[Federal Register Volume 59, Number 186 (Tuesday, September 27, 1994)]
[Unknown Section]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23833]
Federal Register / Vol. 59, No. 186 / Tuesday, September 27, 1994 /
[[Page Unknown]]
[Federal Register: September 27, 1994]
VOL. 59, NO. 186
Tuesday, September 27, 1994
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
Common Crop Insurance Regulations; Cotton Crop Insurance
Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) hereby adopts
regulations for specific crop provisions to insure cotton. These
provisions will supplement the Common Crop Insurance Policy
(Sec. 457.8) which contains standard terms and conditions common to
most crops. The intended effect of this rule is to move specific crop
provisions for insuring cotton from the General Crop Insurance Policy
(Sec. 401.8) to the Common Crop Insurance Policy (Sec. 457.8) for ease
of use by the public and conformance among policy terms.
EFFECTIVE DATE: October 27, 1994.
FOR FURTHER INFORMATION CONTACT:
Mari L. Dunleavy, Regulatory and Procedural Development, Federal Crop
Insurance Corporation, U.S. Department of Agriculture, Washington, DC
20250, telephone (202) 254-8314.
SUPPLEMENTARY INFORMATION: This action has been reviewed under USDA
procedures established by Executive Order 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
March 1, 1999.
This rule has been determined to be ``not significant'' for
purposes of Executive Order 12866, and therefore has not reviewed by
the Office of Management and Budget (OMB).
In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C.
3501 et seq.), the information collection or record-keeping
requirements included in this rule are found in 7 CFR part 400, subpart
H.
It has been determined under section 6(a) of Executive Order 12612,
Federalism, that this rule does not have sufficient federalism
implications to warrant the preparation of a federalism assessment. The
policies and procedures contained in this rule will not have
substantial direct effects on states or their political subdivisions,
or on the distribution of power and responsibilities among the various
levels of government.
This action will not have a significant impact on a substantial
number of small entities. The amount of work required of the insurance
companies delivering these policies will not increase from the amount
required to deliver previous policies. Therefore, this action is
determined to be exempt from the provisions of the Regulatory
Flexibility Act and no Regulatory Flexibility Analysis was prepared.
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
This program is not subject to the provisions of Executive Order
12372 which requires 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.
The Office of the General Counsel has determined that these
regulations meet the applicable standards provided in subsections 2(a)
and 2(b)(2) of Executive Order 12788. 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 located
at 7 CFR part 400, subpart J must be exhausted before judicial action
may be brought.
This action is not expected to have any significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
By separate rule, 7 CFR 401.119 will be amended to restrict the
crop years of application to those prior to the crop year for which
this rule will be effective. FCIC will terminate the provisions of the
present policy at the end of the crop year and remove and reserve the
cotton endorsement contained in 7 CFR 401.119.
On Tuesday, May 31, 1994, FCIC published a notice of proposed
rulemaking in the Federal Register at 59 FR 28022 proposing to revise
the Common Crop Insurance Regulations by adding new provisions for
cotton crop insurance.
Following publication of the proposed rule, the public was afforded
30 days to submit written comments, data, and opinions. The comments
received and FCIC responses are as follows:
Comment: Two comments suggested that the crop provisions should not
be implemented for the 1995 crop year because:
(1) Crop insurance reform will require many policy changes.
Implementation of these crop provisions should be tabled until reform
decisions are reached because impacts on policy terms are not yet
clear. Delaying common policy implementation until it can be
implemented in an orderly fashion should be beneficial to everyone
concerned; and
(2) The Common Crop Insurance Policy should be thoroughly reviewed
and revised as needed before any additional crop provisions are
implemented under it.
Response: Program changes necessary to comply with crop insurance
reform will have the same effects on either the existing cotton policy
or these Cotton Crop Provisions. Any necessary changes can be made to
the Cotton Crop Provisions as easily as they can be made to the
existing policy. FCIC has recently completed a review of the Common
Crop Insurance Policy Basic Provisions (Sec. 457.8). Any necessary
changes required to be made to the Basic Provisions as a result of
reform will be required whether or not the Cotton Crop Provisions have
been implemented. Therefore, FCIC does not find it necessary to delay
implementation for either of the reasons stated in the comments.
Comment: One comment questioned requirements contained in the
definition of ``Practical to replant.'' This definition indicated that
the replanted acreage must have the potential to produce at least
ninety percent (90%) of the production guarantee. The late planting
provisions provide production guarantees much lower than the ninety
percent (90%) potential requirement contained in the definition even
though the late planted and replanted crop may be planted at the same
time. The comment recommended removing the production potential
requirement from the definition of ``practical to replant.''
