels of
peaches per acre.
7. Insurable Acreage
In lieu of the provisions in section 9 (Insurable Acreage) of
the Basic Provisions (Sec. 457.8), that prohibit insurance attaching
to a crop planted with another crop, peaches interplanted with
another perennial crop are insurable unless we inspect the acreage
and determine that it does not meet the requirements contained in
your policy.
8. Insurance Period
(a) In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(1) Coverage begins on November 21 of each crop year, except
that for the year of application, if your application is received
after November 11 but prior to November 21, insurance will attach on
the 10th day after your properly completed application is received
in our local office unless we inspect the acreage during the 10 day
period and determine that it does not meet insurability
requirements. You must provide any information that we require for
the crop to determine the condition of the orchard.
(2) The calendar date for the end of the insurance period for
each crop year is September 30.
(b) In addition to the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(1) If you acquire an insurable share in any insurable acreage
after coverage begins, but on or before the acreage reporting date
for the crop year, and after an inspection, we consider the acreage
acceptable, insurance will be considered to have attached to such
acreage on the calendar date for the beginning of the insurance
period.
(2) If you relinquish your insurable interest on any acreage of
peaches on or before the acreage reporting date for the crop year,
insurance will not be considered to have attached to, and no premium
or indemnity will be due for, such acreage for that crop year
unless:
(i) A transfer of coverage and right to an indemnity, or a
similar form approved by us, is completed by all affected parties;
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date; and
(iii) The transferee is eligible for crop insurance.
9. Causes of Loss
(a) In accordance with the provisions of section 12 (Causes of
Loss) of the Basic Provisions (Sec. 457.8), insurance is provided
only against the following causes of loss that occur within the
insurance period:
(1) Adverse weather conditions;
(2) Fire, unless weeds and other forms of undergrowth have not
been controlled or
[[Page 58790]]
pruning debris has not been removed from the orchard;
(3) Earthquake;
(4) Volcanic eruption;
(5) An insufficient number of chilling hours to effectively
break dormancy; or
(6) 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 excluded in section 12
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not
insure against damage or loss of production due to:
(1) Disease or insect infestation, unless adverse weather:
(i) Prevents the proper application of control measures or
causes properly applied control measures to be ineffective; or
(ii) Causes disease or insect infestation for which no effective
control mechanism is available;
(2) Split pits, regardless of cause; or
(3) Inability to market the peaches for any reason other than
actual physical damage from an insurable cause specified in this
section. For example, we will not pay you an indemnity if you are
unable to market due to quarantine, boycott, or refusal of any
person to accept production.
10. Duties in the Event of Damage or Loss
In addition to the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the
following will apply:
(a) You must notify us within three days of the date that
harvest of the damaged variety should have started if the crop will
not be harvested.
(b) You must notify us at least 15 days before any production
from any unit will be sold by direct marketing. We will conduct an
appraisal that will be used to determine your production to count
for production that is sold by direct marketing. If damage occurs
after this appraisal, we will conduct an additional appraisal. These
appraisals, and any acceptable records provided by you, will be used
to determine your production to count. Failure to give timely notice
that production will be sold by direct marketing will result in an
appraised amount of production to count not less than the production
guarantee per acre if such failure results in our inability to make
the required appraisal.
(c) If you intend to claim an indemnity on any unit, you must
notify us at least 15 days prior to the beginning of harvest of the
damaged variety, if you previously gave notice in accordance with
section 14 of the Basis Provisions (Sec. 457.8), so that we may
inspect the damaged production. You must not sell or dispose of the
damaged crop until after we have given you written consent to do so.
If you fail to meet the requirements of this section, and such
failure results in our inability to inspect the damaged production,
all such production will be considered undamaged and included as
production to count.
11. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event
you are unable to provide separate acceptable production records:
(1) For any optional unit, we will combine all optional units
for which such production records were not provided; or
(2) For any basic unit, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for each unit.
(b) In the event of loss or damage covered by this policy, we
will settle your claim by:
(1) Multiplying the insured acreage by its respective production
guarantee;
(2) Multiplying the result of section 11(b)(1) by the respective
price election;
(3) Totaling the results of section 11(b)(2);
(4) Multiplying the total production to be counted by type, if
applicable, (see subsection 11(c)) by the respective price election;
(5) Totaling the results of section 11(b)(4);
(6) Subtracting the result of section 11(b)(5) from the result
in section 11(b)(3); and
(7) Multiplying the result of section 11(b)(6) by your share.
(c) The total production to count (in bushels) from all
insurable acreage on the unit will include:
(1) All appraised production will be determined as follows:
(i) Not less than the production guarantee per acre for acreage:
(A) That is abandoned;
(B) That is sold by direct marketing if you fail to meet the
requirements contained in section 10;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide acceptable production records
that are acceptable to us;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production;
(iv) Potential production on insured acreage that you intend to
abandon or no longer care for, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for
that acreage will end. If you do not agree with our appraisal, we
may defer the claim only if you agree to continue to care for the
crop. We will then make another appraisal when you notify us of
further damage or that harvest is general in the area unless you
harvested the crop, in which case we will use the harvested
production. If you do not continue to care for the crop, our
appraisal made prior to deferring the claim will be used to
determine the production to count; and
(v) Any appraised production on insured acreage will be
considered production to count unless such production is exceeded by
the actual harvested production.
(2) All harvested production from the insurable acreage.
(3) Mature marketable peach production may be reduced as a
result of a loss in quality due to an insured cause of loss. The
amount of production to count for such peaches will be determined as
follows:
(i) Peaches grown for fresh use by:
(A) Dividing the value per \3/4\ bushel carton of the damaged
peaches by the actual price per bushel for undamaged peaches; and
(B) Multiplying the result of section 11(c)(3)(i)(A) by the
number of bushels of the eligible damaged peaches.
(ii) Peaches grown for processing by:
(A) Dividing the value per bushel of the damaged peaches by the
average price per bushel of undamaged peaches for processing; and
(B) Multiplying the result of section 11(c)(3)(ii)(A) by the
number of bushels of the eligible damaged peaches.
(4) Peaches that cannot be marketed due to insurable causes will
not be considered production to count.
12. Written Agreements
Designated terms of this policy may be altered by written
agreement in accordance with the following:
(a) You must apply in writing for each written agreement no
later than the sales closing date, except as provided in section
12(e);
(b) The application for a written agreement must contain all
variable terms of the contract between you and us that will be in
effect if the written agreement is not approved;
(c) If approved, the written agreement will include all variable
terms of the contract, including, but not limited to, crop type or
variety, the guarantee, premium rate, and price election;
(d) Each written agreement will only be valid for one year (If
the written agreement is not specifically renewed the following
year, insurance coverage for subsequent crop years will be in
accordance with the printed policy); and
(e) An application for a written agreement submitted after the
sales closing date may be approved if, after a physical inspection
of the acreage, it is determined that no loss has occurred and the
crop is insurable in accordance with the policy and written
agreement provisions.
Signed in Washington, DC, on November 13, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-29559 Filed 11-18-96; 8:45 am]
BILLING CODE 3410-FA-P
