[Federal Register Volume 62, Number 60 (Friday, March 28, 1997)]
[Rules and Regulations]
[Pages 14786-14792]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7941]
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DEPARTMENT OF AGRICULTURE
7 CFR Parts 445 and 457
Pepper Crop Insurance Regulations; and Common Crop Insurance
Regulations, Fresh Market Pepper Crop Insurance Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes
specific crop provisions for the insurance of fresh market peppers. The
provisions will be used in conjunction with the Common Crop Insurance
Policy Basic Provisions, which contain standard terms and conditions
common to most crops. The intended effect of this action is to provide
policy changes to better meet the needs of the insured, include the
current Pepper Crop Insurance Regulations under the Common Crop
Insurance Policy for ease of use and consistency of terms, and to
restrict the effect of the current Pepper Crop Insurance Regulations to
the 1997 and prior crop years.
EFFECTIVE DATE: March 28, 1997.
FOR FURTHER INFORMATION CONTACT: Linda Williams, Insurance Management
Specialist, Research and Development, Product Development Division,
Federal Crop Insurance Corporation, United States Department of
Agriculture, 9435 Holmes Road, Kansas City, MO 64131, telephone (816)
926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order No. 12866
The Office of Management and Budget (OMB) has determined this rule
to be exempt for the purposes of Executive Order No. 12866, and,
therefore, this rule has not been reviewed by OMB.
Paperwork Reduction Act of 1995
Following publication of the proposed rule, the public was afforded
60 days to submit written comments on information collection
requirements previously approved by OMB under OMB control number 563-
0003 through September 30, 1998. No public comments were received.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. This rule contains no Federal
mandates (under the regulatory provisions of title II of the UMRA) for
State, local, and tribal governments or the private sector. Thus, this
rule is not subject to the requirements of sections 202 and 205 of the
UMRA.
Executive Order No. 12612
It has been determined under section 6(a) of Executive Order No.
12612, Federalism, that this rule does not have sufficient federalism
implications to warrant the preparation of a Federalism Assessment. The
provisions contained in this rule will not have a substantial direct
effect on states or their political
[[Page 14787]]
subdivisions, or on the distribution of power and responsibilities
among the various levels of government.
Regulatory Flexibility Act
This regulation will not have a significant impact on a substantial
number of small entities. New provisions included in this rule will not
impact small entities to a greater extent than large entities. Under
the current regulations, a producer is required to complete an
application and acreage report. If the crop is damaged or destroyed,
the insured is required to give notice of loss and provide the
necessary information to complete a claim for indemnity. This
regulation does not alter those requirements.
The amount of work required of the insurance companies delivering
and servicing these policies will not increase significantly from the
amount of work currently required. This rule does not have any greater
or lesser impact on the producer. Therefore, this action is determined
to be exempt from the provisions of the Regulatory Flexibility Act (5
U.S.C. 605), and no Regulatory Flexibility Analysis was prepared.
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order No. 12372
This program is not subject to the provisions of Executive Order
No. 12372, which require intergovernmental consultation with State and
local officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
Executive Order No. 12988
The provisions of this rule will not have a retroactive effect
prior to the effective date. The provisions of this rule will preempt
state and local laws to the extent such state and local laws are
inconsistent herewith. The administrative appeal provisions published
at 7 CFR part 11 must be exhausted before any action for judicial
review may be brought.
Environmental Evaluation
This action is not expected to have a significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
National Performance Review
This regulatory action is being taken as part of the National
Performance Review Initiative to eliminate unnecessary or duplicative
regulations and improve those that remain in force.
Background
On Friday, January 3, 1997, FCIC published a proposed rule in the
Federal Register at 61 FR 338-343 to add to the Common Crop Insurance
Regulations (7 CFR part 457), a new section, 7 CFR 457.148, Fresh
Market Pepper Crop Insurance Provisions. The new provisions will be
effective for the 1998 and succeeding crop years. These provisions will
replace and supersede the current provisions for insuring fresh market
peppers found at 7 CFR part 445 (Pepper Crop Insurance Regulations).
This rule also amends 7 CFR part 445 to limit its effect to the 1997
and prior crop years. FCIC will later publish a regulation to remove
and reserve part 445.
