[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31464-31468]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15770]
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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. 61, No. 120 / Thursday, June 20, 1996 /
Proposed Rules
[[Page 31464]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
Common Crop Insurance Regulations; Arizona-California Citrus 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 Arizona-California
citrus. 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 and
combine the current Arizona-California Citrus Crop Insurance
Regulations with the Common Crop Insurance Policy for ease of use and
consistency of terms.
DATES: Written comments, data, and opinions on this proposed rule will
be accepted until close of business July 22, 1996, and will be
considered when the rule is to be made final. The comment period for
information collections under the Paperwork Reduction Act of 1995
continues through August 19, 1996.
ADDRESSES: Interested persons are invited to submit written comments to
the Chief, Product Development Branch, Federal Crop Insurance
Corporation, United States Department of Agriculture (USDA), 9435
Holmes Road, Kansas City, MO 64131. Written comments will be available
for public inspection and copying in room 0324, South Building, USDA,
14th and Independence Avenue, S.W., Washington, D.C., 8:15 a.m.-4:45
p.m., Monday through Friday, except holidays.
FOR FURTHER INFORMATION CONTACT: John Meyer, Program Analyst, Research
and Development Division, Product Development Branch, FCIC, at the
Kansas City, MO, address listed above, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order No. 12866 and Departmental Regulation 1512-1
This action has been reviewed under United States Department of
Agriculture (USDA) procedures established by Executive Order No. 12866
and Departmental Regulation 1512-1. This action constitutes a review as
to the need, currency, clarity, and effectiveness of these regulations
under those procedures. The sunset review date established for these
regulations is June 30, 2006.
This rule has been determined to be not significant for the
purposes of Executive Order No. 12866 and, therefore, has not been
reviewed by the Office of Management and Budget (OMB).
Paperwork Reduction Act of 1995
The information collection requirements contained in the Arizona-
California Crop Insurance Provisions have been submitted to OMB for
approval under section 3507(j) of the Paperwork Reduction Act of 1995.
This proposed rule will amend the information collection requirements
under OMB control number 0563-0003 through September 30, 1998.
The Federal Crop Insurance Corporation will be amending the
information collection to adjust the estimated reporting hours and
revising the usage of FCI-12-P, Pre-Acceptance Perennial Crop
Inspection Report as it applies to the Arizona-California Citrus Crop
Insurance Provisions.
Section 7 of the 1998 Arizona-California Citrus Crop Provisions
adds interplanting as an insurable farming practice as long as it is
interplanted with another perennial crop. This practice was not
insurable under the previous Arizona-California Citrus Crop Insurance
Policy. Consequently, interplanting information will need to be
collected using the FCI-12-P Pre-Acceptance Perennial Crop Inspection
Report form for approximately 0.5 percent of the 2,468 insureds who
interplant their Arizona-California citrus crop. Standard interplanting
language has been added to most perennial crops. Interplanting is an
insurable practice as long as it does not adversely affect the insured
crop. This is a benefit to agriculture because insurance is now
available for more perennial crop producers and as a result less
acreage will need to be covered by the noninsured crop disaster
assistance program (NAP).
Revised reporting estimates and requirements for usage of OMB
control number 0563-0003 will be submitted to OMB for approval under
the provisions of 44 U.S.C., chapter 35. Public comments are due by
August 19, 1996.
The title of this information collection is ``Catastrophic Risk
Protection Plan and Related Requirements including, Common Crop
Insurance Regulations; Arizona-California Citrus Crop Insurance
Provisions.'' The information to be collected includes a crop insurance
acreage report, insurance application and continuous contract.
Information collected from the acreage report and application is
electronically submitted to FCIC by the reinsured companies. Potential
respondents to this information collection are growers of Arizona-
California citrus 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. The reporting burden for this
collection of information is estimated to average 25 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 2,669,970.
