[Federal Register Volume 63, Number 248 (Monday, December 28, 1998)]
[Notices]
[Pages 71426-71441]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-34250]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Revenue Assurance
ACTION: Notice of availability.
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SUMMARY: In accordance with section 508(h) of the Federal Crop
Insurance Act (Act), the Federal Crop Insurance Corporation (FCIC)
Board of Directors (Board) approves for reinsurance and subsidy the
insurance of corn and soybeans in select states and counties under the
Revenue Assurance (RA) plan of insurance for the 1999 crop year. This
notice is intended to inform eligible producers and the private
insurance industry of the areas of availability, the RA coverage
changes for corn and soybeans, and provide its terms and conditions.
FOR FURTHER INFORMATION CONTACT: Tim Hoffmann, Director, Product
Development Division, Federal Crop Insurance Corporation, United States
Department of Agriculture, 9435 Holmes Road, Kansas City, Missouri,
64131, telephone (816) 926-7387.
SUPPLEMENTARY INFORMATION: Section 508(h) of the Act allows for the
submission of a policy to FCIC's Board and authorizes the Board to
review and, if the Board finds that the interests of producers are
adequately protected and that any premiums charged to the producers are
actuarially appropriate, approve the policy for reinsurance and subsidy
in accordance with section 508(e) of the Act.
In accordance with the Act, the Board approved a program of
insurance known as ``Revenue Assurance'' originally submitted by Farm
Bureau Mutual Insurance Company of Iowa as a pilot project covering
corn and soybeans for the 1997 and 1998 crop years.
The RA program was approved for reinsurance and premium subsidy,
including subsidy for administrative and operating expenses. RA was
designed to protect a producer's revenue whenever low prices or low
yields, or a combination of both, causes harvest revenue to fall below
a guaranteed level. Under RA, a producer selects a per-acre revenue
amount that cannot be less than 65 percent or more than 75 percent of
their units' expected revenue.
The RA policy provides coverage on basic units, optional units,
enterprise units, and whole-farm units. For the 1997 and 1998 crop
years, the policy indemnity is finalized when the county harvest price
and the producer's actual production are determined. This determination
will typically take place in early December. The crop prices were
established on a county basis.
For the 1999 crop year, the RA program was expanded for corn and
soybeans into Illinois, South Dakota, and Minnesota. Beginning with the
1999 crop year, producers can select a coverage level percentage up to
80 percent for whole-farm units, and a fall harvest price option that
uses the greater of the projected harvest price or the fall harvest
price in determining the revenue guarantee. The RA program will now use
the Chicago Board of Trade futures for corn and soybean prices rather
than crop county prices in determining the revenue guarantee, and use
actual production history as the base for determining RA premium rates.
FCIC herewith gives notice of the above-stated changes for the 1999
crop
[[Page 71427]]
year for RA corn and soybeans for use by private insurance companies.
The RA underwriting rules, rate factors, and forms for corn and
soybeans will be released electronically to all reinsured companies
through FCIC's Reporting Organization Server. FCIC will also make
available the terms and conditions of the RA reinsurance agreement.
Requests for this information should be sent to Heyward Baker,
Director, Reinsurance Services Division, Federal Crop Insurance
Corporation, 1400 Independence Avenue, S.W., Stop 0804, Room 6727-S,
Washington, D.C., 20250-0804.
Notice: The Basic Provisions and Crop Provisions for the 1999 RA
corn and soybean program of insurance are as follows.
Revenue Assurance Insurance Policy
(This is a continuous policy. Refer to section 3.)
This policy is reinsured by the Federal Crop Insurance Corporation
(FCIC) under the authority of section 508(h) of the Federal Crop
Insurance Act, as amended (7 U.S.C. 1508(h)). The provisions of the
policy may not be waived or varied in any way by the crop insurance
agent or any other agent or employee of the company. In the event the
company cannot pay a loss, the claim will be settled in accordance with
the provisions of the policy and paid by FCIC. No state guarantee fund
will be liable to pay the loss.
Throughout the policy, ``you'' and ``your'' refer to the named
insured shown on the accepted application and ``we,'' ``us,'' and
``our'' refer to the company. Unless the context indicates otherwise,
use of the plural form of a word includes the singular and use of the
singular form of the word includes the plural.
Agreement to Insure: In return for the payment of the premium, and
subject to all of the provisions of this policy, the company agrees
with the insured to provide the insurance as stated in the policy. If a
conflict exists among the policy provisions, the order of priority is
as follows: (1) the Special Provisions; (2) the Crop Provisions; and
(3) these Basic Provisions with (1) controlling (2), etc.
Basic Provisions
Terms and Conditions
1. Definitions
Abandon. Failure to continue to care for the crop, providing care
so insignificant as to provide no benefit to the crop, or failure to
harvest in a timely manner, unless an insured cause of loss prevents
you from properly caring for or harvesting the crop or causes damage to
it to the extent that most producers of the crop on acreage with
similar characteristics in the area would not normally further care for
or harvest it.
Acreage report. A report required by section 7 of these Basic
Provisions that contains, in addition to other required information,
your report of your share of all acreage of an insured crop in the
county, whether insurable or not insurable.
Acreage reporting date. The date contained in the Special
Provisions or as provided in section 7 by which you are required to
submit your acreage report.
Act. The Federal Crop Insurance Act, (7 U.S.C. 1501 et seq.).
Actuarial documents. The material for the crop year that is
available for public inspection in your agent's office, and which shows
the coverage level percent, premium factors, types, practices,
insurable acreage, and other related information regarding crop
insurance in the county.
Administrative fee. An amount you must pay for coverage for each
crop year as specified in section 8.
Agricultural commodity. All insurable crops and other fruit,
vegetable or nut crops produced for human or animal consumption.
Another use, notice of. The written notice required when you wish
to put acreage to another use (see section 15).
Application. The form required to be completed by you and accepted
by us before insurance coverage will commence. This form must be
completed and filed in your agent's office not later than the sales
closing date of the initial insurance year for each crop for which
insurance coverage is requested. If cancellation or termination of
insurance coverage occurs for any reason, including but not limited to
indebtedness, suspension, debarment, disqualification, cancellation by
you or us, or violation of the controlled substance provisions of the
Food Security Act of 1985, a new application must be filed for the
crop. Insurance coverage will not be provided if you are ineligible
under the contract or under any Federal statute or regulation.
Approved yield. The yield determined in accordance with 7 CFR part
400, subpart G.
Assignment of indemnity. A transfer of policy rights, made on our
form, and effective when approved by us. It is the arrangement whereby
you assign your right to an indemnity payment to any party of your
choice for the crop year.
Base premium rate. The premium rate for the risk of a revenue loss.
Cancellation date. The calendar date specified in the Crop
Provisions on which coverage for the crop will automatically renew
unless canceled in writing by either you or us, or terminated in
accordance with the policy terms.
Claim for indemnity. A claim made on our form by you for damage or
loss to an insured crop and submitted to us not later than 60 days
after the end of the insurance period (see section 15).
Consent. Approval in writing by us allowing you to take a specific
action.
Contract. (See definition of ``policy'').
Contract change date. The calendar date by which we make any policy
changes available for inspection in the agent's office (see section 5).
County. Any county, parish, or other political subdivision of a
state shown on your accepted application, including acreage in a field
that extends into an adjoining county if the county boundary is not
readily discernible.
Coverage. The insurance provided by this policy, against insured
loss of revenue, by unit as shown on your summary of coverage.
Coverage begins, date. The calendar date insurance begins on the
insured crop, as contained in the Crop Provisions, or the date planting
begins on the unit (see section 12 of these Basic Provisions for
specific provisions relating to prevented planting).
Coverage level percent. The percent, expressed in decimals (.xxxx),
determined by dividing the per-acre revenue guarantee (see section 1)
by the expected per-acre revenue (see section 1) rounded to hundredths
for enterprise or whole-farm units.
Crop premium per acre. Your per acre revenue guarantee multiplied
by a base rate.
Crop Provisions. The part of the policy that contains the specific
provisions of insurance for each insured crop.
Crop year. The period within which the insured crop is normally
grown, regardless of whether or not it is actually grown, and
designated by the calendar year in which the insured crop is normally
harvested.
Damage. Injury, deterioration, or loss of revenue of the insured
crop due to insured or uninsured causes.
Damage, notice of. A written notice required to be filed in your
agent's office whenever you initially discover the insured crop has
been damaged to the extent that a loss is probable (see section 15).
Days. Calendar days.
Deductible. The amount determined by subtracting the coverage level
percent you choose from 100 percent.
[[Page 71428]]
For example, if you elected a 65 percent coverage level, your
deductible would be 35 percent (100%-65% = 35%).
Delinquent account. Any account you have with us in which premiums,
administrative fees, and interest on those amounts is not paid by the
termination date specified in the Crop Provisions, or any other amounts
due us, such as indemnities found not to have been earned, which are
not paid within 30 days of our mailing or other delivery of
notification to you of the amount due.
Earliest planting date. The earliest date established for planting
the insured crop (see Special Provisions and section 14).
End of insurance period, date of. The date upon which your crop
insurance coverage ceases for the crop year (see Crop Provisions and
section 12).
Expected per-acre revenue. The approved yield times the projected
harvest price.
FCIC. The Federal Crop Insurance Corporation, a wholly owned
government corporation within USDA.
Field. All acreage of tillable land within a natural or artificial
boundary (e.g., roads, waterways, fences, etc.).
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 per-acre revenue guarantee.
FSA. The Farm Service Agency, an agency of the USDA, or a successor
agency.
FSA Farm Serial Number. The number assigned to the farm by the
local FSA office.
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 per-acre revenue
guarantee, and are those recognized by the Cooperative State Research,
Education, and Extension Service as compatible with agronomic and
weather conditions in the county.
