[Federal Register Volume 62, Number 84 (Thursday, May 1, 1997)]
[Proposed Rules]
[Pages 23675-23680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11250]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 62, No. 84 / Thursday, May 1, 1997 / Proposed
Rules
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 401 and 457
General Crop Insurance Regulations, Canning and Processing Bean
Endorsement; and Common Crop Insurance Regulations, Processing Bean
Crop Insurance Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Proposed rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes
specific crop provisions for the insurance of processing beans. The
provisions will be used in conjunction with the Common Crop Insurance
Policy Basic Provisions, which contain standard terms and conditions
common to most crops. The intended effect of this action is to provide
policy changes to better meet the needs of the insured, include the
current canning and processing bean crop insurance endorsement with the
Common Crop Insurance Policy for ease of use and consistency of terms,
and to restrict the effect of the current canning and processing bean
crop insurance endorsement to the 1997 and prior crop years.
DATES: Written comments and opinions on this proposed rule will be
accepted until close of business June 2, 1997 and will be considered
when the rule is to be made final.
ADDRESSES: Interested persons are invited to submit written comments to
the Director, Product Development Division, Federal Crop Insurance
Corporation, United States Department of Agriculture, 9435 Holmes Road,
Kansas City, MO 64131.
FOR FURTHER INFORMATION CONTACT: Ron Nesheim, Insurance Management
Specialist, Research and Development, Product Development Division,
Federal Crop Insurance Corporation, at the Kansas City, MO, address
listed above, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order No. 12866
The Office of Management and Budget (OMB) has determined this rule
to be exempt for the purposes of Executive Order No. 12866, and,
therefore, this rule has not been reviewed by OMB.
Paperwork Reduction Act of 1995
The amendments set forth in this proposed rule contain information
collections that require clearance by OMB under the provisions of 44
U.S.C. chapter 35.
The title of this information collection is ``Catastrophic Risk
Protection Plan and Related Requirements including, Common Crop
Insurance Regulations; Processing Bean Crop Insurance Provisions.'' The
information to be collected includes a crop insurance application and
an acreage report. Information collected from the application and
acreage report is electronically submitted to FCIC by the reinsured
companies. Potential respondents to this information collection are
producers of processing beans that are eligible for Federal crop
insurance.
The information requested is necessary for the reinsured companies
and FCIC to provide insurance and reinsurance, determine eligibility,
determine the correct parties to the agreement or contract, determine
and collect premiums or other monetary amounts, and pay benefits.
All information is reported annually. For the crop insurance
program as a whole, the reporting burden for this collection of
information is estimated to average 16.9 minutes per response for each
of the 3.6 responses from approximately 1,755,015 respondents. The
total annual burden on the public for this information collection is
2,676,932 hours.
FCIC is requesting comments on the following: (a) whether the
proposed collection of information is necessary for the proper
performance of the functions of the agency, including whether the
information shall have practical utility; (b) the accuracy of the
agency's estimate of the burden of the proposed collection of
information; (c) ways to enhance the quality, utility, and clarity of
the information to be collected; and (d) ways to minimize the burden of
the collection of information on respondents, including through the use
of automated collection techniques or other forms of information
gathering technology.
Comments regarding paperwork reduction should be submitted to the
Desk Officer for Agriculture, Office of Information and Regulatory
Affairs, Office of Management and Budget, Washington, D.C. 20503.
OMB is required to make a decision concerning the collections of
information contained in these proposed regulations between 30 and 60
days after submission to OMB. Therefore, a comment to OMB is best
assured of having full effect if OMB receives it within 30 days of
publication. This does not affect the deadline for the public to
comment on the proposed regulation.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. This rule contains no Federal
mandates (under the regulatory provisions of title II of the UMRA) for
State, local, and tribal governments or the private sector. Thus, this
rule is not subject to the requirements of sections 202 and 205 of the
UMRA.
Executive Order No. 12612
It has been determined under section 6(a) of Executive Order No.