The comment period for information collections under the Paperwork
Reduction Act of 1995 continues 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
[[Page 31465]]
or other forms of information 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 (OMB), Washington, DC 20503
and to Bonnie Hart, Advisory and Corporate Operations Staff, Regulatory
Review Group, Farm Service Agency, PO Box 2415, Ag Box 0572, United
States Department of Agriculture, Washington, DC 20013-2415. Copies of
the information collection may be obtained from Bonnie Hart at the
above address, telephone (202) 690-2857.
The Office of Management and Budget (OMB) is required to make a
decision concerning the collection(s) 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 its 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 Mandate 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. Under section 202 of the UMRA, FCIC
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures of State, local, or tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. When such a statement is needed for a rule, section 205 of
the UMRA generally requires FCIC to identify and consider a reasonable
number of regulatory alternatives and adopt the least costly, more
cost-effective or least burdensome alternative that achieves the
objectives of the rule.
This rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, and tribal
governments or the private sector. Thus, this rule is not subject to
the requirements of sections 202 and 205 of the UMRA.
Executive Order No. 12612
It has been determined under section 6(a) of Executive Order No.
12612, Federalism, that this rule does not have sufficient Federalism
implications to warrant the preparation of a Federalism Assessment. The
provisions contained in this rule will not have a substantial direct
effect on States or their political 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. 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 certify to the number of acres and
production on an annual basis or receive a transitional yield. The
producer must maintain the records to support the certified information
for at least 3 years. This regulation does not alter those
requirements. Therefore, the amount of work required of the insurance
companies and Farm Service Agency (FSA) offices 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. 12778
The Office of the General Counsel has determined that these
regulations meet the applicable standards provided in sections 2(a) and
2(b)(2) of Executive Order No. 12778. 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 in 7 CFR parts 11 and 780 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 457.121, Arizona-California Citrus
Crop Insurance Provisions. The new provisions will be effective for the
1998 and succeeding crop years. These provisions will supersede and
replace the current provisions for insuring Arizona-California citrus
found at 7 CFR part 409 (Arizona-California Citrus Crop Insurance
Regulations). By separate rule, the current provisions for insuring
Arizona-California citrus will be revised to restrict its effect
through the 1997 crop year and later remove that part.
This rule makes minor editorial and format changes to improve the
Arizona-California Citrus Crop Insurance Regulations' compatibility
with the Common Crop Insurance Policy. In addition, FCIC is proposing
substantive changes in the provisions for insuring Arizona-California
citrus as follows:
1. Section 1--Add definitions for the terms ``days,''
``dehorning,'' ``direct marketing,'' ``FSA,'' ``good farming
practices,'' ``hedged,'' ``interplanted,'' ``irrigated practice,''
``non-contiguous,'' ``production guarantee (per acre),'' ``scaffold
limb,'' ``set out,'' ``type,'' and ``written agreement'' for
clarification.
2. Section 1--Change the definition of ``harvest,'' for
clarification.
3. Section 3(a)--Clarify that an insured may select one price
election for each citrus type, but that the price election selected for
each type does not need bear the same percentage relationship to the
maximum price offered for each type. However, if separate price
elections are available by variety within each type, the price
elections the insured chooses within the type must have the same
percentage relationship to the maximum price offered by the insurance
provider for each variety within the type. This helps protect against
adverse selection and simplifies the administration of the program.
4. Section 3(b)--Add a provision to specify that instead of
reporting citrus
[[Page 31466]]
production for the previous crop year as required by the Basic
Provisions, there is a lag period of one year because the citrus is not
harvested until after the production reporting date.
5. Section 3(c)--Add a provision to specify that the insured must
report damage, dehorning, removal of trees, and change in practices
that may reduce yields. Further, add provisions that for the first year
of insurance for acreage interplanted with another perennial crop the
insured must report the age and type, if applicable, the planting
pattern, and any other information that the insurance provider requests
to establish the yield upon which the production guarantee is based. If
the insured fails to notify the insurance provider of circumstances
that may reduce the yield below the yield upon which the insurance
guarantee is based, the insurance provider will reduce the production
guarantee at any time the circumstances become known. This allows the
insurance provider to limit liability, if necessary, before insurance
attaches.
