[Federal Register Volume 62, Number 94 (Thursday, May 15, 1997)]
[Proposed Rules]
[Pages 26750-26755]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12707]
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Proposed Rules
Federal Register
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This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 62, No. 94 / Thursday, May 15, 1997 /
Proposed Rules
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 416 and 457
Pea Crop Insurance Regulations; and Common Crop Insurance
Regulations, Dry Pea 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 dry peas. 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, separate dry peas and green
peas into separate crop insurance provisions, include the current pea
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 pea crop insurance regulations to the 1997 and prior crop
years.
DATES: Written comments on this proposed rule will be accepted until
close of business June 16, 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: Arden Routh, Insurance Management
Specialist, Product Development Division, Federal Crop Insurance
Corporation, at 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, this rule 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.
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; Dry Pea 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 dry peas 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
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 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 on large entities. Under
the current regulations, a producer is required to complete an
application and acreage
[[Page 26751]]
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. 12998
This rule has been reviewed in accordance with Executive Order No.
12998. The provisions of this rule will not have 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
1. FCIC proposes to add to the Common Crop Insurance Regulations (7
CFR part 457), a new section, 7 CFR 457.140, Dry Pea 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 dry peas found at 7 CFR part 416 (Pea
Crop Insurance Regulations). FCIC also proposes to amend 7 CFR part 416
to limit its effect for Dry Peas to the 1997 and prior crop years. FCIC
proposes to separately publish crop provisions in Part 457 to cover
Green Peas.
This rule makes minor editorial and format changes to improve the
Pea Crop Insurance Regulations compatibility with the Common Crop
Insurance Policy. In addition, FCIC is proposing substantive changes in
the provisions for insuring dry peas as follows:
1. Section 1--Remove the definition of ``county,'' to default to
the definition contained in the Basic Provisions (Sec. 457.8). The
current definition includes land identified by an FSA farm serial
number for the county that is physically located in another county; the
new definition does not. This change will require land in another
county to be insured using the actuarial materials for the county where
the land is located. Add definitions for the terms ``adequate stand,''
``base price,'' ``contract price,'' ``contract seed peas,'' ``days,''
``dry peas,'' ``FSA,'' ``final planting date,'' ``good farming
practices,'' ``interplanted,'' ``irrigated practice,'' ``local market
price,'' ``nurse crop (companion crop),'' ``planted acreage,''
``practical to replant,'' ``price election,'' ``production guarantee
(per acre),'' ``replanting,'' ``salvage value,'' ``seed company,''
``seed company contract,'' ``timely planted,'' and ``written
agreement'' for clarification purposes. The definition of ``dry peas''
includes fall-planted Austrian Winter Peas if we agree in writing. The
definition also stipulates that peas grown for seed will be considered
contract seed peas only if the insured acreage is enrolled in a state
seed certification program and at least 50 percent of the expected
production from the insured acreage is contracted at a fixed price.
Contract seed peas not meeting these requirements will be insurable at
the price election established for smooth green and yellow varieties of
commercial dry edible peas.
2. Section 2--Allow separate dry pea types to qualify for optional
units rather than only basic units as previously allowed. This change
makes basic unit division provisions for dry peas consistent with
provisions for other crops. Clarify unit division for non-irrigated
corners of acreage irrigated by center-pivot systems.
3. Section 3--Specify that the insured may select only one price
election (percentage of the contract price for contract seed peas) for
all the dry peas 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 dry pea type
designated in the Special Provisions. This change is proposed to be
consistent with other crop provisions that allow insurance by type. The
price elections selected are not required to have the same percentage
relationship to the maximum price offered for each type. Also specify
that the price election for spring-planted contract seed peas produced
under a seed company contract will be based on the contract price.
4. Section 4--Change the contract change date from December 31 to
November 30 for all counties to provide adequate time to permit insured
producers to become familiar with any changes and make informed
decisions before the sales closing date. The sales closing date was
moved up 30 days by the Federal Crop Insurance Reform Act of 1994.
