[Federal Register Volume 62, Number 84 (Thursday, May 1, 1997)]
[Proposed Rules]
[Pages 23685-23690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11249]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 425 and 457
Peanut Crop Insurance Regulations; and Common Crop Insurance
Regulations, Peanut 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 peanuts. 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 peanut
crop insurance regulations with the Common Crop Insurance Policy for
ease of use and consistency of terms, and restrict the effect of the
current peanut crop insurance regulations to the 1997 and prior crop
years.
[[Page 23686]]
DATES: Written comments on this proposed rule will be accepted until
close of business June 2, 1997 and will be considered when the rule is
to be made final.
ADDRESSES: Interested persons are invited to submit written comments to
the Director, Product Development Division, Federal Crop Insurance
Corporation, United States Department of Agriculture, 9435 Holmes Road,
Kansas City, MO 64131.
FOR FURTHER INFORMATION CONTACT: Gary Johnson, Insurance Management
Specialist, Research and Development Division, 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 purpose of Executive Order No. 12866 and,
therefore, this rule has not been reviewed by OMB.
Paperwork Reduction Act of 1995
The amendments set forth in this proposed rule contain information
collections that require clearance by OMB under the provisions of 44
U.S.C. chapter 35.
The title of this information collection is ``Catastrophic Risk
Protection Plan and Related Requirements including, Common Crop
Insurance Regulations; Peanut 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 peanuts that are eligible for Federal crop insurance.
The information requested is necessary for the insurance company
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
State, local, and tribal governments or the private sector. Thus, this
rule is not subject to the requirements of sections 202 and 205 of the
UMRA.
Executive Order No. 12612
It has been determined under section 6(a) of Executive Order No.
12612, Federalism, that this rule does not have sufficient federalism
implication to warrant the preparation of a Federalism Assessment. The
provisions contained in this rule will not have a substantial direct
effect on states or their political subdivisions, or on the
distribution of power and responsibilities among the various levels of
government.
Regulatory Flexibility Act
This regulation will not have a significant impact on a substantial
number of small entities. New provisions included in this rule will not
impact small entities to a greater extent than large entities. Under
the current regulations, a producer is required to complete an
application and acreage report. If the crop is damaged or destroyed,
the insured is required to give notice of loss and provide the
necessary information to complete a claim for indemnity. The insured
must also annually certify to the previous years production if adequate
records are available to support the certification. The producer must
maintain the production records to support the certified information
for at least three years. This regulation does not alter those
requirements. The amount of work required of the insurance companies
delivering and servicing these policies will not increase significantly
from the amount of work currently required. This rule does not have any
greater or lesser impact on the producer. Therefore, this action is
determined to be exempt from the provisions of the Regulatory
Flexibility Act ( 5 U.S.C. 605), and no Regulatory Flexibility Analysis
was prepared.
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order 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
This proposed rule has been reviewed under Executive Order 12988.
The provisions of this rule will not have a retroactive effect prior to
the effective date. The provisions of this rule will preempt State and
local laws to the extent such State and local laws are inconsistent
herewith. The administrative appeal provisions published at 7 CFR part
11 must be exhausted before any action for judicial review may be
brought.
Environmental Evaluation
This action is not expected to have a significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
National Performance Review
This regulatory action is being taken as part of the National
Performance Review Initiative to eliminate unnecessary or duplicative
regulations and improve those that remain in force.
[[Page 23687]]
Background
FCIC proposes to add to the Common Crop Insurance Regulations (7
CFR part 457), a new section, 7 CFR 457.134, Peanut Crop Insurance
Provisions. The new provisions will be effective for the 1998 and
succeeding crop years. These provisions will replace and supersede the
current provisions for insuring peanuts found at 7 CFR part 425 (Peanut
Crop Insurance Regulations). FCIC also proposes to amend 7 CFR part 425
to limit its effect to the 1997 and prior crop years.
This rule makes minor editorial and format changes to improve the
Peanut Crop Insurance Regulations compatibility with the Common Crop
Insurance Policy. In addition, FCIC is proposing substantive changes in
the provisions for insuring peanuts as follows:
1. Section 1--Add definitions for ``CCC'', ``farmer's stock
peanuts,'' ``final planting date,'' ``FSA,'' ``good farming
practices,'' ``green peanuts,'' ``Inspection Certificate and Sales
Memorandum,'' ``interplanted,'' ``irrigated practice,'' ``non-quota
peanuts,'' ``planted acreage,'' ``practical to replant,'' ``production
guarantee (per acre),'' ``quota peanuts,'' ``Segregation I, II, and
III,'' ``timely planted,'' ``USDA,'' and ``written agreement,'' for
clarification purposes. Amend the definition of ``county'' contained in
the Basic Provisions (Sec. 457.8) to include any land identified by an
FSA farm serial number for such county but physically located in
another county.
