[Federal Register Volume 61, Number 224 (Tuesday, November 19, 1996)]
[Rules and Regulations]
[Pages 58769-58779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29560]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 61, No. 224 / Tuesday, November 19, 1996 /
Rules and Regulations
[[Page 58769]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
RIN 0563-AB55
Common Crop Insurance Regulations; Sugar Beet Crop Insurance
Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes
specific crop provisions for the insurance of sugar beets. The
provisions will be used in conjunction with the Common Crop Insurance
Policy Basic Provisions, which contain standard terms and conditions
common to most crops. The intended effect of this action is to provide
policy changes to better meet the needs of the insured and combine the
current Sugar Beet Crop Insurance Regulations with the Common Crop
Insurance Policy for ease of use and consistency of terms.
EFFECTIVE DATE: November 19, 1996.
FOR FURTHER INFORMATION CONTACT: Arden Routh, Program Analyst, Research
and Development Division, Product Development Branch, Federal Crop
Insurance Corporation, United States Department of Agriculture, 9435
Holmes Road, Kansas City, MO 64131, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order No. 12866
This action has been reviewed under United States Department of
Agriculture (USDA) procedures established by Executive Order No. 12866.
This action constitutes a review as to the need, currency, clarity, and
effectiveness of these regulations under those procedures. The sunset
review date established for these regulations is February 1, 2001.
This rule has been determined to be not significant for the
purposes of Executive Order No. 12866 and, therefore, has not been
reviewed by the Office of Management and Budget (OMB).
Paperwork Reduction Act of 1995
Following publication of the proposed rule, the public was afforded
60 days to submit written comments, data, and opinions on information
collection requirements previously approved by OMB under OMB control
number 0563-0003 through September 30, 1998. No public comments were
received.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. This rule contains no Federal
mandates (under the regulatory provisions of Title II of the UMRA) of
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. 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 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
Executive Order No. 12778
The Office of the General Counsel has determined that these
regulations meet the applicable standards provided in sections 2(a) and
2(b)(2) of Executive Order No. 12778. The provisions of this rule will
not have a retroactive effect prior to the effective date. The
provisions of this rule will preempt State and local laws to the extent
such State and local laws are inconsistent herewith. The administrative
appeal provisions published at 7 CFR parts 11 and 780 must be exhausted
before 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 58770]]
Background
On Friday, May 31, 1996, FCIC published a proposed rule in the
Federal Register at 61 FR 27315-27321 to add to the Common Crop
Insurance Regulations (7 CFR part 457) a new section, 7 CFR
Sec. 457.109, Sugar Beet Crop Provisions. The new provisions will be
effective for the 1997 and succeeding crop years in all States except
Arizona and California, and for the 1998 and succeeding crop years in
Arizona and California. These provisions will replace and supersede the
current provisions for insuring sugar beets found at 7 CFR part 430
(Sugar Beet Crop Insurance Regulations). By separate rule, FCIC will
restrict the effects of the Sugar Beet Crop Insurance Regulations
through the 1996 and prior crop years and later remove that part.
Following publication of that proposed rule, the public was afforded 30
days to submit written comments, data, and opinions. A total of 72
comments were received from the crop insurance industry, sugar beet
grower associations, and FCIC. The comments received, and FCIC's
responses are as follows:
Comment: Two comments received from the crop insurance industry had
a concern with the definition of ``Good farming practices,'' which
makes reference to ``generally recognized by the Cooperative Extension
Service.'' The comment indicated that the term ``generally'' would
allow the use of unrecognized practices.
Response: FCIC agrees with the comment and has amended the
definition accordingly.
Comment: One comment received from an FCIC Regional Service Office
(RSO) recommended changing the definition of ``Harvest'' to read,
``means the completion of topping and lifting of sugar beets in the
field.'' The commenter does not believe that removal of sugar beets
from the field should be a condition to be considered harvested. If
required, it would lengthen the insurance period and allow producers to
pile beets in the field and expose the insurer to unintended risks.
Response: FCIC agrees with the comment and has amended the
definition accordingly.
Comment: Two comments received from the crop insurance industry
recommended adding the words ``and quality'' after the word
``quantity'' in the definition of ``Irrigated practice.''
Response: FCIC agrees that water quality is an important issue.
However, since no standards or procedures have been developed to
measure water quality for insurance purposes, FCIC has elected not to
include quality in the definition. Therefore, no change will be made.
Comment: Two comments received from RSOs recommended removing or
changing provisions pertaining to late planting. One of the commenters
recommended changing the definition of ``Late planting period'' to
read, ``The period that begins the day after the final planting date
for the insured crop and ends 25 days after the final planting date,
unless otherwise provided by the Special Provisions.'' The commenters
added that: 1) the length of the late planting period should be
determined by the RSO by crop, by county, depending on the length of
the growing season, etc.; and 2) a blanket 25 days for all crops is not
appropriate for an actuarially sound program.
Response: County by county determinations of the appropriate length
of the late planting period would necessitate a substantial amount of
additional paperwork and procedure. For a majority of the counties, the
25 day late planting period is appropriate to permit the crop to mature
before the end of the insurance period. There is no evidence that
insureds are abusing the current 25 day period. Therefore, no change
will be made.
Comment: One comment received from the crop insurance industry
recommended adding a definition for ``raw sugar'' since this term is
used in the definition of ``local market price'' and elsewhere in the
crop provisions.
Response: FCIC agrees with the comment and has added a definition
for ``raw sugar.''
Comment: One comment received from a sugar beet growers group
concerned ``Local market price.'' The commenter believes that the
guarantee should not be established using the local market price
because it may be vulnerable to fluctuation caused by market demand.
Response: FCIC believes that the commenter misinterpreted the
provisions. The local market price is used to determine the production
to count for sugar beets eligible for a quality adjustment. The local
market price is not used to determine the insurance guarantee.
Comment: One comment received from an RSO recommended adding
language indicating that it will not be considered practical to replant
unless production for the replanted acreage can be delivered under the
terms of the processor contract.
Response: FCIC agrees with the comment and has amended the
definition accordingly.
Comment: Five comments, two from the crop insurance industry and
three from FCIC RSOs, did not agree that the definition of
``Processor'' should limit processors to being only corporations and
the language contained in redesignated section 7(b) (1) and (2), that
requires a processor to be a corporation.
Response: FCIC agrees with the comments and has amended the
definition and provisions accordingly.
Comment: Two comments received from the crop insurance industry
concerned the definition of ``Replanting.'' The comments questioned the
need to break this into two steps and recommended that FCIC consider
something like the definition in the 1986-CHIAA 707: ``Performing the
cultural practices necessary to replant insured acreage to sugar
beets.''