Insured. The named person as shown on the application accepted by
us. This term does not extend to any other person having a share or
interest in the crop (for example, a partnership, landlord, or any
other person) unless specifically indicated on the accepted
application.
Insured crop. The crop for which coverage is available under these
Basic Provisions and the applicable Crop Provisions as shown on the
application accepted by us.
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
per-acre revenue guarantee on the irrigated acreage planted to the
insured crop.
Late planted. Acreage initially planted to the insured crop after
the final planting date.
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, unless otherwise specified in the Crop Provisions
or Special Provisions.
Loss, notice of. The notice required to be given by you not later
than 72 hours after certain occurrences or 15 days after the end of the
insurance period, whichever is earlier (see section 15).
MPCI. Multiple peril crop insurance program, a program of insurance
offered under the Act and implemented in 7 CFR chapter IV.
Negligence. The failure to use such care as a reasonably prudent
and careful person would use under similar circumstances.
Per-acre revenue guarantee. The coverage level percent times your
approved yield, times the projected harvest price. If you choose the
fall harvest price option, the per-acre revenue guarantee equals the
coverage level percent, times the approved yield, times the greater of
the projected harvest price or the fall harvest price. For basic and
optional units, the per-acre revenue guarantee may vary by unit. For an
enterprise unit, the per-acre revenue guarantee will be the same for
all insured acres of the crop in the county. For the whole farm unit,
the per-acre revenue guarantee will be the same for all insured acres
in the county.
Person. An individual, partnership, association, corporation,
estate, trust, or other legal entity, and wherever applicable, a State
or a political subdivision or agency of a State. ``Person'' does not
include the United States Government or any agency thereof.
Planted acreage. Land in which seed has been placed, 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.
Policy. The agreement between you and us consisting of the accepted
application, these Basic Provisions, the Crop Provisions, the Special
Provisions, other applicable endorsements or options, the actuarial
documents for the insured crop, and the applicable regulations
published in 7 CFR chapter IV.
Practical to replant. Our determination, after loss or damage to
the insured crop, based on all factors, including, but not limited to
moisture availability, marketing window, condition of the field, and
time to crop maturity, 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, or the final planting date if no
late planting period is applicable, unless replanting is generally
occurring in the area. Unavailability of seed will not be considered a
valid reason for failure to replant.
Premium billing date. The earliest date upon which you will be
billed for insurance coverage based on your acreage report. The premium
billing date is contained in the Special Provisions.
Premium calculator. A computer program that determines your per-
acre premium based on your approved yields, per-acre revenue guarantee,
coverage level percent, projected harvest price, unit options, and
other factors.
Prevented planting. Failure 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. You may also be eligible
for a prevented planting payment if you failed to plant the insured
crop with the proper equipment within the late planting period. You
must have been prevented from planting the insured crop due to an
insured cause of loss that is general in the surrounding area and that
prevents other producers from planting acreage with similar
characteristics.
Production report. A written record showing your annual production
and used by us to determine your yield for insurance purposes (see
section 4). The report contains yield information for previous years,
including planted acreage and harvested production. This report must be
supported by written verifiable records from a warehouseman or buyer of
the insured crop, or by measurement of farm stored production, or by
other records of production approved by us on an individual case basis.
Replanting. Performing the cultural practices necessary to prepare
the land to replace the seed of the damaged or destroyed insured crop
and then
[[Page 71429]]
replacing the seed of the same crop in the insured acreage with the
expectation of producing at least the yield used to determine the per-
acre revenue guarantee.
Representative sample. Portions of the insured crop that must
remain in the field for examination and review by our loss adjuster
when making a crop appraisal, as specified in the Crop Provisions. In
certain instances we may allow you to harvest the crop and require only
that samples of the crop residue be left in the field.
Revenue guarantee. The per-acre revenue guarantee times the number
of insurable acres in the unit, and times your respective share (see
definition of per-acre revenue guarantee and section 2 of the Crop
Provisions).
Sales closing date. A date contained in the Special Provisions by
which an application must be filed. The last date by which you may
change your crop insurance coverage for a crop year.
Section (for the purposes of unit structure). A unit of measure
under a rectangular survey system describing a tract of land usually
one mile square and usually containing approximately 640 acres.
Share. Your percentage of interest in the insured crop as an owner,
operator, or tenant at the time insurance attaches. However, only for
the purpose of determining the amount of indemnity, your share will not
exceed your share at the earlier of the time of loss, or the beginning
of harvest.
Special Provisions. The part of the policy that contains specific
provisions of insurance for each insured crop that may vary by
geographic area.
State. The state shown on your accepted application.
Substantial beneficial interest. An interest held by any person of
at least 10 percent in the applicant or insured.
Summary of coverage. Our statement to you, based upon your acreage
report, specifying the insured crop and the revenue guarantee provided
by unit.
Tenant. A person who rents land from another person for a share of
the crop or a share of the proceeds of the crop (see the definition of
``share'').
Termination date. The calendar date contained in the Crop
Provisions upon which your insurance ceases to be in effect because of
nonpayment of any amount due us under the policy, including premium.
Timely planted. Planted on or before the final planting date
designated in the Special Provisions for the insured crop in the
county.
Unit.
(a) Basic unit--A basic unit established in accordance with section
2(a).
(b) Optional unit--A unit established from basic units in
accordance with section 2(b).
(c) Enterprise unit--A unit established from basic units or
optional units in accordance with section 2(c).
(d) Whole-farm unit--A unit established from enterprise units in
accordance with section 2(d).
USDA. United States Department of Agriculture.
Void. When the policy is considered not to have existed for a crop
year as a result of concealment, fraud or misrepresentation (see
section 27).
2. Unit Structure
(a) Basic unit--All insurable acreage of the insured crop in the
county on the date coverage begins for the crop year:
(1) In which you have a 100 percent share; or
(2) Which is owned by one person and operated by another person on
a share basis. (Example: If, in addition to the land you own, you rent
land from five landlords, three on a crop share basis and two on a cash
basis, you would be entitled to four units, one for each crop share
lease and one that combines the two cash leases and the land you own.)
Land which would otherwise be one unit may, in certain instances, be
divided according to guidelines contained in this section and in the
applicable Crop Provisions.
(b) Optional unit--Unless limited by the Crop Provisions or Special
Provisions, a basic unit as defined in section 2(a) of these Basic
Provisions may be divided into optional units if, for each optional
unit:
(1) You meet the following:
(i) You must plant the crop in a manner that results in a clear and
discernible break in the planting pattern at the boundaries of each
optional unit;
(ii) All optional units you select for the crop year are identified
on the acreage report for that crop year (Units will be determined when
the acreage is reported but may be adjusted or combined to reflect the
actual unit structure when adjusting a loss. No further unit division
may be made after the acreage reporting date for any reason);
(iii) You have records, that are acceptable to us, of planted
acreage and the production from each optional unit for at least the
last crop year used to determine your revenue guarantee; and
(iv) You have records of marketed or 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
optional unit is kept separate until loss adjustment is completed by
us.
(2) Each optional unit must also meet one or more of the following,
unless otherwise specified in the Crop Provisions:
(i) Optional units may be established if each optional unit is
located in a separate section. In the absence of sections, we may
consider parcels of land legally identified by other methods of measure
such as Spanish grants, as the equivalents of sections for unit
purposes. In areas which have not been surveyed using sections, section
equivalents or in areas where boundaries are not readily discernible,
each optional unit must be located in a separate FSA farm serial
number; and
(ii) 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 and non-irrigated acreage. 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 your revenue guarantee is based, except
the corners of a field in which a center-pivot irrigation system is
used may be considered as irrigated acreage 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. In this case, production from
both practices will be used to determine your approved yield.
(3) If you do not comply fully with the provisions in this section,
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 by us to be inadvertent, and the optional
units are combined into a basic unit, that portion of the additional
premium paid for the optional units that have been combined will be
refunded to you for the units combined.
(c) Enterprise unit--All insurable acreage of the insured crop in
the county in which you have a share on the date coverage begins for
the crop year. An enterprise unit must consist of:
(1) One or more basic units of the same insured crop that are
located in two or more separate sections, section
[[Page 71430]]
equivalents, or FSA farm serial number; or
(2) Two or more optional units of the same insured crop established
by separate sections, section equivalents, or FSA farm serial numbers.
(d) Whole-farm unit--All insurable acreage of the insurable crops
in the county in which you have a share on the date coverage begins for
each crop for the crop year. This unit is established from enterprise
units as defined in section 2(c). The insurable acreage must qualify
for at least two enterprise units under this section, and at least 10
percent of the total liability must be in each crop.
(e) Exclusivity Between Units--If you select whole-farm unit
coverage, you cannot select any other unit structure. However, you may
select an enterprise unit for one crop and basic or optional unit
coverage for other crops.
(f) Selection of unit structure--You may elect an enterprise unit
or a whole-farm unit subject to the following:
(1) You must make such election by the sales closing date for the
insured crops and report such unit structure to us in writing. Your
unit selection will remain in effect from year to year unless you
notify us in writing by the sales closing date for the crop year for
which you wish to change this election. These units may not be further
divided. If you select and qualify for an enterprise or whole-farm
unit, you will qualify for a premium discount. If you do not qualify
for enterprise or whole-farm units when the acreage is reported, we
will assign the basic unit structure.
(2) For a whole-farm unit:
(i) You must report on your acreage report the acreage for each
optional or basic unit for each crop produced in the county that
comprises the whole-farm unit; and
(ii) Although you may insure all of your crops under a whole-farm
unit, you will be required to pay separate applicable administrative
fees for each crop included in the whole-farm unit.