Following publication of the proposed rule, the public was afforded
30 days to submit written comments, data and opinions. A total of 21
comments were received from the crop insurance industry and FCIC
Regional Service Offices (RSO). The comments received and FCIC's
responses, are as follows:
Comment: The crop insurance industry questioned removing the term
``marketable'' from the definition of harvest. The commenter questioned
the affect when the final stage of insurance on a unit can be triggered
by the beginning of harvest, even if none of the crop is marketable.
Response: The current regulation created confusion since it
suggested that if the peppers were not marketable, they would not be
considered as harvested for the purposes of determining the insurance
period, calculation of any claim, etc. The picking of peppers on the
unit, whether marketable or not, is considered harvested. The final
stage of insurance on the unit begins when any peppers are harvested,
whether marketable or not. Requirements of good farming practices will
prevent harvest of the peppers before they are ready. Section 14
contains provisions to determine the amount of production to be counted
for harvested and unharvested, including peppers that are not
marketable. Therefore, no change will be made to the definition.
Comment: One comment from the crop insurance industry recommended
clarifying the language in section 2(a) by stating ``Basic units, as
defined in section 1 (Definitions) of the Basic Provisions, will be
established by planting period.''
Response: FCIC agrees with the comment and has amended section 2(a)
to indicate a basic unit ``will be established by planting period.''
However, the definition of ``unit'' is contained in the Basic
Provisions and no change will be made in that portion of the provision.
Comment: One comment from the crop insurance industry stated that
references to land measurements such as leagues and labors contained in
section 2, Unit Division, was unnecessary. These types of land
measurement were not applicable in Florida and fresh market pepper crop
insurance is only available in Florida.
Response: Fresh market pepper insurance may be expanded into other
areas where such measurements are applicable. Therefore, no changes
will be made.
Comment: The crop insurance industry questioned if it was necessary
to specify in section 3(c) that the CAT amount of insurance will be in
the Actuarial Table when all available amounts of insurance are
specified section 3(a).
Response: FCIC agrees section 3(a) states the coverage levels and
amounts of insurance are contained in the Actuarial Table. As section
3(c) provides no additional statements or requirements, FCIC has
deleted this provision and renumbered the remaining provisions.
Comment: One comment from the crop insurance industry stated
section 3 of the crop provisions contained a heading in the stage chart
that was misleading. The chart heading suggested the percentages
represented coverage levels that the insured would select rather than
the amount of insurance that is selected by the insured. The commenter
suggested the chart heading should state, ``Percent in effect of your
amount of insurance.''
Response: FCIC believes the heading of the stage chart is clearly
stated. Therefore, no change will be made.
Comment: One comment received from an FCIC RSO recommended
clarifying the Basic Provisions, by adding a provision in section 6 to
state that the insured must report the dates the insured acreage was
planted within each planting period.
Response: FCIC concurs with the comment and had added a provision
accordingly.
Comment: The crop insurance industry recommended a grammatical
change in section 7, to add a comma and hyphen in ``e.g., fall direct-
seeded irrigated.''
Response: FCIC agrees with the comment and has amended the
provision in section 7 accordingly.
Comment: The crop insurance industry questioned if the provision in
section 9(a) that states we will insure
[[Page 14788]]
newly cleared land or former pasture land planted to fresh market
peppers is new to the crop provisions and if a waiting period was
applicable before insuring fresh market peppers on newly cleared land
or former pasture land.
Response: To provide consistency among the fresh market vegetable
crops, FCIC clarified that former pasture land planted to the insured
crop is also insurable. It is a recommended practice for the fresh
market vegetable crops to be planted on newly cleared and former
pasture land so no waiting period is required prior to planting the
insured crop.
Comment: One comment from the crop insurance industry stated
section 9(b)(3) was confusing due to the ``except as allowed in section
9(b) (1) and (2)'', and they could not determine what was or was not
allowed. The commenter stated that if it was intended to allow coverage
without fumigation on peppers planted in the next planting period after
peppers were planted but not carried to harvest the previous period,
then the exception should only refer to section 9(b)(2)(ii). Provisions
contained in section 9(b) (1) and (2) refer to peppers planted and
replanted and it would seem that fumigation would be necessary before
planting peppers again the following planting period. If the exceptions
in section 9(b) applied to peppers following peppers, why wouldn't the
exceptions also apply to peppers following tomatoes, eggplants or
tobacco?