Response: FCIC agrees that the production potential required by the
definition of ``practical to replant'' and the production guarantee for
late planted acreage may be inconsistent depending on the time of
planting. Acreage initially planted twenty-five (25) days after the
final planting date would have a production guarantee equal to sixty
percent (60%) of the guarantee for timely planted acreage, while the
definition of ``practical to replant'' would require acreage replanted
at the same time to have a production potential equal to ninety percent
(90%) of the production guarantee. However, expected yield does have an
effect on whether it is practical to replant. The ninety percent (90%)
production potential requirement has been removed from the definition
of ``practical to replant.'' However, the expected yield must be
sufficient to cover production costs and must be at a level that
growers in the area would normally care for and harvest.
Comment: One comment recommended changing the term ``approved
yield'' to ``approved APH yield'' in the definition of ``Production
guarantee'' to correspond with terminology in underwriting procedure.
Response: Underwriting procedure contains several methods which may
be used to determine approved yields. These include the use of yields
which may not represent actual production history (APH). Using the term
``APH'' could be misleading to readers not familiar with administrative
procedures, and, therefore, will not be used in the crop insurance
policy.
Comment: Three comments disagreed with the definition of ``Written
agreement''. This definition required written agreements to be
requested at least 15 days prior to the sales closing date.
(1) One comment recommended keeping the current deadlines for
written agreements as specified in procedures. These procedures require
that requests be made not later than 15 days after the acreage
reporting date for most types of written agreements. Setting a deadline
15 days prior to the sales closing date will either force insureds to
submit requests for written agreements they may not need, or result in
uninsurable acreage if requests are not made for all possible
situations. Unnecessary requests will increase paperwork for the
insured, agent, FCIC Regional Service Office and company. The comment
also recommended deleting the last sentence of the definition, which
required written agreements to contain all variable terms including,
but not limited to, crop variety, guarantee, premium and price
election. The comment indicated it was not necessary to include this
information on every written agreement because many written agreements
do not alter these items.
(2) One comment recommended keeping the deadline of 15 days after
the acreage reporting date because there are many instances when it is
not known that a written agreement is necessary until the acreage is
reported. The comment stated that the change would be an unreasonable
requirement and would create difficulties since the sales closing dates
will be 30 days earlier than in prior years.
(3) One comment stated that it is hard to understand why the
written agreement deadline is 15 days prior to the time a producer has
to purchase coverage, and that a more appropriate date should be
established. The comment also stated that the sales closing dates are
not listed in the proposed crop provisions. If these are the same date
as the cancellation and termination date, the policy should so
indicate.
Response: The proposed definition was intended to require that
requests for written agreements be made far enough ahead of the sales
closing date to allow the insurer to make the offer, and for the
insured to accept the offer, by the sales closing date. Since the
insurance policy is a written contract, both parties must have a
meeting of the minds before the contract is valid. The terms and
conditions of the policy must be known by the final date for
establishing the insurance contract. In this program, the final date is
the sales closing date. FCIC has determined that some situations may
allow written agreements at other times. FCIC is preparing proposed
written agreement regulations which will specify when written
agreements must be completed. Until these regulations have been
published, the written agreement must be completed by the sales closing
date, or, in specific instances, a written agreement may be requested
or approved after the sales closing date if the crop is physically
inspected and a determination made that the crop has an expectancy of
making the guaranteed yield. No prevented planting liability will be
established as a result of any request submitted after the sales
closing date. FCIC does not agree that the final sentence should be
deleted. Specifying all variable terms in the written agreement is
necessary to assure a clear understanding of the terms in effect.
Although the sales closing dates normally will be the same as the
cancellation and termination dates this is not always the case.
Therefore, the sales closing dates will not be included in the crop
provisions. Federal regulations authorize the Manager of FCIC to extend
the sales closing date in any county upon the Manager's determination
that no adverse selection will result during the extended period. The
extended date is placed on file in the applicable service offices and a
notice is placed in the Federal Register. If the sales closing dates
were contained in the crop provisions, the crop provisions would need
to be amended each time a sales closing date is extended.
Comment: One comment stated that unit division language contained
in subsection 2.(b) should allow for situations in which the insured
creates a discernible break via some tillage operation. The proposed
provision states that the insured must plant the crop in a manner that
results in a clear and discernible break in the planting pattern at the
boundaries of each optional unit. There is no required method of
creating a boundary as long as a discernible break is provided.
Response: The intent of the policy language is to allow separate
optional units if acreage is farmed separately. Farming separately
includes planting separately and keeping separate records of inputs,
production, etc. Creating a boundary after the crop is planted by means
of a tillage operation along a section line may or may not meet the
policy requirement of planting the crop in a manner that results in a
clear and discernible break at the units boundary. FCIC believes the
present language clearly sets out the requirements for unit division.
Comment: Two comments were received regarding the changes in the
cancellation and termination dates.