2. Section 2--Define basic units in which the insured has 100
percent share or which are owned by one person and operated by another
specific person on a share basis; and for optional units by FSA Farm
Serial Number. Current provisions define basic units by FSA Farm Serial
Number. This change is consistent with provisions of other crop
policies, and will increase premium cost for some producers.
3. Section 3(a)--Clarify that the insured may select one price
election for quota peanuts and non-quota peanuts; however, the price
election the insured chooses must have the same relationship to the
maximum price offered by the insurance provider. This will help
simplify the administration of the program.
4. Section 3(b)--Limit the use of the quota price election to the
lesser of the insured effective poundage marketing quota or the insured
acreage multiplied by the production guarantee. If the insured acres
multiplied by the production guarantee exceeds the insured effective
poundage marketing quota, the difference will be insured at the non-
quota peanut price election.
5. Section 3(c)--Allows the use of actual production history to
determine the yield for insurance purposes. Guarantees are based on
production records and not necessarily on sales or quota records. In
some instances the yields may be the same. Therefore, the proper use
for yield under the program is the insured's records of production.
6. Section 4--The contract change date has been changed to November
30 for all counties to maintain an adequate time period between this
date and the revised cancellation dates.
7. Section 5--All cancellation and termination dates have been
moved 30 days earlier than currently established by 7 CFR part 425. In
most crop policies, including peanuts, the cancellation and termination
date correspond to the sales closing date. This change is necessary to
conform with the requirement of the Federal Crop Insurance Reform Act
of 1994 to move spring planted crop sales closing dates 30 days
earlier.
8. Section 7--Clarify the method used to determine the annual
premium for peanuts.
9. Section 8(d)--Clarify that peanuts intended to be harvested for
use as green peanuts are not insurable.
10. Section 9(a)(1)--Acreage grown using no-till or minimum tillage
farming methods is uninsurable unless allowed by a written agreement.
Although no-till and minimum tillage farming methods are recognized as
acceptable farming practices by the Cooperative State Research,
Education and Extension Service for other annual crops, the methods are
not acceptable for growing peanuts. The methods delay peanuts from
maturing on time resulting in a yield that is less than the yield used
to determine the production guarantee.
11. Section 10--The end of insurance period has been changed from
November 30 to December 31 in Duval and LaSalle counties, Texas. This
change makes the date consistent in all Texas counties.
12. Section 11--Clarify that insufficient or improper application
of pest or disease control measures are not an insured cause of loss.
13. Section 12(b)--Clarify the maximum replanting payment amount
for peanuts.
14. Section 14(c)--Clarify how the settlement of a claim will be
determined on any unit when the producer has both quota and non-quota
peanuts.
15. Section 15--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 will extend this practice to peanuts
and will allow FCIC to tailor the policy to a specific insured in
certain instances. The new section will cover the application for, and
duration of, written agreements.
Good cause is shown to allow 30 days for comments after this rule
is published in the Federal Register. This rule improves peanut crop
insurance coverage and brings it under the Common Crop Insurance Policy
Provisions for consistency among policies. Although, the contract
change date is December 31, 1997, the final rule must be published by
July 7, 1997. Publication is required by this date to achieve revision
and timely distribution of the actuarial documents thereby allowing the
reinsured companies and insureds sufficient time to implement the new
provisions. Therefore, public interest requires the agency to act
immediately to make these provisions available for the 1998 crop year.
List of Subjects in 7 CFR Parts 425 and 457
Crop insurance, Reporting and recordkeeping requirements, Peanuts.
Proposed Rule
Accordingly, for the reasons set forth in the preamble, the Federal
Crop Insurance Corporation hereby proposes to amend 7 CFR parts 425 and
457, as follows:
PART 425--PEANUT CROP INSURANCE REGULATIONS FOR THE 1993 THROUGH
1997 CROP YEARS
1. The authority citation for 7 CFR part 425 is revised to read as
follows:
Authority: 7 U.S.C. 1506(1), 1506(p).
2. The part heading is revised to read as set forth above.
3. Subpart heading ``Subpart--Regulations for the 1993 and
Succeeding Crop Years'' is removed.