Response: The suggested language would unnecessarily create an
ambiguity because the cultural practices will always include the
preparation of the land and planting the sugar beet seed into the
insured acreage. Therefore, no change will be made.
Comment: One comment received from the crop insurance industry
recommended adding a definition for RMA-Risk Management Agency.
Response: These regulations are published under the authority of
the Federal Crop Insurance Act, which created FCIC and gave it the
authority to offer this crop insurance program. As a result, the term
FCIC rather than Risk Management Agency is used appropriately
throughout these regulations. Therefore, no change will be made.
Comment: Two comments received, one from an FCIC RSO and one from
the insurance industry, recommended clarifying the second to the last
sentence of the first paragraph of redesignated section 2(c). The
current wording may lead the insured to believe that premium may be
refunded any time optional units are combined. That is not true.
Premium is refunded only if there are no optional units within a basic
unit. One of the comments recommended changing the provisions to read
as follows: ``If failure to comply with these provisions is determined
to be inadvertent and if all of the optional units within a basic unit
are combined, that portion of the premium paid for the purpose of
electing optional units will be refunded to you.''
Response: FCIC agrees with the comment and has amended the
provisions accordingly.
Comment: One comment received from the insurance industry
questioned why all optional units must be identified on the acreage
report for each crop year. They asked if this reporting
[[Page 58771]]
is by crop or also by practice, type, and variety. Listing every
possible combination for every crop on a policy could test the limits
on the number of policy lines allowed.
Response: FCIC has clarified this provision to indicate that only
those optional units selected for the specific crop year need be
identified on the acreage report.
Comment: One comment received from the insurance industry indicated
that provisions in section 2(a)(1) requiring verifiable records ``for
at least the last crop year used to determine your production
guarantee'' could cause confusion. The commenter asked whether this is
the ``APH'' or the ``policy'' crop year because the reference to the
last year used to determine the guarantee suggests it is the APH crop
year. The comment questions whether this means that an insured cannot
qualify for any optional units without certifying as many years as
necessary to come up with one year of actual history for every
potential unit database. A record of zero acres planted is an
acceptable production report for maintaining continuity, but is not
``counted'' as a year of actual records when calculating the approved
APH yield.
Response: The APH is based on the actual production of the producer
for each crop year in which a crop is produced up to a maximum of 10
crop years. It is not required that a crop be insured for its
production to be included in the APH data base. To qualify for optional
units, the insured must have production records, by optional unit, for
at least the last year the crop was actually produced. FCIC believes
the provision is clearly stated and has not made changes.
Comment: One comment received from the insurance industry indicated
that the requirement to have verifiable records of planted acreage and
production for each optional unit for at least the last crop year used
to determine your production guarantee might be seen as a contradiction
of the rotation requirements for sugar beets. These requirements do not
allow sugar beets to be planted on the same acreage as the previous
year.
Response: The proposed provisions do not require sugar beets to be
grown on the same acreage in successive crop years. Only those crop
years in which the crop was actually produced are included in the data
base. The year the crop was not produced would not be considered as the
last crop year used to determine the guarantee. Therefore, no changes
have been made.
Comment: One comment received from the insurance industry
concerning section 2(b)(2) recommended deleting ``In addition to, or
instead of, establishing optional units by section, section equivalent,
or FSA Farm Serial Number,'' and beginning the section with ``Optional
units may be based on irrigated * * *'' Item 2(b) begins by saying one
or more of (1) and (2) may apply.
Response: It is the intent of FCIC to allow optional units for
irrigated and non-irrigated practices within an optional unit based on
section, section equivalent, or FSA Farm Serial Number. Therefore, no
change will be made.
Comment: One comment received from an RSO recommended the language
in section 3(b)(1) be changed to read ``First stage, with a guarantee
of 60 percent (60%) of the final stage guarantee, extends from planting
until:''
Response: FCIC agrees with the comment and has amended the
provision accordingly.
Comment: Five comments received, four from the insurance industry
and one from a sugar beet growers group, recommended that the first
stage guarantee should be eliminated, except possibly in California and
other areas where the practice of thinning still exists. References to
``July 1,'' ``thinning'' or ``90 days'' cause more problems than they
solve in other sugar beet areas where early season input costs are no
longer greater than those incurred later in the season. It is the
commenters understanding that machine or hand thinning is no longer a
common practice in many sugar beet areas. Stage production guarantees
were initially established when thinning was an expensive process. The
reduction in guarantee for first stage only adds to the losses the
producer incurs due to adverse weather conditions. Removal of the stage
guarantee would likely result in increased premium costs.
Response: This would be a significant change which could result in
higher premiums, therefore, an additional comment period would be
required to allow interested parties to consider the effects of this
change and any increase in the costs of insurance. No change will be
made to the present rule; however, it will be considered in any future
change to these provisions.
Comment: One comment received from the insurance industry
concerning section 3, Insurance Guarantees, Coverage Levels, and
Prices, recommended the language be changed to ``* * * select only one
price percentage * * *'' it would not then be necessary to say so much
for crops with different maximum prices by type.
Response: Methods used to select price elections vary between
insurance providers. While some require selecting of a percentage,
others require selection a specific dollar amount. The suggested change
will not work in all circumstances. Therefore, no change will be made.
Comment: Three comments received, two from RSOs and one from a
sugar beet growers group, concerned the cancellation and termination
date. One commenter stated that the language in the Background section
of the preamble printed in the proposed rule stated that the
cancellation and termination dates for all States except Arizona and
California were changed to March 15 but the dates contained in section
5 of the proposed Sugar Beet Crop Provisions were February 28. The
commenter believed the correct date should be March 15. Another
commenter advised that the cancellation and termination dates (February
28) are too early because contracting of acreage by the processor has
not been completed.
Response: The language in the Background section concerning the
cancellation and termination dates being changed from April 15 to March
15 for all States except Arizona and California is correct. The correct
cancellation and termination dates for these States are March 15. FCIC
corrected section 5 accordingly.
Comment: Two comments received from the insurance industry asked if
the sales closing date will match the cancellation and termination
dates contained in section 5. The commenters suggested that the
cancellation and sales closing dates should match, and that the date
should be March 15.
Response: The sales closing dates and the cancellation dates will
match and, as stated above, the cancellation date has been changed to
March 15 in most States.
Comment: One comment received from an RSO recommended adding
provisions to indicate that the premium is based on the final stage
production guarantee.
Response: FCIC agrees with the comment and has added a new section
6.
Comment: One comment received from the insurance industry
recommended that FCIC consider whether redesignated section 7(a)(3)
should specify that the processor contract show the insured's name.
This may reduce the potential for abuse by persons without insurable
interests.
