[Federal Register Volume 63, Number 63 (Thursday, April 2, 1998)]
[Notices]
[Pages 16225-16242]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8590]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Crop Revenue Coverage
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, grain sorghum, soybeans and cotton in select states
and counties under the Crop Revenue Coverage (CRC) plan of insurance
for the 1998 crop year. This notice is intended to inform eligible
producers and the private insurance industry of the expanded
availability of the CRC plan of insurance for corn, grain sorghum,
soybeans, and cotton and 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
[[Page 16226]]
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 CRC, originally submitted by American Agrisurance, a
managing general agency for Redland Insurance Company.
The CRC program has been approved for reinsurance and premium
subsidy, including subsidy for administrative and operating expenses.
CRC is designed to protect producers against both price and yield
losses. CRC provides a harvest revenue guarantee that pays losses from
the established yield coverage at a higher price if the harvest time
price is higher than the spring price.
In the 1996 crop year, the CRC program was available for corn and
soybeans in all counties in Iowa and Nebraska. In the 1997 crop year,
the CRC program was expanded for corn into Colorado, Illinois, Indiana,
Kansas, Michigan, Minnesota, Missouri, Ohio, Oklahoma, South Dakota,
and Texas, and soybeans into Illinois, Indiana, Kansas, Michigan,
Minnesota, Missouri, Ohio, Oklahoma, South Dakota, and Texas. New CRC
programs were also made available for grain sorghum in Colorado,
Nebraska, Oklahoma, and crop reporting districts 20, 30, 50, and 70 in
Kansas, 40 in Missouri, 50 and 80 in South Dakota, and 40, 51, 52, 81,
82, 90, 96, and 97 in Texas; for cotton in Arizona, Georgia, Oklahoma,
and crop reporting districts 11, 12, 21, and 22 in Texas; and for wheat
into Kansas, Michigan, Minnesota, Nebraska, South Dakota, Texas,
Washington, and twenty-three counties each in Montana and North Dakota.
In the 1998 crop year, the CRC program was expanded for corn into
Alabama, Arizona, Arkansas, California, Georgia, Idaho, Kentucky,
Louisiana, Mississippi, Montana, New Mexico, North Carolina, North
Dakota, Oregon, South Carolina, Tennessee, Utah, Virginia, Washington,
Wisconsin, and Wyoming; for soybeans into Alabama, Arkansas, Georgia,
Kentucky, Louisiana, Mississippi, North Carolina, North Dakota, South
Carolina, Tennessee, Virginia, and Wisconsin; for grain sorghum into
Alabama, Arkansas, California, Georgia, Illinois, Indiana, Iowa,
Kentucky, Louisiana, Michigan, Minnesota, Mississippi, New Mexico,
North Carolina, North Dakota, Ohio, South Carolina, Tennessee,
Virginia, Wisconsin, and the remaining counties in Kansas, Missouri,
South Dakota, and Texas; for cotton into Alabama, Arkansas, California,
Kansas, Louisiana, Mississippi, Missouri, New Mexico, North Carolina,
South Carolina, Tennessee, Virginia, and the remaining counties in
Texas; and for wheat into Alabama, Arizona, Arkansas, California,
Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana,
Mississippi, Missouri, New Mexico, North Carolina, Ohio, Oklahoma,
Oregon, South Carolina, Tennessee, Utah, Virginia, Wisconsin, Wyoming,
and remaining counties in Montana and North Dakota. Prior to the 1998
crop year, the CRC policy only provided coverage for basic and optional
units as selected by the insured. Beginning with the 1998 crop year,
producers can select basic, optional or enterprise units for corn and
soybeans and a 95 or 100 price percentage for corn, grain sorghum,
soybeans and cotton. The CRC program also provides insurance for any
producer that has been identified on the nonstandard classification
system (NCS).
FCIC herewith gives notice of the above stated changes for the 1998
crop year for corn, grain sorghum, soybeans and cotton for use by
private insurance companies.
The CRC underwriting rules, rate factors and forms for corn, grain
sorghum, soybeans, and cotton 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 CRC
reinsurance agreement. Requests for this information should be sent to
Heyward Baker, Director, Reinsurance Services Division, Federal Crop
Insurance Corporation, 14th & Independence Ave, SW, Room 6727,
Washington, D.C. 20250.