5. Section 5--Change the cancellation and termination dates from
April 15 to March 15 to standardize the cancellation and termination
dates with the sales closing dates.
6. Section 6--Add a requirement that insureds who produce spring-
planted contract seed peas under a seed company contract to submit a
copy of the seed company contract on or before the report of acreage.
This change is made to establish liability under the contract.
7. Section 7(a)(3)--Permit consideration for requests to insure dry
peas interplanted with another crop or planted into an established
grass or legume. This makes insurance available by written agreement
for production practices that are not normally followed in an area.
8. Section 7(c)--Permit insurance of Austrian Winter Peas if the
insurance provider agrees in writing that there is an adequate stand in
the spring to produce the yield used to determine the production
guarantee and the insured requested insurance on or before the sales
closing date.
9. Section 8(b)--Clarify that any acreage damaged prior to the
final planting date must be replanted unless
[[Page 26752]]
we agree that it is not practical to replant.
10. Section 9(a)--Provide that coverage on Austrian Winter Peas
will begin on acreage that has an adequate stand on the earlier of
March 16 or on the date the acreage is accepted for insurance; however,
such coverage will not attach before March 1.
11. Section 9(b)--Change the end of insurance period date from
September 15 to September 30 to ensure that coverage is provided
through the normal harvest period.
12. Section 10(c)--Clarify that insect and disease damage due to
insufficient or improper application of pest or disease control
measures are not an insurable cause of loss.
13. Section 12(b)--Modify the calculations used to determine dry
pea claim amounts to allow the aggregation of production guarantees and
production to count when more than one dry pea type is in one unit.
This modification is necessary to accommodate the insurance of multiple
types of dry peas within a single unit.
14. Section 12--No adjustment for quality deficiencies will be
allowed for Austrian Winter Peas since the type is commonly sold only
after removing any deficiencies.
15. Section 12(e)--Allow quality adjustment for smooth green and
yellow varieties (including peas grown for seed that do not qualify to
be insured as seed peas) that grade lower than U.S. No. 2 instead of
the current U.S. No. 3. This change is consistent with the crop quality
anticipated by the dry pea industry, and specifically by the American
Dry Pea and Lentil Association (ADPLA). The ADPLA assesses the Fair
Average Quality (FAQ) of each crop years' production. The historical
FAQ for smooth green and yellow varieties is between U.S. No. 1 and 2.
FCIC will increase premium rates as appropriate if this change is
adopted in the final rule.
16. Currently, coverage is provided for late planted acreage under
The Late Planting Agreement Option. This option will not be applicable
to the proposed provisions. FCIC will later propose late and prevented
planting provisions that will be added to the Basic Provisions
(Sec. 457.8). These provisions will provide late and prevented planting
coverage for pea producers.
17. Section 13--Provide for 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.
Good cause is shown to allow 30 days for comments after this rule
is published in the Federal Register. This rule improves dry pea crop
insurance coverage and brings it under the Common Crop Insurance Policy
Basic 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 interests requires the agency to act
immediately to make these provisions available for the 1998 crop year.
List of Subjects in 7 CFR Parts 416 and 457
Crop Insurance, Dry pea, Pea crop insurance regulations.
Proposed Rule
Accordingly, as set forth in the preamble, the Federal Crop
Insurance Corporation hereby proposes to amend 7 CFR parts 416 and 457
as follows:
PART 416--PEA CROP INSURANCE REGULATIONS FOR THE 1986 THROUGH THE
1997 CROP YEARS
1. The authority citation for 7 CFR part 416 is revised to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
2. The part heading is revised to read as set forth above.
3. The part heading ``Subpart--Regulations for the 1986 through the
1997 Crop Years'' is removed.
4. Section 416.7 is amended by revising the introductory text of
paragraph (d) to read as follows:
Sec. 416.7 The application and policy.
* * * * *
(d) The application for the 1986 and subsequent crop years is found
at subpart D of part 400-General Administrative Regulations (7 CFR
400.37, 400.38). The provisions of the Pea Insurance Policy for the
1986 through 1997 crop years are as follows:
* * * * *
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(l), 1506(p).
