[Federal Register Volume 62, Number 75 (Friday, April 18, 1997)]
[Proposed Rules]
[Pages 19063-19067]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10042]
========================================================================
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.
========================================================================
Federal Register / Vol. 62, No. 75 / Friday, April 18, 1997 /
Proposed Rules
[[Page 19063]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 455 and 457
Macadamia Nut Crop Insurance Regulations; and Common Crop
Insurance Regulations, Macadamia Nut Crop Insurance Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes
specific crop provisions for the insurance of macadamia nuts. 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 macadamia nut crop insurance regulations with the Common Crop
Insurance Policy for ease of use and consistency of terms, and to
restrict the effect of the current macadamia nut crop insurance
regulations to the 1997 and prior crop years.
DATES: Written comments, data, and opinions on this proposed rule will
be accepted until close of business May 19, 1997 and will be considered
when the rule is to be made final.
ADDRESSES: Interested persons are invited to submit written comments to
the Director, Product Development Division, Federal Crop Insurance
Corporation, United States Department of Agriculture, 9435 Holmes Road,
Kansas City, MO 64131.
FOR FURTHER INFORMATION CONTACT: Stephen Hoy, Insurance Management
Specialist, Research and Development, Product Development Division,
Federal Crop Insurance Corporation, at the Kansas City, MO, address
listed above, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order No. 12866
The Office of Management and Budget (OMB) has determined this rule
to be exempt for the purposes of Executive Order No. 12866, and,
therefore, has not been reviewed by OMB.
Paperwork Reduction Act of 1995
The information collection requirements contained in these
regulations were previously approved by OMB pursuant to the Paperwork
Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB control number
0563-0003 through September 30, 1998.
Section 7 of the 1999 Macadamia Nut Crop Provisions adds
interplanting as an insurable farming practice for macadamia nuts
interplanted with another perennial crop as long as the crop would not
be adversely affected. This practice was not insurable under the
previous Macadamia Nut 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 46 insureds who interplant their macadamia nut crop.
Standard interplanting language has been added to most perennial crops.
Offering insurance for this practice benefits agriculture because now
more perennial crop producers will be able to purchase increased
coverage than was otherwise available under the noninsured crop
disaster assistance program (NAP).
The amendments set forth in this proposed rule do not contain
additional information collections that require clearance by OMB under
the provisions of 44 U.S.C. chapter 35.
The title of this information collection is ``Catastrophic Risk
Protection Plan and Related Requirements including, Common Crop
Insurance Regulations; Macadamia Nut Crop Insurance Provisions.'' The
information to be collected includes a crop insurance application and
an acreage report. Information collected from the application and
acreage report is electronically submitted to FCIC by the reinsured
companies. Potential respondents to this information collection are
producers of macadamia nuts 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 16.9 minutes per
response for each of the 3.6 responses from approximately 1,755,015
respondents. The total annual burden on the public for this information
collection is 2,676,932 hours.
FCIC is requesting comments on the following: (a) Whether the
proposed collection of information is necessary for the proper
performance of the functions of the agency, including whether the
information shall have practical utility; (b) the accuracy of the
agency's estimate of the burden of the proposed collection of
information; (c) ways to enhance the quality, utility, and clarity of
the information to be collected; and (d) ways to minimize the burden of
the collection of information on respondents, including through the use
of automated collection techniques or other forms of information
gathering technology.
Comments regarding paperwork reduction should be submitted to the
Desk Officer for Agriculture, Office of Information and Regulatory
Affairs, Office of Management and Budget, Washington, D.C. 20503.
OMB is required to make a decision concerning the collections of
information contained in these proposed regulations between 30 and 60
days after submission to OMB. Therefore, a comment to OMB is best
assured of having full effect if OMB receives it within 30 days of
publication. This does not affect the deadline for the public to
comment on the proposed regulation.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on state, local, and tribal
governments and the private sector. This rule contains no Federal
mandates (under the regulatory provisions of title II of the UMRA) for
[[Page 19064]]
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. The 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 producer
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 No. 12372
This program is not subject to the provisions of Executive Order
No. 12372, which require intergovernmental consultation with state and
local officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
Executive Order No. 12988
The provisions of this rule will not have a retroactive effect
prior to the effective date. The provisions of this rule will preempt
state and local laws to the extent such state and local laws are
inconsistent herewith. The administrative appeal provisions published
at 7 CFR part 11 must be exhausted before any action for judicial
review may be brought.
Environmental Evaluation
This action is not expected to have a significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
National Performance Review
This regulatory action is being taken as part of the National
Performance Review Initiative to eliminate unnecessary or duplicative
regulations and improve those that remain in force.