Response: Acreage previously planted to peppers, tomatoes,
eggplants or tobacco may host nematodes that will damage the insured
crop. Chemicals that are used to fumigate or treat the acreage will
last two to three months. However, in those situations where the crop
was destroyed shortly after planting and is replanted, there is little
risk from nematodes and fumigation is not required. FCIC has amended
the provisions to clarify that fumigation is required whenever the crop
was previously planted to peppers, tomatoes, eggplants or tobacco and
that it does not apply to replanted peppers.
Comment: The crop insurance industry questioned if the phrase
``coverage begins * * * the later of the date we accept your
application, or when the peppers are planted in each planting period''
means that an application could be accepted after the sales closing to
have coverage for subsequent planting periods in the crop year. If so,
what is the purpose of having one sales closing date for the crop?
Response: Section 10 of these provisions do not alter the
requirement contained in the Basic Provisions, which states the
application must be submitted by the sales closing date. The sales
closing date corresponds to the earliest planting period, so only one
application is filed for the crop year and covers all subsequent
planting periods. Since there are multiple planting periods in each
crop year, the date insurance attaches in each planting period must be
established. Provisions in section 10 simply clarify when insurance
will attach. Therefore, no change will be made.
Comment: One comment from the crop insurance industry questioned if
it was valid to extend the end of the insurance period for Florida from
150 days to 165 days after the date of direct seeding.
Response: In addition to allowing expansion of fresh market pepper
insurance coverage into other areas, FCIC's RSO obtained data from the
University of Florida Research Center that indicated direct seeded
peppers required an additional 15 days more than transplanted peppers
to reach maturity. This change provides assurance that all mature
production will be included as production to count.
Comment: Two comments from the crop insurance industry recommended
the cause of loss due to tropical depression be changed to ``excessive
winds sufficient to damage the crop.'' The change would provide
coverage for damage due to winds associated with stalled fronts, severe
thunderstorms, storms or gales. One of the commenters indicated a
stalled high and low pressure system with winds in excess of 60 mph
caused damage in November, 1996, which was not covered by the current
insurance policy.
Response: The current regulation defined a tropical depression as a
large-scale, atmospheric wind-and-pressure system characterized by low
pressure at its center and counterclockwise circular wind motion. FCIC
agrees that damage to the insured crop may occur from systems other
than a tropical depression. FCIC clarified the definition of tropical
depression to state that it is a system identified by the U.S. Weather
Service, and includes tropical depressions, hurricanes, tropical storms
and gales. Therefore, no change will be made.
Comment: Two comments from the crop insurance industry recommended
removing disease and insect infestation as uninsured causes of loss.
The commenters suggested that disease and insects should be an insured
cause of loss if a producer exhausts all reasonable means to protect
the crop. This would provide coverage for new diseases and insects that
cannot presently be controlled by the chemicals that are available.
Response: FCIC agrees that coverage should be available for damage
due to disease and insect infestation for which no effective control
measure exists. Therefore, FCIC has amended the provisions contained in
section 11(b)(1) accordingly.
Comment: Two comments from the crop insurance industry recommend
raising the maximum amount of the replanting payment per acre. Both
commenters stated the maximum amount provided in the current policy is
not sufficient to cover actual costs.
Response: FCIC agrees there may be instances when replanting costs
exceed $300.00 per acre as provided in the current regulation.
Therefore, provisions contained in section 12(b) have been revised to
state that the maximum amount of the replanting payment per acre will
be the lesser of your actual cost of replanting, or the result obtained
by multiplying the maximum amount of the replanting payment contained
in the applicable Special Provisions by your insured share.
Comment: Two comments from the crop insurance industry questioned
if the dollar amount of the allowable cost contained in the Special
Provisions has been reviewed to determine if the cost is sufficient.
One of the commenters recommended raising the allowable cost by $.50.
Response: The amount of allowable costs are provided in the Special
Provisions to allow the flexibility to set the amount at appropriate
levels. Therefore, no changes will be made.
Comment: The crop insurance industry suggested combining the
provisions contained in section 15(e) with the provisions in section
15(a).
