[Federal Register Volume 61, Number 217 (Thursday, November 7, 1996)]
[Rules and Regulations]
[Pages 57578-57583]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28607]
[[Page 57578]]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
RIN 0563-AB03
Common Crop Insurance Regulations; Pear Crop Insurance Provisions
AGENCY: Federal Crop Insurance Corporation.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes
specific crop provisions for the insurance of pears. 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 and combine the current Pear
Endorsement with the Common Crop Insurance Policy for ease of use and
consistency of terms.
EFFECTIVE DATE: December 9, 1996.
FOR FURTHER INFORMATION CONTACT: Louise Narber, Program Analyst,
Research and Development Division, Product Development Branch, Federal
Crop Insurance Corporation, United States Department of Agriculture,
9435 Holmes Road, Kansas City, MO 64131, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order No. 12866 and Departmental Regulation 1512-1
This action has been reviewed under United States Department of
Agriculture (USDA) procedures established by Executive Order No. 12866
and Departmental Regulation 1512-1. 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 July 31, 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
Following publication of the proposed rule, the public was afforded
60 days to submit written comments, data, and opinions on information
collection requirements previously approved by OMB under OMB control
number 0563-0003. No public comments were received.
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) of
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 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 action for judicial review may be brought.
Environmental Evaluation
This action is not expected to have a significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
National Performance Review
This regulatory action is being taken as part of the National
Performance Review Initiative to eliminate unnecessary or duplicative
regulations and improve those that remain in force.
Background
On Thursday, April 25, 1996, FCIC published a proposed rule in the
Federal Register at 61 FR 18293-18299 to add to the Common Crop
Insurance Regulations (7 CFR part 457) a new section, 7 CFR 457.111,
Pear Crop Insurance Provisions. The new provisions will be effective
for the 1998 and succeeding crop years. These provisions will replace
the current provisions for insuring pears found at 7 CFR Sec. 401.140
(Pear Endorsement), thereby limiting the effect of the current
provisions to the 1997 and prior crop years. After the final rule
becomes effective, the current provisions for insuring pears will be
removed from Sec. 401.140 and that section will be reserved.
Following publication of that proposed rule, the public was
afforded 30 days to submit written comments, data, and opinions. A
total of twenty-six (26) comments were received from the crop insurance
industry and FCIC. The comments received, and FCIC's responses are as
follows:
[[Page 57579]]
Comment: The crop insurance industry questioned whether Red
Bartletts and Green Bartletts would be considered to be the same
varietal group, and recommended retaining some kind of ``all other''
category so all varieties are addressed in some manner.
Response: Type I and Type II were deleted from the pear provisions
to allow varietal grouping by growing region. FCIC recognizes that
varietal groups are still necessary since several varieties of pears in
addition to Green Bartletts are grown in the Pacific Northwest. In
regions where more than one varietal group is grown, separate groupings
will be provided on the Special Provisions. No change has been made.
Comment: The crop insurance industry recommended that the
definition of ``irrigated practice'' should also address the quality of
the water being applied.
Response: FCIC disagrees. There is no clear criteria regarding the
quality of water necessary to produce a crop. The highly variable
factors involved would make such criteria difficult to develop and
administer. Good farming practices would apply. No change has been made
in the definition.
Comment: The crop insurance industry questioned what was intended
in the definition of ``production guarantee (per acre)'' by the phrase
``and multiply the result by any applicable adjustment factor.''
Response: Section 6(f) of the Basic Provisions states, ``If the
information reported by you on the acreage report for a unit results in
a lower premium than the actual premium determined to be due on the
basis of the share, acreage, practice, type or other material
information determined to actually exist, the production guarantee or
amount of insurance on the unit will be reduced proportionately.* * *''
The definition of ``production guarantee'' simply reflects the
possibility of such an adjustment.
Comment: The crop insurance industry stated that providing insureds
with optional units by section, section equivalent or farm serial
number, or optional units by non-contiguous land could cause confusion
and that producers may not understand their options.
Response: Most policies offer optional units by section, section
equivalent, irrigated land, or non-contiguous land. Insurance providers
have adequately explained these policy choices to producers in the
past. FCIC anticipates that insurance providers will continue to be
able to explain available coverage options. No changes have been made.
Comment: The crop insurance industry stated that optional units
should be allowed by variety rather than varietal group (i.e., Red
Bartlett and Green Bartlett are distinct varieties and should be
allowed to be separate optional units).
Response: Permitting unit division by variety could lead to
extremely small insurance units and an increase in the frequency of
losses and overall loss adjustment experiences. In some cases a few
rows of a pollinator variety could qualify as an insurance unit. These
extremely small insurance units would increase paperwork,
administrative expenses, and spot losses. No change has been made.