12612, Federalism, that this rule does not have sufficient federalism
implication to warrant the preparation of a Federalism Assessment. The
provisions contained in this rule will not have a substantial direct
effect on states or their political subdivisions, or on the
distribution of power and responsibilities among the various levels of
government.
Regulatory Flexibility Act
This regulation will not have a significant impact on a substantial
number of small entities. New provisions included in this rule will not
impact small entities to a greater extent than large entities. Under
the current regulations, a producer is required to complete an
application and acreage report. If the crop is damaged or destroyed,
the insured is required to give notice of loss and provide the
necessary information to complete a
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claim for indemnity. The insured must also annually certify to the
number of acres and the previous years production, if adequate records
are available to support the certification, or receive a transitional
yield. The producer must maintain the production records to support the
certified information for at least 3 years. This regulation does not
alter those requirements. The amount of work required of the insurance
companies delivering and servicing these policies will not increase
significantly from the amount of work currently required. This rule
does not have any greater or lesser impact on the producer. Therefore,
this action is determined to be exempt from the provisions of the
Regulatory Flexibility Act (5 U.S.C. 605), and no Regulatory
Flexibility Analysis was prepared.
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order No. 12372
This program is not subject to the provisions of Executive Order
No. 12372, which require intergovernmental consultation with State and
local officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
Executive Order No. 12988
The provisions of this rule will not have a retroactive effect
prior to the effective date. The provisions of this rule will preempt
State and local laws to the extent such State and local laws are
inconsistent herewith. The administrative appeal provisions published
at 7 CFR part 11 must be exhausted before any action for judicial
review may be brought.
Environmental Evaluation
This action is not expected to have a significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
National Performance Review
This regulatory action is being taken as part of the National
Performance Review Initiative to eliminate unnecessary or duplicative
regulations and improve those that remain in force.
Background
FCIC proposes to add to the Common Crop Insurance Regulations (7
CFR part 457), a new section, 7 CFR 457.155, Processing Bean Crop
Insurance Provisions. The new provisions will be effective for the 1998
and succeeding crop years. These provisions will replace and supersede
the current provisions for insuring processing beans found at 7 CFR
401.118 (Canning and Processing Bean Endorsement). FCIC also proposes
to amend 7 CFR 401.118 to limit its effect to the 1997 and prior crop
years.
This rule makes minor editorial and format changes to improve the
Canning and Processing Bean Endorsement's compatibility with the Common
Crop Insurance Policy. In addition, FCIC is proposing substantive
changes in the provisions for insuring processing beans as follows:
1. Remove the words ``Canning and'' from the title of the policy.
``Canning and processing'' is redundant because ``processing'' includes
those beans that are processed for canning.
2. Section 1--Add definitions for the terms ``base contract
price,'' ``bypassed acreage,'' ``days,'' ``FSA,'' ``final planting
date,'' ``good farming practices,'' ``interplanted,'' ``irrigated
practice,'' ``planted acreage,'' ``practical to replant,''
``processor,'' ``processor contract,'' ``production guarantee (per
acre),'' ``replanting,'' ``timely planted,'' ``ton,'' and ``written
agreement'' for clarification.
3. Section 2--Describe the requirements for dividing basic units
into optional units. Also, subsection 2(f)(4)(ii) clarifies unit
division for non-irrigated corners of center-pivot irrigation systems.
4. Section 3--Specify that the producer may select only one price
election for all the processing beans in the county insured under the
policy unless the Special Provisions provide different price elections
by type, in which case the producer may select one price election for
each processing bean type designated. The price election chosen for
each type must have the same percentage relationship to the maximum
price available.
5. Section 4--Change the contract change date from December 31 to
November 30, to allow adequate time for producers to become aware of
contract changes and make informed choices before the sales closing
date, which was moved back 30 days to comply with the Federal Crop
Insurance Reform Act of 1994.
6. Section 5--Change the cancellation and termination dates from
April 15 to March 15, to coincide with the statutory change in the
sales closing date.
7. Section 6--Require the insured to provide a copy of the
processor contract to the insurance provider on or before the acreage
reporting date to establish liability and insurability before a loss is
likely to occur.
