97-13656. General Crop Insurance Regulations, Rice Endorsement; and Common Crop Insurance Regulations, Rice Crop Insurance Provisions  

  • [Federal Register Volume 62, Number 100 (Friday, May 23, 1997)]
    [Rules and Regulations]
    [Pages 28308-28314]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 97-13656]
    
    
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    DEPARTMENT OF AGRICULTURE
    
    Federal Crop Insurance Corporation
    
    7 CFR Parts 401 and 457
    
    
    General Crop Insurance Regulations, Rice Endorsement; and Common 
    Crop Insurance Regulations, Rice Crop Insurance Provisions
    
    AGENCY: Federal Crop Insurance Corporation, USDA.
    
    ACTION: Final rule.
    
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    SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes 
    specific crop provisions for the insurance of rice. 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 Rice 
    Endorsement with the Common Crop Insurance Policy for ease of use and 
    consistency of terms, and to restrict the effect of the current Rice 
    Endorsement to the 1997 and prior crop years.
    
    EFFECTIVE DATE: June 23, 1997.
    
    FOR FURTHER INFORMATION CONTACT: Linda Williams, Insurance Management 
    Specialist, Research and Development, Product Development Division, 
    Federal Crop Insurance Corporation, United States Department of 
    Agriculture, 9435 Holmes Road, Kansas City, MO 64131, telephone (816) 
    926-7730.
    
    SUPPLEMENTARY INFORMATION:
    
    Executive Order 12866
    
        The Office of Management and Budget (OMB) has determined this rule 
    to be exempt for the purposes of Executive Order 12866, and therefore, 
    this rule has not been reviewed by OMB.
    
    Paperwork Reduction Act of 1995
    
        Following publication of the proposed rule, the public was afforded 
    60 days to submit written comments on information collection 
    requirements previously approved by OMB under OMB control number 0563-
    003 through September 30, 1998. No public comments were received.
    
    Unfunded Mandates Reform Act of 1995
    
        Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
    Law 104-4, establishes requirements for Federal agencies to assess the 
    effects of their regulatory actions on state, local, and tribal 
    governments and the private sector. This rule contains no Federal 
    mandates (under the regulatory provisions of title II of the UMRA) for 
    state, local, and tribal governments or the private sector. Thus, this 
    rule is not subject to the requirements of sections 202 and 205 of the 
    UMRA.
    
    Executive Order 12612
    
        It has been determined under section 6(a) of Executive Order No. 
    12612, Federalism, that this rule does not have sufficient federalism 
    implications to warrant the preparation of a Federalism Assessment. The 
    provisions contained in this rule will not have a substantial direct 
    effect on states or their political subdivisions, or on the 
    distribution of power and responsibilities among the various levels of 
    government.
    
    Regulatory Flexibility Act
    
        This regulation will not have a significant impact on a substantial 
    number of small entities. New provisions included in this rule will not 
    impact small entities to a greater extent than large entities. Under 
    the current regulations, a producer is required to complete an 
    application and acreage report. If the crop is damaged or destroyed, 
    the insured is required to give notice of loss and provide the 
    necessary information to complete a claim for indemnity.
        The insured must also annually certify to the previous years 
    production if adequate records are available to support the 
    certification. The producer must maintain the production records to 
    support the certified information for at least three 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 12372
    
        This program is not subject to the provisions of Executive Order 
    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 12988
    
        This final rule has been reviewed in accordance with Executive 
    Order 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.
    
    [[Page 28309]]
    