Comment: The crop insurance industry stated that they did not
understand why all optional units must be identified on the acreage
report for each crop year. They said that listing every possible
combination for every crop on a policy could test the limits on the
number of policy lines allowed.
Response: Only those optional units determined under the selected
method for the crop year for which the acreage report is completed must
be listed. Optional unit designations from past years, or that could
have been established for the current year but were not, should not be
listed on the current crop years' acreage report. This provision has
been clarified.
Comment: The crop insurance industry stated that the provisions
refer to a pro rata refund when optional units are combined into basic
units whenever the insured reported optional units but does not
qualify. They questioned on what basis a pro rata refund would be
determined.
Response: The reference to a pro rata refund has been deleted and
the sentence changed to read ``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.''
Comment: The crop insurance industry questioned if the provision
``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'' could cause
confusion between the APH or policy crop year.
Response: The last year used to determine the production guarantee
refers to the most recent year included in the APH data base. Such year
is always an APH crop year and may or may not be a year in which a
policy was in force. FCIC believes the provision is clearly stated and
has not made changes.
Comment: The crop insurance industry suggested that section 3(a)
begin with the phrase ``You may select only one price percentage * *
*.'' It would not then be necessary to say so much about when different
varieties have different maximum prices.
Response: The method to select price elections varies between
insurance providers. While some require selection of a percentage,
others require a selection of a specific dollar amount. The suggested
changes will not work for all circumstances. No change has been made to
the provisions.
Comment: The crop insurance industry suggested that the insurance
provider modify the APH yield for the next crop year when damage,
removal of trees or change in practices may reduce yields from previous
levels. They stated that there is no procedure for reducing the
guarantee at the time of loss.
Response: Guarantees are determined at the beginning of the crop
year. These Pear Crop Provisions provide the authority to reduce the
APH yield when tree damage has occurred or cultural practices have been
performed that will reduce the insured crop from previous production
levels at the time the guarantee is established or at any time the
insurance provider discovers the damage, removal of trees or change in
practice.
Comment: The crop insurance industry questioned whether the sales
closing date for pears in California will be changed to January 31 to
match the new cancellation/termination dates.
Response: The sales closing date for pears in California will be
changed to January 31.
Comment: The crop insurance industry questioned what is meant by
``In accordance with the provisions of section 11 (Insurance Period) of
the Basic Provisions (Sec. 457.8): (1) Coverage begins for each crop
year on the later of the date we accept your application or: (i) In
California, on February 1; or (ii) In all other states, on November
21.'' They asked if the intent is to allow acceptance of applications
after the sales closing date.
Response: Section 11 of the Basic Provisions states that coverage
begins on the later of the date of application, when the insured crop
is planted, or the date specified in the crop provisions. This
provision provides that date. FCIC has also clarified this provision to
provide the date when coverage begins in the year of application when
the producer's application is received by the insurance provider within
10 days of the sales
[[Page 57580]]
closing date. These provisions were modified so they will not be
interpreted as allowing late filed applications.
Comment: The crop insurance industry recommended removing the
requirement that a written agreement be renewed each year. If no
substantive changes occur from one year to the next, the written
agreement should be continuous.
Response: Provisions regarding written agreements require that the
guarantee, premium rate, and price election be included on the
agreement. Since one or more of these items typically change each year,
the agreement must be renewed every year. No change is made.
Comment: The crop insurance industry stated that the Pear Quality
Adjustment Endorsement should be removed from the crop provisions and
drafted as a separate endorsement, which would only be issued to those
insureds who elect the additional coverage. Otherwise CAT insureds and
others may think such coverage is included as a part of their crop
provisions. It was also suggested that the provisions in section 13(a)
follow those contained in section 13(b).
Response: FCIC believes that the quality adjustment endorsement
should be included in the Pear Crop Insurance Provisions so that pear
producers can readily see their coverage options. However, the
endorsement has been clarified to state in section 13(a) that the
endorsement does not apply if the insured insures the pears under the
catastrophic risk protection (CAT) endorsement or has not specifically
selected such coverage. Therefore, FCIC does not believe that persons
insured under the Catastrophic Risk Protection Endorsement or others
who did not elect this coverage will think they have this coverage. For
further clarification, provisions contained in sections 13(a) and (b)
of the proposed rule have been combined.
Comment: The crop insurance industry is concerned that section
13(c)(1)(ii) is more complicated than necessary. Their interpretation
was that the production will be reduced to zero and that the total
production would be considered cull production.