Response: Processor contracts may not always indicate the name of
all persons who have an insurable interest
[[Page 58772]]
in the acreage. In many cases a contract is held by a producer, but
such contract also covers the share of one or more landlords. While it
is imperative that an insurable interest be established, FCIC does not
feel that the name on the processor contract is an adequate indicator
of an insurable interest. Therefore, no change has been made.
Comment: One comment received from the insurance industry
questioned the language contained in redesignated section 7(a)(4)(i)
regarding acreage interplanted with another crop. The commenter stated
that ``In some areas it is a common practice to plant a small grain
crop on sugar beet ground, let it grow to 6-8 inches, kill it off with
a chemical and then plant the sugar beets. The small grain residue
serves as protection from both wind and cold damage to the beet
seedlings. This should be considered a good farming practice and
possibly addressed in this section. The commenter recalled a FCIC
memorandum being issued a few years ago allowing the practice.
Response: The scenario presented in the comment would constitute
sequential planting, not interplanting. The definition of
``interplanted'' requires the two crops be planted in a manner that
does not permit separate agronomic maintenance or harvest of the
insured crop. In the case presented, the small grain crop would not
inhibit the maintenance or harvest of the sugar beets. Therefore, this
practice is not prohibited.
Comment: One comment received from the insurance industry expressed
concern regarding requirements for processor sales records contained in
redesignated section 7(b)(3). An insurance provider cannot require an
insured to provide copies of sales records for production owned by
other parties.
Response: There is no need to provide the records from other
persons. This provision only applies when a processor is also a sugar
beet producer. All that is required is the records of the processor's
sales to prove that it produced sugar the previous year. The provision
has been amended to specify that it is the sales records of the
processor showing the amount produced for the previous year that must
be provided.
Comment: One comment received from the insurance industry
questioned the requirement in redesignated section 7(b)(3) for
companies to inspect the processing facilities. The comment expressed
concern over the additional expenses incurred for the inspection
process.
Response: An inspection of the processing facilities is necessary
to verify that a producer who claims also to be a processor has
facilities or access to facilities with adequate equipment to accept
and process sugar beets in a reasonable amount of time after harvest.
FCIC does not anticipate a large number of inspections will be
necessary. Therefore, the extra expense should be minimal. No change
will be made.
Comment: One comment received from an RSO recommended changing the
language in redesignated section 8(a)(1) to read, ``the preceding crop
year, unless otherwise specified in the Special Provisions for the
county.'' The Special Provisions take precedence over these provisions;
however, the policy statement of ``preceding crop year'' is a change
for most States. The commenter stated that it would not hurt to remind
insureds to refer to the Special Provisions.
Response: FCIC agrees with the comment and has amended the
provision accordingly.
Comment: One comment received from the insurance industry states
that redesignated sections 8(a) (1) and (3) seem to overlap. The
commenter asked whether the requirement that sugar beets cannot have
been planted on the same acreage the preceding crop year is covered by
the rotation requirements in the Special Provisions. The commenter
states that unless there are areas with no Special Provisions, item (1)
seems to be an unnecessary repetition.
Response: There are areas with Special Provisions that do not
contain rotation requirements and the provisions in redesignated
section 8(a)(1) apply to these areas. Redesignated section 8(a)(3)
applies to counties that may have other rotation requirements.
Therefore, no change will be made.
Comment: One comment received from the insurance industry states
that redesignated section 8(a)(2) appears to conflict with redesignated
section 10(d) and request that redesignated section 8(a)(2) be
rewritten to add ``or controlled as prescribed by University
Extension'' to reduce the times a written agreement would have to be
requested and processed.
Response: Redesignated section 10(d) does not conflict with
redesignated section 8(a)(2). Redesignated section 8(a)(2) specifies
that acreage is not insurable the following crop year after the acreage
has been affected by rhizomania. Redesignated section 10(d) provides
that disease is not an insurable cause of loss in the current crop year
if caused by insufficient or improper application of disease control
measures. Therefore, no change will be made.
Comment: Two comments received from RSOs recommended changing the
language of redesignated section 8(a)(2) to read: ``In any crop year
following the discovery of rhizomania on the acreage unless a written
agreement or the Special Provisions allows otherwise; or.'' The sugar
beet industry is rapidly developing rhizomania tolerant varieties. The
commenters state that this revision will allow for insurance to attach
when specified in the Special Provisions and avoid the need of a costly
written agreement and allow for CAT level protection. This practice
will only be included in the Special Provisions if there are available
rhizomania tolerant varieties adapted to the area that exhibit adequate
yields.
Response: FCIC agrees with the comment and has amended the section
accordingly.
Comment: One comment received from a grower group indicated that
there may be situations where replanting could occur in a location
different than that originally planted. This may occur when it is not
practical to replant in the same field, township or county.
Consideration for replanting payments should be made in this
circumstance.
Response: FCIC agrees that this concept should be studied. However,
no procedure or provisions have been developed or proposed to
accomplish the recommended change. FCIC will consider this
recommendation for future use. Therefore, no change will be made.
Comment: One comment received from a sugar beet growers group
recommended changing the calendar date for the end of insurance period
to December 15 for North Dakota and Minnesota because sugar beets can
be harvested after November 15. They are concerned that producers may
file unnecessary claims to protect their interests. The commenter also
states that production data is only available after November 15,
therefore, the December 15 deadline would be more appropriate. They
claim that supporting documentation is available for this change.
Response: FCIC understands that harvest may occur after November 15
in some exceptional years. However, virtually all sugar beets are
harvested prior to this date. Extending the date for some exceptional
years would adversely affect premium rates. Therefore, no change is
necessary.
Comment: One comment received from an RSO recommended changing the
language redesignated section 11(b) to specify ``the lesser of 10% of
the final stage production guarantee or 1 ton, multiplied by your price
election, multiplied by your share.''
[[Page 58773]]
Response: FCIC agrees with the comment and has amended redesignated
section 11(b) accordingly.
Comment: One comment received from the insurance industry
questioned why a tenant is not allowed to receive the landlord's share
of the allowable replant payment if both are insured with the same
company at a coverage level greater than CAT. Provisions allowing this
are included in the Coarse Grains Crop Provisions (section 10(c)), and
the commenter states that it should be applicable to sugar beets as
well.
Response: FCIC has reevaluated this provision due to comments
received on other regulations and determined that the provision is not
equitable to all insureds. Specifically if a landlord and tenant are
insured with one company, the provisions apply, but if the landlord and
tenant are insured with different companies, the provisions do not
apply. Therefore, no change will be made. Crop provisions containing
these terms will be amended to eliminate them.