    Background
    
        On Wednesday, January 29, 1997, FCIC published a proposed rule in 
    the Federal Register at 62 FR 4194-4200 to add to the Common Crop 
    Insurance Regulations (7 CFR part 457), a new section, 7 CFR 457.141, 
    Rice Crop Insurance Provisions. The new provisions will be effective 
    for the 1998 and succeeding crop years. These provisions will replace 
    and supercede the current provisions for insuring rice found at 7 CFR 
    401.120 (Rice Endorsement). FCIC also amends 7 CFR part 401.120 to 
    limit its effect to the 1997 and prior crop years.
        Following publication of the proposed rule, the public was afforded 
    60 days to submit written comments and opinions. A total of 14 comments 
    were received from the crop insurance industry. The comments received 
    and FCIC's responses, are as follows:
        Comment: One comment from the crop insurance industry recommended 
    adding the words ``and quality'' after the word ``quantity'' in the 
    definition of ``Irrigated practice.''
        Response: Water quality is an important issue. However, since no 
    standards or procedures have been developed to measure water quality 
    for insurance purposes, quality cannot be included in the definition. 
    Therefore, no change will be made.
        Comment: One comment received from the crop insurance industry 
    recommended combining the definitions of ``irrigated practice'' and 
    ``flood irrigation.'' The only crop provision reference to ``irrigated 
    practice'' is in the definition of ``flood irrigated.'' The commenter 
    suggested as an alternative, add ``An irrigated practice commonly used* 
    * *'' to the definition of ``flood irrigation.''
        Response: FCIC agrees with the comment and has revised the 
    definition of flood irrigation to reference the term irrigated 
    practice.
        Comment: One comment received from the crop insurance industry 
    recommended changing the definition of ``production guarantee'' by 
    referring to ``your approved APH yield.'' The commenter stated the 
    current provision implies there is only one APH yield.
        Response: There is only one APH yield for each unit. Therefore, no 
    change will be made.
        Comment: Two comments from the crop insurance industry stated that 
    the definition of ``replanting'' is confusing and awkward. One of the 
    commenters recommended revising the definition to specify ``* * 
    *growing a successful rice crop.''
        Response: FCIC agrees that the definition was confusing and has 
    amended the definition of replanting for clarification.
        Comment: The crop insurance industry recommended that FCIC provide 
    the statements contained in the Special Provisions at the time the crop 
    provisions are published as proposed rule. The commenter suggested that 
    it would be helpful to review the Special Provisions statement 
    regarding the rotation requirements referred to in section 7.
        Response: The Special Provisions contain those policy terms which 
    are specific to a county. These are not included in FCIC's regulatory 
    process because publication of each county and each crop would be 
    voluminous. Further, the information contained in the Special 
    Provisions is not developed until after the Crop Provisions become a 
    final rule. The statements are released with the filing of actuarial 
    documents for the insured crop. Therefore, no change will be made.
        Comment: One comment received from the crop insurance industry 
    recommended revising the cause of loss in section 9(a)(1) to state 
    ``adverse weather conditions (except drought).'' This change would 
    conform FCIC's crop provisions to the current NCIS-716 provisions.
    
    Response: FCIC agrees and will amend the provision accordingly.
    
        Comment: One comment received from the crop insurance industry 
    stated that the crop provisions should not allow the insured to defer 
    settlement of a claim for indemnity as provided in section 
    12(c)(1)(iv). The commenter stated deferring settlement and waiting for 
    a later appraisal usually results in a lower amount of appraised 
    production.
        Response: A later appraisal will only be necessary if the insurance 
    provider agrees that such an appraisal would result in a more accurate 
    determination and if the producer continues to care for the crop. If 
    the producer does not care for the crop, the original appraisal will be 
    used. Therefore, no change will be made to these provisions.
        Comment: The crop insurance industry recommended that the 
    provisions contained in section 13(d)(1)(iii)(B) regarding prevented 
    planting coverage for a substitute crop be eliminated.
        Response: FCIC intends to address this issue for all crops with 
    prevented planting coverage and is currently working on a regulation 
    that will propose substantive changes in this coverage. Therefore, no 
    changes will be made to these rice crop provisions.
        Comment: One comment from the crop insurance industry questioned if 
    the provisions contained in section 13(d)(5)(iii)(D) were intended to 
    be less restrictive by changing the double-cropping requirement to 
    state ``* * *in each of the last 4 years in which the insured crop was 
    grown on the acreage.'' The commenter suggested this change should be 
    included in the summary of changes so that agents and producers were 
    aware of the change.
        Response: The proposed language allows additional acreage to be 
    considered ``double-cropped.'' The previous provisions require eight 
    crops to have been produced on the same acreage in the previous four 
    years to qualify for double-cropped acreage. The intent of this change 
    is to recognize rotation practices used for double-cropped acreage.
        Comment: One comment from the crop insurance industry suggested 
    combining the provisions in section 14(c) with the provisions in 14(a).
        Response: Approval of written agreements requested after the sales 
    closing date is the exception, not the rule. Therefore, these 
    provisions should be kept separate and no changes have been made.
        Comment: Three comments from the crop insurance industry 
    recommended the requirement for a written agreement to be renewed each 
    year be removed. Terms of the agreement should be continuous if no 
    substantive changes occur from one year to the next. One commenter 
    stated that limiting written agreements to one year only increases 
    administrative cost and allows the opportunity for misunderstanding and 
    error.
        Response: Written agreements are intended to permit insurance 
    coverage in unusual or previously unknown situations. If the situation 
    continues year to year, it should be incorporated into the policy or 
    Special Provisions. It is important to minimize exceptions to assure 
    that the insured is well aware of the specific terms of the policy. 
    Therefore, no change will be made.
    