Response: Approval of written agreements requested after the sales
closing date is the exception, not the rule. Therefore, these
provisions should be kept separate and no changes have been made.
Comment: The crop insurance industry recommended the requirement
for a written agreement to be renewed each year be removed. Terms of
the agreement should be stated in the agreement to fit the particular
situation for the policy, or if no substantive changes occur from one
year to the next, allow written agreements to be continuous.
Response: Written agreements are intended to change policy terms or
permit insurance in unusual situations where such changes will not
increase risk. If such practices continue year to year, they should be
incorporated into the policy or Special Provisions. It is
[[Page 14789]]
important to minimize exceptions to assure that the insured is well
aware of the specific terms of the policy. Therefore, no changes will
be made.
In addition to the changes described above, FCIC has made the
following change to the Fresh Market Pepper Crop Provisions:
1. Section 16(b)(1)(i)--Delete $2.75 as the specified lowest dollar
amount obtained when computing the minimum value per box of peppers
sold. The minimum value option price will now be contained in the
Special Provisions to allow FCIC to ensure that the price is correct
for the county.
Good cause is shown to make this rule effective upon publication in
the Federal Register. This rule improves the fresh market pepper
insurance coverage and brings it under the Common Crop Insurance Policy
Basic Provisions for consistency among policies. The earliest contract
change date that can be met for the 1998 crop year is April 30, 1997.
It is therefore imperative that these provisions be made final before
that date so that the reinsured companies and insureds may have
sufficient time to implement these changes. Therefore, public interest
requires the agency to make the rule effective upon publication.
List of Subjects in 7 CFR Parts 445 and 457
Crop insurance, Pepper crop insurance regulations, Fresh market
peppers.
Final Rule
Accordingly, as set forth in the preamble, the Federal Crop
Insurance Corporation hereby amends 7 CFR parts 445 and 457 effective
for the 1998 and succeeding crops, to read as follows:
PART 445--PEPPER CROP INSURANCE REGULATIONS
1. The authority citation for 7 CFR part 445 is revised to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
2. The subpart headings preceding Sec. 445.1 is revised to read as
follows:
Subpart--Regulations for the 1987 Through the 1997 Crop Years
3. Section 445.7 is amended by revising the introductory text of
paragraph (d) to read as follows:
Sec. 445.7 The application and policy.
* * * * *
(d) The application for the 1987 and succeeding crop years is found
at subpart D of part 400--General Administrative Regulations (7 CFR
400.37, 400.38). The provisions of the Pepper Crop Insurance Policy for
the 1987 through 1997 crop years are as follows:
* * * * *
PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE
1994 AND SUBSEQUENT CONTRACT YEARS
4. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
5. Section 457.148 is added to read as follows:
Sec. 457.148 Fresh Market Pepper Crop Insurance Provisions.
The Fresh Market Pepper Crop Insurance Provisions for the 1998 and
succeeding crop years are as follows:
FCIC policies:
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Reinsured policies:
(Appropriate title for insurance provider)
Both FCIC and reinsured policies:
Fresh Market Pepper Crop Provisions
If a conflict exists among the Basic Provisions (Sec. 457.8),
these Crop Provisions, and the Special Provisions; the Special
Provisions will control these Crop Provisions and the Basic
Provisions; and these Crop Provisions will control the Basic
Provisions.
1. Definitions
Acre--43,560 square feet of land when row widths do not exceed
six feet, or if row widths exceed six feet, the land area on which
at least 7,260 linear feet of rows are planted.
Bell pepper--An annual pepper (of the capsicum annum species,
grossum group), widely cultivated for its large, crisp, edible
fruit.
Box--One and one-ninth (1\1/9\) bushels of the insured crop.
Crop year--In lieu of the definition of ``crop year'' contained
in section 1 (Definitions) of the Basic Provisions (Sec. 457.8),
crop year is a period of time that begins on the first day of the
earliest planting period for fall planted peppers and continues
through the last day of the insurance period for spring planted
peppers. The crop year is designated by the calendar year in which
spring planted peppers are harvested.
Days--Calendar days.
Direct marketing--Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper or buyer. Examples of direct
marketing include selling through an on-farm or roadside stand,
farmer's market, and permitting the general public to enter the
field for the purpose of picking all or a portion of the crop.