Following is a complete list of insurable CRC crops by state for
the 1998 crop year:
Alabama
Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Arizona
Corn, Cotton, Wheat
Arkansas
Corn, Cotton, Grain Sorghum, Soybeans, Wheat
California
Corn, Cotton, Grain Sorghum, Wheat
Colorado
Corn, Grain Sorghum, Wheat
Georgia
Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Idaho
Corn, Wheat
Illinois
Corn, Grain Sorghum, Soybeans, Wheat
Indiana
Corn, Grain Sorghum, Soybeans, Wheat
Iowa
Corn, Grain Sorghum, Soybeans, Wheat
Kansas
Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Kentucky
Corn, Grain Sorghum, Soybeans, Wheat
Louisiana
Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Michigan
Corn, Grain Sorghum, Soybeans, Wheat
Minnesota
Corn, Grain Sorghum, Soybeans, Wheat
Mississippi
Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Missouri
Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Montana
Corn, Wheat
Nebraska
Corn, Grain Sorghum, Soybeans, Wheat
New Mexico
Corn, Cotton, Grain Sorghum, Wheat
North Carolina
Corn, Cotton, Grain Sorghum, Soybeans, Wheat
North Dakota
Corn, Grain Sorghum, Soybeans, Wheat
Ohio
Corn, Grain Sorghum, Soybeans, Wheat
Oklahoma
Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Oregon
Corn, Wheat
South Carolina
Corn, Cotton, Grain Sorghum, Soybeans, Wheat
South Dakota
Corn, Grain Sorghum, Soybeans, Wheat
Tennessee
Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Texas
Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Utah
Corn, Wheat
Virginia
Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Washington
Corn, Wheat
Wisconsin
[[Page 16227]]
Corn, Grain Sorghum, Soybeans, Wheat
Wyoming
Corn, Wheat
Notice: The Basic Provisions and Crop Provisions for the CRC
corn, grain sorghum, soybeans, and cotton programs of insurance are
as follows.
Crop Revenue Coverage 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 Basic Provisions; (2) the Special Provisions; and
(3) the Crop 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 which is
available for public inspection in your agent's office, and which show
the revenue guarantees, coverage levels, premium rates, practices,
insurable acreage, and other related information regarding crop
insurance in the county.
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). This yield is established for basic or optional
units. The approved yield for each basic unit comprising an enterprise
unit is retained for premium and final guarantee purposes.
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 price. The initial price determined in accordance with the
Commodity Exchange Endorsement and used to calculate your premium and
Minimum Guarantee.
CRC low price factor. A premium factor, as set forth in the
actuarial documents, used to calculate the risk associated with a
decrease in the Harvest Price relative to the Base Price.
CRC high price factor. A premium factor, as set forth in the
actuarial documents, used to calculate the risk associated with an
increase in the Harvest Price relative to the Base Price.
CRC rate. A premium rate, as set forth in the actuarial documents,
used to calculate the risk associated with producing a level of
production.
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 ``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).
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 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
percentage you choose from 100 percent. 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,
and
[[Page 16228]]
interest on those premiums, 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 the 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 the Crop Provisions
and section 12).
Field. All acreage of tillable land within a natural or artificial
boundary (e.g., roads, waterways, fences, etc).
Final guarantee. The number of dollars guaranteed per acre
determined to be the higher of the minimum guarantee or the harvest
guarantee, where:
(1) Minimum guarantee--The approved yield per acre multiplied by
the base price multiplied by the coverage level percentage you elect.
(2) Harvest guarantee--The approved yield per acre multiplied by
the harvest price, multiplied by the coverage level percentage you
elect.
If you elect enterprise unit coverage, the final guarantee for each
basic unit comprising the enterprise unit will be calculated
separately.
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 final 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 final guarantee and
are those recognized by the Cooperative State Research, Education, and
Extension Service as compatible with agronomic and weather conditions
in the county.
Harvest price. The final price determined in accordance with the
Commodity Exchange Endorsement and used to calculate your calculated
revenue and the harvest guarantee.
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
final 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 Federal Crop Insurance Act, as amended (7 U.S.C. 1501
et seq.) (Act) and implemented in 7 CFR part 400.
Negligence. The failure to use such care as a reasonably prudent
and careful person would use under similar circumstances.
Non-contiguous. Any two or more tracts of land whose boundaries do
not touch at any point, except that land separated only by a public or
private right-of-way, waterway, or an irrigation canal will be
considered as contiguous.
Palmer Drought Severity Index. A meteorological index calculated by
the National Weather Service to indicate prolonged and abnormal
moisture deficiency or excess.
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, plants, or trees have 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 or plants 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.
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 or by the end of the late
planting period. You must have been prevented from planting the insured
crop due to an insured cause of loss that also prevented most producers
from planting on acreage with similar characteristics in the
surrounding area.
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, 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 or plants of the damaged or destroyed
insured crop and then replacing the seed or plants of the same crop in
the insured acreage with the expectation of producing at least the
yield used to determine the final guarantee.
[[Page 16229]]
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.
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 benefit 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'' above).
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 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 in
accordance with section 2(c).
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 100 percent crop 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 section 2(b) and the
applicable Crop Provisions.