    List of Subjects in 7 CFR Parts 401 and 457
    
        Crop insurance, Rice endorsement, Rice.
    
    Final Rule
    
        Accordingly, for the reasons set forth in the preamble, the Federal 
    Crop Insurance Corporation hereby amends 7 CFR parts 401 and 457 
    effective for the 1998 and succeeding crop years to read as follows:
    
    [[Page 28310]]
    
    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(1), 1506(p).
    
        2. The introductory text of Sec. 401.120 is revised to read as 
    follows:
    
    
    Sec. 401.120  Rice endorsement.
    
        The provisions of the Rice Crop Insurance Endorsement for the 1988 
    through the 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(l), 1506(p).
    
        Section 457.141 is added to read as follows:
    
    
    Sec. 457.141  Rice crop insurance provisions.
    
        The Rice Crop Insurance Provisions for the 1998 and succeeding crop 
    years are as follows:
    
        FCIC policies:
    
    United States Department of Agriculture
    
    Federal Crop Insurance Corporation
    
        Reinsured policies:
    
    (Appropriate title for insurance provider)
    
        Both FCIC and reinsured policies:
    
    Rice Crop Provisions
    
        If a conflict exists among the Basic Provisions (Sec. 457.8), 
    these Crop Provisions, and the Special Provisions; the Special 
    Provisions will control these Crop Provisions and the Basic 
    Provisions; and these Crop Provisions will control the Basic 
    Provisions.
    
    1. Definitions
    
        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.
        Flood irrigation. An irrigated practice commonly used for rice 
    production whereby the planted acreage is intentionally covered with 
    water that is maintained at a uniform and shallow depth throughout 
    the growing season.
        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 recognized by the Cooperative State 
    Research, Education, and Extension Service as compatible with 
    agronomic and weather conditions in the county.
        Harvest. Combining or threshing the rice for grain. A crop that 
    is swathed prior to combining is not considered harvested.
        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.
        Late planted. Acreage planted to the insured crop during the 
    late planting period.
        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.
        Local market price. The cash price per pound for the U.S. No. 3 
    grade of rough rice offered by buyers in the area in which you 
    normally market the rice. Factors not associated with grading under 
    the United States Standards for Rice including, but not limited to, 
    protein and oil content or milling quality will not be considered.
        Planted. The uniform placement of an adequate amount of rice 
    seed into a prepared seedbed by one of the following methods:
        (a) Drill seeding--Using a grain drill to incorporate the seed 
    to a proper soil depth;
        (b) Broadcast seeding--Distributing seed evenly onto the surface 
    of an un-flooded seedbed followed by either timely mechanical 
    incorporation of the seed to a proper soil depth in the seedbed or 
    flushing the seedbed with water; or
        (c) Broadcast seeding into a controlled flood--Distributing the 
    rice seed onto a prepared seedbed that has been intentionally 
    covered to a proper depth by water. The water must be free of 
    movement and be completely contained on the acreage by properly 
    constructed levees and gates.
        Acreage seeded 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, marketing 
    windows, 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 unless replanting is generally occurring in the 
    area.
        Prevented planting. Inability 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 the end of 
    the late planting period. You must have been unable to plant the 
    insured crop due to an insured cause of loss that has prevented the 
    majority of producers in the surrounding area from planting the same 
    crop.
        Production guarantee (per acre). The number of pounds determined 
    by multiplying the approved Actual Production History (APH) yield 
    per acre by the coverage level percentage you elect.
        Replanting. Performing the cultural practices necessary to 
    replace the rice seed and then replacing the rice seed in the 
    insured acreage with the expectation of growing a rice crop that 
    will at least produce the approved APH yield.
        Saline water. Water that contains a concentration of salt 
    sufficient to cause damage to the insured crop.
        Second crop rice. The regrowth of a stand of rice following 
    harvest of the initially insured rice crop that can be harvested in 
    the same crop year.
        Swathed. Severance of the stem and grain head from the ground 
    without removal of the rice kernels from the plant and placing in a 
    windrow.
        Timely planted. Planted on or before the final planting date 
    designated in the Special Provisions for the insured crop in the 
    county.
        Total milling yield. Rice production consisting of heads, second 
    heads, screenings, and brewer's rice as defined by the official 
    United States Standards for Rice.
        Written agreement. A written document that alters designated 
    terms of this policy in accordance with section 14.
    