Excess rain--An amount of precipitation sufficient to directly
damage the crop.
FSA--The Farm Service Agency, an agency of the United States
Department of Agriculture or a successor agency.
Freeze--The formation of ice in the cells of the plant or its
fruit, caused by low air temperatures.
Good farming practices--The cultural practices generally in use
in the county for the crop to make normal progress toward maturity,
and are those recognized by the Cooperative State Research,
Education, and Extension Service as compatible with agronomic and
weather conditions in the county.
Harvest--The picking of peppers on the unit.
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 for the insured crop to make normal
progress toward maturity.
Mature bell pepper--A pepper that has reached the stage of
development that will withstand normal handling and shipping.
Plant stand--The number of live plants per acre prior to the
occurrence of an insurable cause of loss.
Planted acreage--Land in which, for each planting period,
transplants or seed have been placed manually or by a machine
appropriate for the insured crop and planting method, at the correct
depth, into soil that has been properly prepared for the planting
method and production practice. For each planting period, peppers
must initially be planted in rows. Acreage planted in any other
manner will not be insurable unless otherwise provided by the
Special Provisions or by written agreement.
Planting period--The period of time designated in the Actuarial
Table in which the peppers must be planted to be considered fall,
winter or spring-planted peppers.
Potential production--The number of boxes of mature bell peppers
that the pepper plants will or would have produced per acre by the
end of the insurance period, assuming normal growing conditions and
practices.
Practical to replant--In lieu of the definition of ``Practical
to replant'' contained in section 1 of the Basic Provisions
(Sec. 457.8), practical to replant is defined as our determination,
after loss or damage to the insured crop, based on factors,
including but not limited to moisture availability, condition of the
field, marketing windows, and time to crop maturity, that replanting
to the insured crop will allow the crop to attain maturity prior to
the calendar date for the end of the insurance period (inability to
obtain plants or seed will not be considered when determining if it
is practical to replant).
Replanting--Performing the cultural practices necessary to
replace the pepper seed or transplants and then replacing the pepper
seed or transplants in the insured acreage with the expectation of
growing a successful crop.
Row width--The widest distance from the center of one row of
plants to the center of an adjacent row of plants.
[[Page 14790]]
Tropical depression--A system identified by the U.S. Weather
Service as a tropical depression, and for the period of time so
designated, including tropical storms, gales, and hurricanes.
Written agreement--A written document that alters designated
terms of a policy in accordance with section 15.
2. Unit Division
(a) In addition to the requirement contained in section 1
(Definitions) of the Basic Provisions (Sec. 457.8), (basic unit), a
basic unit will also be established by planting period.
(b) Unless limited by the Special Provisions, basic units may be
further divided into optional units if, for each optional unit you
meet all the conditions of this section or if a written agreement
for such further division exists.
(c) If you do not comply fully with these provisions, we will
combine all optional units that are not in compliance with these
provisions into the basic unit from which they were formed. We will
combine the optional units at any time we discover that you have
failed to comply with these provisions. If failure to comply with
these provisions is determined to be inadvertent, and the optional
units are combined into a basic unit, that portion of the premium
paid for the purpose of electing optional units will be refunded to
you for the units combined.
(d) All optional units established for a crop year must be
identified on the acreage report for that crop year.
(e) The following requirements must be met for each optional
unit:
(1) You must have records, which can be independently verified,
of planted acreage and production for each optional unit for at
least the last crop year in which the insured crop was planted;
(2) You must plant the crop in a manner that results in a clear
and discernable break in the planting pattern at the boundaries of
each optional unit;
(3) You must have records of marketed production or measurement
of stored production from each optional unit maintained in such a
manner that permits us to verify the production from each optional
unit, or the production from each unit must be kept separate until
loss adjustment is completed by us; and
(4) Each optional unit must be located in a separate legally
identified section. In the absence of sections, we may consider
parcels of land legally identified by other methods of measure
including, but not limited to Spanish grants, railroad surveys,
leagues, labors, or Virginia Military Lands, as the equivalent of
sections for unit purposes. In areas that have not been surveyed
using the systems identified above, or another system approved by
us, or in areas where such systems exist but boundaries are not
readily discernable, each optional unit must be located in a
separate farm identified by a single FSA Farm Serial Number.