(3) All applicable unit structures must be stated on the acreage
report for each crop year.
3. Life of Policy, Cancellation, and Termination
(a) This is a continuous policy and will remain in effect for each
crop year following the acceptance of the original application until
canceled by you in accordance with the terms of the policy or
terminated by operation of the terms of the policy, or by us.
(b) Your application for insurance must contain all the information
required by us to insure the crop. Applications that do not contain all
social security numbers and employer identification numbers, as
applicable (except as stated herein) coverage level percent, crop,
type, variety, or class, plan of insurance, and any other material
information required to insure the crop, are not acceptable. If a
person with a substantial beneficial interest in the insured crop
refuses to provide a social security number or employer identification
number, the amount of coverage available under the policy will be
reduced proportionately by that person's share of the crop.
(c) After acceptance of the application, you may not cancel this
policy for the initial crop year. Thereafter, the policy will continue
in force for each succeeding crop year unless canceled or terminated as
provided below.
(d) Either you or we may cancel this policy after the initial crop
year by providing written notice to the other on or before the
cancellation date shown in the Crop Provisions.
(e) If any amount due, including administrative fees or premium, is
not paid or an acceptable arrangement for payment is not made on or
before the termination date for the crop on which the amount is due,
you will be determined to be ineligible to participate in any crop
insurance program authorized under the Act in accordance with 7 CFR
part 400, subpart U.
(1) For a policy with unpaid administrative fees or premium, the
policy will terminate effective on the termination date immediately
subsequent to the billing date for the crop year;
(2) For a policy with other amounts due, the policy will terminate
effective on the termination date immediately after the account becomes
delinquent;
(3) Ineligibility will be effective as of the date that the policy
was terminated for the crop for which you failed to pay an amount owed
and for all other insured crops with coincidental termination dates;
(4) All other policies that are issued by us under the authority of
the Act will also terminate as of the next termination date contained
in the applicable policy;
(5) If you are ineligible, you may not obtain any crop insurance
under the Act until payment is made, you execute an agreement to repay
the debt and make the payments in accordance with the agreement, or you
file a petition to have your debts discharged in bankruptcy;
(6) If you execute an agreement to repay the debt and fail to
timely make any scheduled payment, you will be ineligible for crop
insurance effective on the date the payment was due until the debt is
paid in full or you file a petition to discharge the debt in bankruptcy
and subsequently obtain discharge of the amounts due. Dismissal of the
bankruptcy petition before discharge will void all policies in effect
retroactive to the date you were originally determined ineligible to
participate and all premiums paid will be refunded;
(7) Once the policy is terminated, the policy cannot be reinstated
for the current crop year unless the termination was in error;
(8) After you again become eligible for crop insurance, if you want
to obtain coverage for your crops, you must reapply on or before the
sales closing date for the crop (Since applications for crop insurance
cannot be accepted after the sales closing date, if you make any
payments after the sales closing date, you cannot apply for insurance
until the next crop year); and
(9) If we deduct the amount due us from an indemnity, the date of
payment for the purpose of this section will be the date you sign the
properly executed claim for indemnity.
(10) For example, if crop A, with a termination date of October 31,
1998, and crop B, with a termination date of March 15, 1999, are
insured and you do not pay the premium for crop A by the termination
date, you are ineligible for crop insurance as of October 31, 1998, and
crop A's policy is terminated on that date. Crop B's policy is
terminated as of March 15, 1999. If you enter an agreement to repay the
debt on April 25, 1999, you can apply for insurance for crop A by the
October 31, 1999, sales closing date and crop B by March 15, 2000,
sales closing date. If you fail to make a scheduled payment on November
1, 1999, you will be ineligible for crop insurance effective on
November 1, 1999, and you will not be eligible unless the debt is paid
in full or you file a petition to have the debt discharged in
bankruptcy and subsequently receive discharge.
(f) If you die, disappear, or are judicially declared incompetent,
or if you are an entity other than an individual and such entity is
dissolved, the policy will terminate as of the date of death, judicial
declaration, or dissolution. If such event occurs after coverage begins
for any crop year, the policy will continue in force through the crop
year and terminate at the end of the insurance period and any indemnity
will be paid to the person or persons determined to be beneficially
entitled to the indemnity. The premium will be deducted from the
indemnity or collected from the estate. Death of a partner in a
partnership will dissolve the partnership unless the partnership
[[Page 71431]]
agreement provides otherwise. If two or more persons having a joint
interest are insured jointly, death of one of the persons will dissolve
the joint entity.
(g) We may terminate your policy if no premium is earned for 3
consecutive years.
(h) The cancellation and termination dates are contained in the
Crop Provisions.
(i) When obtaining coverage, you must provide information regarding
crop insurance coverage on any crop previously obtained from an
approved insurance provider, including the date such insurance was
obtained and the amount of the administrative fee.
(j) You are not eligible to participate in the Revenue Assurance
program if you have elected the MPCI Catastrophic Risk Protection
Endorsement except in the following instance: If you execute a High-
Risk Land Exclusion Option for a Revenue Assurance Policy, you may
elect to insure the ``high-risk land'' under an MPCI Catastrophic Risk
Protection Endorsement provided that the Catastrophic Risk Protection
Endorsement is obtained from us. If both policies are in force, the
acreage of the crop covered under the Revenue Assurance policy and the
acreage covered under an MPCI Catastrophic Risk Protection Endorsement
will be considered as separate crops for insurance purposes, including
the payment of administrative fees.
4. Insurance Coverages
(a) Your revenue guarantee, coverage level percent, approved
yields, per-acre revenue guarantee, and projected harvest price will be
shown on your summary of coverage.
(b) You must select a coverage level percent by the sales closing
date. The maximum allowable coverage level percent is 75 (.7500 decimal
format) and the minimum allowable is 65 (.6500 decimal format) for
basic, optional and enterprise units. The maximum allowable coverage
level percent is 80 (.8000 decimal format) and the minimum allowable is
65 (.6500 decimal format) for whole-farm units.
(c) You may only select one coverage level percent that is
applicable for all insurable acreage of the crop. You may change your
coverage level percent for the following crop year by giving written
notice to us not later than the sales closing date for the insured
crop. If you do not select a new crop coverage level percent on or
before the sales closing date, we will assign the previous year's
coverage level percent or the nearest coverage level percent available.
(For example: If you selected a 65 percent coverage level for the
previous crop year and you do not select a new coverage level percent
for the current crop year, we will assign the 65 percent coverage level
for the current crop year if it is still available.)
(d) This policy is an alternative to the MPCI program and satisfies
the requirements of section 508(b)(7) of the Act.
(e) You must report production to us for the previous crop year by
the earlier of the acreage reporting date or 45 days after the
cancellation date unless otherwise stated in the Special Provisions:
(1) If you do not provide the required production report, we will
assign a yield for the previous crop year. The yield assigned by us
will not be more than 75 percent of the yield used by us to determine
your coverage for the previous crop year. The production report or
assigned yield will be used to compute your approved yield for the
purpose of determining your revenue guarantee for the current crop
year;
(2) If you have filed a claim for any crop year, the documents
signed by you which state the amount of production used to complete the
claim for indemnity will be the production report for that year unless
otherwise specified by FCIC;
(3) Production and acreage for the prior crop year must be reported
for each proposed optional unit by the production reporting date. If
you do not provide the information stated above, the optional units
will be combined into the basic unit.
(f) We may revise your revenue guarantee for any unit, and revise
any indemnity paid based on that revenue guarantee, if we find that
your production report under paragraph (e) of this section:
(1) Is not supported by written verifiable records in accordance
with the definition of production report; or
(2) Fails to accurately report actual production, acreage, or other
material information.
(g) Any person may sign any document relative to crop insurance
coverage on behalf of any other person covered by such a policy,
provided that the person has a properly executed power of attorney or
such other legally sufficient document authorizing such person to sign.
5. Contract Changes
(a) We may change the terms of your coverage under this policy from
year to year.
(b) Any changes in policy provisions, prices, available coverage
level percents, premium rates and program dates will be provided by us
to your crop insurance agent not later than the contract change date
contained in the Crop Provisions. You may view the documents or request
copies from your crop insurance agent.
(c) You will be notified, in writing, of changes to the Basic
Provisions, Crop Provisions, and Special Provisions not later than 30
days prior to the cancellation date for the insured crop. Acceptance of
changes will be conclusively presumed in the absence of notice from you
to change or cancel your insurance coverage.
6. Liberalization
If we adopt any revisions that broaden the coverage under this
policy subsequent to the contract change date without additional
premium, the broadened coverage will apply.
7. Report of Acreage
(a) An annual acreage report must be submitted to us on our form
for each insured crop in the county on or before the acreage reporting
date contained in the Special Provisions, except as follows:
(1) If you insure multiple crops with us that have final planting
dates on or after August 15 but before December 31, you must submit an
acreage report for all such crops on or before the latest applicable
acreage reporting date for such crops; and
(2) If you insure multiple crops with us that have final planting
dates on or after December 31 but before August 15, you must submit an
acreage report for all such crops on or before the latest applicable
acreage reporting date for such crops.
(3) Notwithstanding the provisions in sections 7(a)(1) and (2):
(i) If the Special Provisions designate separate planting periods
for a crop, you must submit an acreage report for each planting period
on or before the acreage reporting date contained in the Special
Provisions for the planting period; and
(ii) If planting of the insured crop 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:
(A) The acreage reporting date contained in the Special Provisions;
(B) The date determined in accordance with sections 7(a)(1) or (2);
or (C) Five days after the end of the late planting period for the
insured crop, if applicable.
(b) If you do not have a share in an insured crop in the county for
the crop year, you must submit an acreage report on or before the
acreage reporting date, so indicating.
