[Federal Register Volume 60, Number 237 (Monday, December 11, 1995)]
[Proposed Rules]
[Pages 63457-63461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30085]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
RIN 0563-AB24
Common Crop Insurance Regulations; Malting Barley Price and
Quality Endorsement Crop Insurance Provisions
AGENCY: Federal Crop Insurance Corporation.
ACTION: Proposed rule.
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SUMMARY: The Federal Crop Insurance Corporation (``FCIC'') hereby
proposes to revise the Malting Barley Option Crop Insurance provisions.
The intended effect of this action is to improve the insurance coverage
now available for producers who grow malting barley under contract with
a brewery, or business that sells malt or processed mash to a brewery;
and to provide a new option that will allow producers without contracts
(open market producers) to obtain insurance for their malting barley.
DATES: Written comments, data, and opinions on this proposed rule must
be submitted by the close of business December 21, 1995 to 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 February 5, 1996.
ADDRESSES: Written comments, data, and opinion on this proposed rule
should be sent to Diana Moslak, Regulatory and Procedural Development
Staff, Federal Crop Insurance Corporation, USDA, Washington, D.C.
20250. Hand or messenger delivery should be made to 14th and
Independence Avenue, S.W., Room 6097, South Building, Washington, D.C.
Written comments will be available for public inspection and copying in
the Office of the Manager, 14th and Independence Avenue, S.W., Room
6097, South Building, Washington, D.C., during regular business hours,
Monday through Friday.
FOR FURTHER INFORMATION CONTACT: For further information and a copy of
the Regulatory Economic Analysis of the Malting Barley Endorsement Crop
Insurance provisions, contact Diana Moslak, Regulatory and Procedural
Development Staff, Federal Crop Insurance Corporation, USDA,
Washington, D.C. 20250. Telephone (202) 720-0713.
SUPPLEMENTARY INFORMATION: This action has been reviewed under United
States Department of Agriculture (``USDA'') procedures established by
Executive Order 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 1, 2000.
This rule has been determined to be ``significant'' for the
purposes of Executive Order 12866 and, therefore, has been reviewed by
the Office of Management and Budget (``OMB'').
A Regulatory Economic Analysis has been completed and is available
to interested persons at the address listed above. In summary, the
analysis finds that the expected benefits of this action outweigh the
costs. The new Malting Barley Price and Quality Endorsement will
simplify program operations, benefit FCIC and reinsured companies, and
enhance the insurance coverage for malting barley producers.
Paperwork Reduction Act of 1995
The information collection requirements contained in these
regulations were submitted to OMB for their approval under section
3507(j) of the Paperwork Reduction Act of 1995, and received emergency
approval through March 5, 1996. The agency is also seeking a valid
approval for 3 years under section 3507(d). These requirements were
previously approved by OMB under OMB control number 0563-0003 through
September 30, 1998. Public comments are due by February 5, 1996.
The title of this information collection is ``Catastrophic Risk
Protection Plan and Related Requirements including General Crop
Insurance Regulations, Common Crop Insurance Regulations; Malting
Barley Price and Quality Endorsement Crop Insurance Provisions.'' The
Information to be collected includes: a crop insurance acreage report,
an insurance application and continuous contract. Information collected
from the acreage report and application is electronically submitted to
FCIC by the reinsured companies. Some respondents may provide
additional information for the purpose of selecting malting barley
insurance coverage options. Potential respondents to this information
collection are growers of malting barley that are eligible for Federal
crop insurance.
The information requested is necessary for the insurance company
and FCIC to provide insurance, provide reinsurance, determine
eligibility, determine and collect premiums or other monetary amounts
(or fees), 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.
The comment period for information collections under the Paperwork
Reduction Act of 1995 continues through February 5, 1996, 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
[[Page 63458]]
on respondents, including through the use of automated collection
techniques or other forms of information technology.
Comments should be submitted to the Desk Officer for Agriculture,
Office of Information and Regulatory Affairs, Office of Management and
Budget (OMB), Washington, D.C. 20503 and to Bonnie Hart, Information
Management Branch, Farm Service Agency, U.S. Department of Agriculture,
Washington, D.C. 20250. Copies of the information collection may be
obtained from Bonnie Hart at the above address. Telephone (202) 690-
2857.
It has been determined under section 6(a) of Executive Order 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.