3. Amounts of Insurance and Production Stages
(a) In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities)
of the Basic Provisions (Sec. 457.8), you may select only one
coverage level (and the corresponding amount of insurance designated
in the Actuarial Table for the applicable planting period and
practice) for all the peppers in the county insured under this
policy.
(b) The amount of insurance you choose for each planting period
and practice must have the same percentage relationship to the
maximum price offered by us for each planting period and practice.
For example, if you choose 100 percent of the maximum amount of
insurance for a specific planting period and practice, you must also
choose 100 percent of the maximum amount of insurance for all other
planting periods and practices.
(c) The production reporting requirements contained in section 3
(Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities) of the Basic Provisions (Sec. 457.8) do not apply to
fresh market peppers.
(d) The amounts of insurance per acre are progressive by stages
as follows:
------------------------------------------------------------------------
Percent of
the amount
of
Stage insurance Length of time if Length of time if
per acre direct-seeded transplanted
that you
selected
------------------------------------------------------------------------
1................ 65 From planting From planting
through the 74th through the 44th
day after planting. day after
planting.
2................ 85 From the 75th day From the 45th day
after planting after planting
until the until the
beginning of stage beginning of stage
3. 3.
3................ 100 Begins the earlier Begins the earlier
of 110 days after of 80 days after
planting, or the planting, or the
beginning of beginning of
harvest. harvest.
------------------------------------------------------------------------
(e) Any acreage of peppers damaged in the first or second stage
to the extent that the majority of producers in the area would not
normally further care for it, will be deemed to have been destroyed.
The indemnity payable for such acreage will be based on the stage
the plants had achieved when the damage occurred.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is April 30
preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation
and termination dates are July 31.
6. Report of Acreage
In addition to the requirements of section 6 (Report of Acreage)
of the Basic Provisions (Sec. 457.8), you must report on or before
the acreage reporting date contained in the Special Provisions for
each planting period:
(a) All the acreage of peppers in the county insured under this
policy in which you have a share;
(b) The dates the acreage was planted within each planting
period; and
(c) The row width.
7. Annual Premium
In lieu of the premium amount determinations contained in
section 7 (Annual Premium) of the Basic Provisions (Sec. 457.8), the
annual premium amount for each cultural practice (e.g., fall direct-
seeded irrigated) is determined by multiplying the third stage
amount of insurance per acre by the premium rate for the cultural
practice as established in the Actuarial Table, by the insured
acreage, by your share at the time coverage begins, and by any
applicable premium adjustment factors contained in the Actuarial
Table.
8. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all the bell
peppers in the county for which a premium rate is provided by the
Actuarial Table:
(a) In which you have a share;
(b) That are:
(1) Planted to be harvested and sold as mature fresh market bell
peppers;
(2) Planted within the planting periods designated in the
Actuarial Table;
(3) Grown under an irrigated practice;
(4) Grown on acreage covered by plastic mulch except where the
Special Provisions allow otherwise;
(5) Grown by a person who in at least one of the three previous
crop years:
(i) Grew bell peppers for commercial sale; or
(ii) Participated in managing a bell pepper farming operation;
(c) That are not:
(1) Interplanted with another crop;
(2) Planted into an established grass or legume;
(3) Pimento peppers; or
(4) Grown for direct marketing.
9. Insurable Acreage
(a) In lieu of the provisions of section 9 (Insurable Acreage)
of the Basic Provisions (Sec. 457.8), that prohibit insurance
attaching if
[[Page 14791]]
a crop has not been planted in at least one of the three previous
crop years, we will insure newly cleared land or former pasture land
planted to fresh market peppers.
(b) In addition to the provisions of section 9 (Insurable
Acreage) of the Basic Provisions (Sec. 457.8):
(1) You must replant any acreage of peppers damaged during the
planting period in which initial planting took place whenever less
than 50 percent of the plant stand remains: and
(i) It is practical to replant;
(ii) If, at the time the crop was damaged, the final day of the
planting period has not passed; and
(iii) The damage occurs within 30 days of transplanting or 60
days of direct-seeding.