(b) Optional unit--Unless limited by the Crop Provisions or Special
Provisions, a basic unit as determined in section 2(a) may be divided
into optional units if, for each optional unit:
(1) You meet the following:
(A) 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 final guarantee;
(B) You 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;
(C) 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); and
(D) 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 meet one or more of the following,
unless otherwise specified in the Crop Provisions:
(A) 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
(B) 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 the final 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--A unit that consists of 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. If you select and qualify for an
enterprise unit, you will qualify for a premium discount based on the
insured crop and number of acres in the enterprise unit. The following
requirements must be met to qualify for an enterprise unit:
(1) The enterprise unit must contain 50 or more acres;
(2) The enterprise unit must be comprised of two or more basic
units of the same insured crop as defined in section 2(a);
(3) The basic units which comprise the enterprise unit must each
have insurable acreage of the same crop in the crop year insured;
(4) You must comply with all reporting requirements for each basic
unit comprising the enterprise unit;
(5) Basic units may not be combined into an enterprise unit on any
basis other than as described under this section; and
[[Page 16230]]
(6) If you do not comply fully with these provisions, and if at any
time we discover that you have failed to comply with these provisions,
we will assign you the basic unit structure and adjust the premium
accordingly.
(d) Selection of unit structure--Basic, optional, or enterprise
units will be determined when the acreage is reported but may be
adjusted, combined, or separated to reflect the actual unit structure
when adjusting a loss. If you select an enterprise unit structure, you
must elect that option in writing by the sales closing date. If you do
not qualify for an enterprise unit when the acreage is reported, you
will be assigned a basic unit structure.
(e) All applicable unit structures must be stated on the acreage
report for each crop year. If you elect enterprise units, both the
enterprise unit and all basic units that comprise the enterprise unit
must also be elected on the acreage report.
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, price percentage,
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 and that person is:
(1) Not on the nonstandard classification system list, the amount
of coverage available under the policy will be reduced proportionately
by that person's share of the crop; or
(2) On the nonstandard classification system list, the insurance
will not be available to that person and any entity in which the person
has a substantial beneficial interest.
(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 premium, is not paid on or before
the termination date for the crop on which an amount is due:
(1) For a policy with the unpaid 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;
(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
payment 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,
1997, and crop B, with a termination date of March 15, 1998, 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, 1997, and
crop A's policy is terminated on that date. Crop B's policy is
terminated as of March 15, 1998. If you enter an agreement to repay the
debt on April 25, 1998, you can apply for insurance for crop A by the
October 31, 1998, sales closing date and crop B by the March 15, 1999,
sales closing date. If you fail to make a scheduled payment on November
1, 1998, you will be ineligible for crop insurance effective on
November 1, 1998, 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
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) You are not eligible to participate in the Crop Revenue
Coverage program if you have elected the MPCI Catastrophic Risk
Protection Endorsement except if you execute a High Risk Land Exclusion
Option for a Crop Revenue Coverage Policy, you may elect to insure the
``high risk land'' under an MPCI Catastrophic Risk Protection
Endorsement. If both policies are in force, the acreage of the crop
covered under the Crop Revenue Coverage 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.
[[Page 16231]]
4. Coverage Level, Price Percentage, and Approved Yield for Determining
Final Guarantee and Indemnity
(a) For each crop year, the final guarantee, coverage level, and
price percentage at which an indemnity will be determined for each unit
will be those used to calculate your summary of coverage. The
information necessary to determine those factors will be contained in
the Special Provisions or in the actuarial documents.
(b) You may select only one coverage level from among those offered
by us for each insured crop. You may change the coverage level for the
following crop year by giving written notice not later than the sales
closing date for the affected insured crop. If you do not change the
coverage level for the succeeding crop year, you will be assigned the
same coverage level that was in effect the previous crop year.
(c) You may select only one price percentage for each insured crop.
You may change the price percentage for the following crop year by
giving written notice to us not later than the sales closing date for
the insured crop. The price percentage you select applies to both the
base price and harvest price. Since the price percentage may change
each year, if you do not select a new price percentage on or before the
sales closing date, we will assign a price percentage which bears the
same relationship to the price percentage schedule that was in effect
for the preceding year. (For example: If you selected a price
percentage of 100 for the previous crop year, and you do not select a
new price percentage for the current crop year, we will assign a price
percentage of 100 for the current crop year.)
(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 final 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 final guarantee for any unit, and revise any
indemnity paid based on that final 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.
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, 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 revision that broadens 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 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 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 (5) 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.
(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.
(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.