Background
FCIC proposes to add to the Common Crop Insurance Regulations (7
CFR part 457), a new section, 7 CFR 457.131, Macadamia Nut Crop
Insurance Provisions. The new provisions will be effective for the 1999
and succeeding crop years. These provisions will replace and supersede
the current provisions for insuring macadamia nuts found at 7 CFR part
455 (Macadamia Nut Crop Insurance Regulations). FCIC also proposes to
amend 7 CFR part 455 to limit its effect to the 1997 and prior crop
years. FCIC will later publish a regulation to remove and reserve part
455.
This rule makes minor editorial and format changes to improve the
Macadamia Nut Crop Insurance Regulations' compatibility with the Common
Crop Insurance Policy. In addition, FCIC is proposing substantive
changes in the provisions for insuring macadamia nuts as follows:
1. Amend the contract term between the producer and the insurance
provider to provide continuous coverage. The current policy is not a
continuous contract. This change standardizes the Macadamia Nut Crop
Insurance Policy with other crop insurance policies and removes the
requirement of annually filing an application.
2. Section 1--Add definitions for the terms ``age,'' ``days,''
``direct marketing,'' ``good farming practices,'' ``graft,''
``interplanted,'' ``irrigated practice,'' ``non-contiguous,''
``pound,'' ``production guarantee (per acre),'' ``rootstock,'' and
``written agreement'' for clarification. Clarify that the crop year is
designated by the calendar year in which the insurance period ends.
3. Section 2--Describe the guidelines under which basic units may
be divided into optional units consistent with other perennial crops
offering optional units. These provisions also incorporate the
requirement that each optional unit must contain at least 80 acres of
bearing macadamia trees and be located on non-contiguous land. These
optional unit guidelines standardize macadamia nuts with other
perennial crops.
4. Section 3(a)--Specify that the insured may select only one price
election for all the macadamia nuts in the county insured under the
policy, unless the Special Provisions provide different price elections
by type, in which case the insured may select one price election for
each macadamia nut type designated in the Special Provisions to
standardize these provisions with other crops that allow insurance
prices by type.
5. Section 3(b)--Specify the reporting requirements when any
circumstance occurs that may reduce the expected yields and when the
insured crop is interplanted with another perennial crop to ensure that
the guarantee accurately reflects the production capabilities of the
acreage and to maximize the number of acres which are insurable so that
such acreage need no longer be covered by NAP.
6. Section 4--Establish August 31 as the contract change date.
Previously, the policy contained no contract change date since it was
not a continuous policy.
7. Section 5--Establish December 31 as the cancellation date.
Previously, the policy contained no cancellation date since it was not
a continuous policy.
8. Section 6(d)--Allow insurance coverage for macadamia nuts
produced on trees that have not reached the fifth growing season,
provided they have produced at least 200 pounds (wet, in-shell) per
acre in a previous crop year, and the insurance provider agrees in
writing to provide such coverage in order to increase the number of
acres that are insurable without adversely affecting the actuarial
soundness of the program.
9. Section 6(e)--Specify that the crop insured will be macadamia
nuts that are produced from blooms that normally occur during the
calendar year in which insurance attaches and that are harvested prior
to the end of the insurance period.
10. Section 7--Allow insurance for macadamia nuts interplanted with
another perennial crop in order to conform with other perennial crops
and increase the number of acres available for insurance coverage.
[[Page 19065]]
11. Section 8--Change the calendar date for the end of the
insurance period from December 31 to the second June 30th of the crop
year. The date insurance attaches remains January 1 of each crop year.
Macadamia trees bloom intermittently throughout the entire calendar
year; however, the primary bloom periods usually occur between January
and July of each calendar year. The nuts are harvested approximately
seven to eight months after the bloom period. The macadamia nut
industry's crop production year extends from July 1 of each calendar
year through June 30 of the next calendar year. The insurance period in
the current policy covers the primary bloom periods but ends on
December 31, midway through the industry's crop production year;
therefore, it is not conducive to maintaining Actual Production History
(APH) records or establishing effective loss adjustment procedures. The
proposed insurance period will provide coverage against insured causes
of loss that occur during the bloom periods, subsequently affecting
macadamia nut production during the macadamia nut crop production year.
The first revised insurance period will begin January 1, 1998, and end
June 30, 1999.
