[Federal Register Volume 61, Number 229 (Tuesday, November 26, 1996)]
[Proposed Rules]
[Pages 60049-60057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29864]
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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. 61, No. 229 / Tuesday, November 26, 1996 /
Proposed Rules
[[Page 60049]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 433 and 457
RIN 0563-AB02
Common Crop Insurance Regulations, Dry Bean Crop Insurance
Provisions; and Dry Bean Crop Insurance Regulations
AGENCY: Federal Crop Insurance Corporation.
ACTION: Proposed rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes
specific crop provisions for the insurance of dry beans, including dry
beans produced under seed bean processor contracts. 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, to include the current Dry
Bean Crop Insurance Regulations with the Common Crop Insurance Policy
for ease of use and consistency of terms, and to restrict the
application to the current Dry Bean Crop Insurance Regulations
effective for the 1997 and succeeding crop years.
DATES: Written comments, data, and opinions on this proposed rule will
be accepted until close of business December 26, 1996, 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 24, 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, SW.,
Washington, DC., 8:15 a.m. to 4:45 p.m., est, Monday through Friday,
except holidays.
FOR FURTHER INFORMATION CONTACT: Arden Routh, 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 March 1, 2001.
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.
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; Dry Bean Crop Insurance Provisions.'' The
information to be collected includes a crop insurance application, an
acreage report, and a continuous contract. Information collected from
the application and acreage report is electronically submitted to FCIC
by reinsured companies. Potential respondents to this information
collection are producers of dry beans 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 2,676,932 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 for Agriculture, Office of Information and Regulatory
Affairs, Office of Management and Budget, Washington, D.C. 20503 and to
Bonnie Hart, Farm Service Agency, United States Department of
Agriculture, 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 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.
[[Page 60050]]
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
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 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 if adequate
records are available to support the certification, 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 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 any 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 457.150, Dry Bean Crop Insurance
Provisions. The new provisions will be effective for the 1997 and
succeeding crop years. These provisions will replace and supersede the
current provisions for insuring dry beans found at 7 CFR part 433 (Dry
Bean Crop Insurance Regulations). FCIC also proposes to amend 7 CFR
part 433 to limit its effect to the 1997 and prior crop years. FCIC
will later publish a regulation to remove and reserve part 433.
This rule makes minor editorial and format changes to improve the
Dry Bean Crop Insurance Regulations compatibility with the Common Crop
Insurance Policy. In addition, FCIC is proposing substantive changes in
the provisions for insuring dry beans as follows:
1. Section 1--Remove the definition of ``county,'' to default to
the definition contained in the Basic Provisions (Sec. 457.8). The
current definition includes land identified by an FSA farm serial
number for the county that is physically located in another county, the
new definition does not. This change will require land in another
county to be insured using the actuarial materials for the county where
the land is located. Add definitions for the terms ``actual value,''
``base price,'' ``beans,'' ``combining,'' ``contract seed beans,''
``days,'' ``dry beans,'' ``FSA,'' ``final planting date,'' ``good
farming practices,'' ``interplanted,'' ``irrigated practice,'' ``late
planted,'' ``late planting period,'' ``local market price,'' ``net
price,'' ``planted acreage,'' ``practical to replant,'' ``prevented
planting,'' ``production guarantee (per acre),'' ``seed bean processor
contract,'' ``seed company,'' ``swathing or knifing,'' ``timely
planted,'' ``type,'' ``variety,'' and ``written agreement'' for
clarification purposes. The Definition of ``Harvest'' is clarified to
indicate that beans which are swathed or knifed and left in the field
for drying prior to combining are not considered harvested.
2. Section 2--Allow separate bean types to qualify for optional
units rather than basic units as previously allowed. Basic units will
be provided as specified in section 1 of the Basic Provisions
(Sec. 457.8). This change makes basic unit division provisions for dry
beans consistent with provisions for other crops. Contract seed beans
are only eligible for optional units if the seed company contracts on
an acreage basis and not on a contract of production basis. Clarify
unit division for non-irrigated corners of center-pivot irrigation
systems.
3. Section 3--Specify that the insured may select only one price
election for all the dry beans 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
dry bean type designated in the Special Provisions. The price elections
selected are not required to have the same percentage relationship to
the maximum price offered for each type.