(g) If the information reported by you on the acreage report for
share, acreage, practice, type or other material
[[Page 16232]]
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
final 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
(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) The annual premium amount is determined by:
(1) Multiplying the approved yield times the coverage level, times
the base rate specified in the actuarial documents, times the base
price as defined in the Commodity Exchange Endorsement;
(2) Multiplying the approved yield times the coverage level, times
the CRC rate specified in the actuarial documents, times the CRC low
price factor specified in the actuarial documents;
(3) Multiplying the approved yield times the coverage level, times
the base rate specified in the actuarial documents, times the CRC high
price factor specified in the actuarial documents;
(4) Totaling section 8(c)(1), (2), and (3);
(5) Multiplying the result of section 8(c)(4) times the acres
insured, times your share at the time coverage begins, and as
applicable, times any rate map adjustment factor; rate class option
factor and; option factor specified in the actuarial documents;
(6) Multiplying the approved yield times the coverage level, times
the base rate specified in the actuarial documents, times the MPCI
market price election, times the insured acres, times your share at the
time coverage begins, and as applicable, times any rate map adjustment
factor; rate class option factor and; option factor specified in the
actuarial documents, and times the applicable producer subsidy
percentage to calculate the appropriate amount of subsidy. The producer
subsidy percentage is based upon the coverage level and is contained in
the actuarial documents; and
(7) Subtracting the result of section 8(c)(6) from the result of
section 8(a)(5) to determine the annual producer paid premium.
(d) The annual premium amount for any applicable nonstandard
classification system designations is determined by:
(1) Multiplying the approved yield (with yield adjustments
specified in the actuarial documents) times the coverage level, times
the NCS rate specified in the actuarial documents, times the rate
differential specified in the actuarial documents, and times the base
price as defined in the Commodity Exchange Endorsement;
(2) Multiplying the result of section 8(d)(1) times the acres
insured, times your share at the time coverage begins, times any
applicable rate class option factor specified in the actuarial
documents, times any applicable option factor specified in the
actuarial documents, and times the NCS premium factor calculated using
the NCS premium factor formula specified in the actuarial documents;
(3) Multiplying the approved yield (with yield adjustments
specified in the actuarial documents) times the coverage level, times
the NCS rate specified in the actuarial documents, times the rate
differential specified in the actuarial documents, times the MPCI
market price election, times the acres insured, times your share at the
time coverage begins, and as applicable, times any rate class option
factor and/or option factor specified in the actuarial documents, and
times the applicable producer subsidy percentage to calculate the
appropriate amount of subsidy (The producer subsidy percentage is based
upon the coverage level and is contained in the actuarial documents);
and
(4) Subtracting the result of section 8(d)(3) from the result of
section 8(d)(2) to determine the annual producer paid premium.
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 final guarantee
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 unless we agree, in writing, to insure such crop; 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 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
[[Page 16233]]
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
(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 United States Department of Agriculture 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.)
(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; and
(4) 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
[[Page 16234]]
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.
(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 the Federal Crop Insurance Corporation.
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.
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 final 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 final guarantee for each acre planted as specified in this
subsection will be determined by multiplying the final guarantee that
is provided for acreage of the insured crop that is timely planted 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) 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;
(3) The final guarantee for any acreage on which an insured cause
of loss prevents 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 determined as indicated in this
section; and
(4) 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 section
17(a) or (b) 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).
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; and
(2) You include any acreage of the insured crop that was prevented
from being planted on your acreage report.
(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, 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 not be
considered to be an insurable cause of loss for the purposes of
prevented planting unless, on the final planting date:
(1) For non-irrigated acreage, the area that is prevented from
being planted is classified by the Palmer Drought Severity Index as
being in a severe or extreme drought; 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
[[Page 16235]]
double cropped acreage in accordance with section 18(f)(3) or (4). The
eligible acres for each insured crop will be determined in accordance
with the following table.
------------------------------------------------------------------------
Eligible acres
if, in any of
Eligible acres if, in the 4 most
any of the 4 most recent crop
Type of crop recent crop years, you years, you have
have produced any crop not produced any
for which insurance crop for which
was available insurance was
available
------------------------------------------------------------------------
(i) The crop is not required (A) The maximum number (B) The number
to be contracted with a of acres certified of acres
processor to be insured. for actual production specified on
history (APH) your intended
purposes or reported acreage report
for insurance for the which is
crop in any one of submitted to us
the 4 most recent by the sales
crop years (not closing date
including reported for all crops
prevented planting you insure for
acreage that was the crop year
planted to a and that is
substitute crop other accepted by us.
than an approved The total
cover crop). The number of acres
number of acres listed may not
determined above for exceed the
a crop may be number of acres
increased by of cropland in
multiplying it by the your farming
ratio of the total operation at
cropland acres that the time you
you are farming this submit the
year (if greater) to intended
the total cropland acreage report.
acres that you farmed The number of
in the previous year, acres
provided that you determined
submit proof to us above for a
that for the current crop may only
crop year you have be increased by
purchased or leased multiplying it
additional land or by the ratio of
that acreage will be the total
released from any cropland acres
USDA program which that you are
prohibits harvest of farming this
a crop. Such acreage year (if
must have been greater) to the
purchased, leased, or number of acres
released from the listed on your
USDA program, in time intended
to plant it for the acreage report,
current crop year if you meet the
using good farming conditions
practices. No cause stated in
of loss that will or section
could prevent 18(e)(1)(i)(A).