6. Section 5--The cancellation and termination dates are changed to
November 20. Currently, the policy states November 30. This change is
consistent with other perennial crop policies and allows for ease of
administration.
7. Section 6--Remove citrus type designations from the Arizona-
California Citrus Crop Provisions and add them to the Special
Provisions. This will eliminate the need to amend the Arizona-
California Citrus Crop Provisions if FCIC decides to add additional
types.
8. Section 7--Add a provision to make interplanted citrus insurable
if planted with another perennial crop unless the insurance provider
inspects the acreage and determines it does not meet the other
requirements for insurability. This clause will make insurance
available to more producers and will reduce the number of acres for
which coverage would be available only under the noninsured crop
disaster assistance program (NAP).
9. Section 8(a)--Change the beginning of the insurance period from
December 1 to November 21 to be consistent with other perennial crops.
However, if an application is accepted by the insurance company after
November 20, insurance will attach on the 10th day after the
application is received in the local agent's office, if approved.
10. Section 8(b)--Add provisions to clarify the procedure for
insuring acreage when an insurable share is acquired or relinquished on
or before the acreage reporting date.
11. Section 9(a)--Add the clause, ``if caused by an insured peril
that occurs during the insurance period,'' to the end of the phrase
``failure of the irrigation water supply.'' This will limit coverage to
a cause of loss covered by the policy.
12. Section 9(b)--Clarify that disease and insect infestation are
excluded causes of loss unless adverse weather prevents the proper
application of control measures, causes control measures to be
ineffective when properly applied, or causes disease or insect
infestation for which no effective control mechanism is available.
13. Section 10--The previous 15 day ``notice of probable loss''
requirement is replaced by the requirement that the insured provide
notice of damage within 72 hours of discovery to be consistent with
other citrus policies.
14. Section 10(a)--Add a provision requiring the insured to give
notice within 3 days of the date harvest should have started if the
crop will not be harvested in order to permit a timely appraisal of the
marketable production.
15. Section 10(b)--Require the producer to give notice at least 15
days before any production from any unit will be marketed directly to
consumers because insureds usually have inadequate records of such
marketing and an appraisal is necessary to accurately determine the
direct marketed production.
16. Section 12--Add provisions for providing insurance coverage by
written agreement. FCIC has a long standing policy of permitting
certain modifications of the insurance contracts by written agreement
for some policies. This amendment will extend this practice to Arizona-
California citrus fruit and make it possible to tailor the policy to a
specific insured in certain specific instances.
List of Subjects in 7 CFR Part 457
Crop insurance, Arizona-California citrus.
Proposed Rule
Pursuant to the authority contained in the Federal Crop Insurance
Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance
Corporation hereby proposes to amend the Common Crop Insurance
Regulations (7 CFR part 457), effective for the 1998 and succeeding
crop years, to read as follows:
PART 457--[AMENDED]
1. The authority citation for 7 CFR part 457 continues to read
as follows:
Authority: 7 U.S.C. 1506(l), and 1506(p)
2. 7 CFR part 457 is amended by adding a new Sec. 457.121 to read
as follows:
Sec. 457.121 Arizona-California Citrus Crop Insurance Provisions.
The Arizona-California Citrus Crop Insurance Provisions for the
1998 and succeeding crop years are as follows:
UNITED STATES DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Arizona-California Citrus 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
Carton--The standard container for marketing fresh packed fruit
by citrus type as shown below. In the absence of marketing records
on a carton basis, production will be converted to cartons on the
basis of the following average net pounds of packed fruit in a
standard packed carton.