    2. Unit Division
    
        (a) Unless limited by the Special Provisions, a unit as defined 
    in section 1 (Definitions) of the Basic Provisions (Sec. 457.8), 
    (basic unit) may be divided into optional units if, for each 
    optional unit, you meet all the conditions of this section.
        (b) Basic units may not be divided into optional units on any 
    basis including, but not limited to, production practice, type, 
    variety, and planting period, other than as described in this 
    section.
        (c) If you do not comply fully with these provisions, we will 
    combine all optional units that are not in compliance with these 
    provisions into the basic unit from which they were formed. We will 
    combine the optional units at any time we discover that you have 
    failed to comply with these provisions. If failure to comply with 
    these provisions is determined to be inadvertent, and the optional 
    units are combined into a basic unit, that portion of the additional 
    premium paid for the optional units that have been combined will be 
    refunded to you.
        (d) All optional units you selected for the crop year must be 
    identified on the acreage report for that crop year.
        (e) The following requirements must be met for each optional 
    unit:
        (1) You must have records, which can be independently verified, 
    of planted acreage and production for each optional unit for at 
    least the last crop year 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
    
    [[Page 28311]]
    
    unit, or the production from each unit must be kept separate until 
    loss adjustment is completed by us; and
        (4) Each optional unit must be located in a separate legally 
    identified section. In the absence of sections, we may consider 
    parcels of land legally identified by other methods of measure 
    including, but not limited to Spanish grants, railroad surveys, 
    leagues, labors, or Virginia Military Lands, as the equivalent of 
    sections for unit purposes. In areas that have not been surveyed 
    using the systems identified above, or another system approved by 
    us, or in areas where such systems exist but boundaries are not 
    readily discernable, each optional unit must be located in a 
    separate farm identified by a single FSA Farm Serial Number unless 
    otherwise specified by a written agreement.
    
    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 rice 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 rice 
    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 also 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:
    
    ------------------------------------------------------------------------
                                                Cancellation and termination
                 State and county                           date            
    ------------------------------------------------------------------------
    Jackson, Victoria, Goliad, Bee, Live Oak,  January 15.                  
     McMullen, La Salle, and Dimmit Counties,                               
     Texas; and all Texas counties south                                    
     thereof.                                                               
    Florida..................................  February 15.                 
    All other Texas counties and all other     February 28.                 
     states.                                                                
    ------------------------------------------------------------------------
    
    6. Insured Crop
    
        In accordance with section 8 (Insured Crop) of the Basic 
    Provisions (Sec. 457.8), the crop insured will be all the rice in 
    the county for which a premium rate is provided by the actuarial 
    table:
        (a) In which you have a share;
        (b) That is planted for harvest as grain;
        (c) That is flood irrigated; and
        (d) That is not wild rice.
    
    7. Insurable Acreage
    
        In addition to the provisions of section 9 (Insurable Acreage) 
    of the Basic Provisions (Sec. 457.8):
        (a) We will not insure any acreage planted to rice:
        (1) The preceding crop year unless allowed by the Special 
    Provisions; or
        (2) That does not meet the rotation requirements shown in the 
    Special Provisions; and
        (b) Any acreage of the insured crop damaged before the final 
    planting date, to the extent that producers in the area would 
    normally not further care for the crop, must be replanted unless we 
    agree that it is not practical to replant.
    
    8. Insurance Period
    
        In accordance with the provisions of section 11 (Insurance 
    Period) of the Basic Provisions (Sec. 457.8), the calendar date for 
    the end of the insurance period is October 31 immediately following 
    planting.
    
    9. Causes of Loss
    
        (a) In accordance with the provisions of section 12 (Causes of 
    Loss) of the Basic Provisions (Sec. 457.8), insurance is provided 
    only against the following causes of loss that occur during the 
    insurance period:
        (1) Adverse weather conditions (except drought);
        (2) Fire;
        (3) Insects, but not damage due to insufficient or improper 
    application of pest control measures;
        (4) Plant disease, 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 caused by an 
    insured peril that occurs during the insurance period.
        (b) In addition to the causes of loss not insured against in 
    section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), we 
    will not insure against any loss of production due to the 
    application of saline water.
    