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
contracted with a processor acres of the crop of acres of the
to be insured. specified in the crop as
processor contract, determined in
if the contract section
specifies a number of 18(e)(1)(ii)(A)
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) If at least one contiguous block of prevented planting acreage
does not constitute at least 20 acres or 20 percent of the insurable
crop acreage in the unit, whichever is less. We will assume that any
prevented planting acreage within a field that contains planted acreage
would have been planted to the same crop that is planted in the field,
unless the prevented planting acreage constitutes at least 20 acres or
20 percent of the insurable acreage in the field and you can prove that
you have previously produced both crops in the same field in the same
crop year;
(2) Used for conservation purposes or intended to be left unplanted
under any program administered by the USDA;
(3) 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;
(4) 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 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;
(5) 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;
(6) For which planting history or conservation plans indicate that
the acreage would have remained fallow for crop rotation purposes;
(7) That exceeds the number of acres eligible for a prevented
planting payment;
(8) That exceeds the number of eligible acres physically available
for planting;
(9) 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 final 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);
(10) Based on an irrigated practice final guarantee unless adequate
irrigation facilities were in place to carry out an irrigated practice
on the
[[Page 16236]]
acreage prior to the insured cause of loss that prevented you from
planting; or
(11) Of a crop type that you did not plant in at least one of the
four most recent years. Types for which separate final guarantees are
available must be included in your APH database in at least one of the
most recent four 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).
(g) The prevented planting payment for any eligible acreage within
a basic or optional unit will be determined by:
(1) Multiplying the final 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(g)(1) by the number of
eligible prevented planting acres in the unit; and
(3) Multiplying the result of section 18(g)(2) by your share.
(h) The prevented planting payment for any eligible acreage within
an enterprise unit will be determined by:
(1) Multiplying the final guarantee for each basic unit 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(h)(1) by the number of
eligible prevented planting acres in each basic unit within the
enterprise unit; and
(3) Multiplying the result of section 18(h)(2) by your share.
(4) Total the results from section 18(h)(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 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.
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 subsection (b) of this section, 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
provision (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
[[Page 16237]]
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 subsection (d) of this section) 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.
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 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. 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.
Crop Revenue Coverage
Coarse Grains Crop Provisions
This is a risk management program. This risk management tool may be
reinsured under the authority provided by section 508(h) of the Federal
Crop Insurance Act. 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
Calculated revenue. The production to count multiplied by the
harvest price.
Coarse grains. Corn, grain sorghum, and soybeans.
Grain sorghum. The crop defined as sorghum under the United States
Grain Standards Act.
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, U.S. No. 2 grain sorghum, or U.S. No. 1 soybeans, offered
by buyers in the area in which you normally market the insured crop.
The local market price
[[Page 16238]]
will reflect the maximum limits of quality deficiencies allowable for
the U.S. No. 2 grade for yellow corn and grain sorghum, or U.S. No. 1
grade for 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, coarse grains 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. That percentage of the final
guarantee for timely planted acres as set forth in section 12.
Silage. A product that results from severing the plant from the
land and chopping it for the purpose of livestock feed.
2. Coverage Level, Price Percentage, and Approved Yield for Determining
Final Guarantee and Indemnity
In addition to the requirements of section 4 of the Basic
Provisions all the insurable acreage of each crop in the county insured
as grain under this policy will have the same coverage level and price
percentage elections.
3. Contract Changes
In accordance with Section 5 of the Basic Provisions, the contract
change date is December 31 preceding the cancellation date.
4. Cancellation and Termination Dates
In accordance with section 3(h) of the Basic Provisions, the
cancellation and termination dates are:
------------------------------------------------------------------------
Cancellation and termination
State and county dates
------------------------------------------------------------------------
(a) For corn and grain sorghum:
Val Verde, Edwards, Kerr, Kendall, January 15.
Bexar, Wilson, Karnes, Goliad,
Victoria, and Jackson Counties,
Texas, and all Texas counties lying
south thereof.
El Paso, Hudspeth, Culberson, February 15.
Reeves, Loving, Winkler, Ector,
Upton, Reagan, Sterling, Coke, Tom
Green, Concho, McCulloch, San Saba,
Mills, Hamilton, Bosque, Johnson,
Tarrant, Wise, Cooke Counties,
Texas, and all Texas counties lying
south and east thereof to and
including Terrell, Crockett,
Sutton, Kimble, Gillespie, Blanco,
Comal, Guadalupe, Gonzales, De
Witt, Lavaca, Colorado, Wharton,
and Matagorda Counties, Texas.
Alabama; Arizona; Arkansas; February 28.