------------------------------------------------------------------------
Container size Types of fruit Pounds
------------------------------------------------------------------------
Container #58 Navel oranges.......... ........................ 38
Valencia oranges & Sweet .......
oranges
Container #58 Lemons................. ........................ 40
Container #59 Grapefruit............. ........................ 32
Container #63 Tangerines............. ........................ 25
(including Tangelos) & .......
Mandarin oranges
------------------------------------------------------------------------
Crop year--In lieu of the definition in section 1 (Definitions)
of the Basic Provisions (Sec. 457.8), crop year is the period
beginning with the date insurance attaches to the citrus crop and
extending through normal harvest time, and will be designated by the
calendar year following the year in which the bloom is normally set.
Days--Calendar days.
Dehorning--Cutting of any scaffold limb to a length that is not
greater than one-fourth (\1/4\) the height of the tree before
cutting.
Direct marketing--Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper or buyer. Examples of direct
marketing include selling through an on-farm or roadside stand,
farmer's market, and permitting the general public to enter the
field for the purpose of picking all or a portion of the crop.
FSA--The Farm Service Agency, an agency of the United States
Department of Agriculture or any successor agency.
Good farming practices--The cultural practices generally in use
in the county for
[[Page 31467]]
the crop to make normal progress toward maturity and produce at
least the yield used to determine the production guarantee, and
generally recognized by the Cooperative Extension Service as
compatible with agronomic and weather conditions in the county.
Harvest--The severance of mature citrus from the tree by
pulling, picking, or any other means, or by collecting marketable
fruit from the ground.
Interplanted--Acreage on which two or more crops are planted in
any form of alternating or mixed pattern.
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.
Non-contiguous land--Any two or more tracts of land owned by
you, or rented by you for any consideration other than a share in
the insured crop, whose boundaries do not touch at any point. Land
that is separated only by a public or private right-of-way, waterway
or irrigation canal will be considered to be contiguous.
Production guarantee (per acre)--The number of citrus (cartons)
determined by multiplying the approved yield per acre by the
coverage level percentage you elect.
Scaffold limb--A major limb attached directly to the trunk.
Set out--Transplanting a tree into the grove.
Type--Classes of fruit with similar characteristics that are
grouped for insurance purposes as specified in the Special
Provisions.
Written agreement--A written document that alters designated
terms of a policy in accordance with section 12.
2. Unit Division
(a) A unit as defined in section 1 (Definitions) of the Basic
Provisions (Sec. 457.8), will be divided into basic units by each
citrus type designated in the Special Provisions.
(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.
(c) Basic units may not be divided into optional units on any
basis including, but not limited to, production practice, type, and
variety, other than as described in this section.
(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, that portion of the premium paid for the purpose
of electing optional units will be refunded to you pro rata for the
units combined.
(e) All optional units must be identified on the acreage report
for each crop year.
(f) The following requirements must be met for each optional
unit:
(1) You must have records, which can be independently verified,
of acreage and production for each optional unit for at least the
last crop year used to determine your production guarantee;
(2) You must have records of marketed production or stored
production from each optional unit maintained in such a manner that
permits us to verify the production from each optional unit, or the
production from each unit must be kept separate until loss
adjustment is completed; and
(3) Each optional unit must be located on non-contiguous land.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities)
of the Basic Provisions (Sec. 457.8), you may select only one price
election and coverage level for each citrus fruit type designated in
the Special Provisions that you elect to insure. The price elections
you choose for each type need not bear the same percentage
relationship to the maximum price offered by us for each type. For
example, if you choose one hundred percent (100%) of the maximum
price election for sweet oranges, you may choose seventy-five
percent (75%) of the maximum price election for grapefruit. However,
if separate price elections are available for varieties within each
type, the price elections you choose for each variety must have the
same percentage relationship to the maximum price offered by us for
each variety within the type.
(b) In lieu of reporting your citrus production of marketable
fresh fruit for the previous crop year, as required by the Basic
Provisions (Sec. 457.8), there is a lag period of one year. Each
crop year, you must report your production from two crop years ago,
e.g., on the 1998 crop year production report, you will provide your
1996 crop year production.