4. Section 4--The contract change date has been changed to November
30 for all counties to maintain an adequate time period between this
date and the revised cancellation dates (see item 7 below).
5. Section 5--Change the cancellation and termination dates from
March 31 to February 28 in California and from April 15 to March 15 in
all other States. These changes are made to standardize the
cancellation and termination dates with the sales closing dates. The
sales closing dates were previously amended
[[Page 60051]]
to comply with the requirement of the Federal Crop Insurance Reform Act
of 1994 that spring planted crop sales closing dates be moved 30 days
earlier. California dates are earlier than in other States because dry
beans are planted earlier in California than they are in other States.
6. Section 6--Add a requirement for the insured to submit a copy of
any applicable seed bean processor contract with the report of acreage.
This change is made to allow the insurance provider to verify that the
policy requirement for a contract has been met when establishing the
liability under the policy.
7. Section 7(a)(4)(ii)--Clarify that dry beans planted into an
established grass or legume are not insurable unless allowed by the
Special Provisions or by written agreement because of the adverse
impact such plants would have on the dry bean production.
8. Section 7(b)--Clarifies that any acreage of contract seed beans
produced by a seed company are not insurable, such seed beans are
usually produced for experimental purposes and experimental crops are
not insurable.
9. Section 7(c)--Clarifies the number of years that test plot
results must be provided to insure dry bean types not shown in the
Special Provisions. Previous provisions did not indicate the number of
years test results were required.
10. Section 9--Establishes the end of the insurance period dates by
State in accordance with the latest usual harvest dates published by
National Agricultural Statistics Service. The previous policy contained
only one calendar date for the end of the insurance period and was too
late in some areas.
11. Section 10--Clarifies that insect or disease damage due to
insufficient or improper application of pest or disease control
measures are not an insurable cause of loss.
12. Section 11(b)--Change the replant payment factor from 100
pounds to the lesser of 10 percent of the production guarantee or 120
pounds for dry beans or contract seed beans. This amount will be
multiplied by the price election for the newly seeded beans and the
insured's share to determine the maximum replant payment per acre. This
change will result in replant payment amounts that more accurately
represent the costs of replanting and seeding rates in various
production areas.
13. Section 13(b)--Modify the calculations used to determine dry
bean claim amounts to allow the aggregation of production guarantees
and production to count when more than one bean type is in one unit or
the unit has both contract seed beans and other bean production.
14. Section 13(e)--Add provisions that require the value of
contract seed production to be multiplied by the elected price election
percentage. The value of production to count must also be multiplied by
the elected price election percentage to be consistent with the amount
of insurance for the insured acreage.
15. Section 13(f)--Allow adjustments in production to count
containing excessive moisture to be made separately from any
adjustments for quality deficiencies. Previous provisions combined
adjustments for moisture and quality when both were applicable. This
change is made because wide variations in charges associated with the
drying and handling of high moisture production have caused production
of equal quality and moisture content to be valued differently. Also,
quality adjustment procedures are clarified for situations in which the
pick exceeds the percentage shown on the Special Provisions or the
production does not meet the grade requirements for U.S. No. 2. Such
production to count will be adjusted using either a conversion factor
shown in the Special Provisions or, if this is not available, the
production will be multiplied by a factor that results from dividing
the value per hundredweight of the damaged production by the local
market price.
16. Section 14--Add late planting provisions that cover acreage not
planted by the final planting date but is planted within 25 days after
the final planting date to standardize the dry bean policy with all
other policies which had previously offered late planting coverage as a
separate option. This provision will also provide for reduction in the
guarantee to reflect the increased risk associated with planting the
crop late. The late planting period is also extended from 20 to 25 days
to conform the late planting period of other crop policies. New
provisions providing coverage for acreage that is prevented from being
planted by the final planting date or during the late planting period
have also been added in this section.
17. Section 15--Add provisions for providing insurance coverage by
written agreement. FCIC has a long standing policy of permitting
modification of certain provisions of insurance contracts by written
agreement. Written agreements are not specifically permitted under the
current Dry Bean Crop Insurance Regulations. The new section will cover
the procedures for, and duration of, written agreements.
List of Subjects
7 CFR part 433
Crop insurance, Dry beans.
7 CFR part 457
Crop insurance, Dry beans.