8. Section 7(a)--Specify that the crop insured will be processing
beans that are grown under a processor contract executed before the
acreage reporting date.
9. Section 7(a)(4)--Permit consideration for requests for a written
agreement to insure processing beans that are interplanted with another
crop or planted into an established grass or legume. This provision
makes insurance available, on a case-by-case basis (written agreement),
for processing beans grown with a production practice that is not
normally followed in an area.
10. Section 7(b)--Specify that a producer will be considered to
have a share in the insured crop, if under the processor contract, the
producer retains possession of the acreage on which the processing
beans are grown, is at risk of loss, and the processor contract
provides for delivery of the processing beans under specified
conditions and at a stipulated base contract price.
11. Section 7(c)--Specify that a commercial bean producer who is
also a processor may establish an insurable interest if certain
requirements are met. This provision is added to other processor
policies.
12. Section 8(a)--Require that any acreage damaged prior to the
final planting date must be replanted unless the insurance provider
agrees that replanting is not practical.
13. Section 8(b)--Require that rotation requirements shown on the
Special Provisions be met for acreage to be insured.
14. Section 9--Add a provision for the insurance to end when the
processing beans should have been harvested or when the amount of
processing beans delivered to the processor fulfills the producer's
processing contract. Also, specify that October 30 is the calendar date
for the end of insurance period for Arkansas.
15. Section 10(a)(1)--Clarify that loss of production due to
adverse weather conditions is an insurable cause of loss when (1)
excessive moisture prevents harvesting equipment from entering the
field or prevents timely operation of harvesting equipment, and (2)
abnormally hot or cold temperatures cause the insured acreage to be
bypassed.
16. Section 10(a)(3)--Clarify that insect damage as an insurable
cause of loss does not include damage due to insufficient or improper
application of pest control measures.
17. Section 10(a)(4)--Clarify that plant disease as an insurable
cause of loss does not include damage due to
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insufficient or improper application of disease control measures.
18. Section 10(b)--Clarify that the insurance provider does not
cover loss of production due to: (1) bypassed acreage if the acreage is
bypassed due to the breakdown or non-operation of equipment or
facilities; (2) bypassed acreage if acreage to be bypassed is selected
based on the availability of a crop insurance payment; (3) beans not
being timely harvested, unless the delay in harvesting is directly due
to an insured cause of loss; (4) failure to follow the requirements
contained in the processor contract; and (5) damage that occurs to
unharvested production after the producer delivers the production
required by the processor contract.
19. Section 11--Require that the producer give notice of loss
within 3 days of the date harvest should have begun on any acreage that
will not be harvested, and document why the acreage was bypassed.
Failure to provide such information may result in the insurance
provider's determination that the acreage was bypassed due to an
uninsured cause of loss. If the crop will not be harvested, the
producer must leave representative samples of the unharvested crop for
the insurance provider's inspection. The samples must be at least 10
feet wide and extend the entire length of each field in the unit and
must not be destroyed until the earlier of the insurance provider's
inspection or 15 days after notice of loss is given.
20. Section 12(a)--Clarify actions to be taken when acceptable
records of production are not provided regarding optional and basic
units.
21. Section 12(c)--Clarify that the total production to count will
include bypassed acreage unless adequate evidence is provided to show
the acreage was bypassed for insurable reasons.
22. Section 12(d)--Clarify determination of production to count for
acreage that is not timely harvested due to an uninsured cause of loss.
23. Section 14--Add provisions for providing insurance coverage by
written agreement. FCIC has a long-standing policy of permitting
certain modification of the insurance contract by written agreement for
some policies. This amendment allows FCIC to tailor the policy to a
specific insured in certain instances. The new section will cover
application for, and duration of, written agreements.
Good cause is shown to allow 30 days for comments after this rule
is published in the Federal Register. This rule improves processing
bean crop insurance coverage and brings it under the Common Crop
Insurance Policy Basic Provisions for consistency among policies.