[[Page 71432]]
(c) Your acreage report must include the following information, if
applicable:
(1) All acreage of the crop in the county (insurable and not
insurable) in which you have a share;
(2) Your share at the time coverage begins;
(3) The practice;
(4) The type; and
(5) The date the insured crop was planted.
(d) Because incorrect reporting on the acreage report may have the
effect of changing your premium and any indemnity that may be due, you
may not revise this report after the acreage reporting date without our
consent.
(e) We may elect to determine all premiums and indemnities based on
the information you submit on the acreage report or upon the factual
circumstances we determine to have existed, subject to the provisions
contained in section 7(g).
(f) If you do not submit an acreage report by the acreage reporting
date, or if you fail to report all units, we may elect to determine by
unit the insurable crop acreage, share, type and practice, or to deny
liability on such units. If we deny liability for the unreported units,
your share of any production from the unreported units will be
allocated, for loss purposes only, as production to count to the
reported units in proportion to the liability on each reported unit.
However, such production will not be allocated to prevented planting
acreage or otherwise affect any prevented planting payment.
(g) If the information reported by you on the acreage report for
share, acreage, practice, type or other material information is
inconsistent with the information that is determined to actually exist
for a unit and results in:
(1) A lower liability than the actual liability determined, the
revenue guarantee on the unit will be reduced to an amount that is
consistent with the reported information. In the event that insurable
acreage is under-reported for any unit, all production or value from
insurable acreage in that unit will be considered production or value
to count in determining the indemnity; and
(2) A higher liability than the actual liability determined, the
information contained in the acreage report will be revised to be
consistent with the correct information. If we discover that you have
incorrectly reported any information on the acreage report for any crop
year, you may be required to provide documentation in subsequent crop
years that substantiates your report of acreage for those crop years,
including, but not limited to, an acreage measurement service at your
own expense.
(h) Errors in reporting units may be corrected by us at the time of
adjusting a loss to reduce our liability and to conform to applicable
unit division guidelines.
8. Annual Premium and Administrative Fees
(a) The annual premium is earned and payable at the time coverage
begins. You will be billed for premium due not earlier than the premium
billing date specified in the Special Provisions. The premium due, plus
any accrued interest, will be considered delinquent if it is not paid
on or before the termination date specified in the Crop Provisions.
(b) Any amount you owe us related to any crop insured with us under
the authority of the Act will be deducted from any prevented planting
payment or indemnity due you for any crop insured with us under the
authority of the Act.
(c) Your annual premium amount is determined by unit by multiplying
the crop premium per acre, times the insured crop acreage, times any
premium adjustment factor that may apply, times your respective share
at the time coverage begins, and less producer premium subsidy.
(d) The producer premium subsidy for a unit equals the crop premium
per acre at the 65 percent coverage level, times the insured crop
acreage, times 0.417, times your respective share. The producer premium
subsidy cannot exceed that available had you purchased a comparable
MPCI policy.
(e) In addition to the premium charged:
(1) You must pay an administrative fee of $20 per crop for each
crop year in which crop insurance coverage remains in effect;
(2) The administrative fee must be paid no later than the time that
premium is due; and
(3) Payment of an administrative fee will not be required if you
file a bona fide zero acreage report on or before the acreage reporting
date for the crop. If you falsely file a zero acreage report, you may
be subject to criminal and administrative sanctions.
(4) The administrative fee is not subject to any limits, and may
not be waived.
(5) Failure to pay the administrative fees when due may make you
ineligible for certain other USDA benefits.
9. Insured Crop
(a) The insured crop will be that shown on your accepted
application and as specified in the Crop Provisions or Special
Provisions and must be grown on insurable acreage.
(b) A crop which will NOT be insured will include, but will not be
limited to, any crop:
(1) If the farming practices carried out are not in accordance with
the farming practices for which the premium rates or revenue guarantees
have been established;
(2) Of a type, class or variety established as not adapted to the
area or excluded by the policy provisions;
(3) That is a volunteer crop;
(4) That is a second crop following the same crop (insured or not
insured) harvested in the same crop year unless specifically permitted
by the Crop Provisions or the Special Provisions;
(5) That is planted for the development or production of hybrid
seed or for experimental purposes, unless permitted by the Crop
Provisions; or
(6) That is used solely for wildlife protection or management. If
the lease states that specific acreage must remain unharvested, only
that acreage is uninsurable. If the lease specifies that a percentage
of the crop must be left unharvested, your share will be reduced by
such percentage.
10. Insurable Acreage
(a) Acreage planted to the insured crop in which you have a share
is insurable except acreage:
(1) That has not been planted and harvested within one of the 3
previous crop years, unless:
(i) Such acreage was not planted:
(A) To comply with any other USDA program;
(B) Because of crop rotation, (e.g., corn, soybean, alfalfa; and
the alfalfa remained for 4 years before the acreage was planted to corn
again);
(C) Due to an insurable cause of loss that prevented planting; or
(D) Because a perennial tree, vine, or bush crop was grown on the
acreage.
(ii) Such acreage was planted but was not harvested due to an
insurable cause of loss; or
(iii) The Crop Provisions specifically allow insurance for such
acreage.
(2) That has been strip-mined, unless an agricultural commodity
other than a cover, hay, or forage crop (except corn silage), has been
harvested from the acreage for at least five crop years after the
strip-mined land was reclaimed;
(3) On which the insured crop is damaged and it is practical to
replant the insured crop, but the insured crop is not replanted;
(4) That is interplanted, unless allowed by the Crop Provisions;
(5) That is otherwise restricted by the Crop Provisions or Special
Provisions; or
[[Page 71433]]
(6) That is planted in any manner other than as specified in the
policy provisions for the crop.
(b) If insurance is provided for an irrigated practice, you must
report as irrigated only that acreage for which you have adequate
facilities, and adequate water, or the reasonable expectation of
receiving adequate water at the time coverage begins, to carry out a
good irrigation practice. If you knew or had reason to know that your
water may be reduced before coverage begins, no reasonable expectation
exists.
(c) Notwithstanding the provisions in section 9(b)(1), if acreage
is irrigated and we do not provide a premium rate for an irrigated
practice, you may either report and insure the irrigated acreage as
``non-irrigated,'' or report the irrigated acreage as not insured.
(d) We may restrict the amount of acreage that we will insure to
the amount allowed under any acreage limitation program established by
the USDA if we notify you of that restriction prior to the sales
closing date.
11. Share Insured
(a) Insurance will attach only to the share of the person
completing the application and will not extend to any other person
having a share in the crop unless the application clearly states that:
(1) The insurance is requested for an entity such as a partnership
or a joint venture; or
(2) You as landlord will insure your tenant's share, or you as
tenant will insure your landlord's share. In this event, you must
provide evidence of the other party's approval (lease, power of
attorney, etc.). Such evidence will be retained by us. You also must
clearly set forth the percentage shares of each person on the acreage
report.
(b) We may consider any acreage or interest reported by or for your
spouse, child or any member of your household to be included in your
share.
(c) Acreage rented for a percentage of the crop, or a lease
containing provisions for Both a minimum payment (such as a specified
amount of cash, bushels, pounds, etc.) And a crop share, will be
considered a crop share lease.
(d) Acreage rented for cash, or a lease containing provisions for
Either a minimum payment Or a crop share (such as a 50/50 share or
$100.00 per acre, whichever is greater), will be considered a cash
lease.
12. Insurance Period
(a) Except for prevented planting coverage (see section 18),
coverage begins on each unit or part of a unit at the later of:
(1) The date we accept your application (For the purposes of this
paragraph, the date of acceptance is the date that you submit a
properly executed application in accordance with section 3);
(2) The date the insured crop is planted; or
(3) The calendar date contained in the Crop Provisions for the
beginning of the insurance period.
(b) Coverage ends at the earliest of:
(1) Total destruction of the insured crop on the unit;
(2) Harvest of the unit;
(3) Final adjustment of a loss on a unit;
(4) The calendar date contained in the Crop Provisions for the end
of the insurance period;
(5) Abandonment of the crop on the unit; or
(6) As otherwise specified in the Crop Provisions.
13. Causes of Loss
The insurance provided is against only unavoidable loss of revenue
directly caused by specific causes of loss contained in the Crop
Provisions. All other causes of loss, including but not limited to the
following, are Not covered:
(a) Negligence, mismanagement, or wrongdoing by you, any member of
your family or household, your tenants, or employees;
(b) Failure to follow recognized good farming practices for the
insured crop;
(c) Water contained by any governmental, public, or private dam or
reservoir project;
(d) Failure or breakdown of irrigation equipment or facilities; or
(e) Failure to carry out a good irrigation practice for the insured
crop if applicable.
14. Replanting Payment
(a) If allowed by the Crop Provisions, a replanting payment may be
made on an insured crop replanted after we have given consent and the
acreage replanted is at least the lesser of 20 acres or 20 percent of
the insured planted acreage for the unit (as determined on the final
planting date or within the late planting period if a late planting
period is applicable). The 20 acres or 20 percent requirement is to be
applied for each crop in a whole-farm unit.
(b) No replanting payment will be made on acreage:
(1) On which our appraisal establishes that production will exceed
the level set by the Crop Provisions;
(2) Initially planted prior to the earliest planting date
established by the Special Provisions; or
(3) On which one replanting payment has already been allowed for
the crop year.
(c) The replanting payment per acre will be your actual cost for
replanting, but will not exceed the amount determined in accordance
with the Crop Provisions.
(d) No replanting payment will be paid if we determine it is not
practical to replant.
