[Federal Register Volume 59, Number 40 (Tuesday, March 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4551]
[[Page Unknown]]
[Federal Register: March 1, 1994]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
Common Crop Insurance Regulations; Fig Crop Insurance Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Interim rule.
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SUMMARY: The Federal Crop Insurance Corporation hereby issues
additional regulations for provisions to insure figs. This action will
add a second set of fig regulations, the Fig Crop Insurance Provisions,
to the crop insurance regulations. The present regulations are based on
the Marketing Order for Dried Figs that was in effect at the time the
regulations were promulgated. This marketing order has since been
amended which severely reduces the amount of indemnity to which the
insured may otherwise have been entitled. These new regulations will
provide quality adjustment provisions and reflect the lower prices
received for figs based on the grades contained in the amended
marketing order. The intended effect of this action is to offer
insurance on figs with added coverage for quality adjustment that is
not in the current Fig Endorsement.
DATES: This rule was effective on February 1, 1994. Comments, data, and
opinions must be received by May 2, 1994.
ADDRESSES: Written comments on this rule should be sent to Mari
Dunleavy, Regulatory and Procedural Development Staff, Federal Crop
Insurance Corporation, USDA, Washington, DC 20250.
FOR FURTHER INFORMATION CONTACT:
Mari L. Dunleavy, Regulatory and Procedural Development Staff, Federal
Crop Insurance Corporation, USDA, Washington, DC 20250. Telephone (202)
254-8314.
SUPPLEMENTARY INFORMATION: This rule has been determined not
significant for purposes of Executive Order 12866 and therefor has not
been reviewed by the Office of Management and Budget.
This rule does not contain information collections that require
clearance by the Office of Management and Budget under the provisions
of 44 U.S.C. chapter 35, the Paper Reduction Act.
The Office of General Counsel, as the Designated Official under
section 6(a) of Executive Order 12612, Federalism, has determined that
the policies and procedures contained in this rule will not have
substantial direct effects on states or their political subdivisions,
or on the distribution of power and responsibilities among the various
levels of government.
This action requires no more of the reinsured company or sales and
service contractor than is considered normal in the ordinary conduct of
business. Therefore, this action is determined to be exempt from the
provisions of the Regulatory Flexibility Act and no Regulatory
Flexibility Analysis was prepared.
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
This program is not subject to the provisions of Executive Order
12372 which requires intergovernmental consultation with state and
local officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
The Manager, FCIC, has certified to the Office of Management and
Budget (OMB) that these regulations meet the applicable standards
provided in subsections 2(a) and 2(b)(2) of Executive Order 12778.
This rule has been reviewed in accordance with Executive Order
12778. The provisions of this rule will preempt state and local laws to
the extent such state and local laws are inconsistent herewith. The
administrative appeal provisions located at 7 CFR part 400, subpart J
must be exhausted before judicial action may be brought. The rule is
retroactive to February 1, 1994 so as to allow insureds the opportunity
to purchase this policy prior to the sales closing date. Because the
Corporation has publicized the policy and the provisions of the rule to
all companies and fig policyholders, those persons have actual notice
of the contents of the rule and will not be adversely affected by the
rule's retroactivity.
This action is not expected to have any significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
Expedited publication of this additional fig insurance policy is
necessary in order for FCIC to be responsive to the effects that the
amended California Marketing Order for Dry Figs has upon fig producers
insured by FCIC. It is necessary to promulgate the new policy so that
insureds will be fully compensated from any loss under the 1994 crop
year policy, therefore, good cause is found to make this rule final
upon publication.
Background
During the 1992 crop year the California Fig Advisory Board amended
the State Marketing Order for Dried Figs. Prior to the amendment, figs
were graded merchantable or substandard. The amended marketing order
provides three grades: regular dried figs (previously merchantable);
manufacturing grade (new grade added); and substandard.
The current fig endorsement contained in 7 CFR 401.125 specifies in
subsection 7.(b) that the total production to be counted for a unit
will include all harvested and appraised marketable figs as defined by
the Marketing Order for Dried Figs, as amended. Paragraph 7.(b)(1) of
the current fig endorsement further specifies that substandard
production will not be counted as production if such production is
inspected by the insurer and the insurer gives written consent to the
insured to deliver the figs to the substandard pool. If substandard
production is not inspected or written consent is not given prior to
delivery to the substandard pool, all such production will be counted
as marketable production.