(1) One comment stated the assumption that since cancellation and
termination dates were changed, that the sales closing dates will be
changed to align with the new cancellation and termination dates.
(2) One comment expressed the concern that an earlier cancellation
date would decrease the amount of time available for producers to make
decisions regarding their insurance coverage.
Response: The sales closing dates, as contained in the Special
Provisions, will be changed generally to be the same as, but no later
than, the new cancellation and termination dates. Earlier cancellation
and sales closing dates are intended to reduce the possibility that a
producer's decision to cancel or purchase insurance is based on
favorable or unfavorable growing conditions. FCIC expects this change
to have favorable impact on insurance experience. Favorable results
will be considered when calculating future premium rates.
Comment: One comment stated that section 6 (Insured Crop) indicates
that colored cotton will be insurable under the cotton crop provisions.
However, the introductory information in the Federal Register indicates
the FCIC Regional Service Offices will issue production guarantees for
colored cotton via written agreement until adequate actual production
history is available for individual policyholders. The comment
recommended that language to this effect be added to the policy, either
in section 3 of the crop provisions or in the special provisions. The
comment asked if the Crop Insurance Handbook will be revised to state
that insureds must keep production history separate for colored cotton,
what constitutes ``adequate production history,'' and what information
must be sent in with the request for a written agreement.
Response: FCIC's research indicates that the production potential
for some colored cottons is significantly less than white upland cotton
and that the value may be significantly higher. Insufficient data are
currently available to establish production guarantees, prices, quality
adjustment methods, etc. for colored cottons. Because data are
insufficient, FCIC believes that colored cotton should be insurable
only with a written agreement. Therefore, the provisions in section 6
(Insured Crop) have been changed accordingly. When requesting a written
agreement, the insured should submit any available production history,
the number of acres intended for planting in the current crop year, and
other information normally required when requesting insurance for an
uninsurable crop type. The Crop Insurance Handbook will be revised to
indicate specific requirements as soon as it is practical to do so.
Comment: Two comments were received regarding the elimination of
provisions that provided coverage while cotton stored in modules
remains in the field.
(1) One comment stated that changing the end of the insurance
period from ``removal from the field'' to ``harvest'' creates some
concerns which need to be addressed. Specifically, the comment asks how
quality will be accurately determined for cotton stored in modules when
the modules may be stored in the field for a significant period of
time?
(2) One comment opposed the removal of coverage for modules stored
in the field. The comment stated that: (a) Large amounts of cotton are
stored in modules and that the practice allows for timely and efficient
harvest of the crop; (b) losses do not occur frequently once cotton is
moduled, but there is some risk of weather-related loss until the
modules are removed from the field; and (c) continuing the practice of
insurance coverage until removal from the field would be consistent
with recent ad hoc disaster rulings that deemed weather-damaged, field
stored modules eligible for assistance.
Response: Upon further review, FCIC has determined that coverage
for modules stored in the field should be provided. Approximately
seventy percent (70%) of the U.S. crop is stored in modules until
ginning can take place, and cotton stored in modules is not as
susceptible to loss as cotton remaining on the stalk. The provisions in
section 8 (Insurance Period) have been revised accordingly.
Comment: One comment recommended either revising or deleting
provisions that allow the insured to leave representative samples if
they disagree with the insurer's appraisal. In the event the provision
cannot be deleted, the comment recommended changing the provision so
that the insurer can decide when using representative samples is
appropriate. In many situations, samples are more susceptible to loss
and do not accurately represent what the entire unit would have
produced.
Response: FCIC agrees that there are situations in which it may not
be reasonable to leave representative strips from which production to
count would ultimately be determined. The samples could be more
vulnerable to damage than an entire field, or the insurer may be
confident that the appraisal made accurately reflects production
potential. However, the entire provision should not be removed. The
provision has been changed to allow the insurer to determine those
situations in which it is reasonable to leave representative samples to
determine the amount of production to be counted. In cases where it is
necessary to defer determinations the insured must be advised how
production to count will ultimately be determined and the consequences
of failure to leave or care for the samples.
Comment: One comment recommended that language in subsection 12.(b)
be changed to require only one notice for prevented planting acreage
rather than requiring notice three days after the final planting date
and three days after the date the insured stops planting within the
late planting period.
Response: The crop provisions provide two distinct periods during
which the insured may be prevented from planting (i.e., by the final
planting date and during the late planting period). The notice
requirement allows the insurer the opportunity to verify that the
acreage could not have been planted during such periods. FCIC agrees
that an insured should only be required to give one notice if it is
sufficient to cover all acreage for prevented planting purposes.
Subsection 12.(b) has been modified to clarify that written notice must
be given not later than three days after the final planting date for
acreage the insured was prevented from planting by the final planting
date, and not later than three days after the date the insured
discovers that planting will not be possible if the insured was not
prevented from planting such acreage by the final planting date but was
prevented from planting such acreage during the late planting period.