Comment: One comment received from a sugar beet growers group
concerned redesignated section 12(b). The commenter recommended that
the sugar beet processor contract include the terminology ``Maximum
Plantable Acreage.'' The term ``plantable acres'' may differ from
contracted acres.
Response: FCIC cannot require that such terminology be added to the
processor contract. FCIC only requires that such contract be binding on
the parties with respect to the production and purchase of a stated
amount and a fixed price. The actual terms of the processor contract
are established between the processor and the grower. Therefore, no
change will be made.
Comment: One comment received from an RSO recommended changing
redesignated section 13(c)(1) to read ``Multiplying the insured acreage
by its respective production guarantee''.
Response: FCIC agrees with comment and has amended redesignated
section 13(b) accordingly.
Comment: One comment received from an RSO recommended changing
redesignated section 13(c)(1)(iii) to read: ``Unharvested production
(unharvested sugar beets which have not reached the earliest delivery
date designated by the processor's harvest schedule for the area will
not be adjusted for quality deficiencies) * * *'' Current loss
adjustment procedure distinguishes appraisal techniques based on crop
maturity. Immature beets are appraised by percentage stand. Mature
beets are appraised by weight. This proposed revision would allow
samples to be submitted to the processor for determination of the
percentage of sugar and to allow a more accurate appraisal of crop
value. Samples submitted to the processor will also confirm whether or
not beets are damaged and whether redesignated section 13(d) or
redesignated section 13(e) is applicable.
Response: FCIC agrees with the substance of the comment and has
amended the provisions accordingly.
Comment: One comment received from an RSO recommended changing
redesignated section 13(d) to read: ``Any unharvested appraised
production which has matured (reached the earliest delivery date
designated by the processor's harvest schedule for the area) or
harvested production of sugar beets acceptable according to the sugar
beet processor contract or corporate resolution will be converted to
standardized tons by:'' The commenter states that this revision
incorporates the recommendation for redesignated section 13(d)(iii),
and clarifies when the percent sugar adjustment is used.
Response: FCIC disagrees with the comment. The provisions in
redesignated section 13(d) are intended for both harvested and
unharvested production that is appraised after the earliest delivery
date that the processor accepts harvested production and that meet the
minimum acceptable standards contained in the processor contract. This
provision will be clarified accordingly.
Comment: One comment received from the insurance industry
recommended changing provisions in redesignated section 13(d)(2) that
requires the percentage of sugar to be determined for each load at the
time of delivery. Normal practice is to test every other load, because
it has been discovered that the sugar percentage does not vary much
between loads. Processors should not have to change this accepted
practice to satisfy this policy requirement.
Response: FCIC agrees with the comment and has amended the
provisions to conform with industry practices.
Comment: One comment received from an RSO recommended changing
redesignated section 13(e) to read: ``Any unharvested appraised
production which has matured (sugar beets which have reached the
earliest delivery date designated by the processor's harvest schedule
for the area) or harvested production of sugar beets that does not meet
the minimum acceptable conditions specified in the sugar beet processor
contract or corporate resolution due to insurable causes will be
converted to standardized tons by:'' The revision incorporates the
recommendation for redesignated section 13(c)(iii), and clarifies the
specific conditions of the crop for which production to count is
adjusted according to this subsection.
Response: FCIC disagrees with the comment. The provisions in
redesignated section 13(e) are intended for both harvested and
unharvested production that is appraised after the earliest delivery
dated that the processor accepts harvested production and that does not
meet the minimum acceptable standards contained in the processor
contract. This provision will be clarified accordingly.
Comment: One comment received from an RSO recommended changing
redesignated section 13(e) to read: ``Production that does not meet the
minimum acceptable standards contained in the sugar beet processor
contract or corporate resolution (damaged sugar beets) will be
converted to standardized tons by:'' Redesignated section 13(e)(1)
refers to ``damaged sugar beets.'' Without adding the clarification of
damaged beets to redesignated section 13(e), there may be (and has been
in the past) some confusion.
Response: FCIC agrees with the comment and has amended the section
accordingly.
Comment: One comment received from an FCIC RSO recommended changing
the language ``the insured crop'' to ``sugar beets'' in redesignated
section 14, Late and Prevented Planting.
Response: Since the insured crop clearly is sugar beets, and the
term is used in other provisions, no change will be made.
Comment: One comment received from an RSO recommended eliminating
late and prevented planting provisions that reference participating in
a USDA program that limits acreage planted, compliance with
conservation plans, and base acreage. These do not apply.
Response: FCIC agrees that acreage limiting programs and base
acreage do not apply to sugar beets and has amended the appropriate
provisions. However, conservation plans may allow the insurance
provider to verify an intent to produce or not produce the crop.
Therefore, provisions regarding the use of conservation plans have not
been changed.
Comment: One comment received from an RSO recommended adding a
statement to the prevented planting provisions to assure compliance
with rotation requirements contained in the Special provisions when
determining eligible prevented planting acreage.
Response: FCIC does not believe the recommended change is
necessary. It would be duplicative since the Insured
[[Page 58774]]
Crop section already contains this requirement. Therefore, no change
will be made.
Comment: Three comments received from the insurance industry
recommended limiting the number of acres eligible for prevented
planting to the number of acres that are under the processor contract
for the crop year.
Response: FCIC agrees with comment and has amended language to
limit the number of acres eligible for prevented planting to the number
of acres under the processor contract or the number of acres needed to
produce the amount of contracted production based on the APH yield for
the acreage.
Comment: One comment received from the insurance industry
recommended that a written release be required from the processor
before a prevented planting guarantee is provided.
Response: FCIC cannot require such a release for the purposes of
the insurance contract since the processor contract is executed between
the processor and the producer. If the producer meets the requirements
for a prevented planting payment under this policy, the payment will be
made regardless of whether the processor releases the acreage.
Comment: One comment received from the insurance industry
recommended that late and prevented planting coverage should not be
provided on crops grown under contract with a processor. The processor
determines what the producer does if the insured crop is not planted
during the normal planting period.
Response: FCIC believes that the inclusion of late and prevented
planting provisions is appropriate for sugar beets. As the comment
indicates, the processor may or may not allow planting within the late
planting period. If planting is allowed under the contract, and the
crop can reach maturity, coverage should be provided. Therefore, no
change will be made.
Comment: Three comments received, two from the insurance industry
and one from an RSO, asked whether the prevented planting coverage
available when a substitute crop is planted will be dropped, or at
least revised, for all affected crops for the 1997 crop year, and
whether it is possible to remove (or revise) redesignated section
14(d)(1)(iii)(B) and 14(d)(2)(iii)(B).