(c) In addition, you must report, by the production reporting
date designated in section 3 (Insurance Guarantees, Coverage Levels,
and Prices for Determining Indemnities) of the Basic Provisions
(Sec. 457.8), by type, if applicable:
(1) The number of trees damaged, dehorned or removed, and any
change in practices or any other circumstance that may reduce the
expected yield below the yield upon which the insurance guarantee is
based; and the number of affected acres;
(2) The number of bearing trees on insurable and uninsurable
acreage;
(3) The age of the trees and the planting pattern; and
(4) For the first year of insurance for acreage interplanted
with another perennial crop, and anytime the planting pattern of
such acreage is changed:
(i) The age of the interplanted crop, and type, if applicable;
(ii) The planting pattern; and
(iii) Any other information that we request in order to
establish your approved yield.
We will reduce the yield used to establish your production
guarantee as necessary, based on our estimate of the effect of the
following: interplanted perennial crop; damage; dehorning; removal
of trees; or change in practices on the yield potential of the
insured crop. If you fail to notify us of any circumstance that may
reduce yields from previous levels, we will reduce your production
guarantee, as necessary, at any time we become aware of the
circumstance.
4. Contract Changes
The contract change date is August 31 preceding the cancellation
date (see the provisions of section 4 (Contract Changes) of the
Basic Provisions (Sec. 457.8)).
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 November 20.
6. Insured Crop
(a) In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all the acreage in
the county of each citrus type designated in the Special Provisions
that you elect to insure and for which a premium rate is provided by
the actuarial table:
(1) In which you have a share;
(2) That is a type adapted to the area; and
(3) That is grown in a grove that, if inspected, is considered
acceptable by us.
(b) In addition to citrus not insurable in section 8 (Insured
Crop) of the Basic Provisions (Sec. 457.8), we do not insure any
citrus fruit:
(1) That is not irrigated; and
(2) That has not reached the sixth growing season after being
set out, unless we inspect and allow insurance on such acreage.
7. Insurable Acreage
In lieu of the provisions in section 9 (Insurable Acreage) of
the Basic Provisions (Sec. 457.8), that prohibit insurance attaching
to a crop planted with another crop, citrus interplanted with
another perennial crop is insurable unless we inspect the acreage
and determine it does not meet the requirements for insurability
contained in your policy.
8. Insurance Period
(a) In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(1) Coverage begins on November 21 of each crop year, except
that for the first crop year, if the application is accepted by us
after November 20, insurance will attach on the 10th day after the
application, if approved, is received in our local agent's office.
(2) The calendar date for the end of the insurance period for
each crop year is:
(i) August 31 for Navel oranges and Southern California lemons;
(ii) November 20 for Valencia oranges; and
(iii) July 31 for all other types of citrus.
(b) In addition to the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(1) If you acquire an insurable share in any insurable acreage
after coverage begins, but on or before the acreage reporting date
for the crop year, and after an inspection we consider the acreage
acceptable, insurance will be considered to have attached to such
acreage on the calendar date for the beginning of the insurance
period.
[[Page 31468]]
(2) If you relinquish your insurable share on any insurable
acreage of citrus on or before the acreage reporting date for the
crop year, insurance will not be considered to have attached to such
acreage for that crop year unless:
(i) A transfer of coverage and right to an indemnity, or a
similar form approved by us, is completed by all affected parties;
and
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date.
If you relinquish your share, no premium or indemnity will be
due unless a transfer of coverage is properly executed.
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;
(2) Fire, unless weeds and other forms of undergrowth have not
been controlled or pruning debris has not been removed from the
grove;
(3) Wildlife;
(4) Earthquake;
(5) Volcanic eruption; or
(6) Failure of irrigation water supply, if caused by an insured
peril that occurs during the insurance period.