Figs which now grade manufacturing under the new marketing order
would have graded substandard under the previous marketing order and
would not have counted as production if written consent was given prior
to delivery to the substandard pool. However, due to the new marketing
order, manufacturing grade figs are sold through normal marketing
outlets and therefore, consistent with the current fig crop insurance
regulations, are considered production to count. The price received for
manufacturing grade figs is considerably lower than the price received
for regular dried figs. In 1992, manufacturing grade figs sold for 35
cents a pound and regular dried figs sold for 82 cents per pound. Under
the current figs endorsement, manufacturing grade and regular dried
figs are counted equally as production to count. The new Fig Crop
Insurance Provisions provide a method to allow an insured to sell his
manufacturing grade figs while also providing the insurer with a method
to include the sale as a part of the insured production.
This rule is being promulgated to provide for a quality adjustment
on production to count in order to offset the lower price received for
manufacturing grade figs resulting from an insurable cause of loss.
List of Subjects in 7 CFR Part 457
Crop insurance, Figs.
Final Rule
Pursuant to the authority contained in the Federal Crop Insurance
Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance
Corporation hereby amends the Common Crop Insurance Regulations (7 CFR
part 457) in the following instances:
PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE
1994 AND SUBSEQUENT CONTRACT YEARS
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506, 1516.
2. 7 CFR part 457 is amended by adding a new section, Sec. 457.110
Fig Crop Insurance Provisions, to read as follows:
Sec. 457.110 Fig Crop Insurance Provisions.
The Fig Crop Insurance Provisions for the 1994 and subsequent crop
years are as follows:
United States Department of Agriculture--Federal Crop Insurance
Corporation
Fig Crop Provisions
If a conflict exists between the Common Crop Insurance Policy
(Sec. 457.8) and the Special Provisions, the Special Provisions will
control. If a conflict exists between these Crop Provisions and the
Special Provisions, the Special Provisions will control.
1. Definitions
(a) Good farming practices--The cultural practices necessary for
the insured crop to make usual and normal progress toward maturity
and which can be expected to produce at least the yield used to
determine the production guarantee. Good farming practices are
generally those in use in the county for production of the insured
crop and are recognized by the Cooperative Extension Service as
compatible with agronomic and weather conditions in the area.
(b) Harvest--The picking of the figs from the trees or ground by
hand or machine for the purpose of removal from the orchard.
(c) Irrigated practice--A method of producing a crop by which
water is artificially applied during the growing season by
appropriate systems, and at the proper times, with the intention of
providing the quantity of water needed to produce at least the yield
used to establish the irrigated production guarantee on the
irrigated acreage for the insured crop.
(d) Manufacturing grade production--Production that meets the
minimum grade standards and is defined as ``manufacturing grade'' by
the Marketing Order for Dried Figs, as amended, which is in effect
on the date insurance attaches.
(e) Marketable figs--Figs that grade manufacturing grade or
better in accordance with the Marketing Order for Dried Figs, as
amended, which is in effect on the date insurance attaches.
(f) Noncontiguous land--Land which is not touching at any point,
except that land which is separated by only a public or private
right-of-way will be considered contiguous.
(g) Production guarantee--The number of pounds determined by
multiplying the approved yield per acre by the coverage level
percentage you elect.
(h) Substandard production--Production that does not meet
minimum grade standards and is defined as ``substandard'' by the
Marketing Order for Dried Figs, as amended, which is in effect on
the date insurance attaches.
2. Unit Division
In addition to the provisions of subsection 1.(tt) of the Common
Crop Insurance Policy (Sec. 457.8), a unit will consist of all the
insurable acreage of an insurable type of fig in the county. Unless
limited by the Special Provisions, these units may be further
divided into optional units if, for each optional unit you claim,
all the conditions of subsections 2.(a), and (b) are met, or if we
agree in writing. Optional units must be established at the time you
file your report of acreage for each crop year.
(a) You must have verifiable records of acreage and production
for each optional unit for at least the last crop year used to
determine your production guarantee.
(b) The acreage of insured figs must be located on noncontiguous
land. Basic units may not be divided into optional units on any
basis (production practice, type, variety, planting period, etc.)
other than as described under this section. If you do not comply
fully with these conditions, we will combine all optional units
which are not established in compliance with these provisions into
the basic unit from which they were formed. We may do this at any
time we discover that you have failed to comply with these
conditions. If failure to comply with these provisions is determined
to be inadvertent, and if the optional units are recombined, the
premium paid for electing optional units will be refunded to you.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements under section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities)
of the Common Crop Insurance Policy (Sec. 457.8), you may select
only one price election for each fig type designated in the Special
Provisions, and insured in the county under this policy.
4. Contract Changes
The contract change date is October 31 preceding the
cancellation date (see the provisions under section 4 (Contract
Changes) of the Common Crop Insurance Policy (Sec. 457.8)).
5. Cancellation and Termination Dates
The cancellation and termination dates are February 28.
6. Report of Acreage
By applying for fig crop insurance, you authorize us to have
access to and to determine or verify your production and acreage
from records maintained by the California Fig Advisory Board and the
fig packer.