12. Section 8(a)--Specify that if the application is received after
December 22 but prior to January 1, insurance will attach on the 10th
day after the insured's properly completed application is received in
the insurance provider's local office unless the acreage is inspected
during the 10 day period and it is determined that insurability
requirements are not met. These provisions were modified so they will
not be interpreted as allowing late-filed applications and a thirty day
period in this situation is not reasonable. Ten days is sufficient to
prevent adverse selection and avoid unnecessary exposure to uninsured
losses during the waiting period.
13. 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.
14. Section 9--Clarify that wildlife is an insurable cause of loss,
unless proper measures to control wildlife have not been taken. 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 to be consistent with other crop provisions.
15. Section 10(a)--Specify the notice requirements if the orchard
has suffered a loss and the crop will not be harvested in order to
permit a timely appraisal of any loss and accurately determine
production to count.
16. Section 10(b)--Require the producer to give notice at least 15
days prior to harvest so a preharvest inspection can be made if the
insured intends to engage in direct marketing to consumers in order to
permit a timely appraisal and determine production to count.
17. Section 10(c)--Require the producer to give at least 15 days
notice prior to the beginning of harvest or immediately if damage is
discovered during harvest so damaged production may be inspected.
18. Section 12--Add provisions for providing insurance coverage by
written agreement. FCIC has a long standing policy of permitting
certain modifications of the insurance contract by written agreement
for some policies. This amendment allows FCIC to tailor the policy to a
specific insured in certain instances. The new section will cover the
procedures for and duration of written agreements.
List of Subjects in 7 CFR Parts 455 and 457
Crop insurance, Macadamia nut.
Proposed Rule
Accordingly, for the reasons set forth in the preamble, the Federal
Crop Insurance Corporation hereby proposes to amend 7 CFR parts 455 and
457, as follows:
PART 455--MACADAMIA NUT CROP INSURANCE REGULATIONS
1. The authority citation for 7 CFR part 455 is amended to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
2. The subpart heading preceding Section 455.1 is revised to read
as follows:
Subpart--Regulations for the 1988 Through 1997 Crop Years
3. Sec. 455.7 is amended by revising the introductory text of
paragraph (d) to read as follows:
Sec. 455.7 The application and policy.
* * * * *
(d) The application for the 1988 through 1997 crop years is found
at subpart D of part 400, General Administrative Regulations (7 CFR
400.37, 400.38). The provisions of the Macadamia Nut Crop Insurance
Policy for the 1988 through 1997 crop years are as follows:
* * * * *
PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE
1994 AND SUBSEQUENT CONTRACT YEAR
4. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
5. Sec. 457.131 is added to read as follows:
Sec. 457.131 Macadamia Nut Crop insurance provisions.
The Macadamia Nut Crop Insurance Provisions for the 1999 and
succeeding crop years are as follows:
FCIC policies:
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Reinsured policies:
(Appropriate title for insurance provider)
Both FCIC and reinsured policies:
Macadamia Nut 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
Age--The number of complete 12-month periods that have elapsed
since the month the trees were set out or were grafted, whichever is
later. An age determination will be made for each unit, or portion
thereof, as of January 1 of each crop year.
Crop year--A period beginning with the date insurance attaches
to the macadamia nut crop and extending through the normal harvest
time. It is designated by the calendar year in which the insurance
period ends.
Days--Calendar days.
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.
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.
Graft--The uniting of a macadamia shoot to an established
macadamia tree rootstock for future production of macadamia nuts.
Harvest--Picking of mature macadamia nuts from the ground.
[[Page 19066]]
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--Any two or more tracts of land whose boundaries
do not touch at any point, except that land separated only by a
public or private right-of-way, waterway, or irrigation canal will
be considered as contiguous.
Pound--A unit of weight equal to 16 ounces avoirdupois.
Production guarantee (per acre)--The number of wet, in-shell
pounds determined by multiplying the approved APH yield per acre by
the coverage level percentage you elect.
Rootstock--The root and stem portion of a macadamia tree to
which a macadamia shoot can be grafted.
Wet, in-shell--The weight of the macadamia nuts as they are
removed from the orchard with the nut meats in the shells after
removal of the husk but prior to being dried.
Written agreement--A written document that alters designated
terms of this policy in accordance with section 12.
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 or if a
written agreement to such division exists.
(b) Basic units may not be divided into optional units on any
basis 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 for the units combined.
(d) All 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 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 measurement
of stored production from each optional unit maintained in such a
manner that permits us to verify the production from each optional
unit, or the production from each unit must be kept separate until
loss adjustment is completed by us;
(3) Each optional unit must contain at least 80 acres of bearing
macadamia trees; and
(4) Each optional unit must be located on non-contiguous land.