This regulation will not have a significant impact on a substantial
number of small entities. The impact of obtaining or delivering these
policies will not vary significantly from that required to obtain or
deliver the present policy. Therefore, this action is determined to be
exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C.
Sec. 605 ) and no Regulatory Flexibility Analysis was prepared.
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
This program is not subject to the provisions of Executive Order
12372 which require intergovernmental consultation with state and local
officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
The Office of the General Counsel has determined that these
regulations meet the applicable standards provided in subsections 2(a)
and 2(b)(2) of Executive Order 12778. 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
promulgated by the National Appeals Division under Pub. L. No. 103-354
must be exhausted before judicial action may be brought.
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.
Background
FCIC proposes to amend the Common Crop Insurance Regulations (7 CFR
part 457) by revising and reissuing 7 CFR 457.103, Malting Barley
Option effective for the 1996 and succeeding crop years. The principal
changes to the provisions for insuring malting barley are as follows:
1. The current Malting Barley Option will be replaced by the
proposed Malting Barley Price and Quality Endorsement. The new
endorsement is divided into two coverage options. Option A is intended
to provide insurance coverage for producers who do not grow malting
barley under contract with a brewery or with a business that makes or
sells malt or processed mash to a brewery. Option B provides insurance
coverage for producers who grow malting barley under such a contract. A
producer may select only one option to cover all acreage planted to
approved varieties of malting barley in the county during the crop
year.
Option A
2. Section 1--Requires an applicant for insurance or insured to
provide records of the sale of malting barley for at least four crop
years to be eligible for coverage. These production records may be used
to determine the malting barley production guarantee (see item 3
below).
3. Section 2--Provides that the malting barley production guarantee
per acre will be the lesser of: (a) The production guarantee calculated
under the APH regulations, 7 CFR part 400, subpart G, and the Small
Grains Crop Provisions for feed barley for acreage planted to approved
malting varieties; or (b) the average amount calculated under the APH
regulations of malting barley sold per planted acre during the APH base
period.
4. Section 3--Provides for the maximum malting barley additional
value price to be designated in the Special Provisions.
5. Section 4--Indicates the production to count against the malting
barley production guarantee. Quality standards specified in this
section represent typical minimum acceptance standards in the malting
barley industry.
6. Section 5--Provides that a claim cannot be settled until final
disposition of all production can be determined, or May 31 of the
calendar year following the crop year. Production stored after May 31
of the calendar year following the crop year will be adjusted based on
the quality specifications contained in subsection 4(b) of the option.
This extended settlement period is intended to prevent the payment of
an indemnity for production that does not meet quality specifications
but is ultimately used for malting purposes due to a shortage of
quality malting barley. If barley is used for malting purposes
regardless of quality it is production to count against the guarantee.
Option B
7. Section 1--Requires an applicant for insurance or insured to
provide a copy of the malting barley contract by the acreage reporting
date to be eligible for coverage. The amount of production under
contract may be used to determine the malting barley production
guarantee (see item 8 below).
8. Section 2--Provides that the malting barley production guarantee
per acre be the lesser of: (a) The production guarantee calculated
under the APH regulations, 7 CFR part 400, subpart G, and the Small
Grains Crop Provisions for feed barley for acreage planted to approved
malting varieties; or (b) the amount determined by dividing the number
of bushels of contracted production by the number of acres planted to
approved malting varieties, and multiplying the result by the
percentage for the coverage level you elected under the Small Grains
Crop Provisions for feed barley.
9. Section 3--Establishes the maximum malting barley additional
value price as: (a) The difference between the maximum price election
available for feed barley under the Small Grains Crop Provisions and
the established sale price in the malting barley contract provided such
price is fixed on or before the acreage reporting date; or (b) the
basis or differential per bushel shown in the malting barley contract
if the sale price is based on a future market price for basic (feed)
barley plus a differential amount for malting barley production. For
example, if the malting barley contract provides for a fixed price of
$2.50 per bushel on or before the acreage reporting date and the
maximum price election available for feed barley is $1.90 per bushel,
the additional value price would be $0.60 per bushel ($2.50-$1.90);
however, if the malting barley contract provides for a basis or
differential of $0.60 per bushel above a future market price, the
additional value price would be $0.60. In no event will the additional
value price exceed 200% of the maximum additional value price shown in
the Special Provisions.