Although the contract change date is December 31, 1997, the final rule
must be published by July 7, 1997. Publication is required by this date
to achieve revision and timely distribution of the actuarial documents
thereby allowing the reinsured companies and insureds sufficient time
to implement the new provisions. Therefore, public interest requires
the agency to act immediately to make these provisions available for
the 1998 crop year.
List of Subjects in 7 CFR Parts 401 and 457
Crop insurance, Canning and processing beans, Reporting and
recordkeeping requirements.
Proposed Rule
Accordingly, as set forth in the preamble, the Federal Crop
Insurance Corporation hereby proposes to amend 7 CFR parts 401 and 457
as follows:
PART 401--GENERAL CROP INSURANCE REGULATIONS--REGULATIONS FOR THE
1988 AND SUBSEQUENT CONTRACT YEARS
1. The authority citation for 7 CFR part 401 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
2. The introductory text of Section 401.118 is revised to read as
follows:
Sec. 401.118 Canning and processing bean endorsement.
The provisions of the Canning and processing bean endorsement for
the 1988 through 1997 crop years are as follows:
* * * * *
PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE
1994 AND SUBSEQUENT CONTRACT YEARS
3. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(1), 1506(p).
4. Section 457.155 is added to read as follows:
Sec. 457.155 Processing bean crop insurance provisions.
The Processing Bean Crop Insurance Provisions for the 1998 and
succeeding crop years are as follows:
FCIC policies:
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Reinsured policies:
(Appropriate title for insurance provider)
Both FCIC and reinsured policies:
Processing Bean Crop Insurance Provisions
If a conflict exists among the Basic Provisions (Sec. 457.8),
these crop provisions, and the Special Provisions; the Special
Provisions will control these crop provisions and the Basic
Provisions; and these crop provisions will control the Basic
Provisions.
1. Definitions
Base contract price. The price stipulated in the contract
executed between you and the processor for the grade factor or sieve
size that is designated in the Special Provisions without regard to
discounts or incentives that may apply.
Bypassed acreage. Land on which production is ready for harvest
but is not harvested. Bypassed acreage upon which an indemnity is
payable will be considered to have a zero yield for Actual
Production History (APH) purposes.
Days. Calendar days.
FSA. The Farm Service Agency, an agency of the United States
Department of Agriculture, or a successor agency.
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 production guarantee.
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 production
guarantee and are those required by the bean processor contract with
the processing company and recognized by the Cooperative State
Research, Education, and Extension Service, as compatible with
agronomic and weather conditions in the county.
Harvest. The mechanical picking of bean pods from the vines.
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 irrigated production guarantee on the irrigated
acreage planted to the insured crop.
Planted acreage. Land in which seed has been placed by a machine
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. Processing beans must
initially be placed in rows far enough apart to permit mechanical
cultivation. Acreage planted in any other manner will not be
insurable unless otherwise provided by the Special Provisions or by
written agreement.
Practical to replant. In lieu of the definition of ``Practical
to replant'' contained in section 1 of the Basic Provisions
(Sec. 457.8), practical to replant is defined as our determination,
after loss or damage to the insured crop, based on factors,
including but not limited to moisture availability,
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condition of the field, time to crop maturity, and marketing window,
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 unless
production from the replanted acreage can be delivered under the
terms of the processor contract.
Processor. Any business enterprise regularly engaged in
processing beans for human consumption, that possesses all licenses
and permits for processing beans required by the state in which it
operates, and that possesses facilities, or has contractual access
to such facilities, with enough equipment to accept and process
contracted beans within a reasonable amount of time after harvest.
Processor contract. A written agreement between the producer and
a processor, containing at a minimum:
(a) The producer's commitment to plant and grow processing
beans, and to deliver the bean production to the processor;
(b) The processor's commitment to purchase all the production
stated in the contract; and
(c) A base contract price.
Production guarantee (per acre). The number of tons determined
by multiplying the approved APH yield per acre by the coverage level
percentage you elect.
Replanting. Performing the cultural practices necessary to
prepare the land to replace the processing bean seed and then
replacing the bean seed in the insured acreage with the expectation
of growing a successful crop.