Response: Consideration is being given to removal of prevented
planting provisions that allow a substitute crop for all affected crops
for the 1998 crop year. Necessary changes will be made in a separate
rule for these and any other affected crop provisions. Therefore, no
change will be made.
Comment: One comment received from the insurance industry
recommended that the requirement for a written agreement to be renewed
each year should be removed. Terms of the agreement should be stated in
the agreement to fit the particular situation for the policy, or if no
substantive changes occur from one year to the next, allow the written
agreement to be continuous.
Response: Written agreements are intended to change policy terms or
permit insurance in unusual situations where such changes will not
increase risk. If such practices continue year to year, they should be
incorporated into the policy or Special Provisions. It is important to
keep non-uniform exceptions to the minimum and to insure that the
insured is well aware of the specific terms of the policy. Therefore,
no change will be made.
Comment: One comment received from the insurance industry
recommended that the policy language concerning written agreements
should not be so detailed, but should be handled in procedure. The
commenter suggested that redesignated sections 15 (a) and (c) should
not be so specific as to the sales closing date, especially when it is
possible to request some written agreements until the acreage reporting
date. If these items are kept, the commenter suggests combining both
sections into redesignated section 15(a) instead of having two separate
items.
Response: FCIC disagrees with the comment. To prevent the practice
of delaying the purchase of insurance until a loss is more probable,
most written agreements must be requested by the sales closing date. It
is only rare circumstances when an insured can request a written
agreement after the sales closing date. FCIC believes the current
format clearly states the necessary requirements for a written
agreement. Written agreements are the exceptions, not the rule and
their use must be strictly controlled. Therefore, no change will be
made.
Comment: One comment received from an RSO recommended deleting
paragraph (b) of redesignated section 15. A request for a written
agreement is really a Request for Actuarial Change. If it is not
approved, all contract provisions will remain in effect as before. The
commenter receives requests for actuarial change for many situations
and the requirement as outlined in part (b) seems cumbersome and
unwarranted.
Response: This requirement is necessary to ensure that the producer
will be aware of the terms of his insurance in case the request for
written agreement is denied. Therefore, no change will be made.
In addition to the changes described above, FCIC has made the
following changes to the Sugar Beet Provisions:
1. Moved Arizona from section 3(b)(1)(i) to section 3(b)(1)(ii)
because production practices in Arizona are more similar to Central and
Southern California than Northern California and other States.
2. Section 7(a)(3)--Added provisions to clarify that sugar beets
are not insurable if excluded from the processor contract at anytime
during the crop year.
3. Section 9--Added a provision to clarify that the insurance
period ends when the production delivered to the processor equals the
production stated in the sugar beet processor contract.
4. Section 13(b)--Clarified the calculations used to settle the
claim.
5. Section 14(d)--Clarified that the production guarantee for
prevented planting will be based on the final stage guarantee.
6. Section 14(d)(4)(ii)--Clarified when prevented planting coverage
begins to include the 1997 crop year.
Good cause is shown to make this rule effective upon publication in
the Federal Register. This rule improves the sugar beet insurance
coverage and brings it under the Common Crop Insurance Policy Basic
Provisions for consistency among policies. The earliest contract change
date that can be met for the 1997 crop year is November 30, 1996. It is
therefore imperative that these provisions be made final before that
date so that the reinsured companies and insureds may have sufficient
time to implement these changes. Therefore, public interest requires
the agency to act immediately to make these provisions available for
the 1997 crop year.
List of Subjects in 7 CFR Part 457
Crop insurance, Sugar beets.
Final Rule
Pursuant to the authority contained in the Federal Crop Insurance
Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance
Corporation hereby amends the Common Crop Insurance Regulations, (7 CFR
part 457), effective for the 1997 and succeeding crop years in all
States except Arizona and California and for the 1998 and succeeding
crop years in Arizona and California, to read as follows:
PART 457--[AMENDED]
1. The authority citation for 7 CFR part 457 continues to read as
follows:
[[Page 58775]]
Authority: 7 U.S.C. 1506(1), 1506(p).
2. 7 CFR part 457 is amended by adding a new Sec. 457.109 to read
as follows:
Sec. 457.109 Sugar Beet Crop Insurance Provisions.
The Sugar Beet Crop Insurance Provisions for the 1997 and
succeeding crop years are as follows:
FCIC Policies
United States Department of Agriculture
Federal Crop Insurance Corporation
Reinsured policies
(Appropriate title for insurance provider)
Both FCIC and Reinsured Policies
Sugar Beet 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
Crop year--In Imperial, Lassen, Modoc, Shasta and Siskiyou
counties, California and all other States, the period within which
the sugar beets are normally grown, which is designated by the
calendar year in which the sugar beets are normally harvested. In
all other California counties, the period from planting until the
applicable date for the end of the insurance period which is
designated by:
(a) The calendar year in which planted if planted on or before
July 15; or
(b) The following calendar year if planted after July 15.
Days--Calendar days.
FSA--Farm Service Agency of the United States Department of
Agriculture, or a successor agency.
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--Topping and lifting of sugar beets in the field.
Initially planted--The first occurrence that land is considered
as planted acreage for the crop year.
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.
Late planted--Acreage planted to the insured crop during the
late planting period.
Late planting period--The period that begins the day after the
final planting date for the insured crop and ends twenty-five (25)
days after the final planting date.
Local market price--The price per pound for raw sugar offered by
buyers in the area in which you normally market the sugar beets.
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. Sugar beets 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 if production from the replanted
acreage cannot be delivered under the terms of the processor
contract, or 30 days after the initial planting date for all
counties where a late planting period is not applicable, unless
replanting is generally occurring in the area.
Prevented planting--Inability to plant the insured crop with
proper equipment by the final planting date designated in the
Special Provisions for the insured crop in the county or the end of
the late planting period. You must have been unable to plant the
insured crop due to an insured cause of loss that has prevented the
majority of producers in the surrounding area from planting the same
crop.
Processor--Any business enterprise regularly engaged in
processing sugar beets for sugar that possesses all licenses and
permits for processing sugar beets required by the State in which it
operates, and that possesses facilities, or has contractual access
to such facilities, with enough equipment to accept and process the
contracted sugar beets within a reasonable amount of time after
harvest.
Production guarantee (per acre):
(a) First stage production guarantee--The final stage production
guarantee multiplied by 60 percent.
(b) Final stage production guarantee--The number of tons
determined by multiplying the approved yield per acre by the
coverage level percentage you elect.
Raw sugar--Sugar that has not been extracted from the sugar
beet.
Replanting--Performing the cultural practices necessary to
replace the sugar beet seed and then replacing the sugar beet seed
in the insured acreage with the expectation of growing a successful
crop.
Standardized ton--A ton of sugar beets containing the percentage
of raw sugar specified in the Special Provisions.