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 Dry Bean Crop Insurance
Regulations (7 CFR part 433), effective for the 1997 and succeeding
crop years, as follows:
PART 433--[AMENDED]
1. The authority citation for 7 CFR part 433 is revised to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
2. The heading of the subpart is revised to read as follows:
Subpart--Regulations for the 1986 through 1996 Crop Years.
3. Section 433.7 is amended by revising the introductory text of
paragraph (d) of the Dry Bean Crop Insurance Regulations to read as
follows:
Sec. 433.7 The application and policy.
* * * * *
(d) The application for the 1986 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 Dry Bean Insurance Policy for
the 1986 through 1996 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(l), 1506(p).
5. 7 CFR part 457 is amended by adding a new Sec. 457.150 to read
as follows:
Sec. 457.150 Dry Bean Crop Insurance Provisions.
The Dry Bean Crop Insurance Provisions for the 1997 and succeeding
crop years are as follows:
FCIC policies:
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Reinsured policies:
(Appropriate title for insurance provider)
[[Page 60052]]
Both FCIC and reinsured policies:
Dry Bean 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 value--The dollar value received, or that could be received,
for contract seed beans under a seed bean processor contract if the
contract seed bean production is properly handled.
Base price--The price per pound that is stated in the seed bean
processor contract and that is paid to the grower for at least 50% of
the total production under contract with the seed company.
Beans--Means dry beans and contract seed beans.
Combining--A harvesting process that is completed using a machine
that separates the beans from the pods and other vegetative matter and
places the beans into a temporary storage receptacle.
Contract seed beans--Dry beans grown under the terms of a seed bean
processor contract for the purpose of producing seed to be used for
producing dry beans or vegetable beans in a future crop year.
Days--Calendar days.
Dry beans--The crop defined by the official United States Standards
for Beans.
FSA--The Farm Service Agency, an agency of the United States
Department of Agriculture, or a successor agency.
Final planting date--The date contained in the Special Provisions
for the insured crop by which the crop must initially be planted in
order to be insured for the full production guarantee.
Good farming practices--The cultural practices generally in use in
the county for the crop to make normal progress toward maturity and
produce at least the yield used to determine the production guarantee
and are those recognized by the Cooperative State Research, Education,
and Extension Service as compatible with agronomic and weather
conditions in the county.
Harvest--Combining the beans. Beans which are swathed or knifed
prior to combining are not considered harvested.
Interplanted--Acreage on which two or more crops are planted in a
manner that does not permit separate agronomic maintenance or harvest
of the insured crop.
Irrigated practice--A method of producing a crop by which water is
artificially applied during the growing season by appropriate systems
and at the proper times, with the intention of providing the quantity
of water needed to produce at least the yield used to establish the
irrigated production guarantee on the irrigated acreage planted to the
insured crop.
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 per hundredweight for the U.S.
No. 2 grade of dry beans offered by buyers in the area in which you
normally market the dry beans. Factors not associated with grading
under the United States Standards for Beans, such as moisture content,
will not be considered.
Net price--The dollar value of dry bean production after reductions
in value due to insurable causes of loss are considered.
Pick--The percentage, on a weight basis, of defects such as splits,
damaged (including discolored) beans, contrasting types, and foreign
material remaining in the dry beans after dockage has been removed by
the proper use of screens or sieves.
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. Beans must initially be planted in rows
far enough apart to permit cultivation to be considered planted.
Acreage planted in any other manner will not be insurable unless
otherwise provided by the Special Provisions or by written agreement.
Practical to replant--In lieu of the definition of ``Practical to
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8),
practical to replant is defined as our determination, after loss or
damage to the insured crop, based on factors, including but not limited
to moisture availability, condition of the field, time to crop
maturity, and marketing window, that replanting the insured crop will
allow the crop to attain maturity prior to the calendar date for the
end of the insurance period. It will not be considered practical to
replant after the end of the late planting period unless replanting is
generally occurring in the area.
Prevented planting--Inability to plant the insured crop with proper
equipment by the final planting date designated in the Special
Provisions for the insured crop in the county or the end of the late
planting period. You must have been unable to plant the insured crop
due to an insured cause of loss that has prevented the majority of
producers in the surrounding area from planting the same crop.