15. Duties In The Event of Damage or Loss
Your Duties:
(a) In case of damage to any insured crop you must:
(1) Protect the crop from further damage by providing sufficient
care;
(2) Give us notice within 72 hours of your initial discovery of
damage (but not later than 15 days after the end of the insurance
period), by unit, for each insured crop (we may accept a notice of loss
provided later than 72 hours after your initial discovery if we still
have the ability to accurately adjust the loss);
(3) Leave representative samples intact for each field of the
damaged unit as may be required by the Crop Provisions;
(4) Give us notice of your expected revenue loss not later than 45
days after the date the fall harvest price is released; and
(5) Cooperate with us in the investigation or settlement of the
claim, and, as often as we reasonably require:
(i) Show us the damaged crop;
(ii) Allow us to remove samples of the insured crop; and
(iii) Provide us with records and documents we request and permit
us to make copies.
(b) You must obtain consent from us before, and notify us after
you:
(1) Destroy any of the insured crop that is not harvested;
(2) Put the insured crop to an alternative use;
(3) Put the acreage to another use; or
(4) Abandon any portion of the insured crop. We will not give
consent for any of the actions in sections 15(b)(1) through (4) if it
is practical to replant the crop or until we have made an appraisal of
the potential production of the crop.
(c) In addition to complying with all other notice requirements,
you must submit a claim for indemnity declaring the amount of your loss
not later than 60 days after the end of the insurance period. This
claim must include all the information we require to settle the claim.
[[Page 71434]]
(d) Upon our request, you must:
(1) Provide a complete harvesting and marketing record of each
insured crop by unit including separate records showing the same
information for production from any acreage not insured; and
(2) Submit to examination under oath.
(e) You must establish the total production or value received for
the insured crop on the unit, that any loss of production or value
occurred during the insurance period, and that the loss of production
or value was directly caused by one or more of the insured causes
specified in the Crop Provisions.
(f) All notices required in this section that must be received by
us within 72 hours may be made by telephone or in person to your crop
insurance agent but must be confirmed in writing within 15 days.
Our Duties--
(a) If you have complied with all the policy provisions, we will
pay your loss within 30 days after:
(1) We reach agreement with you;
(2) Completion of arbitration or appeal proceedings; or
(3) The entry of a final judgment by a court of competent
jurisdiction.
(b) In the event we are unable to pay your loss within 30 days, we
will give you notice of our intentions within the 30-day period.
(c) We may defer the adjustment of a loss until the amount of loss
can be accurately determined. We will not pay for additional damage
resulting from your failure to provide sufficient care for the crop
during the deferral period.
(d) We recognize and apply the loss adjustment procedures
established or approved by FCIC.
16. Production Included In Determining Indemnities
(a) The total production to be counted for a unit will include all
production determined in accordance with the policy.
(b) The amount of production of any unharvested insured crop may be
determined on the basis of our field appraisals conducted after the end
of the insurance period.
(c) The amount of an indemnity that may be determined under the
applicable provisions of your crop policy may be reduced by an amount,
determined in accordance with the Crop Provisions or Special
Provisions, to reflect out-of-pocket expenses that were not incurred by
you as a result of not planting, caring for, or harvesting the crop.
Indemnities paid for acreage prevented from being planted will be based
on a reduced revenue guarantee as provided for in the crop policy and
will not be further reduced to reflect expenses not incurred.
(d) Appraised production will be used to calculate your claim if
you will not be harvesting the acreage. To determine your indemnity
based on appraised production, you must agree to notify us if you
harvest the crop and advise us of the production. If the acreage will
be harvested, harvested production will be used to determine any
indemnity due, unless otherwise specified in the policy.
17. Late Planting
Unless limited by the Crop Provisions, insurance will be provided
for acreage planted to the insured crop after the final planting date
in accordance with the following:
(a) The per-acre revenue guarantee for each acre planted to the
insured crop during the late planting period will be reduced by 1
percent per day for each day planted after the final planting date.
(b) Acreage planted after the late planting period (or after the
final planting date for crops that do not have a late planting period)
may be insured as follows:
(1) The per-acre revenue guarantee for each acre planted as
specified in this subsection will be determined by multiplying the per-
acre revenue guarantee that is provided for acreage of the insured crop
that is timely planted by the prevented planting coverage level percent
you elected, or that is contained in the Crop Provisions if you did not
elect a prevented planting coverage level percentage;
(2) Planting on such acreage must have been prevented by the final
planting date (or during the late planting period, if applicable) by an
insurable cause occurring within the insurance period for prevented
planting coverage; and
(3) All production from acreage as specified in this section will
be included as production to count for the unit.
(c) The premium amount for insurable acreage specified in this
section will be the same as that for timely planted acreage. If the
amount of premium you are required to pay (gross premium less our
subsidy) for such acreage exceeds the liability, coverage for those
acres will not be provided (no premium will be due and no indemnity
will be paid).
(d) Any acreage on which an insured cause of loss is a material
factor in preventing completion of planting, as specified in the
definition of ``planted acreage'' (e.g., seed is broadcast on the soil
surface but cannot be incorporated) will be considered as acreage
planted after the final planting date and the per-acre revenue
guarantee will be calculated in accordance with section 17(b)(1).
18. Prevented Planting
(a) Unless limited by the policy provisions, a prevented planting
payment may be made to you for eligible acreage if:
(1) You were prevented from planting the insured crop by an insured
cause that occurs:
(i) On or after 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 or after the sales closing
date for the previous crop year for the insured crop in the county,
provided insurance has been in force continuously since that date.
Cancellation for the purpose of transferring the policy to a different
insurance provider for the subsequent crop year will not be considered
a break in continuity for the purpose of the preceding sentence;
(2) You include any acreage of the insured crop that was prevented
from being planted on your acreage report; and
(3) You did not plant the insured crop during or after the late
planting period. If such acreage was planted to the insured crop during
or after the late planting period, it is covered under the late
planting provisions.
(b) The actuarial documents may contain additional levels of
prevented planting coverage that you may purchase for the insured crop:
(1) Such purchase must be made on or before the sales closing date;
(2) If you do not purchase one of those additional levels by the
sales closing date, you will receive the prevented planting coverage
specified in the Crop Provisions;
(3) If you have an MPCI Catastrophic Risk Protection Endorsement
for any acreage of ``high risk land'' the additional levels of
prevented planting coverage will not be available for that acreage; and
(4) You may not increase your elected or assigned preventing
planting coverage level for any crop year if a cause of loss that will
or could prevent planting is evident prior to the time you wish to
change your prevented planting coverage level.
(c) The premium amount for acreage that is prevented from being
planted will be the same as that for timely planted acreage. If the
amount of premium you are required to pay (gross premium less our
subsidy) for acreage that is prevented from being planted exceeds the
liability on such acreage,
[[Page 71435]]
coverage for those acres will not be provided (no premium will be due
and no indemnity will be paid for such acreage).
(d) Drought or failure of the irrigation water supply will be
considered to be an insurable cause of loss for the purposes of
prevented planting only if, on the final planting date (or within the
late planting period if you elect to try to plant the crop):
(1) For non-irrigated acreage, the area that is prevented from
being planted has insufficient soil moisture for germination of seed
and progress toward crop maturity due to a prolonged period of dry
weather. Prolonged precipitation deficiencies must be verifiable using
information collected by sources whose business it is to record and
study the weather, including, but not limited to, local weather
reporting stations of the National Weather Service; or
(2) For irrigated acreage, there is not a reasonable probability of
having adequate water to carry out an irrigated practice.
(e) The maximum number of acres that may be eligible for a
prevented planting payment for any crop will be determined as follows:
(1) The total number of acres eligible for prevented planting
coverage for all crops cannot exceed the number of acres of cropland in
your farming operation for the crop year, unless you are eligible for
prevented planting coverage on double-cropped acreage in accordance
with section 18(f)(4) or (5). The eligible acres for each insured crop
will be determined in accordance with the following table.
------------------------------------------------------------------------
Eligible acres if,
Eligible acres if, in any of the 4 most
in any of the 4 most recent crop years,
recent crop years, you have not planted
you have planted any any crop in the
crop in the county county for which
Type of crop for which prevented prevented planting
planting insurance insurance was
was available or available or have
have received a not received a
prevented planting prevented planting
insurance guarantee insurance guarantee
------------------------------------------------------------------------
(i) The crop is not required (A) The maximum (B) The number of
to be contracted with a number of acres acres specified on
processor to be insured. certified for APH your intended
purposes or acreage report
reported for which is submitted
insurance for the to us by the sales
crop in any one of closing date for
the 4 most recent all crops you
crop years (not insure for the crop
including reported year and that is
prevented planting accepted by us. The
acreage that was total number of
planted to a acres listed may
substitute crop not exceed the
other than an number of acres of
approved cover cropland in your
crop). The number farming operation
of acres determined at the time you
above for a crop submit the intended
may be increased by acreage report. The
multiplying it by number of acres
the ratio of the determined above
total cropland for a crop may only
acres that you are be increased by
farming this year multiplying it by
(if greater) to the the ratio of the
total cropland total cropland
acres that you acres that you are
farmed in the farming this year
previous year, (if greater) to the
provided that you number of acres
submit proof to us listed on your
that for the intended acreage
current crop year report, if you meet
you have purchased the conditions
or leased stated in section
additional land or 18(e)(1)(i)(A).
that acreage will
be released from
any USDA program
which prohibits
harvest of a crop.
Such acreage must
have been
purchased, leased,
or released from
the USDA program,
in time to plant it
for the current
crop year using
good farming
practices. No cause
of loss that will
or could prevent
planting may be
evident at the time
the acreage is
purchased, leased,
or released from
the USDA program.
(ii) The crop must be (A) The number of (B) The number of
contracted with a processor acres of the crop acres of the crop
to be insured. specified in the as determined in
processor contract, section
if the contract 18(e)(1)(ii)(A).
specifies a number
of acres contracted
for the crop year;
or the result of
dividing the
quantity of
production stated
in the processor
contract by your
approved yield, if
the processor
contract specifies
a quantity of
production that
will be accepted.