    10. Replanting Payment
    
        (a) A replanting payment for rice is allowed as follows:
        (1) You must comply with all requirements regarding replanting 
    payments contained under section 13 (Replanting Payment) of the 
    Basic Provisions (Sec. 457.8);
        (2) The rice must be damaged by an insurable cause of loss to 
    the extent that the remaining stand will not produce at least 90 
    percent of the production guarantee for the acreage; and
        (3) The replanted rice must be seeded at a rate that is normal 
    for initially planted rice (if new seed is planted at a reduced 
    seeding rate into a partially damaged stand of rice, the acreage 
    will not be eligible for a replanting payment).
        (b) In accordance with the provisions of section 13 (Replanting 
    Payment) of the Basic Provisions (Sec. 457.8), the maximum amount of 
    the replanting payment per acre will be the lesser of 20 percent of 
    the production guarantee or 400 pounds, multiplied by your price 
    election, multiplied by your insured share.
        (c) When rice is replanted using a practice that is uninsurable 
    for an original planting, the liability for the unit will be reduced 
    by the amount of the replanting payment. The premium amount will not 
    be reduced.
    
    11. Duties in the Event of Damage or Loss
    
        In accordance with the requirements of section 14 (Duties in the 
    Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the 
    representative samples of the unharvested crop must be at least 10 
    feet wide and extend the entire length of each field in the unit. 
    The samples must not be harvested or destroyed until the earlier of 
    our inspection or 15 days after harvest of the balance of the unit 
    is completed.
    
    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 on any unit 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 of section 12(b)(2);
        (4) Multiplying the total production to be counted by type, if 
    applicable, (see section 12(c) through (e)) by the respective price 
    election;
        (5) Totaling the results of section 12(b)(4);
        (6) Subtracting the result of section 12(b)(5) from the result 
    of section 12(b)(3); and
        (7) Multiplying the result of section 12(b)(6) by your share.
        (c) The total production to count (in pounds) 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) Put to another use without our consent;
        (C) That is damaged solely by uninsured causes; or
        (D) For which you fail to provide acceptable production records;
        (ii) Production lost due to uninsured causes;
        (iii) Unharvested production (mature unharvested production may 
    be adjusted for quality deficiencies and excess moisture in 
    accordance with section 12(d));
        (iv) Potential production on insured acreage that you intend to 
    put to another use or abandon, if you and we agree on the appraised 
    amount of production. Upon such agreement, the insurance period for 
    that acreage will end when you put the acreage to another use or 
    abandon the crop. If agreement on the appraised amount of production 
    is not reached:
        (A) If you do not elect to continue to care for the crop, we may 
    give you consent to put
    
    [[Page 28312]]
    
    the acreage to another use if you agree to leave intact, and provide 
    sufficient care for, representative samples of the crop in locations 
    acceptable to us (The amount of production to count for such acreage 
    will be based on the harvested production or appraisals from the 
    samples at the time harvest should have occurred. If you do not 
    leave the required samples intact, or you fail to provide sufficient 
    care for the samples, our appraisal made prior to giving you consent 
    to put the acreage to another use will be used to determine the 
    amount of production to count); or
        (B) If you elect to continue to care for the crop, the amount of 
    production to count for the acreage will be the harvested 
    production, or our reappraisal if additional damage occurs and the 
    crop is not harvested; and
        (2) All harvested production from the insurable acreage, 
    including any production from a second rice crop harvested in the 
    same crop year.
        (d) Mature rough rice 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 12 percent. 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 Rice, result in rice not meeting the 
    grade requirements for U.S. No. 3 (grades U.S. No. 4 or worse) 
    because of red rice, chalky kernels or damaged kernels;
        (ii) The rice has a total milling yield of less than 68 pounds 
    per hundredweight;
        (iii) The whole kernel weight is less than 55 pounds per 
    hundredweight of milled rice for medium and short grain varieties;
        (iv) The whole kernel weight is less than 48 pounds per 
    hundredweight of milled rice for long grain varieties; or
        (v) 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 specified in 
    section 12(d)(2) resulted from a cause of loss against which 
    insurance is provided under these crop provisions and which occurs 
    within the insurance period;
        (ii) The deficiencies, substances, or conditions specified in 
    section 12(d)(2) result in a net price for the damaged production 
    that is less than the local market price;
        (iii) All determinations of these deficiencies, substances, or 
    conditions specified in section 12(d)(2) are made using samples of 
    the production obtained by us or by a disinterested third party 
    approved by us; and
        (iv) The samples are analyzed by a grader licensed to grade rice 
    under the authority of the United States Agriculture Marketing 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. Notwithstanding 
    the preceding sentence, test weight for quality adjustment purposes 
    may be determined by our loss adjuster.
        (4) Rice production that is eligible for quality adjustment, as 
    specified in sections 12(d)(2) and (3), will be reduced as follows:
        (i) In accordance with quality adjustment factors contained in 
    the Special Provisions; or
        (ii) If quality adjustment factors are not contained in the 
    Special Provisions, as follows:
        (A) The market price of the qualifying damaged production and 
    the local market price will be determined on the earlier of the date 
    such quality adjusted production is sold or the date of final 
    inspection for the unit. The price for the qualifying damaged 
    production will be the market price for the local area to the extent 
    feasible. Discounts used to establish the net price of the damaged 
    production will be limited to those that are usual, customary, and 
    reasonable. The price will not be reduced for:
        (1) Moisture content;
        (2) Damage due to uninsured causes; or
        (3) Drying, handling, processing, or any other costs associated 
    with normal harvesting, handling, and marketing of the rice; except, 
    if the price of the damaged production can be increased by 
    conditioning, we may reduce the price of the production after it has 
    been conditioned by the cost of conditioning but not lower than the 
    value of the production before conditioning,
        (We may obtain prices from any buyer of our choice. If we obtain 
    prices from one or more buyers located outside your local market 
    area, we will reduce such prices by the additional costs required to 
    deliver the rice to those buyers.);
        (B) The value of the damaged or conditioned production will be 
    divided by the local market price to determine the quality 
    adjustment factor; and
        (C) The number of pounds remaining after any reduction due to 
    excessive moisture (the moisture-adjusted gross pounds (if 
    appropriate)) of the damaged or conditioned production will then be 
    multiplied by the quality adjustment factor to determine the net 
    production to count.
        (e) Any production harvested from plants growing in the insured 
    crop may be counted as production of the insured crop on a weight 
    basis.
    