Response: When more than sixty percent of the pears fail the grade
standard the production will be reduced to zero and that production
will be considered cull production. FCIC believes that the provisions
are written as clearly as possible.
Comment: The crop insurance industry stated that section 13(c)(2)
is not necessary because such pears would be included under section
13(c)(1) whenever an appraisal is made.
Response: FCIC has reformatted the provisions but believes all the
provisions are necessary for clarity.
Comment: One comment received from an FCIC office recommended that
production be adjusted when it does not grade ninety percent (90%) U.S.
No. 2 grade or better in accordance with applicable United States
Standards for Grades of Summer and Fall Pears, United States Standards
for Grades of Winter Pears, or United States Standards for Grades of
Pears for Processing, as applicable when the damage is caused by hail.
Proposed provisions contained in section 13(c)(1) allowed adjustment
only when production did not grade eighty percent (80%) U.S. No. 2 or
better. The comment stated that the majority of orchards normally
produce eighty-seven percent (87%) to ninety-five percent (95%) U.S.
No. 2 grade or better and eighty percent (80%) did not give adequate
protection to the producers. Although, five to thirteen percent of all
pears are culls, very few of these pears are damaged by a cause of loss
covered under the endorsement.
Response: FCIC agrees that eighty percent (80%) may not provide
adequate coverage and has increased the amount to ninety percent (90%).
In addition to the changes described above, FCIC has made the
following changes:
1. Section 1--Clarify the definitions of ``FSA,'' ``non-
contiguous,'' and ``written agreement''. Delete the definition of
``culls'' because fruit that is considered to be cull production for
the purposes of this policy is sufficiently identified in section 13.
2. Section 3(b)--Amend the provision to include any circumstance
that may reduce the expected yield below the yield upon which the
insurance guarantee is based. The proposed rule required an insured to
report only damage, removal of trees, and changes in practices and
there may be other circumstances that may affect the yield.
3. Section 8(b)(1)--Clarify that if the producer acquires an
insurable share after coverage begins but on or before the acreage
reporting date, insurance attaches on the calendar date for the
beginning of the insurance period.
4. Section 8(b)(2)--Clarify that not only will insurance not attach
but no premium will be due if the producer relinquishes an insurable
interest in any insurable acreage of pears on or before the acreage
reporting date of any crop year unless a transfer of coverage and right
to an indemnity is completed and the insurance provider is notified in
writing on or before the acreage reporting date. Clarify that the
transferee must also be eligible for crop insurance.
5. Section 10(b)--Simplify the provision to remove any ambiguity.
6. Section 10(c)--Modify the provision to specify that the producer
must notify the insurance provider at least 15 days prior to the
beginning of harvest if the producer previously gave notice in
accordance with section 14 of the Basic Provisions (Sec. 457.8). Also
specify that if the producer fails to meet the requirements of this
section, and such failure results in the insurance providers inability
to inspect the damaged production, all such production will be
considered undamaged and included as production to count.
7. Section 11--Add a provision to specify that an amount of
production not less than the production guarantee per acre will be
counted if the producer fails to notify the insurer of acreage that is
to be sold by direct marketing to conform to section 10(b). Also
clarify the claim settlement calculation and the quality adjustment
provisions for pears grown in California.
8. Section 13--Clarify the pear quality adjustment endorsement
provisions. Also, limit the cause of loss to hail only in section
13(b)(1) to be consistent with optional coverage provided for apples in
the same area.
List of Subjects in 7 CFR Part 457
Crop insurance, Pears, Reporting and recordkeeping requirements.
Final Rule
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 amends the Common Crop Insurance Regulations (7 CFR
part 457), effective for the 1998 and succeeding crop years, as
follows:
PART 457--[AMENDED]
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p) .
2. 7 CFR part 457 is amended by adding a new Sec. 457.111 to read
as follows:
Sec. 457.111 Pear crop insurance provisions.
The Pear Crop Insurance Provisions for the 1998 and succeeding crop
years are as follows:
FCIC Policies:
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Reinsured Policies:
[[Page 57581]]
(Appropriate title for insurance provider)
Both FCIC and Reinsured Policies:
Pear 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
Days--Calendar days.
Direct marketing--Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper, or buyer. Examples of direct
marketing include selling through an on-farm or roadside stand,
farmer's market, and permitting the general public to enter the
field for the purpose of picking all or a portion of the crop.
FSA--The Farm Service Agency, an agency of the United States
Department of Agriculture, or a 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 generally recognized by the Cooperative State
Research, Education, and Extension Service as compatible with
agronomic and weather conditions in the county.
Harvest--The picking of mature pears from the trees or the
collecting of marketable pears from the ground.
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.