California; Florida; Georgia;
Louisiana; Mississippi; Nevada;
North Carolina; and South Carolina.
All other Texas counties and all March 15.
other states.
(b) For soybeans:
Jackson, Victoria, Goliad, Bee, Live February 15.
Oak, McMullen, LaSalle, and Dimmit
Counties, Texas and all Texas
counties lying south thereof.
Alabama; Arizona; Arkansas; February 28.
California; Florida; Georgia;
Louisiana; Mississippi; Nevada;
North Carolina; and South Carolina;
and El Paso, Hudspeth, Culberson,
Reeves, Loving, Winkler, Ector,
Upton, Reagan, Sterling, Coke, Tom
Green, Concho, McCulloch, San Saba,
Mills, Hamilton, Bosque, Johnson,
Tarrant, Wise, Cooke Counties,
Texas, and all Texas counties lying
south and east thereof to and
including Maverick, Zavala, Frio,
Atascosa, Karnes, De Witt, Lavaca,
Colorado, Wharton, and Matagorda
Counties, Texas.
All other Texas counties and all March 15.
other states.
------------------------------------------------------------------------
5. Insured Crop
(a) In accordance with section 9 of the Basic Provisions, the crop
insured will be each coarse grain crop you elect to insure for which
premium rates and prices are provided by the actuarial documents:
(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, including
air seeded soybeans subject to our approval;
(3) That is not (unless allowed by the Special Provisions):
(i) Interplanted with another crop; or
(ii) Planted into an established grass or legume; and
(4) Planted for harvest as grain.
(b) For corn only, 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 ninety 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) For grain sorghum only, in addition to the provisions of
section 5(a), the grain sorghum crop insured will be all of the grain
sorghum in the county:
(1) That is planted for harvest as grain;
(2) That is a combine--type hybrid grain sorghum (grown from hybrid
seed); and
(3) That is not a dual--purpose type of grain sorghum (a type used
for both grain and forage).
(d) For soybeans only, in addition to the provisions of section
5(a), the soybean crop insured will be all of the soybeans in the
county 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 most producers in the surrounding
area with acreage with similar characteristics would not normally
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
the date immediately following planting as follows:
(a) For corn insured as grain:
[[Page 16239]]
(1) Val Verde, Edwards, Kerr, September 30.
Kendall, Bexar, Wilson, Karnes,
Goliad, Victoria, and Jackson
Counties, Texas, and all Texas
counties lying south thereof.
(2) Clark, Cowlitz, Grays Harbor, October 31.
Island, Jefferson, King, Kitsap,
Lewis, Pierce, Skagit, Snohomish,
Thurston, Wahkiakum, and Whatcom
Counties, Washington.
(3) All other counties and states... December 10.
(b) For grain sorghum insured as grain:
(1) Val Verde, Edwards, Kerr, September 30.
Kendall, Bexar, Wilson, Karnes,
Goliad, Victoria, and Jackson
Counties, Texas, and all Texas
counties lying south thereof.
(2) All other Texas counties and all December 10.
other states.
(c) For soybeans insured as beans:
All states.......................... December 10.
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 due to 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 harvest price that is less than the base price.
9. Replanting Payments
(a) In accordance with section 14 of the Basic Provisions,
replanting payments for coarse grains are allowed if the coarse grains
are damaged by an insurable cause of loss to the extent that the
remaining stand will not produce at least 90 percent of the minimum
guarantee for the acreage and it is practical to replant.
(b) The maximum amount of the replanting payment per acre will be
the lesser of 20 percent of the minimum guarantee or:
(1) For corn grain, 8 bushels multiplied by the base price,
multiplied by your insured share;
(2) For grain sorghum, 7 bushels multiplied by the base price,
multiplied by your insured share; and
(3) For soybeans, 3 bushels multiplied by the base price multiplied
by your insured share.
(c) When the crop is replanted using a practice that is uninsurable
as an original planting, the final guarantee for the unit 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
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, and you do not intend to harvest the
acreage, you must leave representative samples of the unharvested crop
for our inspection. The samples must be at least 10 feet wide, extend
the entire length of each field in the unit, and must not be harvested
or destroyed until after our inspection.
11. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide records of production:
(1) For any optional unit, we will combine all optional units for
which acceptable records of production 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 on any insured basic or optional unit of coarse
grains by:
(1) Multiplying the insured acreage of the crop by the final
guarantee;
(2) Subtracting the calculated revenue from the result of section
11(b)(1); and
(3) Multiplying the result of 11(b)(2) by your share.
If the result of section 11(b)(3) is greater than zero, an
indemnity will be paid. If the result of section 11(b)(3) is less than
zero, no indemnity will be due.