Timely planted. Planted on or before the final planting date
designated in the Special Provisions for the insured crop in the
county.
Ton. Two thousand (2000) pounds avoirdupois.
Written agreement. A written document that alters designated
terms of this policy in accordance with section 14.
2. Unit Division
(a) In addition to the criteria stated in the definition of unit
in section 1 (Definitions) of the Basic Provisions (Sec. 457.8), and
if provided for in the Special Provisions, snap type beans will form
a basic unit and lima type beans will form a basic unit.
(b) Unless limited by the Special Provisions, these basic units
may be divided into optional units if, for each optional unit, you
meet all the conditions of this section or if a written agreement to
such division exists. Basic units may not be divided into optional
units on any basis other than as described in this section.
(c) Optional units will be available only if the processor
contract stipulates the number of acres that are under contract and
not a specific amount of production. This provision may not be
changed by written agreement.
(d) If you do not comply fully with these provisions, we will
combine all optional units that are not in compliance with these
provisions into the basic unit from which they were formed. We will
combine the optional units at any time we discover that you have
failed to comply with these provisions. If failure to comply with
these provisions is determined to be inadvertent, and the optional
units are combined into a basic unit, that portion of the additional
premium paid for the optional units that have been combined will be
refunded to you.
(e) All optional units you selected for the crop year must be
identified on the acreage report for that crop year.
(f) The following requirements must be met for each optional
unit:
(1) You must have records, which can be independently verified,
of planted acreage and production for each optional unit for at
least the last crop year used to determine your production
guarantee;
(2) You must plant the crop in a manner that results in a clear
and discernable break in the planting pattern at the boundaries of
each optional unit;
(3) You must have records of marketed production or measurement
of stored production from each optional unit maintained in such a
manner that permits us to verify the production from each optional
unit, or the production from each unit must be kept separate until
loss adjustment is completed by us; and
(4) Each optional unit must meet one or more of the following
criteria as applicable:
(i) Optional Units by Section, Section Equivalent, or FSA Farm
Serial Number: Optional units may be established if each optional
unit is located in a separate legally identified section. In the
absence of sections, we may consider parcels of land legally
identified by other methods of measure including, but not limited to
Spanish grants, railroad surveys, leagues, labors, or Virginia
Military Lands, as the equivalent of sections for unit purposes. In
areas that have not been surveyed using the systems identified
above, or another system approved by us, or in areas where such
systems exist but boundaries are not readily discernable, each
optional unit must be located in a separate farm identified by a
single FSA Farm Serial Number.
(ii) Optional Units on Acreage Including Both Irrigated and Non-
irrigated Practices: 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 acreage and non-
irrigated acreage if both are located in the same section, section
equivalent, or FSA Farm Serial Number. 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 guarantee is based,
except the corners of a field in which a center-pivot irrigation
system is used will be considered as irrigated acreage if separate
acceptable records of production from the corners are not provided.
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,
they will be a part of the unit containing the irrigated acreage.
Non-irrigated acreage that is not a part of a field in which a
center-pivot irrigation system is used may qualify as a separate
optional unit provided that all other requirements of this section
are met.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities)
of the Basic Provisions (Sec. 457.8), you may select only one price
election for all the processing beans in the county insured under
this policy unless the Special Provisions provide different price
elections by type, in which case you may select one price election
for each processing bean type designated in the Special Provisions.
The price elections you choose for each type must have the same
percentage relationship to the maximum price offered by us for each
type. For example, if you choose 100 percent of the maximum price
election for one type, you must choose 100 percent of the maximum
price election for all other types.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is November 30
preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation
and termination dates are March 15.
6. Report of Acreage
In addition to the provisions of section 6 (Report of Acreage)
of the Basic Provisions (Sec. 457.8), you must provide a copy of all
processor contracts to us on or before the acreage reporting date.