5. Section 457.140 is added to read as follows:
Sec. 457.140 Dry pea crop insurance provisions.
The Dry Pea 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:
Dry Pea 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
Adequate stand. A population of live plants per unit of acreage
which will produce at least the yield used to establish your
production guarantee.
Base price. The price per pound (excluding any discounts or
incentives that may apply) that is stated in the contract seed pea
processor contract and that will be paid to the producer for at
least 50 percent of the total production under contract with the
seed company.
Combining. A harvesting process that uses a machine to separate
the peas from the pods and other vegetable matter and place the peas
into a temporary storage receptacle.
Contract price. A fixed price per pound, (excluding any
discounts or incentives that may apply), that is stated in the seed
company contract.
Contract seed peas--Dry peas produced for the purpose of
producing seed to be planted at a future date and that are grown:
(1) On acreage enrolled in the seed certification program
administered by the state in which the peas are produced; and
(2) Under a contract with a seed company. The contract must
stipulate a fixed price for at least fifty percent of the
anticipated production from the acreage planted to the contract seed
peas, and must be executed before you report your acreage.
Days. Calendar days.
Dry peas--Peas of the following types:
(1) All spring-planted smooth green and yellow varieties of
commercial dry edible peas, and peas that are grown for the purpose
of producing seed to be planted at a future date that do not meet
the requirements contained in the definition of contract seed peas;
(2) All fall-planted varieties of Austrian Winter Peas (if we
agree in writing (see section 7(c));
(3) All spring-planted varieties of lentils; and
(4) All spring-planted varieties of contract seed peas.
FSA. The Farm Service Agency, an agency of the United States
Department of Agriculture, or a successor agency.
[[Page 26753]]
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.
Good farming practices. The cultural practices generally in use
in the county for the crop to make normal progress toward maturity
and produce at least the yield used to determine the production
guarantee, and are those recognized by the Cooperative State
Research, Education, and Extension Service as compatible with
agronomic and weather conditions in the county.
Harvest. Combining of dry peas.
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.
Local market price. The cash price per pound for the U.S. No. 2
grade of dry peas or lentils offered by buyers in the area in which
you normally market the insured crop. Such price will be the
prevailing dollar amount these buyers are willing to pay for dry
peas or lentils containing the maximum limits of quality
deficiencies allowable for the U.S. No. 2 grade. Factors not
associated with grading under the United States Standards for Whole
Dry Peas, Split Peas and Lentils will not be considered.
Nurse crop (companion crop). A crop planted into the same
acreage as another crop, that is intended to be harvested
separately, and which is planted to improve growing conditions for
the crop with which it is grown.
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. Dry peas must initially be
planted in rows to be considered planted. 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.
Price Election. In addition to the provisions of the definition
of price election in section 1 of the Basic Provisions (Sec. 457.8)
the price election for spring-planted contract seed peas produced
under a seed company contract will be the result of multiplying the
contract price by a percentage (not to exceed 100 percent) that you
elect.
Production guarantee (per acre). The number of pounds determined
by multiplying the approved APH yield per acre by the coverage level
percentage you elect.
Replanting. Performing the cultural practices necessary to
prepare the land to replace the pea seed and then replacing the pea
seed in the insured acreage with the expectation of growing a
successful crop.
Salvage value. The highest price per pound that will be paid for
the damaged dry peas as determined by us.
Seed company. Any business enterprise regularly engaged in the
processing of contract seed peas, that possesses all licenses and
permits for marketing contract seed peas required by the state in
which it operates, and that possesses or has contracted for
facilities, with enough drying, screening, and bagging or packaging
equipment to accept and process the contract seed peas within a
reasonable amount of time after harvest.
Seed company contract--A written agreement between the producer
and the seed company, containing at a minimum:
(a) The producer's promise to plant and grow one or more
specific varieties of contract seed peas, and deliver the production
from those varieties to the seed company;
(b) The seed company's promise to purchase all the production
stated in the contract;
(c) A date by which the crop must be harvested to be accepted by
the processor; and
(d) A fixed price or a method to determine such price based on
published independent information, that will be paid to the producer
for the production stated in the contract.