    13. Late Planting and Prevented Planting
    
        (a) In lieu of provisions contained in the Basic Provisions 
    (Sec. 457.8) regarding acreage initially planted after the final 
    planting date and the applicability of a Late Planting Agreement 
    Option, insurance will be provided for acreage planted to the 
    insured crop during the late planting period (see section 13(c)), 
    and acreage you were prevented from planting (see section 13(d)). 
    These coverages provide reduced production guarantees. The premium 
    amount for late planted acreage and eligible prevented planting 
    acreage 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 late planted acreage or prevented planting acreage 
    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.
        (b) If you were prevented from planting, you must provide 
    written notice to us not later than the acreage reporting date.
        (c) Late Planting
        (1) For rice acreage planted during the late planting period, 
    the production guarantee for each acre will be reduced for each day 
    planted after the final planting date by:
        (i) One percent (1%) per day for the 1st through the 10th day; 
    and
        (ii) Two percent (2%) per day for the 11th through the 25th day.
        (2) In addition to the requirements of section 6 (Report of 
    Acreage) of the Basic Provisions (Sec. 457.8), you must report the 
    dates the acreage is planted within the late planting period.
        (3) If planting of rice 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:
        (i) The acreage reporting date contained in the Special 
    Provisions for the insured crop; or
        (ii) Five (5) days after the end of the late planting period.
        (d) Prevented Planting (Including Planting After the Late 
    Planting Period)
        (1) If you were prevented from timely planting rice, you may 
    elect:
        (i) To plant rice during the late planting period. The 
    production guarantee for such acreage will be determined in 
    accordance with section 13(c)(1);
        (ii) Not to plant this acreage to any crop except a cover crop 
    not for harvest. You may also elect to plant the insured crop after 
    the late planting period. In either case, the production guarantee 
    for such acreage will be thirty-five percent (35%) of the production 
    guarantee for timely planted acres. For example, if your production 
    guarantee for timely planted acreage is 2,000 pounds per acre, your 
    prevented planting production guarantee would be 700 pounds per acre 
    (2,000 pounds multiplied by 0.35). If you elect to plant the insured 
    crop after the late planting period, production to count for such 
    acreage will be determined in accordance with sections 12 (c) 
    through (e); or
        (iii) Not to plant the intended crop but plant a substitute crop 
    for harvest, in which case:
        (A) No prevented planting production guarantee will be provided 
    for such acreage if the substitute crop is planted on or before the 
    10th day following the final planting date for the insured crop; or
        (B) A production guarantee equal to 17.5 percent of the 
    production guarantee for timely planted acres will be provided for 
    such acreage, if the substitute crop is planted after the 10th day 
    following the final planting date for the insured crop. If you 
    elected the Catastrophic Risk Protection Endorsement or excluded 
    this coverage, and plant a substitute crop, no prevented planting 
    coverage will be provided. For example, if your production guarantee 
    for timely planted acreage is 2,000 pounds per acre, your prevented 
    planting production guarantee would be 350 pounds
    