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):
(a) You may select only one price election for all the macadamia
nuts 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 macadamia nut 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.
(b) 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) Any damage, removal of trees, 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; removal of trees; damage;
change in practices and any other circumstance on the yield
potential of the insured crop. If you fail to notify us of any
circumstance that may reduce your yields from previous levels, we
will reduce your production guarantee as necessary at any time we
become aware of the circumstance.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is August 31
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 December 31.
6. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all macadamia nuts
in the county for which a premium rate is provided by the actuarial
table:
(a) In which you have a share;
(b) That are grown on tree varieties that:
(1) Were commercially available when the trees were set out;
(2) Are adapted to the area; and
(3) Are grown on a rootstock that is adapted to the area.
(c) That are grown in an orchard that, if inspected, is
considered acceptable by us;
(d) That have reached at least the fifth growing season after
being set out or grafted. However, we may agree in writing to insure
acreage that has not reached this age if it has produced at least
200 pounds of (wet, in-shell) macadamia nuts per acre in a previous
crop year; and
(e) That are produced from blooms that normally occur during the
calendar year in which insurance attaches and that are normally
harvested prior to the end of the insurance period.
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, macadamia nuts interplanted
with another perennial crop are insurable unless we inspect the
acreage and determine that it does not meet the requirements
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 January 1 of each crop year, except that
for the year of application, if your application is received after
December 22 but prior to January 1, insurance will attach on the
10th day after your properly completed application is received in
our local office, unless we inspect the acreage during the 10 day
period and determine that it does not meet insurability
requirements. You must provide any information that we require for
the crop or to determine the condition of the orchard.
(2) The calendar date for the end of the insurance period for
each crop year is the second June 30th of the crop year.
(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.
(2) If you relinquish your insurable share on any insurable
acreage of macadamia nuts on or before the acreage reporting date
for the crop year, insurance will not be considered to have attached
to, and no premium or indemnity will be due for such acreage for
that crop year unless:
(i) A transfer of coverage and right to an indemnity, or a
similar form approved by us,
[[Page 19067]]
is completed by all affected parties; (ii) We are notified by you or
the transferee in writing of such transfer on or before the acreage
reporting date; and
(iii) The transferee is eligible for crop insurance.
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
orchard;
(3) Earthquake;
(4) Volcanic eruption;
(5) Wildlife, unless proper measures to control wildlife have
not been taken; 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:
(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; or
(2) Inability to market the macadamia nuts 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 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 sold by direct marketing. We will conduct an
appraisal that will be used to determine your production to count
for production that is sold by direct marketing. 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 sold by direct marketing will result in an
appraised amount of production to count of 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 at least 15 days prior to the beginning of harvest or
immediately if damage is discovered during harvest, so that we may
inspect the damaged production. If you fail to notify us and such
failure results in our inability to inspect the damaged production,
we may consider all such production to be undamaged and include it
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 separate, acceptable production records:
(1) For any optional units, we will combine all optional units
for which such production records were not provided; or
(2) For any basic units, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for the units.
(b) In the event of loss or damage covered by this policy, we
will settle your claim by:
(1) Multiplying the insured acreage for each type, if
applicable, by its respective production guarantee;
(2) Multiplying each result in section 11(b)(1) by the
respective price election for each type, if applicable;
(3) Totaling the results in section 11(b)(2);
(4) Multiplying the total production to be counted of each type,
if applicable, (see section 11(c)) by the respective price election;
(5) Totaling the results in section 11(b)(4);
(6) Subtracting the total in section 11(b)(5) from the total in
section 11(b)(3); and
(7) Multiplying the result in section 11(b)(6) by your share.
(c) The total production to count (wet, in-shell pounds) 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) That is sold by direct marketing if you fail to meet the
requirements contained in section 10;
(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; 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 from the insurable acreage.
12. 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
12(e);
(b) The application for a written agreement must contain all
variable terms of the contract between you and us that will be in
effect if the written agreement is not approved;
(c) If approved, the written agreement will include all variable
terms of the contract, including, but not limited to, crop type or
variety, the guarantee, premium rate, and price election;
(d) Each written agreement will only be valid for one year (If
the written agreement is not specifically renewed the following
year, insurance coverage for subsequent crop years will be in
accordance with the printed policy); and
(e) An application for a written agreement submitted after the
sales closing date may be approved if, after a physical inspection
of the acreage, it is determined that no loss has occurred and the
crop is insurable in accordance with the policy and written
agreement provisions.
Signed in Washington D.C., on April 10, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-10042 Filed 4-17-97; 8:45 am]
BILLING CODE 3410-FA-P