Sugar beet processor contract--A written contract between the
producer and the processor, containing at a minimum:
(1) The producer's commitment to plant and grow sugar beets, and
to deliver the sugar beet production to the processor;
(2) The processor's commitment to purchase the production stated
in the contract; and
(3) A price or formula for a price based on third party data
that will be paid to the producer for the production stated in the
contract.
Thinning--The process of removing, either by machine or hand, a
portion of the sugar beet plants to attain a desired plant
population.
Timely planted--Planted on or before the final planting date
designated in the Special Provisions for the insured crop in the
county.
Ton--Two thousand (2,000) pounds avoirdupois.
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), a
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 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 records, which can be independently verified,
of planted acreage and production for each optional unit for at
least the last crop year used to determine your production
guarantee;
(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
[[Page 58776]]
be kept separate until loss adjustment is completed by us;
(4) The sugar beet processor contract provides that the
processor will accept all the production from the number of acres
designated in the contract (Acreage insured under a sugar beet
processor contract which provides that the processor will accept a
designated amount of production will not be eligible for optional
units).
(5) Each optional unit must meet one or more of the following
criteria, as applicable:
(i) 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.
(ii) 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 the irrigation system can deliver the quantity of
water needed to produce the yield on which the guarantee is based.
However, 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 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
(a) In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities)
of the Basic Provisions (Sec. 457.8), you may select only one price
election for all the sugar beets in the county insured under this
policy.
(b) The production guarantees are progressive by stages, and
increase at specified intervals to the final stage. The stages are:
(1) First stage, with a guarantee of 60 percent (60%) of the
final stage production guarantee, extends from planting until:
(i) July 1 in Lassen, Modoc, Shasta and Siskiyou counties,
California and all other States except Arizona; and
(ii) The earlier of thinning or 90 days after planting in
Arizona and all other California counties.
(2) Final stage, with a guarantee of 100 percent (100%) of the
final stage production guarantee, applies to all insured sugar beets
that complete the first stage.
(c) The production guarantee will be expressed in standardized
tons.
(d) Any acreage of sugar beets damaged in the first stage to the
extent that growers in the area would not normally further care for
the sugar beets will be deemed to have been destroyed, even though
you may continue to care for it. The production guarantee for such
acreage will not exceed the first stage production guarantee.
4. Contract Changes
In accordance with the provisions of section 4 (Contract
Changes) of the Basic Provisions (Sec. 457.8), the contract change
date is April 30 preceding the cancellation date for counties with a
July 15 or August 31 cancellation date and November 30 preceding the
cancellation date for all other counties.
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:
------------------------------------------------------------------------
State and County Cancellation date Termination date
------------------------------------------------------------------------
Arizona; and Imperial County, August 31.......... August 31.
California.
All California counties, except July 15............ November 30.
Imperial, Lassen, Modoc,
Shasta and Siskiyou.
All Other States, and Lassen, March 15........... March 15.
Modoc, Shasta and Siskiyou
Counties, California.
------------------------------------------------------------------------
6. Annual Premium
In lieu of the premium computation method contained in section 7
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual
premium amount is computed by multiplying the final stage production
guarantee by the price election, the premium rate, the insured
acreage, your share at the time of planting, and any applicable
premium adjustment factors contained in the Actuarial Table.
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 sugar
beets in the county 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 sugar beets;
(3) That are grown under a sugar beet processor contract
executed before the acreage reporting date and are not excluded from
the processor contract at any time during the crop year; and
(4) 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 prior to submitting a properly completed
application.
(b) Sugar beet growers who are also processors may establish an
insurable interest if they meet the following requirements:
(1) The processor must meet the definition of a ``processor'' in
section 1 of these crop provisions and have a valid insurable
interest in the sugar beet crop;
(2) The Board of Directors or officers of the processor must
have duly promulgated a resolution that sets forth essentially the
same terms as a sugar beet processor contract. Such resolution will
be considered a sugar beet processing contract under the terms of
the sugar beet crop insurance policy;
(3) The sales records of the processor showing the amount of
sugar produced the previous year must be supplied to us to confirm
the processor has produced and sold sugar in the past; and
(4) Our inspection of the processing facilities determines that
they conform to the definition of processor contained in section 1
of these crop provisions.
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 planted to sugar beets:
(1) The preceding crop year, unless otherwise specified in the
Special Provisions for the county;
(2) In any crop year following the discovery of rhizomania on
the acreage, unless allowed by the Special Provisions or by written
agreement; or
(3) That does not meet the rotation requirements shown in the
Special Provisions;
(b) Any acreage of the insured crop damaged before the final
planting date, (or within 30 days of initial planting for those
counties without a final planting date) to the extent that growers
in the area would normally not further care for the crop, must be
replanted unless we agree that replanting is not practical.
9. 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:
(1) July 15 in Arizona and in Imperial County, California;
(2) The last day of the 12th month after the insured crop was
initially planted in all
[[Page 58777]]
California counties except Imperial, Lassen, Modoc, Shasta and
Siskiyou;
(3) October 31 in Lassen, Modoc, Shasta and Siskiyou Counties,
California, and in Klamath County, Oregon;
(4) November 25 in Ohio;
(5) December 31 in New Mexico and Texas; and
(6) November 15 in all other States and counties.
(b) In addition to the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8), regarding the end of
the insurance period, the insurance period ends for all units when
the production delivered to the processor equals the amount of
production stated in the sugar beet processor contract.
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 within the insurance
period:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage due to insufficient or improper
application of pest control measures;
(d) Plant disease, but not damage due to insufficient or
improper application of disease control 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. Replanting Payments
(a) In accordance with section 13 (Replanting Payment) of the
Basic Provisions (Sec. 457.8), 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 (90%) of
the final stage production guarantee for the acreage and it is
practical to replant.
(b) The maximum amount of the replanting payment per acre will
be the lesser of 10 percent (10%) of the final stage production
guarantee or one ton, multiplied by your price election, multiplied
by your insured share.
(c) When sugar beets are replanted using a practice that is
uninsurable for an original planting, our liability on the unit will
be reduced by the amount of the replanting payment. The premium
amount will not be reduced.
12. 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):
(a) 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; and
(b) You must provide a copy of your sugar beet processor
contract or corporate resolution if you are the processor.
13. 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 unit, we will combine all optional units
for which acceptable production records were not provided; or
(2) For any basic unit, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for each unit.
(b) In the event of loss or damage covered by this policy, we
will settle your claim on any unit by:
(1) Multiplying the insured acreage by its respective production
guarantee;
(2) Subtracting the total production to count from the result in
paragraph (b)(1);
(3) Multiplying the result of paragraph (b)(2) by your price
election; and
(4) Multiplying the result of paragraph (b)(3) by your share.