    [[Page 28313]]
    
    per acre (2,000 pounds multiplied by 0.175). You may elect to 
    exclude prevented planting coverage when a substitute crop is 
    planted for harvest and receive a reduction in the applicable 
    premium rate. If you wish to exclude this coverage, you must so 
    indicate, on or before the sales closing date, on your application 
    or on a form approved by us. Your election to exclude this coverage 
    will remain in effect from year to year unless you notify us in 
    writing on our form by the applicable sales closing date for the 
    crop year for which you wish to include this coverage. All acreage 
    of the crop insured under this policy will be subject to this 
    exclusion.
        (2) Production guarantees for timely, late, and prevented 
    planting acreage within a unit will be combined to determine the 
    production guarantee for the unit. For example, assume you insure 
    one unit in which you have a 100 percent share. The unit consists of 
    150 acres, of which 50 acres were planted timely, 50 acres were 
    planted 7 days after the final planting date (late planted), and 50 
    acres were not planted but are eligible for a prevented planting 
    production guarantee. The production guarantee for the unit will be 
    computed as follows:
        (i) For the timely planted acreage, multiply the per acre 
    production guarantee for timely planted acreage by the 50 acres 
    planted timely;
        (ii) For the late planted acreage, multiply the per acre 
    production guarantee for timely planted acreage by 93 percent and 
    multiply the result by the 50 acres planted late; and
        (iii) For prevented planting acreage, multiply the per acre 
    production guarantee for timely planted acreage by:
        (A) Thirty-five percent (35%) and multiply the result by the 50 
    acres you were prevented from planting, if the acreage is eligible 
    for prevented planting coverage, and if the acreage is left idle for 
    the crop year, or if a cover crop is planted not for harvest. 
    Prevented planting compensation hereunder will not be denied because 
    the cover crop is hayed or grazed; or
        (B) Seventeen and five tenths percent (17.5%) and multiply the 
    result by the 50 acres you were prevented from planting, if the 
    acreage is eligible for prevented planting coverage, and if you 
    elect to plant a substitute crop for harvest after the 10th day 
    following the final planting date for the insured crop. (This 
    paragraph (B) is not applicable, and prevented planting coverage is 
    not available under these crop provisions, if you elected the 
    Catastrophic Risk Protection Endorsement or you elected to exclude 
    prevented planting coverage when a substitute crop is planted (see 
    section 13 (d)(1)(iii))).
        Your premium will be based on the result of multiplying the per 
    acre production guarantee for timely planted acreage by the 150 
    acres in the unit.
        (3) You must have the inputs available to plant and produce the 
    intended crop with the expectation of at least producing the 
    production guarantee. Proof that these inputs were available may be 
    required.
        (4) In addition to the provisions of section 11 (Insurance 
    Period) of the Basic Provisions (Sec. 457.8), the insurance period 
    for prevented planting coverage begins:
        (i) On 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 the sales closing date for 
    the insured crop in the county for the previous crop year, provided 
    continuous coverage has been in effect since that date. For example, 
    if you make application and purchase insurance for rice for the 1998 
    crop year, prevented planting coverage will begin on the 1998 sales 
    closing date for rice in the county. If the rice coverage remains in 
    effect for the 1999 crop year (is not terminated or canceled during 
    or after the 1998 crop year), prevented planting coverage for the 
    1999 crop year began on the 1998 sales closing date. Cancellation 
    for the purpose of transferring the policy to a different insurance 
    provider when there is no lapse in coverage will not be considered 
    terminated or canceled coverage for the purpose of the preceding 
    sentence.
        (5) The acreage to which prevented planting coverage applies 
    will not exceed the total eligible acreage on all FSA Farm Serial 
    Numbers in which you have a share, adjusted for any reconstitution 
    that may have occurred on or before the sales closing date. Eligible 
    acreage for each FSA Farm Serial Number is determined as follows:
        (i) If you participate in any program administered by the United 
    States Department of Agriculture that limits the number of acres 
    that may be planted for the crop year, the acreage eligible for 
    prevented planting coverage will not exceed the total acreage 
    permitted to be planted to the insured crop.
        (ii) If you do not participate in any program administered by 
    the United States Department of Agriculture that limits the number 
    of acres that may be planted, and unless we agree in writing on or 
    before the sales closing date, eligible acreage will not exceed the 
    greater of:
        (A) The FSA base acreage for the insured crop, including acres 