Production guarantee (per acre)--The number of pounds determined by
multiplying the approved yield per acre by the coverage level
percentage you elect, and multiplying the result by any applicable
adjustment factor specified in the Special Provisions.
Replanting--Performing the cultural practices necessary to replace
the bean seed and then replacing the bean seed in the insured acreage
with the expectation of growing a successful crop.
Seed bean processor contract--A written agreement between the
contract seed bean producer and the seed company, containing at a
minimum:
(a) The contract seed bean producer's promise to plant and grow one
or more specific varieties of contract seed beans, and deliver the
production from those varieties to the seed company;
(b) The seed company's promise to purchase all the production
stated in the contract; and
(c) A base price or a method to determine such price, that will be
paid to the contract seed bean producer for the production stated in
the contract.
Seed company--A corporation that possesses all licenses and permits
for marketing seed beans required by the State in which it is domiciled
or operated, and that possesses facilities, or has contractual access
to such facilities, with enough drying, screening and bagging equipment
to accept and process the seed beans within a reasonable amount of time
after harvest.
Swathing or knifing--Severance of the bean plant from the ground,
including the pods and beans, and placing them into windrows.
Timely planted--Planted on or before the final planting date
designated in the Special Provisions for the insured crop in the
county.
Type--A category of beans identified as a type in the Special
Provisions.
Variety--A kind of contract seed bean specified in the Special
Provisions and named in the seed bean processor contract.
Written agreement--A written document that alters designated terms
of this policy in accordance with section 15.
2. Unit Division.
(a) Unless limited by the Special Provisions, a unit as defined in
section 1 (Definitions) the Basic Provisions (Sec. 457.8), a basic
unit, may be divided
[[Page 60053]]
into optional units if, for each optional unit you meet all 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, variety, and
planting period, other than as described in this section.
(c) Optional units will only be available for contract seed beans
if the seed bean processor contract specifies that it is a specified
number of acres that are under contract and not a specified amount of
production.
(d) If you do not comply fully with these provisions, we will
combine all optional units that are not in compliance with these
provisions into the basic unit from which they were formed. We will
combine the optional units at any time we discover that you have failed
to comply with these provisions. If failure to comply with these
provisions is determined to be inadvertent, and the optional units are
combined, that portion of the premium paid for the purpose of electing
optional units will be refunded to you pro rata for the units combined.
(e) All optional units established for a crop year must be
identified on the acreage report for that crop year.
(f) The following requirements must be met for each optional unit:
(1) You must have records, which can be independently verified, of
planted acreage and production for each optional unit for at least the
last crop year used to determine your production guarantee;
(2) You must plant the crop in a manner that results in a clear and
discernable break in the planting pattern at the boundaries of each
optional unit;
(3) 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 bean type: A separate optional unit may be
established for each bean type shown in the Special Provisions.
(ii) 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.
(iii) 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 dry beans 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 dry bean
type designated in the Special Provisions. 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 election for
one type, you may also choose 75 percent of the maximum price election
for another type.
(b) For contract seed beans only, the dollar amount of insurance is
obtained by multiplying the production guarantee per acre for each
variety in the unit by the insured acreage of that variety, times the
applicable base price, and times the price election percentage you
selected. The total of these results will be the amount of insurance
for contract seed beans in the unit.
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 Basic Provisions (Sec. 457.8), the cancellation and
termination dates are:
------------------------------------------------------------------------
Cancellation and termination
State and county dates
------------------------------------------------------------------------
California.............................. Feb. 28.
All other States........................ Mar. 15.
------------------------------------------------------------------------
6. Report of Acreage.
For contract seed beans only, in addition to the requirements of
section 6 (Report of Acreage) of the Basic Provisions (Sec. 457.8), you
must submit a copy of the seed bean processor contract at the time you
file your report of acreage.
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 beans in the
county for which a premium rate is provided by the actuarial table:
(1) In which you have a share;
(2) That are planted for harvest as:
(i) Dry beans; or
(ii) If applicable, contract seed beans, if the seed bean processor
contract is executed before the acreage reporting date;
(3) That are not volunteer beans; and
(4) That are not (unless allowed by the Special Provisions or by
written agreement):
(i) Interplanted with another crop; or
(ii) Planted into an established grass or legume.