(For the purposes
of establishing the
number of prevented
planting acres, any
reductions applied
to the transitional
yield for failure
to certify acreage
and production for
four prior years
will not be used.).
------------------------------------------------------------------------
(2) Any eligible acreage determined in accordance with the table
contained in section 18(e)(1) will be reduced by subtracting the number
of acres of the crop (insured and uninsured) that are timely and late
planted, including acreage specified in section 17(b).
(f) Regardless of the number of eligible acres determined in
section 18(e), prevented planting coverage will not be provided for any
acreage:
(1) That does not constitute at least 20 acres or 20 percent of the
insurable crop acreage in the unit, whichever is less. Any prevented
planting acreage within a field that contains planted acreage will be
considered to be acreage of the same crop, type, and practice that is
planted in the field, unless the acreage that was prevented from being
planted constitutes at least 20 acres or 20 percent of the total
insurable acreage in the field and you produced both crops, crop types,
or followed both practices in the same field in the same crop year
within any of the 4 most recent crop years;
(2) For which the actuarial documents do not designate a premium
rate;
(3) Used for conservation purposes or intended to be left unplanted
under any program administered by the USDA;
(4) On which the insured crop is prevented from being planted, if
you or any other person receives a prevented planting payment for any
crop for the same acreage in the same crop year (excluding share
arrangements), unless you have coverage greater than the Catastrophic
Risk Protection Plan of Insurance and have records of acreage and
production that are used to determine your approved yield that show the
acreage was double-cropped in each of the last 4 years in which the
insured crop was grown on the acreage;
(5) On which the insured crop is prevented from being planted, if
any crop from which any benefit is derived under any program
administered by the USDA is planted and fails, or if any crop is
harvested, hayed or grazed on the same acreage in the same crop year
(other than a cover crop which may be
[[Page 71436]]
hayed or grazed after the final planting date for the insured crop),
unless you have coverage greater than that applicable to the
Catastrophic Risk Protection Plan of Insurance and have records of
acreage and production that are used to determine your approved yield
that show the acreage was double-cropped in each of the last 4 years in
which the insured crop was grown on the acreage. (If one of the crops
being double-cropped is not insurable, other verifiable records of it
being planted may be used);
(6) Of a crop that is prevented from being planted if a cash lease
payment is also received for use of the same acreage in the same crop
year (not applicable if acreage is leased for haying or grazing only).
(If you state that you will not be cash renting the acreage and claim a
prevented planting payment on the acreage, you could be subject to
civil and criminal sanctions if you cash rent the acreage and do not
return the prevented planting payment for it);
(7) For which planting history or conservation plans indicate that
the acreage would have remained fallow for crop rotation purposes;
(8) That exceeds the number of acres eligible for a prevented
planting payment;
(9) That exceeds the number of eligible acres physically available
for planting;
(10) For which you cannot provide proof that you had the inputs
available to plant and produce a crop with the expectation of at least
producing the yield used to determine the per-acre revenue guarantee.
(Evidence that you have previously planted the crop on the unit will be
considered adequate proof unless your planting practices or rotational
requirements show that the acreage would have remained fallow or been
planted to another crop);
(11) Based on an irrigated practice per-acre revenue guarantee
unless adequate irrigation facilities were in place to carry out an
irrigated practice on the acreage prior to the insured cause of loss
that prevented you from planting. Acreage with an irrigated practice
per-acre revenue guarantee will be limited to the number of acres
allowed for that practice under sections 18(e) and (f); or
(12) Based on a crop type that you did not plant, or did not
receive a prevented planting insurance guarantee for, in at least one
of the four most recent crop years. Types for which separate prices or
per-acre revenue guarantees are available must be included in your APH
database in at least one of the four most recent crop years, or crops
that do not require yield certification (crops for which the insurance
guarantee is not based on APH) must be reported on your acreage report
in at least one of the four most recent crop years except as allowed in
section 18(e)(1)(i)(B). We will limit prevented planting payments based
on a specific crop type to the number of acres allowed for that crop
type as specified in sections 18(e) and (f).
(g) If you purchased a Revenue Assurance policy for a crop, and you
executed a High Risk Land Exclusion Option that separately insures
acreage which has been designated as ``high-risk'' land by FCIC under a
Catastrophic Risk Protection Endorsement for that crop, the maximum
number of acres eligible for a prevented planting payment will be
limited for each policy as specified in sections 18 (e) and (f).
(h) If you are prevented from planting a crop for which you do not
have an adequate base of eligible prevented planting acreage, as
determined in accordance with section 18(e)(1), your prevented planting
per-acre revenue guarantee, premium, and prevented planting payment
will be based on the crops insured for the current crop year, for which
you have remaining eligible prevented planting acreage. The crops used
for this purpose will be those that result in a prevented planting
payment most similar to the prevented planting payment that would have
been made for the crop that was prevented from being planted.
(1) For example, assume you were prevented from planting 200 acres
of corn and have 100 acres eligible for a corn prevented planting
guarantee that would result in a payment of $40 per acre. You also had
50 acres of potato eligibility that would result in a $100 per acre
payment, 90 acres of grain sorghum eligibility that would result in a
$30 per acre payment, and 100 acres of soybean eligibility that would
result in a $25 per acre payment. Your prevented planting coverage for
the 200 acres would be based on 100 acres of corn ($40 per acre), 90
acres of grain sorghum ($30 per acre), and 10 acres of soybeans ($25
per acre).
(2) Prevented planting coverage will be allowed as specified in
this section (18(h)) only if the crop that was prevented from being
planted meets all policy provisions, except for having an adequate base
of eligible prevented planting acreage. Payment may be made based on
crops other than those that were prevented from being planted even
though other policy provisions, including but not limited to, processor
contract and rotation requirements, have not been met for the crop on
which payment is being based.
(i) The prevented planting payment for any eligible acreage within
a basic or optional unit will be determined by:
(1) Multiplying the per-acre revenue guarantee for timely planted
acreage of the insured crop by the prevented planting coverage level
percentage you elected, or that is contained in the Crop Provisions if
you did not elect a prevented planting coverage level percentage;
(2) Multiplying the result of section 18(i)(1) by the number of
eligible prevented planting acres in the unit; and
(3) Multiplying the result of section 18(i)(2) by your share.
(j) The prevented planting payment for any eligible acreage within
an enterprise unit will be determined by:
(1) Multiplying the per-acre revenue guarantee within the
enterprise unit, for timely planted acreage of the insured crop by the
prevented planting coverage level percentage you elected, or that is
contained in the Crop Provisions if you did not elect a prevented
planting coverage level percentage;
(2) Multiplying the result of section 18(j)(1) by the number of
eligible prevented planting acres in the enterprise unit;
(3) Multiplying the result of section 18(j)(2) by your share; and
(4) Totaling the results from section 18(j)(3).
(k) The prevented planting payment for any eligible acreage within
a whole-farm unit will be determined by:
(1) Multiplying the per-acre revenue guarantee for the whole-farm
unit, for timely planted acreage of the insured crop by the prevented
planting coverage level percentage you elected, or that is contained in
the Crop Provisions if you did not elect a prevented planting coverage
level percentage;
(2) Multiplying the result of section 18(k)(1) by the number of
eligible prevented planting acres in the whole-farm unit;
(3) Multiplying the result of section 18(k)(2) by your share; and
Totaling the results from section 18(k)(3).
19. Crops As Payment
You must not abandon any crop to us. We will not accept any crop as
compensation for payments due us.
20. Arbitration
(a) If you and we fail to agree on any factual determination, the
disagreement will be resolved in accordance with the rules of the
American Arbitration Association. Failure to agree with any factual
determination made by FCIC must be resolved through the FCIC
[[Page 71437]]
appeal provisions published at 7 CFR part 11.
(b) No award determined by arbitration or appeal can exceed the
amount of liability established or which should have been established
under the policy.
21. Access to Insured Crop and Records, and Record Retention
(a) We reserve the right to examine the insured crop as often as we
reasonably require.
(b) For three years after the end of the crop year, you must
retain, and provide upon our request, complete records of the
harvesting, storage, shipment, sale, or other disposition of all the
insured crop produced on each unit. This requirement also applies to
the records used to establish the basis for the production report for
each unit. You must also provide upon our request, separate records
showing the same information for production from any acreage not
insured. We may extend the record retention period beyond three years
by notifying you of such extension in writing. Your failure to keep and
maintain such records will, at our option, result in:
(1) Cancellation of the policy;
(2) Assignment of production to the units by us;
(3) Combination of the optional units; or
(4) A determination that no indemnity is due.
(c) Any person designated by us will, at any time during the record
retention period, have access:
(1) To any records relating to this insurance at any location where
such records may be found or maintained; and
(2) To the farm.
(d) By applying for insurance under the authority of the Act or by
continuing insurance for which you previously applied, you authorize
us, or any person acting for us, to obtain records relating to the
insured crop from any person who may have custody of those records
including, but not limited to, FSA offices, banks, warehouses, gins,
cooperatives, marketing associations, and accountants. You must assist
us in obtaining all records which we request from third parties.
(e) This policy will be considered a continuation of any prior crop
insurance policy issued under the authority of the Act for actual
production history purposes under 7 CFR part 400, subpart G.
22. Other Insurance
(a) Other Like Insurance--You must not obtain any other crop
insurance issued under the authority of the Act, on your share of the
insured crop. If we determine that more than one policy on your share
is intentional, you may be subject to the sanctions authorized under
this policy, the Act, or any other applicable statute. If we determine
that the violation was not intentional, the policy with the earliest
date of application will be in force and all other policies will be
void. Nothing in this paragraph prevents you from obtaining other
insurance not issued under the Act.