Comment: One comment indicated that the proposed provisions in
paragraph 12.(d)(3) will allow an insured to request a written
agreement for prevented planting coverage for acreage exceeding the
policy limitations, and to subsequently enroll in a USDA program that
allows less acreage to be planted. The comment recommended revising the
paragraph to limit eligible acreage to the amount allowed by any
applicable USDA program, regardless of when the insured enrolls in such
program or any previously approved written agreement.
Response: FCIC agrees that, if the farm is enrolled in an USDA
program that limits the number of acres planted, acreage in excess of
the amount allowed under an USDA program should not be eligible for
prevented planting coverage. Paragraph 12.(d)(3) has been amended
accordingly.
Comment: One comment recommended that language be added to
paragraph 12.(d)(3) to allow prevented planting coverage by written
agreement for acreage added to the insured's farming operation after
the sales closing date.
Response: The insurance period for prevented planting coverage
begins on the sales closing date. Allowing additional coverage to
attach after the beginning of this period would likely result in
coverage being requested primarily when conditions are favorable for a
prevented planting indemnity. This adverse selection should be avoided
to help maintain an actuarially sound program and to keep premium rates
from rising to cover such losses. The definition of ``written
agreement'' has been amended to specifically disallow any prevented
planting liability as a result of any request submitted after the sales
closing date.
In addition to the changes indicated in the responses to comments,
FCIC has determined that:
1. The definition of skip-row should reference United States
Department of Agriculture qualification requirements for skip-row
patterns. These requirements are used to determine the land area that
is considered to be planted to cotton.
2. Provisions in section 6 (Insured Crop) are modified to allow
coverage on crops planted into an established grass or legume in
certain instances. The increased emphasis on Highly Erodible Land
Conservation had made conservation tillage and no-till more acceptable.
3. New small grain and cotton varieties that mature earlier than
previously available varieties make ``double cropping'' more practical.
However, in areas where soil moisture may be depleted by the first crop
planted, this practice may not be feasible or may result in
significantly more risk to the insurer. To allow insurance for this
practice, yet limit the insurer's vulnerability in areas where ``double
cropping'' may not be practical, section 6 of the crop provisions have
been modified to allow insurance for ``double cropped'' cotton only if
allowed by a written agreement or the Special Provisions.
Accordingly, the rule, ``Common Crop Insurance Regulations; Cotton
Crop Insurance Provisions'' published at 59 FR 28022 as revised as set
out below is hereby adopted as final rule.
List of Subjects in 7 CFR Part 457
Crop Insurance; Cotton.
Final Rule
Accordingly, 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 amends the Common Crop Insurance
Regulations (7 CFR part 457), effective for the 1995 and succeeding
crop years, in the following instances:
PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE
1994 AND SUBSEQUENT CONTRACT YEARS
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506, 1516.
2. 7 CFR part 457 is amended by revising the heading as set forth
above and by adding Sec. 457.104 Cotton Crop Provisions to read as
follows:
Sec. 457.104 Cotton Crop Insurance Provisions.
The Cotton Crop Insurance Provisions for the 1995 and succeeding
crop years are as follows:
UNITED STATES DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Cotton Crop Provisions
If a conflict exists among the Common Crop Insurance Policy
(Sec. 457.8), these crop provisions, and the Special Provisions, the
Special Provisions will control these crop provisions and the common
policy and these crop provisions will control the common policy.
1. Definitions
(a) Cotton--Varieties identified as American Upland Cotton.
(b) Days--Calendar days.
(c) 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.
(d) Good farming practices--The cultural practices generally in
use in the county for the insured crop to make normal progress
toward maturity and produce at least the yield used to determine the
production guarantee and are those recognized by Cooperative
Extension Service as compatible with agronomic and weather
conditions in the area.
(e) Growth area--A geographic area designated by the Secretary
of Agriculture for the purpose of reporting cotton prices.
(f) Harvest--The removal of the seed cotton from the open cotton
boll, or the severance of the open cotton boll from the stalk by
either manual or mechanical means.
(g) Interplanted--Acreage on which two or more crops are planted
in a manner that does not permit separate agronomic maintenance or
harvest of the insured crop.
(h) 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.
(i) Late planted--Acreage planted to cotton during the late
planting period.
(j) Late planting period--The period that begins the day after
the final planting date for the insured crop and ends twenty-five
(25) days after the final planting date.
(k) Mature cotton--Cotton that can be harvested either manually
or mechanically.