(c) The total production to count (in standardized tons) from
all insurable acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide acceptable production records
that are acceptable to us;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (unharvested production that is
appraised prior to the earliest delivery date that the processor
accepts harvested production will not be eligible for a conversion
to standardized tons in accordance with section 13 (d) and (e));
(iv) Only appraised production in excess of the difference
between the first and final stage production guarantee for acreage
that does not qualify for the final stage guarantee will be counted,
except that all production from acreage subject to section 13(c)(1)
(i) and (ii) will be counted; and
(v) 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 if you put the acreage to another use or
abandon the crop. If agreement on the appraised amount of production
is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to
leave intact, and provide sufficient care for, representative
samples of the crop in locations acceptable to us (The amount of
production to count for such acreage will be based on the harvested
production or appraisals from the samples at the time harvest should
have occurred. If you do not leave the required samples intact, or
you fail to provide sufficient care for the samples, our appraisal
made prior to giving you consent to put the acreage to another use
will be used to determine the amount of production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested
production, or our reappraisal if additional damage occurs and the
crop is not harvested; and
(2) All harvested production from the insurable acreage.
(d) Harvested production or unharvested production that is
appraised after the earliest delivery date that the processor
accepts harvested production and that meets the minimum acceptable
standards contained in the sugar beet processor contract or
corporate resolution will be converted to standardized tons by:
(1) Dividing the average percentage of raw sugar in such sugar
beets by the raw sugar content percentage shown in the Special
Provisions; and
(2) Multiplying the result (rounded to three places) by the
number of tons of such sugar beets.
The average percentage of raw sugar will be determined from
tests performed by the processor at the time of delivery. If
individual tests of raw sugar content are not made at the time of
delivery, the average percent of raw sugar may be based on the
results of previous tests performed by the processor during the crop
year if it is determined that such results are representative of the
total production. If not representative, the average percent of raw
sugar will equal the raw sugar content percent shown in the Special
Provisions.
(e) Harvested production or unharvested production that is
appraised after the earliest delivery date that the processor
accepts harvested production and that does not meet the minimum
acceptable standards contained in the sugar beet processor contract
due to an insured peril will be converted to standardized tons by:
(1) Dividing the gross dollar value of all of the damaged sugar
beets on the unit (including the value of cooperative stock,
patronage refunds, etc.) by the local market price per pound on the
earlier of the date such production is sold or the date of final
inspection for the unit;
(2) Dividing that result by 2,000; and
(3) Dividing that result by the county average raw sugar factor
contained in the Special Provisions for this purpose.
For example, assume that the total dollar value of the damaged
sugar beets is $6,000.00; the local market price is $0.10; and the
county average raw sugar factor is 0.15. The amount of production to
count would be calculated as follows:
(($6,000.00$0.10)2,000)0.15=200 tons.
14. Late and Prevented Planting
(a) In lieu of provisions contained in the Basic Provisions
(Sec. 457.8) regarding acreage initially planted after the final
planting date and the applicability of a Late Planting Agreement
Option, insurance will be provided for acreage planted to the
insured crop during the late planting period (see section 14(c)),
and acreage you were prevented from planting (see section 14(d)).
These coverages provide reduced production guarantees and are
applicable in all counties except California counties with a July 15
cancellation date. The premium amount for late planted acreage and
eligible prevented planting acreage will be the same as that for
timely planted acreage. If the amount of
[[Page 58778]]
premium you are required to pay (gross premium less our subsidy) for
late planted acreage or prevented planting acreage exceeds the
liability on such acreage: coverage for those acres will not be
provided; no premium will be due; and no indemnity will be paid for
such acreage.
(b) You must provide written notice to us not later than the
acreage reporting date if you were prevented from planting.
(c) Late planting.
(1) For sugar beet acreage planted during the late planting
period, the production guarantee for the applicable stage for each
acre will be reduced for each day planted after the final planting
date by:
(i) One percent (1%) for the 1st through the 10th day; and
(ii) Two percent (2%) for the 11th through the 25th day.
(2) In addition to the requirements of section 6 (Report of
Acreage) of the Basic Provisions (Sec. 457.8), you must report the
dates the acreage is planted within the late planting period.
(3) If planting of sugar beets continues after the final
planting date, or you are prevented from planting during the late
planting period, the acreage reporting date will be the later of:
(i) The acreage reporting date contained in the Special
Provisions for the insured crop; or
(ii) Five (5) days after the end of the late planting period.
(d) Prevented Planting (Including Planting After the Late
Planting Period)
(1) If you were prevented from timely planting sugar beets, you
may elect:
(i) To plant sugar beets during the late planting period. The
production guarantee for such acreage will be determined in
accordance with section 14(c)(1);
(ii) Not to plant this acreage to any crop except a cover crop
not for harvest. You may also elect to plant the insured crop after
the late planting period. In either case, the production guarantee
for such acreage will be 35 percent of the final stage production
guarantee for timely planted acres. For example, if your final stage
production guarantee for timely planted acreage is 20.0 tons per
acre, your prevented planting production guarantee would be 7.0 tons
per acre (20.0 tons multiplied by 0.35). If you elect to plant the
insured crop after the late planting period, production to count for
such acreage will be determined in accordance with section 13; or
(iii) Not to plant the intended crop but plant a substitute crop
for harvest, in which case:
(A) No prevented planting production guarantee will be provided
for such acreage if the substitute crop is planted on or before the
10th day following the final planting date for the insured crop; or
(B) A production guarantee equal to 17.5 percent of the final
stage production guarantee for timely planted acres will be provided
for such acreage, if the substitute crop is planted after the 10th
day following the final planting date for the insured crop. If you
elected the Catastrophic Risk Protection Endorsement or excluded
this coverage, and plant a substitute crop, no prevented planting
coverage will be provided. For example, if your final stage
production guarantee for timely planted acreage is 20.0 tons per
acre, your prevented planting production guarantee would be 3.5 tons
per acre (20.0 ton multiplied by 0.175). You may elect to exclude
prevented planting coverage when a substitute crop is planted for
harvest and receive a reduction in the applicable premium rate. If
you wish to exclude this coverage, you must so indicate, on or
before the sales closing date, on your application or on a form
approved by us. Your election to exclude this coverage will remain
in effect from year to year unless you notify us in writing on our
form by the applicable sales closing date for the crop year for
which you wish to include this coverage. All acreage of the crop
insured under this policy will be subject to this exclusion.