10. Section 4--Indicates the production to count against the
malting barley production guarantee in the event of a claim. Production
meeting the
[[Page 63459]]
minimum acceptance standards specified in the malting barley contract
for percentage of protein, plump kernels, thin kernels, germination,
blight damage, mold injury or damage, sprout damage, frost injury or
damage, and parts per million of substances or conditions, including
mycotoxins, that are identified by the Food and Drug Administration as
being injurious to human or animal health, or the standards specified
in this section, will be considered production to count.
11. Section 5--Specifies that a claim cannot be settled until final
disposition of all production can be determined, or May 31 of the
calendar year following the crop year. Production stored after this
date will be adjusted based on the quality specifications indicated in
subsection 4(b) of the option. This extended settlement period is
intended to prevent the payment of an indemnity for production that
does not meet quality specifications but that is ultimately used for
malting purposes due to a shortage of quality malting barley. If barley
is used for malting purposes regardless of quality it is production to
count against the guarantee.
List of Subjects in 7 CFR Part 457
Crop insurance, Malting Barley Price and Quality Endorsement Crop
Provisions
Proposed Rule
Pursuant to the authority contained in the Federal Crop Insurance
Act, as amended (7 U.S.C. Sec. 1501 et seq.), the Federal Crop
Insurance Corporation hereby proposes to amend the Common Crop
Insurance Regulations (7 CFR part 457), effective for the 1996 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(1).
2. Section 457.103 is revised to read as follows:
Sec. 457.103 Malting Barley Crop Insurance.
The malting barley crop insurance provisions for the 1996 and
succeeding crop years are as follows:
United States Department of Agriculture; Federal Crop Insurance
Corporation; Small Grains Crop Insurance; Malting Barley Price and
Quality Endorsement
(This is a continuous endorsement. Refer to section 2 of the Common
Crop Insurance Policy.)
In return for your payment of premium for the coverage contained
herein, this endorsement will be attached to and made part of the
Common Crop Insurance Policy (Sec. 457.8) and Small Grains Crop
Provisions (Sec. 457.101), subject to the terms and conditions
described herein.
1. You must have the Common Crop Insurance Policy (Sec. 457.8)
and the Small Grains Crop Insurance Provisions (Sec. 457.101) in
force to elect to insure malting barley under this endorsement.
2. You must select either option A or option B before the sales
closing date. Failure to select either option A or option B, or
failure to qualify for coverage under the terms of the option
selected, will result in no coverage under this endorsement for the
applicable crop year. For example, if you elect option B but fail to
have a binding malting barley contract by the acreage reporting
date, no coverage will be provided under this endorsement for the
crop year. The selection will continue from year to year unless you
cancel or change your selection prior to the sales closing date.
3. You must select an added value price election at the time of
application.
4. The additional premium amount for this coverage will be
determined by multiplying your malting barley production guarantee
per acre times your selected additional value price election, times
the premium rate, times the insured acreage, times your share at the
time coverage begins.
5. In addition to the acreage reporting requirements contained
in section 6 of the Common Crop Insurance Policy (Sec. 457.8), you
must provide the information required by your selected option.
6. All barley acreage that is planted to approved malting
varieties, and that is insurable under the feed barley crop
provisions and the selected option must be insured under this
endorsement and, on the acreage report, will be designated as, and
limited to, one unit.
7. In lieu of provisions in the Common Crop Insurance Policy
(Sec. 457.8) that require you to submit a claim for indemnity not
later than 60 days after the end of the insurance period, you must
submit a claim for indemnity declaring the amount of your loss not
later than May 31 of the calendar year immediately following the
crop year.
8. Prevented planting coverage is not provided by this
endorsement but is available only under the terms of the Small
Grains Crop Provisions for barley.
9. Definitions:
(a) APH--Actual Production History as determined in accordance
with 7 CFR part 400, subpart G.
(b) Approved malting variety--A variety of barley specified as
such in the Special Provisions.
(c) Brewery--A facility where malt beverages are commercially
produced for human consumption.
(d) Contracted production--The quantity of malting barley the
insured producer agrees to grow and deliver, and the buyer agrees to
accept, under the terms of the malting barley contract.
(e) Licensed grain grader--A person who is authorized to inspect
and grade barley under the United States Grain Standards Act or the
United States Warehouse Act.