(c) In the event of loss or damage covered by this policy, we will
settle your claim on any insured enterprise unit by:
(1) Multiplying the insured acreage of the crop by the final
guarantee for each basic unit within the enterprise unit;
(2) For each basic unit in 11(c)(1), compute the calculated
revenue;
(3) Subtract each result in section 11(c)(2) from the respective
result of section 11(c)(1);
(4) Multiplying each result of section 11(c)(3) by your share; and
(5) Total the results of section 11(c)(4).
If the result of section 11(c)(5) is greater than zero, an
indemnity will be paid. If the result of section 11(c)(5) is less than
zero, no indemnity will be due.
(d) The total production in bushels to count from all insurable
acreage for the crop on the unit will include:
(1) All appraised production as follows:
(i) Not less than that amount of production that when multiplied by
the harvest price equals the final guarantee for the acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) Damaged solely by uninsured causes; or
(D) For which you fail to provide records of production that are
acceptable to us;
(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(e)); and
(iv) Potential production on insured acreage you want 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 if 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
[[Page 16240]]
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.
(e) Mature coarse grain production 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);
(ii) Fourteen percent for grain sorghum; and
(iii) 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;
(B) Grain sorghum 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 commercially
objectionable foreign odor (except smut odor), or meets the special
grade requirements for smutty grain sorghum; or
(C) 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 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;
(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 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) Coarse grain production that is eligible for quality
adjustment, as specified in sections 11(e)(2) and 11(e)(3), will be
reduced by the quality adjustment factor contained in the Special
Provisions.
(f) 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 final
guarantee for timely planted acreage. If you have limited or additional
levels of coverage, as specified in 7 CFR part 400, subpart T, and pay
an additional premium, you may increase your prevented planting
coverage to a level specified in the actuarial documents.
Crop Revenue Coverage
Cotton Crop Provisions
This is a risk management program. This risk management tool will
be reinsured under the authority provided by section 508 (h) of the
Federal Crop Insurance Act. 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
Calculated Revenue. The production to count multiplied by the
harvest price.
Cotton. Varieties identified as American Upland Cotton.
Growth area. A geographic area designated by the Secretary of
Agriculture for the purpose of reporting cotton prices.
Harvest. The removal of the seed cotton from the open cotton boll,
or the severance of the open cotton boll from the stalk by either
manual or mechanical means.
Mature cotton. Cotton that can be harvested either manually or
mechanically.
Planted acreage. In addition to the definition contained in the
Basic Provisions, cotton must be planted in rows, unless otherwise
provided by the Special Provisions or actuarial documents. The yield
conversion factor normally applied to non-irrigated skip-row cotton
acreage will not be used if the land between the rows of cotton is
planted to any other spring planted crop.
Prevented Planting Guarantee. That percentage of the final
guarantee for timely planted acres as set forth in section 11(b).
Skip-row. A planting pattern that:
(1) Consists of alternating rows of cotton and fallow land or land
planted to another crop the previous fall; and
(2) Qualifies as a skip-row planting pattern as defined by FSA or a
successor agency.
2. Coverage Level, Price Percentage, and Approved Yield for Determining
Final Guarantee and Indemnity
In addition to the requirements of section 4 of the Basic
Provisions, all the insurable acreage of each crop in the county
insured as cotton under this policy will have the same coverage level
and price percentage elections.
3. Contract Changes
In accordance with Section 5 of the Basic Provisions, the contract
change date is December 31 preceding the cancellation date.
4. Cancellation and Termination Dates
In accordance with section 3(h) of the Basic Provisions, the
cancellation and termination dates are:
------------------------------------------------------------------------
Cancellation and termination
State and county dates
------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, January 15.
Bexar, Wilson, Karnes, Goliad,
Victoria, and Jackson Counties, Texas,
and all Texas counties lying south
thereof.
[[Page 16241]]
Alabama; Arizona; Arkansas; California; February 28.
Florida; Georgia; Louisiana;
Mississippi; Nevada; North Carolina;
South Carolina; El Paso, Hudspeth,
Culberson, Reeves, Loving, Winkler,
Ector, Upton, Reagan, Sterling, Coke,
Tom Green, Concho, McCulloch, San Saba,
Mills, Hamilton, Bosque, Johnson,
Tarrant, Wise, and Cooke Counties,
Texas, and all Texas counties lying
south and east thereof to and including
Terrell, Crocket, Sutton, Kimble,
Gillespie, Blanco, Comal, Guadalupe,
Gonzales, De Witt, Lavaca, Colorado,
Wharton, and Matagorda Counties, Texas.
All other Texas counties and all other March 15.
states.