Sec. 425.7 [Amended]
4. Section 425.7 is amended by revising the introductory text of
paragraph (d) to read as follows:
* * * * *
(d) The application for the 1993 and succeeding crop years is found
at subpart D of part 400--General Administrative Regulations (7 CFR
400.37, 400.38). The provisions of the Peanut Insurance Policy for the
1993 through 1997 crop years are as follows:
* * * * *
[[Page 23688]]
PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE
1994 AND SUBSEQUENT CONTRACT YEARS
4. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(1), 1506(p).
5. Section 457.134 is added to read as follows:
Sec. 457.134 Peanut crop insurance provisions.
The Peanut Crop Insurance Provisions for the 1998 and succeeding
crop years are as follows:
FCIC policies:
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Reinsured policies:
(Appropriate title for insurance provider)
Both FCIC and reinsured policies:
Peanut 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.
Average price per pound:
(1) The average CCC support price per pound, by type, for
Segregation I peanuts and Segregation II and III peanuts eligible to
be valued and insured as quota peanuts; or
(2) The highest non-quota price election contained in the
Special Provisions for all non-quota and Segregation II and III
peanuts not eligible to be valued and insured as quota peanuts.
Average support price per pound. The average price per pound for
each type of quota peanuts announced by the USDA under the peanut
price support program.
CCC. Commodity Credit Corporation, a wholly owned government
corporation within USDA.
County. In addition to the definition contained in the Basic
Provisions (Sec. 457.8), ``county'' also includes any land
identified by an FSA farm serial number for such county but
physically located in another county.
Days. Calendar days.
Effective poundage marketing quota. The number of pounds
reported on the acreage report as eligible for the average support
price per pound, not to exceed the Marketing Quota established by
FSA for the farm serial number.
Farmers' stock peanuts. Peanuts customarily marketed by
producers, produced in the United States, and which are not shelled,
crushed, cleaned, or otherwise changed (except for removal of
foreign material, loose shelled kernels, and excess moisture) from
the condition in which peanuts are harvested.
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.
FSA. Farm Service Agency, an agency of USDA or a successor
agency.
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.
Green peanuts. Peanuts that are harvested and marketed prior to
maturity without drying or removal of moisture either by natural or
artificial means. They are marketed for human consumption
exclusively as boiled peanuts (freshly dug, unshelled peanuts that
have been boiled in salt water).
Harvest. Combining or threshing of peanuts. Digging of peanuts
prior to combining or threshing is not considered harvesting.
Inspection Certificate and Sales Memorandum. A USDA form that
records the inspection grading results and marketing record for the
net weight of peanuts delivered to a buyer.
Interplanted. Acreage on which two or more crops are planted in
a manner that does not permit separate agronomic maintenance or
harvest of the insured crop.
Irrigated practice. A method of producing a crop by which water
is artificially applied during the growing season by appropriate
systems and at the proper times, with the intention of providing the
quantity of water needed to produce at least the yield used to
establish the irrigated production guarantee on the irrigated
acreage planted to the insured crop.
Non-quota peanuts. Peanuts other than quota peanuts.
Planted acreage. Land in which seed has been placed by a machine
appropriate for the insured crop and planting method, at the correct
depth, into a seedbed that has been properly prepared for the
planting method and production practice. Peanuts must initially be
planted in rows wide enough to permit mechanical cultivation.
Acreage planted in any other manner will not be insurable unless
otherwise provided by the Special Provisions or by written
agreement.
Practical to replant. In lieu of the definition of ``Practical
to replant'' contained in section 1 of the Basic Provisions
(Sec. 457.8), practical to replant is defined as our determination,
after loss or damage to the insured crop, based on factors,
including but not limited to moisture availability, condition of the
field, time to crop maturity, and marketing window, that replanting
the insured crop will allow the crop to attain maturity prior to the
calendar date for the end of the insurance period. It will not be
considered practical to replant after the end of the late planting
period unless replanting is generally occurring in the area.
Production guarantee (per acre). The number of pounds determined
by multiplying the farm yield per acre by the coverage level
percentage you elect.
Quota peanuts. Peanuts that are marketed for domestic edible
use, seed, or other related uses, which are eligible to be valued at
the average support price per pound.
Replanting. Performing the cultural practices necessary to
replace the peanut seed and then replacing the peanut seed in the
insured acreage with the expectation of growing a successful crop.
Segregation I, II, or III. Grades designated and defined for
peanuts by the Agricultural Marketing Service of USDA.
Timely planted. Planted on or before the final planting date
designated in the Special Provisions for the insured crop in the
county.
USDA. The United States Department of Agriculture.
Value per pound. A price determined by USDA as shown on the USDA
``Inspection Certificate and Sales Memorandum'' or other record
accepted by us.
Written agreement. A written document that alters designated
terms of this policy in accordance with section 15.