(b) For contract seed beans only:
(1) 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 seed bean processor contract may be treated as a contract
[[Page 60054]]
under which you have an insurable interest in the crop; and
(2) We will not insure any acreage of contract seed beans produced
by a seed company.
(c) In addition to the types of beans designated in the Special
Provisions, we will insure other types provided:
(1) The type you intend to plant has been demonstrated to be
adapted to the area. Evidence of adaptability must include:
(i) Results of test plots for 2 years and recommendations by a
university or seed company; or
(ii) Two years of production reports that indicate your experience
producing the type in your production area;
(2) You submit on or before the sales closing date your production
reports and prices received, or the test plot results and evidence of
market potential, including the price buyers are willing to pay for the
type; and
(3) We provide you a written agreement allowing insurance on the
type.
(d) Any acreage of beans that is destroyed and replanted to a
different insurable type of beans will be considered insured acreage.
8. Insurable Acreage.
In addition to the provisions of section 9 (Insurable Acreage) of
the Basic Provisions (Sec. 457.8):
(a) We will not insure any acreage that does not meet the rotation
requirements shown in the Special Provisions; or
(b) Any acreage of the insured crop damaged before the final
planting date, to the extent that the majority of growers in the area
would normally not further care for the crop, must be replanted unless
we agree that replanting is not practical. We will not require you to
replant if it is not practical to replant to the same type of beans as
originally planted.
9. Insurance Period.
In accordance with the provisions of section 11 (Insurance Period)
of the Basic Provisions (Sec. 457.8), the calendar date for the end of
the insurance period is the date immediately following planting as
follows:
(a) October 15 in Oklahoma, New Mexico, and Texas;
(b) November 15 in California; and
(c) October 31 in all other States.
10. Causes of Loss.
In accordance with the provisions of section 12 (Causes of Loss) of
the Basic Provisions (Sec. 457.8), insurance is provided only against
the following causes of loss that occur during the insurance period:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage due to insufficient or improper
application of pest control measures;
(d) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(e) Wildlife;
(f) Earthquake;
(g) Volcanic eruption; or
(h) Failure of the irrigation water supply, if caused by an insured
peril that occurs during the insurance period.
11. Replanting Payments.
(a) In accordance with section 13 (Replanting Payment) of the Basic
Provisions (Sec. 457.8), a replanting payment is allowed if the bean
crop is damaged by an insurable cause of loss to the extent that the
remaining stand will not produce at least 90 percent of the production
guarantee for the acreage and it is practical to replant.
(b) The maximum amount of the replanting payment per acre will be
the lesser of 10 percent of the production guarantee or 120 pounds for
dry beans or contract seed beans, times your price election for the
newly seeded type, times your insured share.
(c) When beans are replanted using a practice that is uninsurable
as an original planting, the liability for the unit will be reduced by
the amount of the replanting payment. The premium amount will not be
reduced.
12. Duties In The Event of Damage or Loss.
In accordance with the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the
representative samples of the unharvested crop must be at least 10 feet
wide and extend the entire length of each field in the unit. The
samples must not be harvested or destroyed until the earlier of our
inspection or 15 days after harvest of the balance of the unit is
completed.
13. 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 to your bean crop covered by
this policy, we will settle your claim on by:
(1) Multiplying the insured acreage of each dry bean type by the
respective production guarantee;
(2) Multiplying each result in section 13(b)(1) by the respective
price election for the type;
(3) Totaling the results in section 13(b)(2);
(4) Multiplying the insured acreage of each contract seed bean
variety by its respective production guarantee;
(5 ) Multiplying each result in section 13(b)(4) by the applicable
base price;
(6) Multiplying each result in section 13(b)(5) by your selected
price election percentage;
(7) Totaling the results in section 13(b)(6);
(8) Totaling the results in section 13(b)(3) and section 13(b)(6);
(9) Multiplying the total production to be counted of each dry bean
type if applicable, (see section 13(d)) by the respective price
election;
(10) Totaling the value of all contract seed bean production (see
section 13(c));
(11) Totaling the results in section 13(b)(9) and section
13(b)(10);
(12) Subtracting the total in section 13(b)(11) from the total in
section 13(b)(8); and
(13) Multiplying the result by your share.