(b) In addition to the causes of loss excluded in section 12
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not
insure against damage or loss of production due to:
(1) Disease or insect infestation, unless adverse weather
conditions:
(i) Prevents the proper application of control measures or
causes properly applied control measures to be ineffective; or
(ii) Causes disease or insect infestation for which no effective
control mechanism is available;
(2) Inability to market the citrus for any reason other than
actual physical damage from an insurable cause specified in this
section. For example, we will not pay you an indemnity if you are
unable to market due to quarantine, boycott, or refusal of any
person to accept production.
10. 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), the
following will apply:
(a) You must notify us within three 3 days of the date harvest
should have started if the crop will not be harvested.
(b) You must notify us at least 15 days before any production
from any unit will be marketed directly to consumers. We will
conduct an appraisal that will be used to determine your production
to count for direct marketed production. If damage occurs after this
appraisal, we will conduct an additional appraisal. These
appraisals, and any acceptable records provided by you, will be used
to determine your production to count. Failure to give timely notice
that production will be marketed directly to consumers will result
in an appraised amount of production to count that is not less than
the production guarantee per acre if such failure results in our
inability to make the required appraisal.
(c) If you intend to claim an indemnity on any unit, you must
notify us prior to the beginning of harvest so that we may inspect
the damaged production. You must not sell or dispose of the damaged
crop until after we have given you written consent to do so. If you
fail to meet the requirements of this section, all such production
will be considered undamaged and included as production to count.
11. Settlement Of Claim
(a) We will determine your loss on a unit basis. In the event
you are unable to provide production records:
(1) For any optional unit, we will combine all optional units
for which acceptable production records were not provided; or
(2) For any basic unit, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for each unit.
(b) In the event of loss or damage covered by this policy, we
will settle your claim by:
(1) Multiplying the insured acreage for each type by its
respective production guarantee;
(2) Multiplying each result in paragraph (1) by the respective
price election for each type, or variety within a type;
(3) Totaling the results in paragraph (2);
(4) Multiplying the total production to be counted of each type
or variety, if applicable (see section 11(c)), by the respective
price election;
(5) Totaling the results of paragraph (4);
(6) Subtracting the total of paragraph (5) from the total in
paragraph (3); and
(7) Multiplying the result of paragraph (6) by your share;
(c) The total production to count (in cartons) from all
insurable acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee per acre for acreage:
(A) That is abandoned;
(B) Marketed directly to consumers if you fail to meet the
requirements contained in section 10;
(C) Damaged solely by uninsured causes; or
(D) For which you fail to provide production records that are
acceptable to us;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production determined to be marketable as
fresh packed fruit; and
(iv) Potential production on insured acreage that you intend to
abandon or no longer care for, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for
that acreage will end. If you do not agree with our appraisal, we
may defer the claim only if you agree to continue to care for the
crop. We will then make another appraisal when you notify us of
further damage or that harvest is general in the area unless you
harvested the crop, in which case we will use the harvested
production. If you do not continue to care for the crop, our
appraisal made prior to deferring the claim will be used to
determine the production to count; and
(2) All harvested production marketed as fresh packed fruit from
the insurable acreage.
(3) All disposed or sold damaged citrus that was disposed or
sold without an inspection or written consent.
(d) Any production will be considered marketed or marketable as
fresh packed fruit unless, due to insurable causes, such production
was not marketed or marketable as fresh packed fruit.
(e) Citrus that cannot be marketed due to insurable causes will
not be considered production to count.
(f) If we determine that frost protection equipment was not
properly utilized or not properly reported, the indemnity for the
unit will be reduced by the percentage of premium reduction allowed
for frost protection equipment. You must, at our request, provide us
records showing the start-stop times by date for each period the
frost protection equipment was used.
12. 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
12(e);
(b) The application for written agreement must contain all 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 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, DC., on June 13, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-15770 Filed 6-19-96; 8:45 am]
BILLING CODE 3410-FA-P