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.
(d) All optional units you selected for the crop year must be
identified on the acreage report for that crop year.
(e) The following requirements must be met for each optional
unit:
(1) You must have records, which can be independently verified,
or planted acreage and production for each optional unit for at
least the last crop year used to determine your production
guarantee.
(2) You must plant the crop in a manner that results in a clear
and discernable break in the planting pattern at the boundaries of
each optional unit;
(3) For each crop year, records of marketed production or
measurement of stored production from each optional unit must be
maintained in such a manner that permits us to verify the production
from each optional unit, or the production from each unit must be
kept separate until loss adjustment is completed by us; and
(4) Each optional unit must be located in a separate farm
identified by a single FSA Farm Serial Number.
(f) We may reject or modify any FSA reconstitution for the
purpose of the unit definition, if we determine the reconstitution
was done in whole or in part to defeat the purpose of the Federal
crop insurance
[[Page 23689]]
program or to gain a disproportionate advantage under this policy.
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) The price elections you choose for the quota and non-quota
peanuts must have the same percentage relationship to the maximum
price election offered by us for quota and non-quota peanuts. For
example, if you choose 100 percent of the maximum quota peanut price
election, you must also choose 100 percent of the maximum non-quota
election.
(b) The maximum pounds that may be insured at the quota price
election are the lesser of:
(1) The effective poundage marketing quota; or
(2) The insured acreage multiplied by the production guarantee.
If the insured acres multiplied by the production guarantee exceeds
the effective poundage marketing quota, the difference will be
insured at the non-quota peanut price election.
(c) You may be required to file an annual production report to
us, if required by the Special Provisions, to establish an approved
yield in lieu of the approved yield published in the actuarial
table. If we require you to file an annual production report, you
must do so in accordance to section 3(c) (Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities) of the
Common Crop Insurance Policy (Sec. 457.8).
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is November 30
preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation
and termination dates are:
Cancellation and Termination
State, County, and Dates
Jackson, Victoria, Golliad, Bee, Live Oak, Mullen, La Salle, and
Dimmit Counties, Texas and all Texas Counties lying south thereof.--
January 15
El Paso, Hudspeth, Culberson, Reeves, Loving, Winkler, Ector, Upton,
Reagan, Sterling, Coke, Tom Green, Concho, McCulloch, San Saba,
Mills, Hamilton, Bosque, Johnson, Tarrant, Wise, Cooke Counties,
Texas, and all Texas counties south and east thereof; and all other
states.--February 28
New Mexico; Oklahoma; and all other Texas counties.--March 15
6. Report of Acreage
In addition to the requirements of section 6 (Report of Acreage)
of the Basic Provisions (Sec. 457.8), you must report the effective
poundage marketing quota, if any, that is applicable to each unit
for the current crop year.
7. Annual Premium
In lieu of the premium amount determinations contained in
section 7(c) (Annual Premium) of the Basic Provisions (Sec. 457.8),
the annual premium will be determined by:
(a) Multiplying the insured effective poundage marketing quota
by the price election for quota peanuts;
(b) Multiplying the insured pounds of non-quota peanuts by the
price election for non-quota peanuts;
(c) Totaling the results of section 7(a) and 7(b);
(d) Multiplying the total of section 7(c) by the applicable
premium rate stated in the actuarial table; and
(e) Multiplying the result of section 7(d) by your share.
8. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all the peanuts in
the county for which a premium rate is provided by the actuarial
table:
(a) In which you have a share;
(b) That are planted for the purpose of marketing as farmers'
stock peanuts;
(c) That are a type of peanut designated in the Special
Provisions as being insurable; and
(d) That are not (unless allowed by the Special Provisions or by
written agreement):
(1) Harvested for use as green peanuts;
(2) Interplanted with another crop; or
(3) Planted into an established grass or legume.
9. Insurable Acreage
In addition to the provisions of section 9 (Insurable Acreage)
of the Basic Provisions (Sec. 457.8):
(a) Any acreage of the insured crop damaged before the final
planting date, to the extent that the majority of growers in the
area would normally not further care for the crop, must be replanted
unless we agree that replanting is not practical.
(b) We will not insure any acreage:
(1) On which peanuts are grown using no-till or minimum tillage
farming methods unless a written agreement allows otherwise; or
(2) Which does not meet the rotation requirements contained in
the Special Provisions.
10. Insurance Period
(a) In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8), the calendar date for
the end of the insurance period is the date immediately following
planting as follows:
(1) November 30 in all states except New Mexico, Oklahoma, and
Texas; and
(2) December 31 in New Mexico, Oklahoma, and Texas.