7. Insured Crop
The crop insured will be all the commercially grown dried figs
that are grown in the county on insurable acreage, and for which a
premium rate is provided by the actuarial table:
(a) In which you have a share;
(b) That are grown for harvest as dried figs;
(c) That are irrigated;
(d) That have reached the seventh growing season after being set
out; and
(e) For which acceptable production records for at least the
previous crop year are provided;
(f) That are not figs:
(1) Grown on acreage with less than 90 percent of a stand based
on the original planting pattern unless we agree, in writing, to
insure such figs;
(2) Which we inspect and consider not acceptable;
(3) Grown for the crop year the application is filed unless
inspected and accepted by us; or
(4) Grown on acreage acquired for the crop year unless such
acreage has been inspected and accepted by us.
8. Insurance Period
In lieu of the provisions of section 11 (Insurance Period) of
the Common Crop Insurance Policy (Sec. 457.8), insurance attaches on
each unit the later of the date you submit your application or March
1 of the crop year and ends at the earliest of:
(a) Total destruction of the fig crop;
(b) The date harvest of the figs (by type) should have started
on any acreage that will not be harvested;
(c) Harvest of the figs;
(d) Final adjustment of a loss;
(e) Abandonment of the crop; or
(f) October 31 of the crop year.
9. Causes of Loss
(a) In addition to the provisions under section 12 (Causes of
Loss) of the Common Crop Insurance Policy (Sec. 457.8), any loss
covered by this policy must occur within the insurance period. The
specific causes of loss for figs are:
(1) Adverse weather conditions;
(2) Earthquake;
(3) Fire;
(4) Volcanic eruption;
(5) Wildlife; or
(6) Failure of the irrigation water supply.
(b) In addition to the causes of loss not insured against
contained in section 12 (Causes of Loss) of the Common Crop
Insurance Policy (Sec. 457.8), we will not insure against:
(1) Any loss of production due to fire, where weeds and other
forms of undergrowth have not been controlled or tree pruning debris
has not been removed from the grove; or
(2) The inability to market the fruit as a direct result of
quarantine, boycott, or refusal of any entity to accept production.
10. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event
you are unable to provide records of production that are acceptable
to us for any:
(1) Optional unit, we will combine all optional units for which
acceptable records of production were not provided; or
(2) Basic unit, we will allocate any commingled production to
such units in proportion to our liability on the harvested acreage
for each unit.
(b) In the event of loss or damage covered by this policy, we
will settle your claim by:
(1) Multiplying the insured acreage by the production guarantee;
(2) Subtracting from this the total production to count;
(3) Multiplying the remainder by your price election; and
(4) Multiplying this result by your share.
(c) The total production (pounds) to count from all insurable
acreage on the unit will include all harvested and appraised
marketable figs.
(1) Figs, which due to insurable causes, grade manufacturing
grade will be adjusted by:
(i) Dividing the value per pound of the manufacturing grade
production by the highest price election available for the insured
type; and
(ii) Multiplying the result (not to exceed 1) by the number of
pounds of such manufacturing grade production.
(2) Figs, which due to insurable causes, grade substandard and
are delivered to the substandard pool will not be considered
production to count, provided all the insured's substandard
production is inspected by us and we give written consent to such
delivery prior to delivery. If we do not give written consent prior
to the delivery to the substandard pool, all production will be
counted as undamaged marketable production. Substandard production
for which we give written consent to you prior to delivery to the
substandard pool, which is not delivered to the substandard pool,
and is sold by you, will be considered production to count and
adjusted as follows:
(i) Dividing the value per pound received for such substandard
production by the highest price election available for the insured
type; and
(ii) Multiplying the result (not to exceed 1) by the number of
pounds of such substandard production.
(3) Appraised production to be counted will include:
(i) Potential production lost due to uninsured causes and
failure to follow recognized good fig farming practices;
(ii) Not less than the production guarantee for the figs on any
acreage:
(A) That is abandoned without our consent;
(B) Damaged solely by uninsured causes;
(c) If the figs are destroyed by you without our consent; or
(D) For which you fail to provide records of production that are
acceptable to us;
(iii) Unharvested production which would be marketable if
harvested; and
(iv) Potential production on insured acreage that you want 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 if you abandon the crop. If agreement on the
appraised amount of production is not reached:
(A) We may require you to continue to care for the crop so that
a subsequent appraisal may be made or the crop harvested to
determine actual production. You must notify us within three days of
the date harvest should have started if the crop is not harvested;
or
(B) You may elect to continue to care for the crop. We will
determine the amount of production to count for the acreage using
the harvested production or our reappraisal if the crop is not
harvested.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 94-4551 Filed 2-28-94; 8:45 am]
BILLING CODE 3410-08-M