Marketable--Pear production acceptable for processing or other
human consumption even if failing to meet any U.S. or applicable
state grading standard.
Non-contiguous--Any two or more tracts of land whose boundaries
do not touch at any point, except that land separated only by a
public or private right-of-way, waterway, or an irrigation canal
will be considered as contiguous.
Production guarantee (per acre)--The quantity of pears (in tons)
determined by multiplying the approved APH yield per acre by the
coverage level percentage you elect, and multiplying the result by
any applicable adjustment factor provided in section 6(f) of the
Basic Provisions (Sec. 457.8).
Ton--Two thousand (2,000) pounds avoirdupois.
Varietal group--Types of pears with similar characteristics that
are grouped for insurance purposes as specified in the Special
Provisions.
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), a
basic unit, may be divided 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, 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 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.
(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; or
(ii) Optional Units on Acreage Located on Non-Contiguous Land:
In lieu of establishing optional units by section, section
equivalent or FSA Farm Serial Number, optional units may be
established if each optional unit is located on non-contiguous land.
(iii) Optional Units on Acreage by Varietal Group: In addition
to, or instead of, establishing optional units by section, section
equivalent, FSA Farm Serial Number, or on non-contiguous land,
optional units may be established by varietal group when provided
for in the Special Provisions.
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 pears in
the county insured under this policy unless the Special Provisions
provide different price elections by varietal group, in which case
you may select one price election for each varietal group designated
in the Special Provisions. The price elections you choose for each
varietal group must have the same percentage relationship to the
maximum price offered by us for each varietal group. For example, if
you choose one hundred percent (100%) of the maximum price election
for one varietal group, you must also choose one hundred percent
(100%) of the maximum price election for all other varietal groups.
(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
varietal group:
(1) Any damage, removal of trees, 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 trees on insurable and uninsurable
acreage;
(3) The age of the trees and the planting pattern; and
(4) For the first year of insurance for acreage interplanted
with another perennial crop, and any time the planting pattern of
such acreage is changed:
(i) The age of the interplanted crop, and type if applicable;
(ii) The planting pattern; and
(iii) Any other information that we request in order to
establish your approved yield. We will reduce the yield used to
establish your production guarantee as necessary, based on our
estimate of the effect of the following: interplanted perennial
crop; removal of trees; damage; change in practices or any other
circumstance on the yield potential of the insured crop. If you fail
to notify us of any circumstance that may reduce your yields from
previous levels, we will reduce your production guarantee as
necessary at any time that we become aware of the circumstance.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is October 31
preceding the cancellation date for states with a January 31
cancellation date and August 31 preceding the cancellation date for
all other states.
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:
[[Page 57582]]
------------------------------------------------------------------------
Cancellation and termination
States dates
------------------------------------------------------------------------
California............................. January 31.
All other states....................... 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 pears in
the county for which a premium rate is provided by the actuarial
table:
(a) In which you have a share;
(b) That are of varieties adapted to the area;
(c) That are grown on trees that have produced an average of at
least five (5) tons of pears per acre in at least one of the four
previous crop years unless the Special Provisions or a written
agreement establishes a lower production level; and
(d) That are grown in an orchard that, if inspected, is
considered acceptable by us.
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, pears 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:
(i) In California, on February 1 of each crop year, except that
for the year of application, if your application is received after
January 22 but prior to February 1, insurance will attach on the
10th day after your properly completed application is received in
our local office, unless we inspect the acreage during the 10 day
period and determine that it does not meet insurability
requirements. You must provide any information that we require for
the crop or to determine the condition of the orchard; or
(ii) In all other states, 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 or to determine the condition of the orchard.
(2) The calendar date for the end of the insurance period for
each crop year is:
(i) September 15 for Bartlett (green and red) and Star Crimson
(Crimson Red) varietal groups; or
(ii) October 15 for all other varietal groups.
(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 insurable
acreage of pears on or before the acreage reporting date of any crop
year, insurance will not be considered to have attached to, and no
premium will be due, and no indemnity paid, for such acreage for
that crop year unless:
(i) A transfer of coverage and right to an indemnity, or a
similar form approved by us, is completed by all affected parties;
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date; and
(iii) The transferee is eligible for crop insurance.
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 pruning debris has not been removed from the
orchard;
(3) Earthquake;
(4) Volcanic eruption; or
(5) Failure of the 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) Failure of the fruit to color properly; or
(3) Inability to market the pears 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 3 days of the date harvest should
have started if the crop will not be harvested.