(c) The value of contract seed bean production to count for each
variety in the unit will be determined as follows:
(1) For production meeting the minimum quality requirements
contained in the seed bean processor contract and for production that
does not meet such requirements due to uninsured causes:
(i) Multiplying the actual value or base price per pound, whichever
is greater, by the price election percentage you selected; and
(ii) Multiplying the result by the number of pounds of such
production.
(2) For production not meeting the minimum quality requirements
contained in the seed bean processor contract due to insurable causes:
(i) Multiplying the actual value by the price election percentage
you selected; and
(ii) Multiplying the result by the number of pounds of such
production.
(d) The total bean production to count (in pounds) from all
insurable acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee 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
that are acceptable to us;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (mature unharvested production of dry
beans
[[Page 60055]]
may be adjusted for quality deficiencies and excess moisture in
accordance with section 13(e)); and
(iv) Potential production on insured acreage that you intend to put
to another use or abandon, if you and we agree on the appraised amount
of production. Upon such agreement, the insurance period for that
acreage will end when you put the acreage to another use or abandon the
crop. If agreement on the appraised amount of production is not
reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to
leave intact, and provide sufficient care for, representative samples
of the crop in locations acceptable to us (The amount of production to
count for such acreage will be based on the harvested production or
appraisals from the samples at the time harvest should have occurred.
If you do not leave the required samples intact, or fail to provide
sufficient care for the samples, our appraisal made prior to giving you
consent to put the acreage to another use will be used to determine the
amount of production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production,
or our reappraisal if additional damage occurs and the crop is not
harvested; and
(2) All harvested production from the insurable acreage.
(e) Mature dry bean production to count may be adjusted for excess
moisture and quality deficiencies. Adjustment for excess moisture and
quality deficiencies will not be applicable to contract seed beans. If
moisture adjustment is applicable, it will be made prior to any
adjustment for quality.
(1) Production will be reduced by 0.12 percent for each 0.1
percentage point of moisture in excess of 18 percent. We may obtain
samples of the production to determine the moisture content.
(2) Production will be eligible for quality adjustment if:
(i) A pick is designated in the Special Provisions and the pick of
the damaged production exceeds this designation; or
(ii) A pick is not designated in the Special Provisions and
deficiencies in quality, in accordance with the United States Standards
for Beans, result in dry beans not meeting the grade requirements for
U.S. No. 2 (grades U.S. No. 3 or worse) because the beans are damaged
or badly damaged; or
(iii) Substances or conditions are present that are identified by
the Food and Drug Administration or other public health organizations
of the United States as being injurious to human or animal health.
(3) Quality will be a factor in determining your loss only if:
(i) The deficiencies, substances, or conditions resulted from a
cause of loss against which insurance is provided under these crop
provisions and within the insurance period;
(ii) The deficiencies, substances, or conditions result in a net
price for the damaged production that is less than the local market
price;
(iii) All determinations of these deficiencies, substances, or
conditions are made using samples of the production obtained by us or
by a disinterested third party approved by us; and
(iv) The samples are analyzed by a grader licensed to grade dry
beans under the authority of the United States Agricultural Marketing
Act or the United States Warehouse Act with regard to deficiencies in
quality, or by a laboratory approved by us with regard to substances or
conditions injurious to human or animal health. (Test weight for
quality adjustment purposes may be determined by our loss adjuster.)
(4) Dry bean production that is eligible for quality adjustment, as
specified in sections 13(e) (2) and (3), will be reduced:
(i) If a conversion factor is designated by the Special Provisions,
by multiplying the number of pounds of eligible production by the
conversion factor designated in the Special Provisions for the
applicable grade or pick; or
(ii) If a conversion factor is not designated by the Special
Provisions as follows:
(A) The market price of the qualifying damaged production and the
local market price will be determined on the earlier of the date such
quality adjusted production is sold or the date of final inspection for
the unit. If a local market price is not available for the insured crop
year, the current years' maximum price election available for the
applicable type will be used. The price for the qualifying damaged
production will be the market price for the local area to the extent
feasible. We may obtain prices from any buyer of our choice. If we
obtain prices from one or more buyers located outside your local market
area, we will reduce such prices by the additional costs required to
deliver the dry beans to those buyers. Discounts used to establish the
net price of the damaged production will be limited to those that are
usual, customary, and reasonable. The price of the damaged production
will not be reduced for:
(1) Moisture content;
(2) Damage due to uninsured causes; or
(3) Drying, handling, processing, or any other costs associated
with normal harvesting, handling, and marketing of the dry beans;
except, if the price of the damaged production can be increased by
conditioning, we may reduce the price of the production after it has
been conditioned by the cost of conditioning but not lower than the
value of the production before conditioning;
(B) The value per pound of the damaged or conditioned production
will be divided by the local market price to determine the quality
adjustment factor; and
(C) The number of pounds remaining after any reduction due to
excessive moisture (the moisture-adjusted gross pounds) of the damaged
or conditioned production will then be multiplied by the quality
adjustment factor to determine the net production to count.