7. Insured Crop
(a) In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all the processing
beans in the county for which a premium rate is provided by the
actuarial table:
(1) In which you have a share;
(2) That are planted for harvest to be canned or frozen;
(3) That are grown under and in accordance with the requirements
of a processor contract executed on or before the acreage reporting
date and are not excluded from the processor contract at any time
during the crop year; and
(4) That are not (unless allowed by the Special Provisions or by
written agreement):
(i) Interplanted with another crop; or
(ii) Planted into an established grass or legume.
(b) You will be considered to have a share in the insured crop
if, under the processor contract, you retain possession of the
acreage on which the processing beans are grown, you are at risk of
loss, and the processor contract provides for delivery of the
processing beans under specified conditions and at a stipulated base
contract price per unit of delivery.
(c) A commercial bean producer who is also a processor may
establish an insurable interest if the following requirements are
met:
(1) The processor must meet the requirements as defined in these
crop provisions;
(2) The Board of Directors, or officers of the processor, must
have executed a resolution
[[Page 23679]]
that sets forth essentially the same terms as a processor contract.
Such resolution will be considered a contract under the terms of the
processing bean crop insurance policy; and
(3) Our inspection of the processing facilities determines that
they satisfy the definition of a processor contained in these crop
provisions.
8. Insurable Acreage
In addition to the provisions of section 9 (Insurable Acreage)
of the Basic Provisions (Sec. 457.8):
(a) Any acreage of the insured crop that is damaged before the
final planting date, to the extent that the majority of growers in
the area would normally not further care for the crop, must be
replanted unless we agree that it is not practical to replant; and
(b) We will not insure any acreage that does not meet the
rotation requirements contained in the Special Provisions.
9. Insurance Period
In lieu of the provisions contained in section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8), regarding the end of
the insurance period, insurance ceases at the earlier of:
(a) The date the processing beans:
(1) Were destroyed;
(2) Should have been harvested;
(3) Were abandoned; or
(4) Were harvested;
(b) The date you harvested sufficient production to fulfill your
processor contract;
(c) Final adjustment of a loss; or
(d) The date for the end of the insurance period in the calendar
year in which the processing beans would normally be harvested,
unless otherwise agreed to in writing, as follows:
(1) October 30 for all processing beans in the state of
Arkansas;
(2) October 15 for all processing beans in the states of
Delaware, Maryland, and New Jersey;
(3) September 30 for fresh snap beans in the state of New York;
(4) September 20 for fresh snap beans in all other states; or
(5) October 5 for fresh lima beans in all other states.
10. Causes of Loss
In accordance with the provisions of section 12 (Causes of Loss)
of the Basic Provisions (Sec. 457.8):
(a) Insurance is provided only against the following causes of
loss that occur during the insurance period:
(1) Adverse weather conditions, including but not limited to:
(i) Excessive moisture that prevents the harvesting equipment
from entering the field or that prevents the timely operation of
harvesting equipment; and
(ii) Abnormally hot or cold temperatures, as determined by us,
that causes insured acreage to be bypassed because of an unexpected
number of acres over a large producing area are ready for harvest at
the same time, and the total production is beyond the normal
capacity of the processor to timely harvest or process;
(2) Fire;
(3) Insects, but not damage due to insufficient or improper
application of pest control measures;
(4) Plant disease on acreage not planted to the processing beans
the previous crop year, but not damage due to insufficient or
improper application of disease control measures;
(5) Wildlife;
(6) Earthquake;
(7) Volcanic eruption; or
(8) Failure of the irrigation water supply, if due to an insured
cause of loss referred to in section 10(a)(1) through (7), above,
that occurs during the insurance period; or
(b) In addition to the causes of loss excluded in section 12
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we do not
insure any loss of production:
(1) On bypassed acreage if the acreage is bypassed due to the
breakdown or non-operation of equipment or facilities;
(2) On bypassed acreage if acreage to be bypassed is selected
based on the availability of a crop insurance payment;
(3) Due to processing beans not being timely harvested unless
such delay in harvesting is solely and directly due to an insured
cause of loss;
(4) Due to your failure to follow the requirements contained in
the processor contract; or
(5) Due to damage that occurs to unharvested production after
you deliver the production required by the processor contract.