Timely planted. Planted on or before the final planting date
designated in the Special Provisions for the insured crop in the
county.
Written agreement. A written document that alters designated
terms of this policy in accordance with section 14.
2. Unit Division
(a) Unless limited by the Special Provisions, a unit as defined
in section 1 (Definitions) of the Basic Provisions (Sec. 457.8),
(basic unit) may be divided into optional units if, for each
optional unit you meet all the conditions of this section.
(b) Basic units may not be divided into optional units on any
basis including, but not limited to, production practice, type,
variety, and planting period, other than as described in this
section.
(c) If you do not comply fully with these provisions, we will
combine all optional units that are not in compliance with these
provisions into the basic unit from which they were formed. We will
combine the optional units at any time we discover that you have
failed to comply with these provisions. If failure to comply with
these provisions is determined to be inadvertent, and the optional
units are combined into a basic unit, that portion of the additional
premium paid for the optional units that have been combined will be
refunded to you.
(d) All optional units you selected for the crop year must be
identified on the acreage report for that crop year.
(e) The following requirements must be met for each optional
unit:
(1) You must have provided records by the production reporting
date, which can be independently verified, of planted acreage and
production for each optional unit for at least the last crop year
used to determine your production guarantee;
(2) You must plant the crop in a manner that results in a clear
and discernable break in the planting pattern at the boundaries of
each optional unit;
(3) You must have records of marketed production or measurement
of stored production from each optional unit maintained in such a
manner that permits us to verify the production from each optional
unit, or the production from each unit must be kept separate until
loss adjustment is completed by us; and
(4) Each optional unit must meet one or more of the following
criteria unless otherwise specified by a written agreement, as
applicable:
(i) Optional Units by Dry Pea Type: A separate optional unit may
be established for each dry pea type designated in section 1
(Definitions).
(ii) Optional Units by Section, Section Equivalent, or FSA 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, as the equivalent of sections for unit purposes. In
areas that have not been surveyed using the systems identified
above, or another system approved by us, or in areas where such
systems exist but boundaries are not readily discernable, each
optional unit must be located in a separate farm identified by a
single FSA Farm Serial Number.
(iii) 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 FSA Farm Serial
Number, optional units may be based on irrigated acreage or non-
irrigated acreage if both are located in the same section, section
equivalent, or FSA Farm Serial Number. To qualify as separate
irrigated and non-irrigated optional units, the non-irrigated
acreage may not continue into the irrigated acreage in the same rows
or planting pattern. 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 the guarantee is based,
except the corners of a field in which a center-pivot irrigation
system is used will be considered as irrigated acreage if separate
acceptable records of production from the corners are not provided.
If the corners of a field in which a center-pivot irrigation system
is used do not qualify as a separate non-irrigated optional unit,
they will be a part of the unit containing the irrigated acreage.
However, non-irrigated acreage that is not a part of a field in
which a center-pivot irrigation
[[Page 26754]]
system is used may qualify as a separate optional unit provided that
all requirements of this section are met.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities)
of the Basic Provisions (Sec. 457.8), you may select only one price
election (percentage of the contract price for spring-planted
contract seed peas) for all the dry peas 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
(percentage of the contract price for spring-planted contract seed
peas) for each dry pea type so designated in the Special Provisions.
The price elections you choose for each type are not required to
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 may choose 80 percent of
the maximum price election for another type. However, if you elect
the Catastrophic Risk Protection level of insurance for any dry pea
type, that level of coverage will be applicable to all insured
acreage in the county. When you elect a price election for one or
more dry pea type that is applicable to the limited level of
coverage and a price election applicable to the additional level of
coverage for the remaining dry pea types, the administrative fees
applicable to both the limited and additional levels of coverage
will apply.
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 March 15.