(2) Whenever peppers initially are planted during the fall or
winter planting periods and the conditions specified in sections
9(b)(1) (ii) and (iii) are not satisfied, you may elect:
(i) To replant such acreage and collect any replant payment due
as specified in section 12. The initial planting period coverage
will continue for such replanted acreage.
(ii) Not to replant such acreage and receive an indemnity based
on the stage of growth the plants had attained at the time of
damage. However, such an election will result in the acreage being
uninsurable in the subsequent planting period.
(3) We will not insure any acreage on which peppers (except for
replanted peppers in accordance with sections 9(b)(1) and (2)),
tomatoes, eggplants, or tobacco have been grown and the soil was not
fumigated or otherwise properly treated before planting peppers.
10. Insurance Period
In lieu of the provisions of section 11 (Insurance Period) of
the Basic Provisions (Sec. 457.8), coverage begins on each unit or
part of a unit the later of the date we accept your application, or
when the peppers are planted in each planting period. Coverage ends
at the earliest of:
(a) Total destruction of the peppers on the unit;
(b) Abandonment of the peppers on the unit;
(c) The date harvest should have started on the unit on any
acreage which will not be harvested;
(d) Final adjustment of a loss on the unit;
(e) Final harvest; or
(f) The calendar date for the end of the insurance period as
follows:
(1) 165 days after the date of direct-seeding or replanting with
seed; and
(2) 150 days after the date of transplanting or replanting with
transplants.
11. Causes of Loss
(a) In accordance with the provisions of section 12 (Causes of
Loss) of the Basic Provisions (Sec. 457.8), insurance is provided
only against the following causes of loss that occur during the
insurance period:
(1) Excess rain;
(2) Fire;
(3) Freeze;
(4) Hail;
(5) Tornado;
(6) Tropical depression; or
(7) Failure of the irrigation water supply, if caused by an
insured cause of loss that occurs during the insurance period.
(b) In addition to the causes of loss excluded in section 12
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not
insure against any loss of production due to:
(1) Disease or insect infestation, unless no effective control
measure exists for such disease or insect infestation; or
(2) Failure to market the peppers, unless such failure is due to
actual physical damage caused by an insured cause of loss that
occurs during the insurance period.
12. Replanting Payments
(a) In accordance with section 13 (Replanting Payment) of the
Basic Provisions (Sec. 457.8), a replanting payment is allowed if,
due to an insured cause of loss, more than 50 percent of the plant
stand will not produce peppers and it is practical to replant.
(b) The maximum amount of the replanting payment per acre will
be the lesser of your actual cost of replanting or the result
obtained by multiplying the per acre replanting payment amount
contained in the Special Provisions by your insured share.
(c) In lieu of the provisions contained in section 13
(Replanting Payment) of the Basic Provisions (Sec. 457.8), that
limit a replanting payment to one each crop year, only one
replanting payment will be made for acreage planted during each
planting period within the crop year.
13. Duties In The Event of Damage or Loss
In addition to the requirements contained in section 14 (Duties
In The Event of Damage or Loss) of the Basic Provisions
(Sec. 457.8), if you intend to claim an indemnity on any unit you
also must give us notice not later than 72 hours after the earliest
of:
(a) The time you discontinue harvest of any acreage on the unit;
(b) The date harvest normally would start if any acreage on the
unit will not be harvested; or
(c) The calendar date for the end of the insurance period.
14. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event
you are unable to provide separate acceptable production records:
(1) For any optional unit, we will combine all optional units
for which such production records were not provided; or
(2) For any basic unit, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for each unit.
(b) In the event of loss or damage covered by this policy, we
will settle your claim by:
(1) Multiplying the insured acreage in each stage by the amount
of insurance per acre for the final stage;
(2) Multiplying each result in section 14(b)(1) by the
percentage for the applicable stage (see section 3(d));
(3) Total the results of section 14(b)(2);
(4) Subtracting either of the following values from the result
of section 14(b)(3):
(i) For other than catastrophic risk protection coverage, the
total value of production to be counted (see section 14(c)); or
(ii) For catastrophic risk protection coverage, the result of
multiplying the total value of production to be counted (see section
14(c)) by:
(A) Sixty percent for the 1998 crop year; or
(B) Fifty-five percent for 1999 and subsequent crop years; and
(5) Multiplying the result of section 14(b)(4) by your share.