(f) Malting barley contract--A written contract with a brewery
or business that produces or sells malt or processed mash to a
brewery or a company owned by such brewery or business, in which is
stated the production contracted and a purchase price or a method to
be used in determining such price.
(g) Objective test--A determination made by a qualified person
using standardized equipment that is widely used in the malting
industry, and following a procedure approved by the American Society
of Brewing Chemists when determining percent germination or protein
content; grading performed following a procedure approved by the
Federal Grain Inspection Service when determining quality factors
other than percent germination or protein content; or by the Food
and Drug Administration when determining parts per million of
mycotoxins or other substances or conditions that are identified as
being injurious to human or animal health.
(h) Subjective test--A determination made using olfactory,
visual, touch or feel, masticatory, or other senses unless performed
by a licensed grain grader; or that uses non-standardized equipment,
or that does not follow a procedure approved by the American Society
of Brewing Chemists, the Federal Grain Inspection Service, or the
Food and Drug Administration.
(i) Value per bushel--The highest price per bushel received or
that could be received for the malting barley in the local market
area.
(j) Unit--All insurable acreage of approved malting varieties in
the county on the date coverage begins for the crop year.
Option A (for Non-Contracted Production or a Combination of Contracted
and Non-Contracted Production)
This option provides coverage for malting barley production
losses at a price per bushel greater than that available under the
Small Grains Crop Provisions.
1. To be eligible for coverage under this option you must
provide us acceptable records of the sale of malting barley and the
number of acres planted to malting varieties for at least the four
crop years prior to the crop year immediately preceding the current
crop year. For example, to determine your production guarantee for
the 1995 crop year, records must be provided for the 1990 through
the 1993 crop years, if malting barley was planted in each of those
crop years. You must provide these records to us no later than the
production reporting date.
2. Your malting barley production guarantee per acre will be the
lesser of:
(a) The production guarantee for feed barley for acreage planted
to approved malting varieties calculated in accordance with the
Small Grains Crop Provisions and APH regulations; or
(b) A production guarantee calculated in accordance with APH
procedures using the malting barley sales and acreage records
provided by you.
3. The additional value price per bushel elected cannot exceed
the maximum price designated in the Special Provisions.
4. The amount of production to count against your malting barley
production guarantee will include all:
[[Page 63460]]
(a) Appraised production determined in accordance with
subsections 11(c)(1) (i) and (ii) of the Small Grains Crop
Provisions;
(b) Harvested production and potential unharvested production
that meets, or would if properly handled, meet:
(1) Tolerances established by the Food and Drug Administration
or other public health organization of the United States for
substances or conditions, including mycotoxins, that are identified
as being injurious to human or animal health; and
(2) The following quality standards, as applicable:
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Six-rowed malting barley Two-rowed malting barley
----------------------------------------------------------------------------------------------------------------
Protein (dry basis)................... 14.0% maximum...................... 14.0% maximum.
Plump kernels......................... 65.0% minimum...................... 75.0% minimum.
Thin kernels.......................... 10.0% maximum...................... 10.0% maximum.
Germination........................... 95.0% minimum...................... 95.0% minimum.
Blight damaged........................ 4.0% maximum....................... 4.0% maximum.
Injured by mold....................... 5.0% maximum....................... 5.0% maximum.
Mold damaged.......................... 0.4% maximum....................... 0.4% maximum.
Sprout damaged........................ 1.0% maximum....................... 1.0% maximum.
Injured by frost...................... 5.0% maximum....................... 5.0% maximum.
Frost damaged......................... 0.4% maximum....................... 0.4% maximum.
----------------------------------------------------------------------------------------------------------------
(c) Harvested production that does not meet the quality
standards contained in subsection 4(b) of this option, but is
accepted by a buyer for malting purposes.
(d) No reduction in value will be allowed for moisture content;
damage due to uninsured causes; costs or reduced value associated
with drying, handling, processing, or quality factors other than
those contained in subsection (b) of this section; or any other
costs associated with normal handling and marketing of malting
barley. All grade and quality determinations must be based on the
results of objective tests. No indemnity will be paid for any loss
established by subjective tests. We may obtain one or more samples
of the insured crop and have tests performed at an official grain
inspection location established under the Grain Standards Act to
verify the result of any test. In the event of a conflict in the
test results, our results will be used to determine the amount of
production to count. If failure to meet the quality standards is due
to insurable causes, the quantity of such production may be reduced
for quality deficiencies by:
(1) Adding the maximum barley price election under the Small
Grains Crop Provisions and the maximum additional value price;
(2) Dividing this sum into the value per bushel of the damaged
production; and
(3) Multiplying the resulting factor (not to exceed 1.0) by the
number of bushels of damaged production.