6. Report of Acreage
In addition to the provisions of section 6 (Report of Acreage)
of the Basic Provisions (Sec. 457.8), if you are insuring spring-
planted contract seed peas grown under contract with a seed company
you must submit a copy of the seed company contract to us on or
before the acreage reporting date.
7. Insured Crop
(a) In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all the dry pea
types in the county (except Austrian Winter Peas unless you request
insurance for such peas in accordance with section 7(c)) for which a
premium rate is provided by the actuarial table:
(1) In which you have a share;
(2) That are planted for harvest as dry peas and which, if grown
under a seed company contract, are not excluded from such contract
for or during the crop year; and
(3) That are not (unless allowed by the Special Provisions or by
written agreement):
(i) Interplanted with another crop;
(ii) Planted into an established grass or legume; or
(iii) Planted as a nurse crop.
(b) An instrument in the form of a ``lease'' under which you
retain control of the acreage on which the insured crop is grown and
that provides for delivery of the crop under substantially the same
terms as a seed company contract may be treated as a contract under
which you have an insurable interest in the crop.
(c) Austrian Winter Peas will be insured only if you request
insurance in writing for such dry peas and we agree to provide
coverage by written agreement. Your request to insure Austrian
Winter Peas must be submitted to us not later than the sales closing
date. We will not agree to insure Austrian Winter Peas unless an
adequate stand exists in the spring to produce at least the
production guarantee.
(d) Any acreage of dry peas which is destroyed and replanted to
different insurable type of dry peas will be considered insured
acreage.
8. Insurable Acreage
In addition to the provisions of section 9 (Insurable Acreage)
of the Basic Provisions (Sec. 457.8):
(a) We will not insure any acreage that does not meet the
rotation requirements shown in the Special Provisions; or
(b) Any acreage of the insured crop damaged before the final
planting date, to the extent that the majority of producers in the
area would normally not further care for the crop, must be replanted
unless we agree that it is not practical to replant. We will not
require you to replant if it is not practical to replant the type of
dry peas originally planted.
9. Insurance Period
In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(a) Coverage for Austrian Winter Peas will begin on acreage that
has an adequate stand on the earlier of March 16 or on the date we
agree to accept the acreage for insurance; however, insurance will
not begin before March 1; and
(b) The calendar date for the end of the insurance period is
September 30 of the calendar year in which the crop normally is
harvested.
10. 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.
11. Duties in the Event of Damage or Loss
In accordance with the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the
representative samples of the unharvested crop must be at least 10
feet wide and extend the entire length of each field in the unit.
The samples must not be harvested or destroyed until the earlier of
our inspection or 15 days after harvest of the balance of the unit
is completed.
12. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event
you are unable to provide separate acceptable production records:
(1) For any optional units, we will combine all optional units
for which such production records were not provided; or
(2) For any basic units, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for the unit.
(b) In the event of loss or damage to your pea crop covered by
this policy, we will settle your claim by:
(1) Multiplying the insured acreage of each dry pea type,
excluding contract seed peas, by its respective production
guarantee;
(2) Multiplying each result in section 12(b)(1) by the
respective price election for each insured type;
(3) Totaling the results in section 12(b)(2);
(4) Multiplying the insured acreage of each contract seed pea
type by its respective production guarantee;
(5 ) Multiplying each result in section 12(b)(4) by the
applicable base price;
(6) Multiplying each result in section 12(b)(5) by your selected
price election percentage;
(7) Totaling the results in section 12(b)(6);
(8) Totaling the results in section 12(b)(3) and section
12(b)(7);
(9) Multiplying the total production to be counted of each dry
pea type, excluding contract seed peas, if applicable, (see section
12(d)) by the respective price election;
(10) Totaling the value of all contract seed pea production (see
section 12(c));
(11) Totaling the results in section 12(b)(9) and section
12(b)(10);
(12) Subtracting the result in section 12(b)(11) from the result
in section 12(b)(8); and
(13) Multiplying the result by your share.