(l) Planted acreage--Land in which seed has been placed by a
machine appropriate for the insured crop and planting method, at the
correct depth, into a seedbed which has been properly prepared for
the planting method and production practice. Cotton must be planted
in rows to be considered planted. Planting in any other manner will
be considered as a failure to follow recognized good farming
practices and any loss of production will not be insured unless
otherwise provided by the special provisions or by written agreement
to insure such crop. The yield conversion factor normally applied to
non-irrigated skip-row cotton acreage will not be used if the land
between the rows of cotton is planted to any crop.
(m) Practical to replant--In lieu of subsection 1.(ff) of the
Common Crop Insurance Policy (Sec. 457.8) practical to replant is
defined as our determination, after loss or damage to the insured
crop, based on factors including, but not limited to moisture
availability, condition of the field, and time to crop maturity,
that replanting to the insured crop will allow the crop to attain
maturity prior to the calendar date for the end of the insurance
period. It will not be considered practical to replant after the end
of the late planting period unless replanting is generally occurring
in the area.
(n) Prevented planting--Inability to plant the insured crop with
proper equipment by:
(1) The final planting date designated in the Special Provisions
for the insured crop in the county; or
(2) 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 most producers in the
surrounding area from planting due to similar insurable causes. The
insured cause of prevented planting must occur between the sales
closing date and the final planting date for the insured crop in the
county or within the late planting period.
(o) Production guarantee--The number of pounds determined by
multiplying the approved yield per acre by any applicable yield
conversion factor for non-irrigated skip-row planting patterns, and
multiplying the result by the coverage level percentage you elect.
(p) Replanting--Performing the cultural practices necessary to
replace the cotton seed, and replacing the seed in the insured
acreage with the expectation of growing a successful crop.
(q) Skip-row--A planting pattern that:
(1) Consists of alternating rows of cotton and fallow land or
land planted to another crop the previous fall; and
(2) Qualifies as a skip-row planting pattern as defined by the
ASCS or successor agency.
(r) Timely planted--Planted on or before the final planting date
designated in the Special Provisions for the insured crop in the
county.
(s) Written agreement--Designated terms of this policy may be
altered by written agreement. Each agreement must be applied for by
the insured in writing no later than the sales closing date and is
valid for one year only. If not specifically renewed the following
year, continuous insurance will be in accordance with the printed
policy. All variable terms including, but not limited to, crop
variety, guarantee, premium rate and price election must be set out
in the written agreement. In specific instances a written agreement
may be applied for after the sales closing date and approved if,
after a physical inspection of the acreage, there is a determination
that the crop has the expectancy of making at least the guaranteed
yield. However, no prevented planting liability will be established
as a result of any request submitted after the sales closing date.
All applications for written agreements as submitted by the insured
must contain all variable terms of the contract between the company
and the insured that will be in effect if the written agreement is
disapproved.
2. Unit Division
Unless limited by the Special Provisions, a unit as defined in
subsection 1.(tt) of the Common Crop Insurance Policy (Sec. 457.8),
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. All optional units must be reflected on the
acreage report for each crop year.
(a) 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.
(b) You must plan the crop in a manner that results in a clear
and discernable break in the planting pattern at the boundaries of
each optional unit.
(c) You must have records of measurement of stored or marketed
production from each optional unit maintained in such a manner that
we can verify the production from each optional unit or the
production from each optional unit must be kept separate until after
loss adjustment under the policy is completed.
(d) Each optional unit must meet one or more of the following
criteria as applicable;
(1) Optional Units by Section, Section Equivalent, or ASCS Farm
Serial Number: Optional units may be established if each optional
unit is located in a separate legally identified Section. In the
absence of Sections, we may consider parcels of land legally
identified by other methods of measure including, but not limited
to: Spanish grants, railroad surveys, leagues, labors, or Virginia
Military Lands an equivalent of Sections for unit purposes. In areas
which 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 ASCS Farm
Serial Number.
(2) Optional Units on Acreage Including Both Irrigated and Non-
irrigated Practices: In addition to or instead of establishing
optional units by Section, section equivalent, or ASCS Farm Serial
Number, optional units may be based or irrigated acreage or non-
irrigated acreage if both are located in the same Section, section
equivalent, or ASCS Farm Serial Number. The irrigated acreage may
not extend beyond the point at which your irrigation system can
deliver the quantity of water needed to produce the yield on which
your guarantee is based and you may not continue into non-irrigated
acreage in the same rows or planting pattern. You must plant,
cultivate, fertilize, or otherwise care for the irrigated acreage in
accordance with recognized good irrigated farming practices.
Basic units may not be divided into optional units on any basis
including, but not limited to: Production practice, type, variety,
or planting period, other than as described above. If you do not
comply fully with these provisions, we will combine all optional
units which are not in compliance with these provisions into the
unit from which they were formed. We may 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 on all
optional units is determined to be inadvertent, and the optional
units are combined, premium paid for the purpose of electing
optional units will be refunded to you.