5. No claim under this option may be settled until the earlier
of:
(a) The date final disposition of production from all acreage
planted to approved malting barley varieties is completed; or
(b) May 31 of the calendar year immediately following the
calendar year in which the insured malting barley is normally
harvested. Production to count for malting barley that has not been
sold by this May 31 date will include all production that meets the
quality specifications contained in subsection 4(b) of this option.
The limitations specified in subsections 5(a) and (b) will not
apply when all production from the insured malting barley unit
grades U.S. No. 4 or lower in accordance with the grades and grade
requirements for the subclasses Six-rowed barley, Two-rowed barley,
and the class Barley in accordance with the Official United States
Standards for Grain.
6. In the event of loss or damage covered by this policy, we
will settle your claim by:
(a) Multiplying the insured acreage by the malting barley
production guarantee per acre;
(b) Multiplying the result by your elected additional value
price per bushel;
(c) Multiplying the number of bushels of production to count by
your elected additional value price per bushel; and
(d) Subtracting the result of step (c) from the result of step
(b).
7. For example, assume you insure two units of barley under the
Small Grains Crop Provisions in which you have a 100% share and that
are planted to approved malting varieties. Assume that each unit
contains 40 acres. Further assume that your production guarantee
under the Small Grains Crop Provisions is 30 bushels per acre or a
total of 2,400 bushels. Your malting barley unit production
guarantee is limited to 2,100 bushels by subsection 2(b). A loss
causes the total production to count for all units under the Small
Grains Crop Provisions to drop to 1,000 bushels, none of which meet
the quality standards covered by this option. The indemnity for the
malting barley unit would be based on a combined production and
quality loss of 2,100 bushels. The indemnity would be paid at the
additional value price per bushel. If the price were $0.40 per
bushel, the indemnity for the malting barley unit would be $840.00
(2,100 x $0.40). The basic loss is paid under the Small Grains
Crop Provisions for feed barley.
Option B--(for Contracted Production)
This option provides coverage for malting barley production
losses at a price per bushel greater than that available under the
Small Grains Crop Provisions.
1. To be eligible for coverage under this option you must
provide us a copy of your malting barley contract by the acreage
reporting date. Only production or acreage under contract is covered
by this option (B). The contract must be in place and effective
before the acreage reporting date.
2. Your malting barley production guarantee per acre will be the
lesser of:
(a) The production guarantee for feed barley for acreage planted
to approved malting varieties calculated in accordance with the
Small Grains Crop Provisions and APH regulations; or
(b) The number of bushels obtained by:
(1) Dividing the number of bushels of contracted production by
the number of acres planted to approved malting varieties in the
current crop year; and
(2) Multiplying the result by the percentage for the coverage
level you elected for barley covered under the Small Grains Crop
Provisions.
3. The additional value price per bushel will not exceed 200% of
the maximum additional value price shown on the Special Provisions
and will be further limited to:
(a) The difference between the maximum price election available
for feed barley under the Small Grains Crop Provisions and the
established sale price contained in the malting barley contract for
production that meets the quality standards required by such
contract (without regard to discounts or incentives) if the sale
price is a fixed dollar amount established on or before the acreage
reporting date; or
(b) The premium amount per bushel contained in the malting
barley contract for production that meets the quality specifications
required by such contract (without regard to discounts or
incentives) if the sale price is based on a future market price for
feed barley plus a premium amount for malting barley production.
4. The amount of production to count against your malting barley
production guarantee will include all:
(a) Appraised production determined in accordance with
subsection 11(c)(1) (i) and (ii) of the Small Grains Crop
Provisions;
(b) Either harvested production and potential unharvested
production that meets, or would if properly handled meet, the
minimum acceptance standards contained in the malting barley
contract for protein, plump kernels, thin kernels, germination,
blight damage, mold injury or damage, sprout damage, frost injury or
damage, and mycotoxins or other substances or conditions identified
by the Food and Drug Administration or other public health
organization of the United States as being injurious to human or
animal health, or the following quality standards as applicable:
[[Page 63461]]
----------------------------------------------------------------------------------------------------------------
Six-rowed malting barley Two-rowed malting barley
----------------------------------------------------------------------------------------------------------------
Protein (dry basis)................... 14.0% maximum...................... 14.0% maximum.