(c) The value of contract seed pea production to count for each
type in the unit will be determined as follows:
(1) For production meeting the minimum quality requirements
contained in the seed pea processor contract and for production that
does not meet such requirements due to uninsured causes:
(i) Multiplying the actual value or base price per pound,
whichever is greater, by the price election percentage you selected;
and
(ii) Multiplying the result by the number of pounds of such
production.
(2) For mature production not meeting the minimum quality
requirements contained in the seed pea processor contract due to
insurable causes, and immature production that is appraised:
(i) Multiplying the actual value by the price election
percentage you selected; and
[[Page 26755]]
(ii) Multiplying the result by the number of pounds of such
production.
(d) The total pea production to count (in pounds) from all
insurable acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee per acre for acreage:
(A) That is abandoned;
(B) That is put to another use without our consent;
(C) That is 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 of
dry peas, excluding Austrian Winter Peas, may be adjusted for
quality deficiencies in accordance with section 12 (c) or (e), if
applicable); 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
(2) All harvested production from the insurable acreage.
(e) Mature production of smooth green and yellow peas, lentils,
and contract seed peas that are not deliverable under the contract
or are sold under the contract for less than the contract price, may
be adjusted for quality deficiencies. No adjustment for quality
deficiencies will be allowed for Austrian Winter Peas.
(1) Production will be eligible for quality adjustment if:
(i) Deficiencies in quality, in accordance with the United
States Standards for Whole Dry Peas, Split Peas, and Lentils, result
in production grading U.S. No. 3 or worse because of defects, color,
skinned production (lentils only), odor, material weathering, or
distinctly low quality; or
(ii) Substances or conditions are present that are identified by
the Food and Drug Administration or other public health
organizations of the United States as being injurious to human or
animal health.
(2) Quality will be a factor in determining your loss only if:
(i) The deficiencies, substances, or conditions resulted from a
cause of loss against which insurance is provided under these crop
provisions and which occurs within the insurance period;
(ii) The deficiencies, substances, or conditions result in a net
price for the damaged production that is less than the local market
price;
(iii) All determinations of these deficiencies, substances, or
conditions are made using samples of the production obtained by us
or by a disinterested third party approved by us; and
(iv) The samples are analyzed by a grader licensed to grade dry
peas under the authority of the United States Agricultural Marketing
Act or the United States Warehouse Act with regard to deficiencies
in quality, or by a laboratory approved by us with regard to
substances or conditions injurious to human or animal health. Test
weight for quality adjustment purposes may be determined by our loss
adjuster.
(3) Dry Pea production that is eligible for quality adjustment,
as specified in sections 12(e) (1) and (2), will be reduced as
follows:
(i) The value per pound of the qualifying damaged production and
the local market price will be determined on the earlier of the date
such damaged production is sold or the date of final inspection for
the unit. The value per pound for the qualifying damaged production
will be the value determined in the local area to the extent
feasible. We may obtain prices from any buyer of our choice. If we
obtain prices from one or more buyers located outside your local
market area, we will reduce such prices by the additional costs
required to deliver the dry peas to those buyers. Discounts used to
establish the net value of the damaged production will be limited to
those that are usual, customary, and reasonable. The value will not
be reduced for:
(A) Moisture content;
(B) Damage due to uninsured causes; or
(C) Drying, handling, processing, or any other costs associated
with normal harvesting, handling, and marketing of the dry peas;
except, if the value of the damaged production can be increased by
conditioning, we may reduce the value of the production after it has
been conditioned by the cost of conditioning but not lower than the
value of the production before conditioning;
(ii) The value per pound of the damaged or conditioned
production will be divided by the local market price to determine
the quality adjustment factor;
(iii) The number of pounds of the damaged or conditioned
production will then be multiplied by the quality adjustment factor
to determine the production to count to be included in section
12(d); and
(iv) Any production harvested from plants growing in the insured
crop may be counted as production of the insured crop on a weight
basis.
13. Written Agreements
Terms of this policy which are specifically designated for the
use of written agreements 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
13(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 May 8, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-12707 Filed 5-14-97; 8:45 am]
BILLING CODE 3410-88-P