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 Common Crop Insurance Policy (Sec. 457.8), you may select
only one price election for all cotton in the county insured under
this policy.
4. Contract Changes
The contract change date is November 30 preceding the
cancellation date (see the provisions of section 4 (Contract
Changes) of the Common Crop Insurance Policy (Sec. 457.8)).
5. Cancellation and Termination Dates
In accordance with subsection 2. (f) of the Common Crop
Insurance Policy (Sec. 457.8), the cancellation and termination
dates are:
------------------------------------------------------------------------
Cancellation and
State and county termination
dates
------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, Wilson, February 15
Karnes, Goliad, Victoria, and Jackson Counties,
Texas, and all Texas counties lying south thereof.
Alabama; Arizona; Arkansas; California; Florida; February 28
Georgia; Louisiana; Mississippi; Nevada; North
Carolina; South Carolina; El Paso, Hudspeth,
Culberson, Reeves, Loving, Winkler, Ector, Upton,
Reagon, Sterling, Coke, Tom Green, Concho, McCulloch,
San Saba, Mills, Hamilton, Bosque, Johnson, Tarrant,
Wise, and Cooke Counties, Texas, and all Texas
counties lying south and east thereof to and
including Terrell, Crocket, Sutton, Kimble,
Gillespie, Blanco, Comal, Guadalupe, Gonzales, De
Witt, Lavaca, Colorado, Wharton, and Matagorda
Counties, Texas.
All other Texas counties and all other states......... March 15
------------------------------------------------------------------------
6. Insured Crop
In accordance with section 8 (Insured Crop) of the Common Crop
Insurance Policy (Sec. 457.8), the crop insured will be all the
cotton lint, in the county for which premium rates are provided by
the actuarial table:
(a) In which you have a share; and
(b) That is not (unless allowed by the Special Provisions or by
written agreement):
(1) Colored cotton lint;
(2) Planted into an established grass or legume;
(3) Interplanted with another spring planted crop;
(4) Grown on acreage from which a hay crop was harvested in the
same calendar year unless the acreage is irrigated; or
(5) Grown on acreage on which a small grain crop reached the
heading stage in the same calendar year unless the acreage is
irrigated or adequate measures are taken to terminate the small
grain crop prior to heading and less than fifty percent (50%) of the
small grain plants reach the heading stage.
7. Insurable Acreage
In addition to the provisions of section 9 (Insurable Acreage)
of the Common Crop Insurance Policy (Sec. 457.8):
(a) The acreage insured will be only the land occupied by the
rows of cotton when a skip row planting pattern is utilized; and
(b) Any acreage of the insured crop damaged before the final
planting date, to the extent that the remaining stand will not
produce at least ninety percent (90%) of the production guarantee,
must be replanted unless we agree that replanting is not practical
(see subsection 1.(m)).
8. Insurance Period
(a) In lieu of subsection 11.(b) of the Common Crop Insurance
Policy (Sec. 457.8) (Harvest of the unit), insurance will end upon
the removal of the cotton from the field.
(b) In accordance with the provisions under section 11
(Insurance Period) of the Common Crop Insurance Policy (Sec. 457.8),
the calendar date for the end of the insurance period is the date
immediately following planting as follows:
(1) September 30 in Val Verde, Edwards, Kerr, Kendall, Bexar,
Wilson, Karnes, Goliad, Victoria, and Jackson Counties, Texas, and
all Texas counties lying south thereof;
(2) January 31 in Arizona, California, New Mexico, Oklahoma, and
all other Texas counties; and
(3) December 31 in all other states.
9. Causes of Loss
In accordance with the provisions of section 12 (Causes of Loss)
of the Common Crop Insurance Policy (Sec. 457.8), insurance is
provided only against the following causes of loss which occur
within the insurance period:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage due to insufficient or improper
application of pest control measures;
(d) Plant disease, but not damage due to insufficient or
improper application of disease control meaures;
(e) Wildlife;
(f) Earthquake;
(g) Volcanic eruption; or
(h) Failure of the irrigation water supply, if applicable, due
to an unavoidable cause of loss occurring within the insurance
period.
10. Duties in the Event of Damage or Loss
(a) In addition to your duties under section 14 (Duties in the
Event of Damage or Loss) of the Common Crop Insurance Policy
(Sec. 457.8), in the event of damage or loss:
(1) The cotton stalks must remain intact for our inspection; and
(2) If you initially discover damage to the insured crop within
15 days of harvest, or during harvest, you must leave representative
samples of the unharvested crop in the field for our inspection. The
samples must be at least 10 feet wide and extend the entire length
of each field in the unit.
(b) The stalks must not be destroyed, and required samples must
not be harvested, until the earlier of our inspection or 15 days
after harvest of the balance of the unit is completed and written
notice of probable loss given to us.
11. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event
you are unable to provide records of production:
(1) For any optional unit, we will combine all optional units
for which acceptable records of production were not provided; or
(2) For any basic unit, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for each unit.
(b) In the event of loss or damage covered by this policy, we
will settle your claim on any unit by:
(1) Multiplying the insured acreage by the production guarantee;
(2) Subtracting from this the total production to count;
(3) Multiplying the remainder by your price election; and
(4) Multiplying this result by your share.
(c) The total production (pounds) to count 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) Damaged solely by uninsured causes;
(D) For which you fail to provide records of production that are
acceptable to us; or
(E) On which the cotton stalks are destroyed, in violation of
section 10;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (mature unharvested production of
white cotton may be adjusted for quality deficiencies in accordance
with subsection 11.(d)); and
(iv) Potential production on insured acreage you want to put to
another use or you wish to abandon or no longer care for, if you and
we agree on the appraised amount of production. Upon such agreement,
the insurance period for that acreage will end if you put the
acreage to another use or abandon the crop. If agreement on the
appraised amount of production is not reached:
(A) If you do not elect to continue to care for the crop we may
give you consent to put the acreage to another use if you agree to
leave intact, and 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 of appraisals from the samples at the time harvest should
have occurred. If you do not leave the required samples intact, or
you fail to provide sufficient care for the samples, our appraisal
made prior to giving you consent to put the acreage to another use
will be used to determine the amount of production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested
production, or our reappraisal if additional damage occurs and the
crop is not harvested; and
(2) All harvested production from the insurable acreage,
including any mature cotton retrieved from the ground.
(d) Mature white cotton may be adjusted for quality when
production has been damaged by insured causes. Such production to
count will be reduced if the price quotation for cotton of like
quality (price quotation ``A'') for the applicable growth area is
less than seventy-five percent (75%) of price quotation ``B.'' Price
quotation ``B'' is defined as the price quotation for the applicable
growth area for cotton of the color and leaf grade, staple length,
and micronaire reading designated in the Special Provisions for this
purpose. Price quotations ``A'' and ``B'' will be the price
quotations contained in the Daily Spot Cotton Quotations published
by the USDA Agricultural Marketing Service on the date the last bale
from the unit is classed. If the date the last bale classed is not
available, the price quotations will be determined on the date the
last bale from the unit is delivered to the warehouse, as shown on
the producer's account summary obtained from the gin. If eligible
for adjustment, the amount of production to be counted will be
determined by multiplying the number of pounds of such production by
the factor derived from dividing price quotation ``A'' by seventy-
five percent (75%) of price quotation ``B.''
(e) Colored cotton lint will not be eligible for quality
adjustment.
12. Late Planting and Prevented Planting
(a) In lieu of paragraph 8.(b)(2) and subsection 1.(aa) of the
Common Crop Insurance Policy (Sec. 457.8), insurance will be
provided for acreage planted to the insured crop during the late
planting period (see subsection (c)), and acreage you were prevented
from planting (see subsection (d)). These coverages provide reduced
production guarantees. The reduced guarantees will be combined with
the production guarantee for timely planted acreage for each unit.
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). (For example, assume you
insure one unit in which you have a 100 percent (100%) 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 are unplanted and eligible for prevented
planting coverage. To calculate the amount of any indemnity which
may be due to you, the production guarantee for the unit will be
computed as follows:
(1) For timely planted acreage, multiply the per acre production
guarantee for timely planted acreage by the 50 acres planted timely;
(2) For late planted acreage, multiply the per acre production
guarantee for timely planted acreage by ninety-three percent (0.93)
and multiply the result by the 50 acres planted late; and
(3) For prevented planting acreage, multiply the per acre
production guarantee for timely planted acreage by thirty-five
percent (0.35) and multiply the result by the 50 acres eligible for
prevented planting coverage.
The total of the three calculations will be the production
guarantee for the unit. Your premium will be based on the result of
multiplying the per acre production guarantee per acre for timely
planted acreage by the 150 acres in the unit.)
(b) You must provide written notice to us if you were prevented
from planting (see subsection 1.(n)). This notice must be given not
later than three days after:
(1) The final planting date for acreage you were prevented from
planting by the final planting date if you have unplanted acreage
that may be eligible for prevented planting coverage; and
(2) The date you discover that planting will not be possible
within the late planting period for acreage that may be eligible for
prevented planting coverage if you were not prevented from planting
such acreage by the final planting date, but were prevented from
planting such acreage during the late planting period.
(c) Late Planting
(1) For cotton acreage planted after the final planting date but
on or before 25 days after the final planting date, the production
guarantee for each acre will be reduced for each day planted after
the final planting date by:
(i) One percent (.01) for the first through the tenth day; and
(ii) Two percent (.02) for the eleventh through the twenty-fifth
day.