(b) You must notify us at least 15 days before any production
from any unit will be sold by direct marketing. We will conduct an
appraisal that will be used to determine your production to count
for production that is sold by direct marketing. If damage occurs
after this appraisal, we will conduct an additional appraisal. These
appraisals, and any acceptable records provided by you, will be used
to determine your production to count. Failure to give timely notice
that production will be sold by direct marketing will result in an
appraised amount of production to count of not less than the
production guarantee per acre if such failure results in our
inability to make the required appraisal.
(c) If you intend to claim an indemnity on any unit, you must
notify us at least 15 days prior to the beginning of harvest if you
previously gave notice in accordance with section 14 of the Basic
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 for each varietal group if
applicable, by its respective production guarantee;
(2) Multiplying the results of section 11(b)(1) by the
respective price election for each varietal group, if applicable;
(3) Totaling the results of section 11(b)(2);
(4) Multiplying the total production to be counted of each
varietal group, if applicable, by the respective price election;
(5) Totaling the results of section 11(b)(4);
(6) Subtracting this result of section 11(b)(5) from the result
of section 11(b)(3); and
(7) Multiplying the result of section 11(b)(6) by your share.
(c) The total production to count (in tons) from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee per acre for acreage:
(A) That is abandoned;
(B) That is sold by direct marketing if you fail to meet the
requirements contained in section 10;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide production records that are
acceptable to us;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production; and
(iv) Potential production on insured acreage that you intend to
abandon or no longer care for, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for
that acreage will end. If you do not agree with our appraisal, we
may defer the claim only if you agree to continue to care for the
crop. We will then make another appraisal when you notify us of
further damage or that harvest is general in the area unless you
harvested the crop, in
[[Page 57583]]
which case we will use the harvested production. If you do not
continue to care for the crop, our appraisal made prior to deferring
the claim will be used to determine the production to count; and
(2) For all states except California, all harvested and
appraised marketable pear production from the insurable acreage.
(3) For California, all harvested and appraised production that:
(i) Meets the standards for first grade canning as defined by
the California Pear Advisory Board or for U.S. Number 1 as defined
by the United States Standards for Grades of Summer and Fall Pears,
or Pears for Processing, or for U.S. Extra Number 1 or U.S. Number 1
as defined by the United States Standards for Grades of Winter
Pears;
(ii) Is accepted by a processor for canning or packing; or
(iii) Is marketable for any purpose. However, if the pears are
damaged by an insured cause, the production to count will be reduced
by the greater of the following amounts:
(A) The excess over ten percent (10%) of pears that are size 180
or smaller for varieties other than Forelle, Seckel or Winter Nelis;
or
(B) The result of dividing the value per ton of such pears by
the highest price election for the insured varietal group,
subtracting this result from 1.000, and multiplying this difference
(if positive) by the number of tons of such pears.
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.
13. Pear Quality Adjustment Endorsement
(a) This endorsement applies to any crop year: Provided,
(1) The insured pears are located in a State other than
California and the actuarial table designates a premium rate for
this endorsement;
(2) You have not elected to insure your pears under the
Catastrophic Risk Protection (CAT) Endorsement;
(3) You elected it on your application or other form approved by
us, and did so on or before the sales closing date for the initial
crop year for which you wish it to be effective. By doing so, you
agreed to pay the additional premium designated in the actuarial
table for this optional coverage; and
(4) You or we did not cancel it in writing on or before the
cancellation date. Your election of CAT coverage for any crop year
after this endorsement is effective will be considered as notice of
cancellation by you.
(b) If the pear production is damaged by hail and if eleven
percent (11%) or more of the harvested and appraised production does
not grade at least U.S. No. 2 in accordance with applicable United
States Standards for Grades of Summer and Fall Pears, United States
Standards for Grades of Winter Pears, or United States Standards for
Grades of Pears for Processing, as applicable, due solely to hail,
the amount of production to count will be reduced as follows:
(i) By two percent (2%) for each full one percent (1%) in excess
of ten percent (10%), when eleven percent (11%) through sixty
percent (60%) of the pears fail the grade standard; or
(ii) By one hundred percent (100%) when more than sixty percent
(60%) of the pears fail the grade standard.
The difference between the reduced production determined in
section 13(b) and the total production will be considered as cull
production.
(c) Pears that are knocked to the ground by wind or that are
frozen and cannot be packed or marketed as fresh pears will be
considered one hundred percent (100%) cull production.
(d) Marketable production that grades less than U.S. No. 2 due
to causes not covered by this endorsement will not be reduced.
(e) Fifteen percent (15%) of all production considered as cull
production in accordance with section 13 (b) and (c) will be
production to count.
Signed in Washington, D.C., on October 31, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-28607 Filed 11-6-96; 8:45 am]
BILLING CODE 3410-FA-P