(2) Production guarantees for timely, late, and prevented
planting acreage within a unit will be combined to determine the
production guarantee for the unit. For example, assume you insure 1
unit in which you have a 100 percent share. The unit consists of 150
acres, of which 50 acres were planted timely, 50 acres were planted
7 days after the final planting date (late planted), and 50 acres
were not planted but are eligible for a prevented planting
production guarantee. The production guarantee for the unit will be
computed as follows:
(i) For the timely planted acreage, multiply the per acre
production guarantee for timely planted acreage by the 50 acres
planted timely;
(ii) For the late planted acreage, multiply the per acre
production guarantee for timely planted acreage by 93 percent and
multiply the result by the 50 acres planted late; and
(iii) For prevented planting acreage, multiply the final stage
per acre production guarantee for timely planted acreage by:
(A) Thirty five percent and multiply the result by the 50 acres
you were prevented from planting, if the acreage is eligible for
prevented planting coverage, and if the acreage is left idle for the
crop year, or if a cover crop is planted not for harvest. Prevented
planting compensation hereunder will not be denied because the cover
crop is hayed or grazed; or
(B) Seventeen and one-half percent and multiply the result by
the 50 acres you were prevented from planting, if the acreage is
eligible for prevented planting coverage, and if you elect to plant
a substitute crop for harvest after the 10th day following the final
planting date for the insured crop. (This subparagraph (B) is not
applicable, and prevented planting coverage is not available
hereunder, if you elected the Catastrophic Risk Protection
Endorsement or you elected to exclude prevented planting coverage
when a substitute crop is planted (see section 14(d)(1)(iii)).)
Your premium will be based on the result of multiplying the per
acre production guarantee for timely planted acreage by the 150
acres in the unit.
(3) You must have the inputs available to plant and produce the
intended crop with the expectation of at least producing the
production guarantee. Proof that these inputs were available may be
required.
(4) In addition to the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8), the insurance period
for prevented planting coverage begins:
(i) On the sales closing date contained in the Special
Provisions for the insured crop in the county for the crop year the
application for insurance is accepted; or
(ii) For any subsequent crop year, on the sales closing date for
the insured crop in the county for the previous crop year, provided
continuous coverage has been in effect since that date. For example:
If you make application and purchase insurance for sugar beets for
the 1997 crop year, prevented planting coverage will begin on the
1997 sales closing date for sugar beets in the county. If the sugar
beet coverage remains in effect for the 1998 crop year (is not
terminated or canceled during or after the 1997 crop year),
prevented planting coverage for the 1998 crop year began on the 1997
sales closing date. Cancellation for the purpose of transferring the
policy to a different insurance provider when there is no lapse in
coverage will not be considered terminated or canceled coverage for
the purpose of the preceding sentence.
(5) The acreage to which prevented planting coverage applies
will not exceed the total eligible acreage on all FSA Farm Serial
Numbers in which you have a share, adjusted for any reconstitution
that may have occurred on or before the sales closing date. Eligible
acreage for each FSA Farm Serial Number is determined as follows:
(i) Eligible acreage will not exceed the number of acres
required to be grown in the current crop year under a contract
executed with a processor prior to the acreage reporting date or the
number of acres needed to produce the amount of contracted
production based on the APH yield for the acreage.
(ii) Acreage intended to be planted under an irrigated practice
will be limited to the number of acres for which you had adequate
irrigation facilities prior to the insured cause of loss which
prevented you from planting.
(iii) A prevented planting production guarantee will not be
provided for any acreage:
(A) That does not constitute at least 20 acres or 20 percent of
the acreage in the unit, whichever is less (Acreage that is less
than 20 acres or 20 percent of the acreage in the unit will be
presumed to have been intended to be planted to the insured crop
planted in the unit, unless you can show that you had the inputs
available before the final planting date to plant and produce
another insured crop on the acreage);
(B) For which the actuarial table does not designate a premium
rate unless a written agreement designates such premium rate;
(C) Used for conservation purposes or intended to be left
unplanted under any program administered by the United States
Department of Agriculture;
(D) On which another crop is prevented from being planted, if
you have already received a prevented planting indemnity, guarantee
or amount of insurance for the same acreage in the same crop year,
unless you provide adequate records of acreage and production
showing that the acreage was double-cropped in each of the last 4
years;
(E) On which the insured crop is prevented from being planted,
if any other crop is
[[Page 58779]]
planted and fails, or is planted and harvested, hayed or grazed on
the same acreage in the same crop year, (other than a cover crop as
specified in section 14(d)(2)(iii)(A), or a substitute crop allowed
in section 14 (d)(2)(iii)(B), unless you provide adequate records of
acreage and production showing that the acreage was double-cropped
in each of the last 4 years;
(F) When coverage is provided under the Catastrophic Risk
Protection Endorsement if you plant another crop for harvest on any
acreage you were prevented from planting in the same crop year, even
if you have a history of double-cropping. If you have a Catastrophic
Risk Protection Endorsement and receive a prevented planting
indemnity, guarantee, or amount of insurance for a crop and are
prevented from planting another crop on the same acreage, you may
only receive the prevented planting indemnity, guarantee, or amount
of insurance for the crop on which the prevented planting indemnity,
guarantee, or amount of insurance is received; or
(G) For which planting history or conservation plans indicate
that the acreage would have remained fallow for crop rotation
purposes.
(iv) For the purpose of determining eligible acreage for
prevented planting coverage, acreage for all units will be combined
and be reduced by the number of sugar beet acres timely planted and
late planted. For example, assume you have 100 acres eligible for
prevented planting coverage in which you have a 100 percent (100%)
share. The acreage is located in a single FSA Farm Serial Number
which you insure as two separate optional units consisting of 50
acres each. If you planted 60 acres of sugar beets on one optional
unit and 40 acres of sugar beets on the second optional unit, your
prevented planting eligible acreage would be reduced to zero (i.e.,
100 acres eligible for prevented planting coverage minus 100 acres
planted equals zero).
(6) In accordance with the provisions of section 6 (Report of
Acreage) of the Basic Provisions (Sec. 457.8), you must report by
unit any insurable acreage that you were prevented from planting.
This report must be submitted on or before the acreage reporting
date. For the purpose of determining acreage eligible for a
prevented planting production guarantee, the total amount of
prevented planting and planted acres cannot exceed the maximum
number of acres eligible for prevented planting coverage. Any
acreage you report in excess of the number of acres eligible for
prevented planting coverage, or that exceeds the number of eligible
acres physically located in a unit, will be deleted from your
acreage report.
15. Written Agreements
Designated terms of this policy may be altered by written
agreement. The following conditions will apply:
(a) You must apply in writing for each written 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, 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.
(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, DC, on November 13, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-29560 Filed 11-18-96; 8:45 am]
BILLING CODE 3410-FA-P