11. Duties In The Event of Damage or Loss
In addition to the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), you
must give us notice:
(a) Not later than 48 hours after:
(1) Total destruction of the processing beans on the unit; or
(2) Discontinuance of harvest on a unit;
(b) Within 3 days of the date harvest should have started on any
acreage that will not be harvested and document why the acreage was
bypassed. Failure to provide such information will result in our
determination that the acreage was bypassed due to an uninsured
cause of loss. If the crop will not be harvested and you wish to
destroy the crop, you must leave representative samples of the
unharvested crop for our inspection. The samples must be at least 10
feet wide and extend the entire length of each field in each unit
and must not be destroyed until the earlier of our inspection or 15
days after notice is given to us.
(c) At least 15 days prior to the beginning of harvest if you
intend to claim an indemnity on any unit, or immediately if damage
is discovered during harvest, so that we may inspect any damaged
production. If you fail to notify us and such failure results in our
inability to inspect the damaged production, we will consider all
such production to be undamaged and include it as production to
count. You do not have to delay harvest if notification is timely
given.
12. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event
you are unable to provide separate, acceptable production records:
(1) For any optional units, we will combine all optional units
for which such production records were not provided; or
(2) For any basic units, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for the units.
(b) In the event of loss or damage covered by this policy, we
will settle your claim by:
(1) Multiplying the insured acreage by its respective production
guarantee, by type if applicable;
(2) Multiplying each result in section 12(b)(1) by the
respective price election, by type if applicable;
(3) Totaling the results in section 12(b)(2);
(4) Multiplying the total production to be counted of each type,
if applicable, (see section 12(c)) by the respective price election;
(5) Totaling the results in section 12(b)(4);
(6) Subtracting the results in section 12(b)(5) from the results
in section 12(b)(3); and
(7) Multiplying the result in section 12(b)(6) by your share.
(c) The total production to count, specified in tons, from all
insurable acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
(A) That is abandoned;
(B) That is put to another use without our consent;
(C) That is damaged solely by uninsured causes;
(D) For which you fail to provide production records that are
acceptable to us; or
(E) That is bypassed unless the acreage was bypassed due to a
cause of loss stated in section 10(a).
(ii) Production lost due to uninsured causes;
(iii) Potential production on insured acreage that you intend to
put to another use or abandon, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for
that acreage will end when you put the acreage to another use or
abandon the crop. If agreement on the appraised amount of production
is not reached:
(A) 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
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.
(2) All harvested processing bean production from the insurable
acreage. The
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amount of such production will be determined by dividing the dollar
amount as required by the contract for the quality and quantity of
the processing beans delivered to the processor by the base contract
price per ton.
(d) If any acreage is not timely harvested due to an uninsured
cause of loss but is later harvested, the production to count will
be the greater of:
(1) The harvested amount of production with no adjustment for
quality; or
(2) The amount determined by dividing the dollar amount as
required by the contract for the quality and quantity of the
processing beans delivered to the processor by the base contract
price per ton.
13. Late Planting
Late planting provisions are not applicable to processing beans.
14. Written Agreement
Designated terms of this policy may be altered by written
agreement in accordance with the following:
(a) You must apply in writing for each written agreement no
later than the sales closing date, except as provided in section
14(e);
(b) The application for a written agreement must contain all
variable terms of the contract between you and us that will be in
effect if the written agreement is not approved;
(c) If approved, the written agreement will include all variable
terms of the contract, including, but not limited to, crop type or
variety, the guarantee, premium rate, and price election;
(d) Each written agreement will only be valid for one year (If
the written agreement is not specifically renewed the following
year, insurance coverage for subsequent crop years will be in
accordance with the printed policy.); and
(e) An application for a written agreement submitted after the
sales closing date may be approved if, after a physical inspection
of the acreage, it is determined that no loss has occurred and the
crop is insurable in accordance with the policy and written
agreement provisions.
Signed in Washington, D.C., on April 25, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-11250 Filed 4-30-97; 8:45 am]
BILLING CODE 3410-FA-P