Plump kernels......................... 65.0% minimum...................... 75.0% minimum.
Thin kernels.......................... 10.0% maximum...................... 10.0% maximum.
Germination........................... 95.0% minimum...................... 95.0% minimum.
Blight damaged........................ 4.0% maximum....................... 4.0% maximum.
Injured by mold....................... 5.0% maximum....................... 5.0% maximum.
Mold damaged.......................... 0.4% maximum....................... 0.4% maximum.
Sprout damaged........................ 1.0% maximum....................... 1.0% maximum.
Injured by frost...................... 5.0% maximum....................... 5.0% maximum.
Frost damaged......................... 0.4% maximum....................... 0.4% maximum.
----------------------------------------------------------------------------------------------------------------
(c) Harvested production that does not meet the minimum
acceptance standards for the factors listed in subsection 4(b) of
this option, but that is accepted by a buyer for malting purposes.
(d) No reduction in value will be allowed for moisture content;
damage due to uninsured causes; costs or reduced value associated
with drying, handling, processing, or quality factors other than
those contained in subsection (b) of this section; or any other
costs associated with normal handling and marketing of malting
barley. All grade and quality determinations must be based on the
results of objective tests. No indemnity will be paid for any loss
established by subjective tests. We may obtain one or more samples
of the insured crop and have tests performed at an official grain
inspection location established under the Grain Standards Act to
verify the result of any test. In the event of a conflict in the
test results, our results will be used to determine the amount of
production to count. If failure to meet the quality standards is due
to insurable causes, the quantity of such production may be reduced
for quality deficiencies by:
(1) Adding the maximum barley price election under the Small
Grains Crop Provisions and the maximum additional value price;
(2) Dividing this sum into the value per bushel of the damaged
production; and
(3) Multiplying the resulting factor (not to exceed 1.0) by the
number of bushels of damaged production.
5. No claim under this option may be settled until the earlier
of :
(a) The date final disposition of production from all acreage
planted to approved malting barley varieties is completed; or
(b) May 31 of the calendar year immediately following the
calendar year in which the insured malting barley is normally
harvested. Production to count for malting barley that has not been
sold by this May 31 date will include all production established in
accordance with subsection 4(b) of this option.
The limitations specified in subsections 5 (a) and (b) will not
apply when all production from the insured malting barley unit
grades U.S. No. 4 or worse in accordance with the grades and grade
requirements for the subclasses Six-rowed barley, Two-rowed barley,
and the class Barley in accordance with the Official United States
Standards for Grain.
6. In the event of loss or damage covered by this policy, we
will settle your claim by:
(a) Multiplying the insured acreage by the malting barley
production guarantee per acre;
(b) Multiplying the result by your elected additional value
price per bushel;
(c) Multiplying the number of bushels of production to count by
your elected additional value price per bushel; and
(d) Subtracting the result of step (c) from the result of step
(b).
7. For example, assume you insure two units of barley under the
Small Grains Crop Provisions in which you have a 100% share and that
are planted to approved malting varieties. Assume that unit contains
40 acres. Further assume that your production guarantee under the
Small Grains Crop Provisions is 30 bushels per acre or a total of
2,400 bushels. Your malting barley unit production guarantee is
limited to 2,100 bushels by subsection 2(b). A loss causes the total
production to count under the basic barley policy to drop to 1,000
bushels, none of which meet the minimum acceptance standards covered
under this option. The indemnity for the malting barley unit would
be based on a combined production and quality loss of 2,100 bushels.
The indemnity would be paid at the additional value price per
bushel. If the price were $0.60 per bushel, the indemnity for the
malting barley unit would be $1,260.00 (2,100 x $0.60). The basic
loss is paid under the Small Grains Crop Provisions for feed barley.
Done in Washington, D.C., on December 5, 1995.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 95-30085 Filed 12-6-95; 4:03 pm]
BILLING CODE 3410-FA-P