(b) Other Insurance Against Fire--If you have other insurance,
whether valid or not, against damage to the insured crop by fire during
the insurance period, we will be liable for loss due to fire only for
the smaller of:
(1) The amount of indemnity determined pursuant to this policy
without regard to such other insurance; or
(2) The amount by which the loss from fire is determined to exceed
the indemnity paid or payable under such other insurance.
(c) For the purpose of section 22(b), the amount of loss from fire
will be the reduction in revenue of the insured crop on the unit
involved determined pursuant to this policy.
23. Conformity to Food Security Act
Although your violation of a number of federal statutes, including
the Act, may cause cancellation, termination, or voidance of your
insurance contract, you should be specifically aware that your policy
will be canceled if you are determined to be ineligible to receive
benefits under the Act due to violation of the controlled substance
provisions (title XVII) of the Food Security Act of 1985 (Pub. L. 99-
198) and the regulations promulgated under the Act by USDA. Your
insurance policy will be canceled if you are determined, by the
appropriate Agency, to be in violation of these provisions. We will
recover any and all monies paid to you or received by you during your
period of ineligibility, and your premium will be refunded, less a
reasonable amount for expenses and handling not to exceed 20 percent of
the premium paid or to be paid by you.
24. Amounts Due Us
(a) Interest will accrue at the rate of 1.25 percent simple
interest per calendar month, or any portion thereof, on any unpaid
amount due us. For the purpose of premium amounts due us, the interest
will start to accrue on the first day of the month following the
premium billing date specified in the Special Provisions.
(b) For the purpose of any other amounts due us, such as repayment
of indemnities found not to have been earned, interest will start to
accrue on the date that notice is issued to you for the collection of
the unearned amount. Amounts found due under this paragraph will not be
charged interest if payment is made within 30 days of issuance of the
notice by us. The amount will be considered delinquent if not paid
within 30 days of the date the notice is issued by us.
(c) All amounts paid will be applied first to expenses of
collection (see section 24(d)) if any, second, to the reduction of
accrued interest, and then to the reduction of the principal balance.
(d) If we determine that it is necessary to contract with a
collection agency or to employ an attorney to assist in collection, you
agree to pay all of the expenses of collection.
(e) Amounts owed to us by you may be collected in part through
administrative offset from payments you receive from United States
government agencies in accordance with 31 U.S.C. chapter 37.
25. Legal Action Against Us
(a) You may not bring legal action against us unless you have
complied with all of the policy provisions.
(b) If you do take legal action against us, you must do so within
12 months of the date of denial of the claim. Suit must be brought in
accordance with the provisions of 7 U.S.C. 1508(j).
(c) Your right to recover damages (compensatory, punitive, or
other), attorney's fees, or other charges is limited or excluded by
this contract or by Federal Regulations.
26. Payment and Interest Limitations
(a) Under no circumstances will we be liable for the payment of
damages (compensatory, punitive, or other), attorney's fees, or other
charges in connection with any claim for indemnity, whether we approve
or disapprove such claim.
(b) We will pay simple interest computed on the net indemnity
ultimately found to be due by us or by a final judgment of a court of
competent jurisdiction, from and including the 61st day after the date
you sign, date, and submit to us the properly completed claim on our
form. Interest will be paid only if the reason for our failure to
timely pay is NOT due to your failure to provide information or other
material necessary for the computation or payment of the indemnity. The
interest rate will be that established by the Secretary of the Treasury
under section
[[Page 71438]]
12 of the Contract Disputes Act of 1978 (41 U.S.C. 611) and published
in the Federal Register semiannually on or about January 1 and July 1
of each year, and may vary with each publication.
27. Concealment, Misrepresentation or Fraud
(a) If you have falsely or fraudulently concealed the fact that you
are ineligible to receive benefits under the Act or if you or anyone
assisting you has intentionally concealed or misrepresented any
material fact relating to this policy:
(1) This policy will be voided; and
(2) You may be subject to remedial sanctions in accordance with 7
CFR part 400, subpart R.
(b) Even though the policy is void, you may still be required to
pay 20 percent of the premium due under the policy to offset costs
incurred by us in the service of this policy. If previously paid, the
balance of the premium will be returned.
(c) Voidance of this policy will result in you having to reimburse
all indemnities paid for the crop year in which the voidance was
effective.
(d) Voidance will be effective on the first day of the insurance
period for the crop year in which the act occurred and will not affect
the policy for subsequent crop years unless a violation of this section
also occurred in such crop years.
28. Transfer of Coverage and Right to Indemnity
If you transfer any part of your share during the crop year, you
may transfer your coverage rights, if the transferee is eligible for
crop insurance. We will not be liable for any more than the liability
determined in accordance with your policy that existed before the
transfer occurred. The transfer of coverage rights must be on our form
and will not be effective until approved by us in writing. Both you and
the transferee are jointly and severally liable for the payment of the
premium and administrative fees. The transferee has all rights and
responsibilities under this policy consistent with the transferee's
interest.
29. Assignment of Indemnity
You may assign to another party your right to an indemnity for the
crop year. The assignment must be on our form and will not be effective
until approved in writing by us. The assignee will have the right to
submit all loss notices and forms as required by the policy. If you
have suffered a loss from an insurable cause and fail to file a claim
for indemnity within 60 days after the end of the insurance period, the
assignee may submit the claim for indemnity not later than 15 days
after the 60-day period has expired. We will honor the terms of the
assignment only if we can accurately determine the amount of the claim.
However, no action will lie against us for failure to do so.
30. Subrogation (Recovery of Loss From a Third Party)
Since you may be able to recover all or a part of your loss from
someone other than us, you must do all you can to preserve this right.
If we pay you for your loss, your right to recovery will, at our
option, belong to us. If we recover more than we paid you plus our
expenses, the excess will be paid to you.
31. Descriptive Headings
The descriptive headings of the various policy provisions are
formulated for convenience only and are not intended to affect the
construction or meaning of any of the policy provisions.
32. Notices
(a) All notices required to be given by you must be in writing and
received by your crop insurance agent within the designated time unless
otherwise provided by the notice requirement. Notices required to be
given immediately may be by telephone or in person and confirmed in
writing. Time of the notice will be determined by the time of our
receipt of the written notice. If the date by which you are required to
submit a report or notice falls on Saturday, Sunday, or a Federal
holiday, or if your agent's office is, for any reason, not open for
business on the date you are required to submit such notice or report,
such notice or report must be submitted on the next business day.
(b) All notices and communications required to be sent by us to you
will be mailed to the address contained in your records located with
your crop insurance agent. Notice sent to such address will be
conclusively presumed to have been received by you. You should advise
us immediately of any change of address.
33. Multiple Benefits
(a) If you are eligible to receive an indemnity under an additional
coverage plan of insurance and are also eligible to receive benefits
for the same loss under any other USDA program, you may receive
benefits under both programs, unless specifically limited by the crop
insurance contract or by law.
(b) The total amount received from all such sources may not exceed
the amount of your actual loss. The total amount of the actual loss is
the difference between the fair market value of the insured commodity
before and after the loss, based on your production records and the
highest price election or amount of insurance available for the crop.
(c) FSA will determine and pay the additional amount due you for
any applicable USDA program, after first considering the amount of any
crop insurance indemnity.
(d) Farm ownership and operating loans may be obtained from USDA in
addition to any crop insurance indemnities.
Revenue Assurance
Corn and Soybean Crop Provisions
This is a pilot risk management program. This risk management tool
will be reinsured under the authority provided by the Federal Crop
Insurance Act as amended. If a conflict exists among the policy
provisions, the order of priority is as follows: (1) the Special
Provisions; (2) these Crop Provisions; and (3) the Basic Provisions
with (1) controlling (2), etc.
1. Definitions
CBOT. Chicago Board of Trade.
Fall harvest price. The price used to value production to count.
For corn, the fall harvest price is the simple average of the final
daily settlement prices in November for the CBOT December corn futures
contract. For soybeans, the fall harvest price is the simple average of
the final daily settlement prices in October for the CBOT November
soybean futures contract. These prices will be released November 5 for
soybeans and December 5 for corn.
Fall harvest price option. A coverage option that allows you to use
the greater of the projected harvest price or the fall harvest price to
determine your per-acre revenue guarantee. For basic, optional, and
enterprise units, this option applies to all insurable acres of a crop
in the county. For the whole-farm unit, this option will apply to all
insurable acres of the applicable crops in the county. This option must
be selected by the sales closing date and is continuous unless canceled
by the crop sales closing date.
Harvest. Combining, threshing, or picking the insured crop for
grain.
Local market price.--The cash grain price per bushel for U.S. No. 2
yellow corn or U.S. No. 1 soybeans, offered by buyers in the area in
which you normally market the insured crop. The local market price will
reflect the maximum limits of quality deficiencies allowable for the
U.S. No. 2 grade for yellow corn or U.S. No. 1 grade for
[[Page 71439]]
soybeans. Factors not associated with grading under the Official United
States Standards for Grain, including but not limited to protein and
oil, will not be considered.
Planted acreage. In addition to the definition contained in the
Basic Provisions, corn and soybeans must initially be planted in rows
(corn must be planted in rows far enough apart to permit mechanical
cultivation), unless otherwise provided by the Special Provisions or
actuarial documents.
Prevented planting guarantee. The prevented planting guarantee for
such acreage will be the selected percentage of the per-acre revenue
guarantee for timely planted acres.
Projected harvest price. The price used to determine the expected
per-acre revenue. For corn, the projected harvest price is the simple
average of the final daily settlement prices in February for the CBOT
December corn futures contract. For soybeans, the projected harvest
price is the simple average of the final daily settlement prices in
February for the CBOT November soybean futures. The crop projected
harvest prices will be released by March 5 of the current crop year.