------------------------------------------------------------------------
5. Insured Crop
In accordance with section 9 of the Basic Provisions, the crop
insured will be all the cotton lint, in the county for which premium
rates are provided by the actuarial documents:
(a) In which you have a share; and
(b) That is not (unless allowed by the Special Provisions):
(1) Colored cotton lint;
(2) Planted into an established grass or legume;
(3) Interplanted with another spring planted crop;
(4) Grown on acreage from which a hay crop was harvested in the
same calendar year unless the acreage is irrigated; or
(5) Grown on acreage on which a small grain crop reached the
heading stage in the same calendar year unless the acreage is irrigated
or adequate measures are taken to terminate the small grain crop prior
to heading and less than 50 percent of the small grain plants reach the
heading stage.
6. Insurable Acreage
In addition to the provisions of section 10 of the Basic
Provisions:
(a) The acreage insured will be only the land occupied by the rows
of cotton when a skip row planting pattern is utilized; and
(b) Any acreage of the insured crop damaged before the final
planting date, to the extent that most producers in the area with
acreage with similar characteristics would not normally further care
for the crop, must be replanted unless we agree that it is not
practical to replant.
7. Insurance Period
(a) In lieu of section 12(b)(2) of the Basic Provisions, insurance
will end upon the removal of the cotton from the field.
(b) In accordance with the provisions under section 12 of the Basic
Provisions, the calendar date for the end of the insurance period is
the date immediately following planting as follows:
(1) September 30 in Val Verde, Edwards, Kerr, Kendall, Bexar,
Wilson, Karnes, Goliad, Victoria, and Jackson Counties, Texas, and all
Texas counties lying south thereof;
(2) January 31 in Arizona, California, New Mexico, Oklahoma, and
all other Texas counties; and
(3) December 31 in all other states.
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 due to 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 harvest price that is less than the base price.
9. Duties in the Event of Damage or Loss
(a) In addition to your duties under section 15 of the Basic
Provisions, in the event of damage or loss:
(1) The cotton stalks must remain intact for our inspection; and
(2) If you initially discover damage to the insured crop within 15
days of harvest, or during harvest, and you do not intend to harvest
the acreage, you must leave representative samples of the unharvested
crop in the field for our inspection. The samples must be at least 10
feet wide and extend the entire length of each field in the unit.
(b) The stalks must not be destroyed or harvested, until after our
inspection.
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:
(1) For any optional unit, we will combine all optional units for
which acceptable records of production 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 of the crop by the final
guarantee;
(2) Subtracting the calculated revenue from the result of section
10(b)(1); and
(3) Multiplying the result of 10(b)(2) by your share.
If the result of section 10(b)(3) is greater than zero, an
indemnity will be paid. If the result of section 10(b)(3) is less than
zero, no indemnity will be due.
(c) The total production (in pounds) to count from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than that amount of production that when multiplied by
the harvest price equals the final guarantee for the acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) Damaged solely by uninsured causes;
(D) For which you fail to provide records of production that are
acceptable to us; or
(E) On which the cotton stalks are destroyed, in violation of
section 9;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (mature unharvested production of
white cotton may be adjusted for quality deficiencies in accordance
with section 10(d)); and
(iv) Potential production on insured acreage you want to put to
another use or you wish to abandon or no longer care for, if you and we
agree on the appraised amount of production. Upon such agreement, the
insurance period for that acreage will end if you 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
[[Page 16242]]
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, including
any mature cotton retrieved from the ground.
(d) Mature white cotton may be adjusted for quality when production
has been damaged by insured causes. Such production to count will be
reduced if the price quotation for cotton of like quality (price
quotation ``A'') for the applicable growth area is less than 75 percent
of price quotation ``B.'' Price quotation ``B'' is defined as the price
quotation for the applicable growth area for cotton of the color and
leaf grade, staple length, and micronaire reading designated in the
Special Provisions for this purpose. Price quotations ``A'' and ``B''
will be the price quotations contained in the Daily Spot Cotton
Quotations published by the USDA Agricultural Marketing Service on the
date the last bale from the unit is classed. If the date the last bale
classed is not available, the price quotations will be determined on
the date the last bale from the unit is delivered to the warehouse, as
shown on the producer's account summary obtained from the gin. If
eligible for adjustment, the amount of production to be counted will be
determined by multiplying the number of pounds of such production by
the factor derived from dividing price quotation ``A'' by 75 percent of
price quotation ``B.''
(e) Colored cotton lint will not be eligible for quality
adjustment.
11. Prevented Planting
(a) In addition to the provisions contained in section 18 of the
Basic Provisions, your prevented planting final guarantee will be based
on your approved yield without adjustment for skip-row planting
patterns.
(b) Your prevented planting coverage will be 45 percent of your
final guarantee for timely planted acreage. If you have limited or
additional levels of coverage, as specified in 7 CFR part 400, subpart
T, and pay an additional premium, you may increase your prevented
planting coverage to a level specified in the actuarial documents.
Signed in Washington, D.C. on March 26, 1998.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 98-8590 Filed 4-1-98; 8:45 am]
BILLING CODE 3410-08-P