(b) In addition to the events contained in section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8) the insurance period
ends when the peanuts are removed from the field.
11. Causes of Loss
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:
(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 measures;
(e) Wildlife;
(f) Earthquake;
(g) Volcanic eruption; or
(h) Failure of the irrigation water supply, if caused by an
insured peril that occurs during the insurance period.
12. Replanting Payments
(a) In accordance with section 13 (Replanting Payments) of the
Basic Provisions (Sec. 457.8):
(1) A replanting payment is allowed if the crop is damaged by an
insurable cause of loss to the extent that the remaining stand will
not produce at least 90 percent of the production guarantee for the
acreage and it is practical to replant.
(2) The maximum amount of the replanting payment for the unit
will be the lesser of:
(i) Eighty dollars ($80.00) per acre; or
(ii) The actual cost of replanting per acre multiplied by the
number of acres replanted and by your insured share; or
(iii) Twenty-percent of the production guarantee multiplied by
your price election, multiplied by the number of acres replanted,
multiplied by your insured share.
(b) When peanuts are replanted using a practice that is
uninsurable as an original planting, the liability for the unit will
be reduced by the amount of the replanting payment. The premium
amount will not be reduced.
13. Duties In The Event of Damage or Loss
In accordance with the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the
representative samples of the unharvested crop must be at least 10
feet wide and extend the entire length of each field in the unit.
The samples must not be harvested or destroyed until the earlier of
our inspection or 15 days after harvest of the balance of the unit
is completed.
14. 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) When settling your claim, the effective poundage marketing
quota for each unit will be limited to the lesser of:
(1) The amount of quota reported on the acreage report; or
(2) The amount of the FSA effective poundage marketing quota
minus fall transfers of the FSA effective poundage marketing quota
to another FSA Farm Serial Number; or
[[Page 23690]]
(3) The amount determined at the final settlement of your claim.
(c) In the event of loss or damage covered by this policy, we
will settle your claim by:
(1) Multiplying the insured acreage for the unit by the
production guarantee per acre;
(2) Subtract the insured effective poundage marketing quota from
the result of section 14(c)(1) to determine the insured non-quota
peanuts;
(3) Multiply the insured quota and non-quota peanuts by their
respective price election for quota and/or non-quota peanuts;
(4) Total the results of section 14(c)(3);
(5) Multiply the quota and non-quota production to count (see
section 14(d)) by their respective price election for quota and/or
non-quota peanuts;
(6) Total the results of section 14(c)(5);
(7) Subtract the result of section 14(c)(6) from section
14(c)(4); and
(8) Multiply the result by your share.
(d) The total production to count (in pounds) from all insurable
acreage on the unit will include:
(1) All appraised and harvested production.
(2) All appraised production will include:
(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; 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 (mature unharvested production may
be adjusted for quality deficiencies and excess moisture in
accordance with section 14(e)); and
(iv) Potential production on insured acreage that you intend to
put to another use or abandon, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for
that acreage will end when you put the acreage to another use or
abandon the crop. If agreement on the appraised amount of production
is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to
leave intact, and provide sufficient care for, representative
samples of the crop in locations acceptable to us, (The amount of
production to count for such acreage will be based on the harvested
production or appraisals from the samples at the time harvest should
have occurred. If you do not leave the required samples intact, or
fail to provide sufficient care for the samples, our appraisal made
prior to giving you consent to put the acreage to another use will
be used to determine the amount of production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested
production, or our reappraisal if additional damage occurs and the
crop is not harvested; and
(3) All harvested production from the insurable acreage.
(e) Mature peanut production that is damaged by insurable causes
and for which the value per pound is less than the average support
price per pound for the type will be adjusted by:
(1) Dividing the value per pound for the insured types of
peanuts by the applicable average price per pound; and
(2) Multiplying this result by the number of pounds of such
production.
(f) To enable us to determine the net weight and quality of
production of any peanuts for which a ``Inspection Certificate and
Sales Memorandum'' has not been issued, we must be given the
opportunity to have such peanuts inspected and graded before you
dispose of them. If you dispose of any production without giving us
the opportunity to have the peanuts inspected and graded, the gross
weight of such production will be used in determining total
production to count unless you submit a marketing record
satisfactory to us which clearly shows the net weight and quality of
such peanuts.
15. 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 agreement no later than
the sales closing date, except as provided in section 15(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 by us, 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 provisions.
Signed in Washington, D.C., on April 25, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-11249 Filed 4-30-97; 8:45 am]
BILLING CODE 3410-FA-P