Silage. A product that results from severing the plant from the
land and chopping it for the purpose of livestock feed.
2. Contract Changes
In accordance with section 5 of the Basic Provisions, the contract
change is November 30 preceding the cancellation date.
3. Cancellation and Termination Dates
In accordance with section 3 of the Basic Provisions, the
cancellation and termination dates are March 15.
4. Annual Premium
Your per-acre premium is determined by the premium calculator for
the applicable crop, state, type, practice, acreage, approved yield,
the per-acre revenue guarantee, share, and other options such as
prevented planting. Your per-acre premiums will differ by crop and unit
structure.
(a) Basic unit: The premium calculator calculates your per-acre
premium for each crop basic unit.
(b) Optional unit: The premium calculator calculates your crop
basic unit per-acre premium and multiplies it by a surcharge factor of
1.22 for corn and 1.30 for soybeans for each crop optional unit.
(c) Enterprise unit: The premium calculator calculates your per-
acre premium for each crop enterprise unit. This premium includes a
reduction for the number of sections on which the insured crop is
located, up to a maximum of 10 sections.
(d) Whole-farm unit: The premium calculator calculates your per-
acre premium for the whole-farm unit. This premium includes a reduction
for the number of sections on which the insured crops are located, up
to a maximum of 10 sections for each crop. Your whole-farm premium also
depends on the ratio of corn to soybean insured acres in the unit.
5. Insured Crop
(a) Corn--In accordance with section 9 of the Basic Provisions, the
crop insured will be all the corn for which premium is provided by the
premium calculator:
(1) In which you have a share;
(2) That is adapted to the area based on days to maturity and is
compatible with agronomic and weather conditions in the area;
(3) That is planted for harvest as grain.
(4) That is not (unless allowed by the Special Provisions):
(i) Interplanted with another crop; or
(ii) Planted into an established grass or legume.
(b) In addition to the provisions of section 5(a), the corn crop
insured will be all corn that is yellow dent or white corn, including
mixed yellow and white, waxy, high-lysine corn, high-oil corn blends
containing mixtures of at least 90 percent high yielding yellow dent
female plants with high-oil male pollinator plants, commercial
varieties of high-protein hybrids, and excluding:
(1) High amylose, high-oil except as defined in section 5(b),
flint, flour, Indian, or blue corn, or a variety genetically adapted to
provide forage for wildlife or any other open pollinated corn.
(2) A variety of corn adapted for silage use when the corn is
reported for insurance as grain.
(c) Soybeans--In accordance with section 9 of the Basic Provisions,
the crop insured will be all the soybeans for which premium is provided
by the premium calculator:
(1) In which you have a share;
(2) That are adapted to the area based on days to maturity and is
compatible with agronomic and weather conditions in the area;
(3) That are not (unless allowed by the Special Provisions):
(i) Interplanted with another crop; or
(ii) Planted into an established grass or legume.
(4) That are planted for harvest as beans.
6. Insurable Acreage
In addition to the provisions of section 10 of the Basic
Provisions, any acreage of the insured crop damaged before the final
planting date, to the extent that a majority of producers in the area
would normally not further care for the crop, must be replanted unless
we agree that it is not practical to replant.
7. Insurance Period
In accordance with the provisions under section 12 of the Basic
Provisions, the calendar date for the end of the insurance period is
December 10 immediately following planting.
8. Causes of Loss
In accordance with the provisions of section 13 of the Basic
Provisions, insurance is provided only against an unavoidable loss of
revenue against the following causes of loss which occur within 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;
(h) Failure of the irrigation water supply, if applicable, due to a
cause of loss contained in section 8(a) through (g) occurring within
the insurance period; or
(i) A decline in the fall harvest price below the projected harvest
price.
9. Replanting Payment
(a) In accordance with section 14 of the Basic Provisions:
(1) Replanting payments for corn and soybeans are allowed if the
corn and soybeans are damaged by an insurable cause of loss to the
extent that the remaining stand will not produce at least 90 percent of
the per-acre revenue guarantee for the acreage and it is practical to
replant. The projected harvest price is used to determine if 90 percent
of the unit revenue guarantee can be achieved.
(2) The maximum amount of the replanting payment per acre will be
your share times the lesser of 20 percent of the per-acre revenue
guarantee based on the projected harvest price or:
(i) For corn, an amount equal to 8 bushels times the projected
harvest price,
(ii) For soybeans, an amount equal to 3 bushels times the projected
harvest price.
[[Page 71440]]
(b) When the insured crop is replanted using a practice that is
uninsurable as an original planting, the unit per-acre revenue
guarantee based on the projected harvest price will be reduced by the
amount of the replanting payment which is attributable to your share.
The premium amount will not be reduced.
10. Duties in the Event of Damage or Loss
(a) In accordance with the requirements of section 15 of the Basic
Provisions, if you initially discover damage to any insured crop within
15 days of, or during harvest, you must leave representative samples of
the unharvested crop for our inspection. The samples must be at least
10 feet wide and extend the entire length of each field in the unit,
and must not be harvested or destroyed until the earlier of our
inspection or 15 days after harvest of the unit is completed.
(b) In addition to the provisions of section 15 of the Basic
Provisions, you must notify us before harvest begins if you intend to
harvest any corn acreage for silage.
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 units, 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 using the following procedures:
(1) Basic and Optional units: We will settle your claim on each
basic or optional unit by:
(i) Multiplying the unit's per-acre revenue guarantee by the number
of insured acres in the unit;
(ii) Multiplying the applicable fall harvest price by production to
count for each unit (see sections 11(c) through (e));
(iii) Subtracting the result of section 11(b)(1)(ii) from the
result of section 11(b)(1)(i); and
(iv) Multiplying the results in section 11(b)(2)(iii) by your
share.
If the result of section 11(b)(1)(iv) is greater than zero, an
indemnity equal to that result will be paid to you. If the result of
section 11(b)(1)(iv) is less than or equal to zero, no indemnity will
be paid.
(2) Enterprise units: We will settle your claim on an enterprise
unit by:
(i) Multiplying the enterprise unit's per-acre revenue guarantee by
the number of insured acres in the enterprise unit;
(ii) Multiplying the applicable fall harvest price by the
production to count for the enterprise unit;
(iii) Subtracting the result of section 11(b)(2)(ii) from the
result of section 11(b)(2)(i); and
(iv) Multiplying the result in section 11(b)(2)(iii) by your share.
If the result of section 11(b)(2)(iv) is greater than zero, an
indemnity equal to that result will be paid to you. If the result is
less than or equal to zero, no indemnity will be paid.
(3) Whole-farm units: We will settle your claim on a whole-farm
unit by:
(i) Multiplying the per-acre revenue guarantee for each crop by the
number of insured acres planted to each crop;
(ii) Totaling the results of section 11(b)(3)(i);
(iii) Multiplying the applicable fall harvest price for each crop
by the production to count for each crop;
(iv) Totaling the results of section 11(b)(3)(iii);
(v) Subtracting the result of section 11(b)(3)(iv) from the result
of section 11(b)(3)(ii); and
(vi) Multiplying the result in section 11(b)(3)(v) by your share.
If the result of section 11(b)(2)(vi) is greater than zero, an
indemnity equal to that result will be paid to you. If the result is
less than or equal to zero, no indemnity will be paid.
(c) The total production to count in bushels from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the per-acre revenue guarantee will be used for
such acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) Planted for grain but harvested as silage, if you fail to give
us notice before harvest begins;
(D) Damaged solely by uninsured causes; or
(E) For which you fail to provide acceptable production records;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (mature unharvested production may be
adjusted for quality deficiencies and excess moisture in accordance
with section 11(d)); and
(iv) Potential production on insured acreage that you intend to put
to another use or you wish to abandon and 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 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 you 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.
(d) Mature crop production (excluding silage type or corn harvested
as silage) may be adjusted for excess moisture and quality
deficiencies. 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:
(i) Fifteen percent for corn (If moisture exceeds 30 percent,
production will be reduced 0.2 percent for each 0.1 percentage point
above 30 percent); and
(ii) Thirteen percent for soybeans.
We may obtain samples of the production to determine the moisture
content.
(2) Production will be eligible for quality adjustment if:
(i) Deficiencies in quality, in accordance with the Official United
States Standards for Grain, result in:
(A) Corn not meeting the grade requirements for U.S. No. 4 (grades
U.S. No. 5 or worse) because of test weight or kernel damage (excluding
heat damage) or having a musty, sour, or commercially objectionable
foreign odor; or
(B) Soybeans not meeting the grade requirements for U.S. No. 4
(grades U.S. Sample grade) because of test weight or kernel damage
(excluding heat damage) or having a musty, sour, or
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commercially objectionable foreign odor (except garlic odor), or which
meet the special grade requirements for garlicky soybeans; or
(ii) 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 which occurs within the insurance period;
(ii) 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
(iii) The samples are analyzed by a grader licensed to grade the
insured crops under the authority of the United States Grain Standards
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) The grain production that is eligible for quality adjustment,
as specified in sections 11(d)(2) and (3), will be reduced by the
quality adjustment factor contained in the Special Provisions.
(e) Any production harvested from plants growing in the insured
crop may be counted as production of the insured crop on a weight
basis.
12. Prevented Planting
Your prevented planting coverage will be 60 percent of your per-
acre revenue guarantee for timely planted acreage. You may increase
your prevented planting coverage to a level specified in the actuarial
documents by paying an additional premium.
Signed in Washington, D.C., on December 17, 1998.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 98-34250 Filed 12-24-98; 8:45 am]
BILLING CODE 3410-08-P