(f) Any production harvested from plants growing in the insured
crop may be counted as production of the insured crop on a weight
basis.
14. 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 14(c)), and acreage
you were prevented from planting (see section 14(d)). These coverages
provide reduced production guarantees. The premium amount for late
planted acreage and eligible prevented planting acreage will be the
same as that for timely planted. 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) If you were prevented from planting, you must provide written
notice to us not later than the acreage reporting date.
(c) Late Planting
(1) For bean acreage planted during the late planting period, the
production guarantee or amount of insurance for each acre will be
reduced for each day planted after the final planting date by:
(i) One percent for the 1st through the 10th day; and
[[Page 60056]]
(ii) Two percent 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 beans 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 (5) 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 beans, you may
elect:
(i) To plant beans during the late planting period. The production
guarantee or amount of insurance for such acreage will be determined in
accordance with section 14(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 production guarantee or
amount of insurance for such acreage will be 50 percent of the
production guarantee for timely planted acres. For example, if your
production guarantee for timely planted acreage is 1,500 pounds per
acre, your prevented planting production guarantee would be 750 pounds
per acre (1,500 pounds multiplied by 0.50). 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 13; or
(iii) Not to plant the intended crop but plant a substitute crop
for harvest, in which case:
(A) No prevented planting production guarantee 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) A production guarantee equal to 25 percent of the production
guarantee 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 production guarantee for timely planted
acreage is 30 bushels per acre, your prevented planting production
guarantee would be 7.5 bushels per acre (30 bushels multiplied by
0.25). 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) Production guarantees for timely, late, and prevented planting
acreage within a unit will be combined to determine the production
guarantee for the unit. For example, assume you insure one unit in
which you have a 100 percent share. 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 production guarantee or
amount of insurance. The production guarantee for the unit will be
computed as follows:
(i) For the timely planted acreage, multiply the per acre
production guarantee or amount of insurance for timely planted acreage
by the 50 acres planted timely;
(ii) For the late planted acreage, multiply the per acre production
guarantee or 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
production guarantee or amount of insurance for timely planted acreage
by:
(A) Fifty 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
(B) Twenty five 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 14(d)(1)(iii)).
Your premium will be based on the result of multiplying the per
acre production guarantee/amount of insurance for timely planted
acreage by the 150 acres in the unit.
(3) We may require proof that you had the inputs available to plant
and produce the intended crop with the expectation of at least
producing the production guarantee or amount of insurance.
(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 dry beans for the 1997
crop year, prevented planting coverage will begin on the 1997 sales
closing date for dry beans in the county. If the dry bean coverage
remains in effect for the 1998 crop year (is not terminated or canceled
during or after the 1997 crop year), prevented planting coverage for
the 1998 crop year began on the 1997 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,
[[Page 60057]]
eligible acreage will not exceed the greater of:
(A) The FSA base acreage for the insured crop, including acres that
could be flexed from another crop, if applicable;
(B) The number of acres planted to dry deans on the FSA Farm Serial
Number during the previous crop year; or
(C) One hundred percent of the simple average of the number of
acres planted to dry beans 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 production guarantee or 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;
(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 section 14 (d)(2)(iii)(A), or a substitute
crop allowed in section 14(d)(2)(iii)(B)), unless you provide adequate
records of acreage and production showing that the acreage was double-
cropped in each of the last 4 years;
(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 dry bean 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 dry beans on one optional unit and 40 acres of dry beans 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
production guarantee, 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.
15. 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 15(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 provisions.
Done in Washington, D.C., on November 18, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-29864 Filed 11-25-96; 8:45 am]
BILLING CODE 3410-FA-P