    that could be flexed from another crop, if applicable;
        (B) The number of acres planted to rice on the FSA Farm Serial 
    Number during the previous crop year; or
        (C) One-hundred percent of the simple average of the number of 
    acres planted to rice during the crop years that you certified to 
    determine your yield.
        (iii) A prevented planting production guarantee will not be 
    provided for any acreage:
        (A) That does not constitute at least 20 acres or 20 percent of 
    the acreage in the unit, whichever is less (Acreage that is less 
    than 20 acres or 20 percent of the acreage in the unit will be 
    presumed to have been intended to be planted to the insured crop 
    planted in the unit, unless you can show that you had the inputs 
    available before the final planting date to plant and produce 
    another insured crop on the acreage);
        (B) For which the actuarial table does not designate a premium 
    rate unless a written agreement designates such premium rate;
        (C) Used for conservation purposes or intended to be left 
    unplanted under any program administered by the United States 
    Department of Agriculture;
        (D) On which another crop is prevented from being planted, if 
    you have already received a prevented planting indemnity, guarantee 
    or amount of insurance for the same acreage in the same crop year, 
    unless you provide adequate records of acreage and production 
    showing that the acreage was double-cropped in each of the last 4 
    years in which the insured crop was grown on the acreage;
        (E) On which the insured crop is prevented from being planted, 
    if any other crop is planted and fails, or is planted and harvested, 
    hayed, or grazed on the same acreage in the same crop year (other 
    than a cover crop as specified in section 13(d)(2)(iii)(A) or a 
    substitute crop allowed in section 13(d)(2)(iii)(B)) unless you 
    provide adequate records of acreage and production showing that the 
    acreage was double-cropped in each of the last 4 years in which the 
    insured crop was grown on the acreage;
        (F) When coverage is provided under the Catastrophic Risk 
    Protection Endorsement if you plant another crop for harvest on any 
    acreage you were prevented from planting in the same crop year, even 
    if you have a history of double-cropping. If you have a Catastrophic 
    Risk Protection Endorsement and receive a prevented planting 
    indemnity, guarantee, or amount of insurance for a crop and are 
    prevented from planting another crop on the same acreage, you may 
    only receive the prevented planting indemnity, guarantee, or amount 
    of insurance for the crop on which the prevented planting indemnity, 
    guarantee, or amount of insurance is received; or
        (G) For which planting history or conservation plans indicate 
    that the acreage would have remained fallow for crop rotation 
    purposes.
        (iv) For the purpose of determining eligible acreage for 
    prevented planting coverage, acreage for all units will be combined 
    and be reduced by the number of rice acres timely planted and late 
    planted. For example, assume you have 100 acres eligible for 
    prevented planting coverage in which you have a 100 percent share. 
    The acreage is located in a single FSA Farm Serial Number which you 
    insure as two separate optional units consisting of 50 acres each. 
    If you planted 60 acres of rice on one optional unit and 40 acres 
    rice on the second optional unit, your prevented planting eligible 
    acreage would be reduced to zero (i.e., 100 acres eligible for 
    prevented planting coverage minus 100 acres planted equals zero).
        (6) In accordance with the provisions of section 6 (Report of 
    Acreage) of the Basic Provisions (Sec. 457.8), you must report by 
    unit any insurable acreage that you were prevented from planting. 
    This report must be submitted on or before the acreage reporting 
    date. For the purpose of determining acreage eligible for a 
    prevented planting production guarantee, the total amount of 
    prevented planting and planted acres cannot exceed the maximum 
    number of acres eligible for prevented planting coverage. Any 
    acreage you report in excess of the number of acres eligible for 
    prevented planting coverage, or that exceeds the number of eligible 
    acres physically located in a unit, will be deleted from your 
    acreage report.
    
    [[Page 28314]]
    
    14. Written Agreements
    
        Designated terms of this policy may be altered by written 
    agreement in accordance with the following:
        (a) You must apply in writing for each written agreement no 
    later than the sales 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 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 May 19, 1997.
    Kenneth D. Ackerman,
    Manager, Federal Crop Insurance Corporation.
    [FR Doc. 97-13656 Filed 5-22-97; 8:45 am]
    BILLING CODE 3401-08-P
    
    
    

Document Information

Effective Date:
6/23/1997
Published:
05/23/1997
Department:
Federal Crop Insurance Corporation
Entry Type:
Rule
Action:
Final rule.
Document Number:
97-13656
Dates:
June 23, 1997.
Pages:
28308-28314 (7 pages)
PDF File:
97-13656.pdf
CFR: (2)
7 CFR 401.120
7 CFR 457.141