(c) The total value of production to count from all insurable
acreage on the unit will include:
(1) Not less than the amount of insurance per acre for the stage
for any acreage:
(i) That is abandoned;
(ii) Put to another use without our consent;
(iii) That is damaged solely by uninsured causes; or
(iv) For which you fail to provide acceptable production
records;
(2) The value of the following appraised production will not be
less than the dollar amount obtained by multiplying the number of
boxes of appraised peppers by the minimum value per box shown in the
Special Provisions for the planting period:
(i) Potential production on any acreage that has not been
harvested the third time;
(ii) Unharvested mature bell peppers (unharvested production
that is damaged or defective due to insurable causes and is not
marketable will not be counted as production to count);
(iii) Production lost due to uninsured causes; and
(iv) Potential production on insured acreage that you intend to
put to another use or abandon, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for
that acreage will end when you put the acreage to another use or
abandon the crop. If agreement on the appraised amount of production
is not reached:
(A) 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 (If we require you to continue to care
for the crop and you do not do so, the original appraisal will be
used); or
(B) You may elect to continue to care for the crop, in which
case the amount of production to count for the acreage will be the
harvested production, or our reappraisal if the crop is not
harvested.
(3) The total value of all harvested production from the
insurable acreage will be the dollar amount obtained by subtracting
the allowable cost contained in the Special Provisions from the
price received for each box of peppers (this result may not be less
than the minimum value shown in the Special Provisions for any box
of peppers), and multiplying this result by the number of boxes of
peppers harvested. Harvested production that is damaged or defective
due to insurable causes and is not marketable, will not be counted
as production to count.
15. Written Agreements
Designated terms of this policy may be altered by written
agreement in accordance with the following:
(a) You must apply in writing for each written agreement no
later than the sales
[[Page 14792]]
closing date, except as provided in section 15(e);
(b) The application for a written agreement must contain all
variable terms of the contract between you and us that will be in
effect if the written agreement is not approved;
(c) If approved, the written agreement will include all variable
terms of the contract, including, but not limited to, crop type or
variety, and premium rate;
(d) Each written agreement will only be valid for one year (If
the written agreement is not specifically renewed the following
year, insurance coverage for subsequent crop years will be in
accordance with the printed policy); and
(e) An application for a written agreement submitted after the
sales closing date may be approved if, after a physical inspection
of the acreage, it is determined that no loss has occurred and the
crop is insurable in accordance with the policy and written
agreement provisions.
16. Minimum Value Option
(a) The provisions of this option are continuous and will be
attached to and made a part of your insurance policy, if:
(1) You elect either Option I or Option II of the Minimum Value
Option on your application, or on a form approved by us, on or
before the sales closing date for the initial crop year in which you
wish to insure fresh market peppers under this option, and pay the
additional premium indicated in the Actuarial Table for this
optional coverage; and
(2) You have not elected coverage under the Catastrophic Risk
Protection Endorsement.
(b) In lieu of the provisions contained in section 14(c)(3), the
total value of harvested production will be determined as follows:
(1) If you selected Option I of the Minimum Value Option, the
total value of harvested production will be as follows:
(i) For sold production, the dollar amount obtained by
subtracting the allowable cost contained in the Special Provisions
from the price received for each box of peppers (this result may not
be less than the minimum value option price contained in the Special
Provisions for any box of peppers), and multiplying this result by
the number of boxes of peppers sold; and
(ii) For marketable production that is not sold, the dollar
amount obtained by multiplying the number of boxes of such peppers
on the unit by the minimum value shown in the Special Provisions for
the planting period (harvested production that is damaged or
defective due to insurable causes and is not marketable will not be
counted as production).
(2) If you selected Option II of the Minimum Value Option, the
total value of harvested production will be as provided in section
16(b)(1), except that the dollar amount specified in section
16(b)(1)(i) may not be less than zero.
(c) This option may be canceled by either you or us for any
succeeding crop year by giving written notice on or before the
cancellation date preceding the crop year for which the cancellation
of this option is to be effective.
Signed in Washington, DC, on March 24, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance.
[FR Doc. 97-7941 Filed 3-27-97; 8:45 am]
BILLING CODE 3410-FA-P