(2) In addition to the requirements of section 6 (Report of
Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must
report the dates the acreage is planted within the late planting
period.
(3) If planting of cotton 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; 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 planting cotton (see subsection
1.(n)), you may elect:
(i) To plant cotton during the late planting period (The
production guarantee for such acreage will be determined in
accordance with paragraph 12.(c)(1));
(ii) Not to plant this acreage to any crop that is intended for
harvest in the same crop year, (the production guarantee for such
acreage will be thirty-five percent (0.35) of the production
guarantee for timely planted acres. For example, if your production
guarantee for timely planted acreage is 700 pounds per acre, your
prevented planting production guarantee would be equivalent to 245
pounds per acre (700 pounds multiplied by 0.35). This subparagraph
does not prohibit the preparation and care of the acreage for
conservation practices, such as planting a cover crop, as long as
such crop is not intended for harvest.); or
(iii) To plant cotton after the late planting period, (the
production guarantee for such acreage will be thirty-five percent
(0.35) of the production guarantee for timely planted acres. For
example, if your production guarantee for timely planted acreage is
700 pounds per acre, your prevented planting production guarantee
would be equivalent to 245 pounds per acre (700 pounds multiplied by
0.35). Production to count for such acreage will be determined in
accordance with subsections 11.(c) and (d)).
(2) In addition to the provisions of section 11 (Insurance
Period) of the Common Crop Insurance Policy (Sec. 457.8), the
insurance period for prevented planting coverage begins on the sales
closing date contained in the Special Provisions for the insured
crop in the county.
(3) The acreage to which prevented planting coverage applies
will be limited as follows:
(i) If you participate in any program administered by the United
States Department of Agriculture for the crop year which limits the
number of acres that may be planted, prevented planting acreage will
not exceed the ASCS base acreage for the insured crop, reduced by
any acreage reduction applicable to the farm under such program.
(ii) If you do not participate in any program administered by
the United States Department of Agriculture which limits the number
of acres that may be planted, unless a written agreement exists to
the contrary, eligible acreage will not exceed the greater of:
(A) The ASCS base acreage for the insured crop, if applicable;
(B) The number of acres planted to cotton on each ASCS Farm
Serial Number during the previous crop year (adjusted for any
reconstitution which may have occurred prior to the sales closing
date); or
(C) One hundred percent (100%) of the simple average of the
number of acres planted to cotton during the crop years that were
used to determine your yield.
(iii) Acreage intended to be planted under an irrigated practice
will be limited to the number of acres properly prepared to carry
out an irrigated practice.
(iv) A prevented planting production guarantee will not be
provided for:
(A) Any acreage that does not constitute at least 20 acres or 20
percent (20%) of the acres in the unit, whichever is less;
(B) Land for which the actuarial table does not designate a
premium rate unless a written agreement is in place designating such
premium rate;
(C) Land used for conservation purposes or intended to be or
considered to have been left unplanted under any program
administered by the United States Department of Agriculture;
(D) Land on which any crop, other than cotton, has been planted
and is intended for harvest, or has been harvested in the same crop
year; or
(E) Land which planting history or conservation plans indicate
would remain fallow for crop rotation purposes.
(v) For the purpose of determining eligible acreage for
prevented planting coverage, acreage for all units will be combined
and reduced by the number of cotton acres timely planted after the
final planting date. (For example, assume you have 100 acres
eligible for prevented planting coverage in which you have a 100
percent (100%) share. The acreage is located in a single ASCS Farm
Serial Number which you insure as two separate optional units
consisting of 50 acres each. If you planted 60 acres of cotton on
one optional unit and 40 acres of cotton on the second optional
unit, your prevented planting eligible acreage would be reduced to
zero. (100 acres eligible for prevented planting coverage minus 100
acres planted equals zero). If you report more cotton acreage under
this contract than is eligible for prevented planting coverage, we
will allocate the eligible acreage to insured units based on the
number of prevented planting acres and share your report for each
unit.)
(4) When the ASCS Farm Serial Number covers more than one unit,
or a unit consists of more than one ASCS Farm Serial Number, the
covered acres will be pro-rated based on the number of acres in each
unit or ASCS Farm Serial Number that could have been planted to
cotton in the crop year.
(5) In accordance with the provisions of section 6 (Report of
Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must
report any insurable acreage you were prevented from planting. This
report must be submitted on or before the acreage reporting date,
even though you may elect to plant the acreage after the late
planting period. Any acreage you report as eligible for prevented
planting coverage which is not eligible will be deleted from
prevented planting coverage.
Done in Washington, DC on September 13, 1994.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 94-23833 Filed 9-26-94; 8:45 am]
BILLING CODE 3410-08-M
