[Federal Register Volume 59, Number 40 (Tuesday, March 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4551]


[[Page Unknown]]

[Federal Register: March 1, 1994]


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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation

7 CFR Part 457

 

Common Crop Insurance Regulations; Fig Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Interim rule.

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SUMMARY: The Federal Crop Insurance Corporation hereby issues 
additional regulations for provisions to insure figs. This action will 
add a second set of fig regulations, the Fig Crop Insurance Provisions, 
to the crop insurance regulations. The present regulations are based on 
the Marketing Order for Dried Figs that was in effect at the time the 
regulations were promulgated. This marketing order has since been 
amended which severely reduces the amount of indemnity to which the 
insured may otherwise have been entitled. These new regulations will 
provide quality adjustment provisions and reflect the lower prices 
received for figs based on the grades contained in the amended 
marketing order. The intended effect of this action is to offer 
insurance on figs with added coverage for quality adjustment that is 
not in the current Fig Endorsement.

DATES: This rule was effective on February 1, 1994. Comments, data, and 
opinions must be received by May 2, 1994.

ADDRESSES: Written comments on this rule should be sent to Mari 
Dunleavy, Regulatory and Procedural Development Staff, Federal Crop 
Insurance Corporation, USDA, Washington, DC 20250.

FOR FURTHER INFORMATION CONTACT:
Mari L. Dunleavy, Regulatory and Procedural Development Staff, Federal 
Crop Insurance Corporation, USDA, Washington, DC 20250. Telephone (202) 
254-8314.

SUPPLEMENTARY INFORMATION: This rule has been determined not 
significant for purposes of Executive Order 12866 and therefor has not 
been reviewed by the Office of Management and Budget.
    This rule does not contain information collections that require 
clearance by the Office of Management and Budget under the provisions 
of 44 U.S.C. chapter 35, the Paper Reduction Act.
    The Office of General Counsel, as the Designated Official under 
section 6(a) of Executive Order 12612, Federalism, has determined that 
the policies and procedures contained in this rule will not have 
substantial direct effects on states or their political subdivisions, 
or on the distribution of power and responsibilities among the various 
levels of government.
    This action requires no more of the reinsured company or sales and 
service contractor than is considered normal in the ordinary conduct of 
business. Therefore, this action is determined to be exempt from the 
provisions of the Regulatory Flexibility Act and no Regulatory 
Flexibility Analysis was prepared.
    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.
    This program is not subject to the provisions of Executive Order 
12372 which requires intergovernmental consultation with state and 
local officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.
    The Manager, FCIC, has certified to the Office of Management and 
Budget (OMB) that these regulations meet the applicable standards 
provided in subsections 2(a) and 2(b)(2) of Executive Order 12778.
    This rule has been reviewed in accordance with Executive Order 
12778. The provisions of this rule will preempt state and local laws to 
the extent such state and local laws are inconsistent herewith. The 
administrative appeal provisions located at 7 CFR part 400, subpart J 
must be exhausted before judicial action may be brought. The rule is 
retroactive to February 1, 1994 so as to allow insureds the opportunity 
to purchase this policy prior to the sales closing date. Because the 
Corporation has publicized the policy and the provisions of the rule to 
all companies and fig policyholders, those persons have actual notice 
of the contents of the rule and will not be adversely affected by the 
rule's retroactivity.
    This action is not expected to have any significant impact on the 
quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.
    Expedited publication of this additional fig insurance policy is 
necessary in order for FCIC to be responsive to the effects that the 
amended California Marketing Order for Dry Figs has upon fig producers 
insured by FCIC. It is necessary to promulgate the new policy so that 
insureds will be fully compensated from any loss under the 1994 crop 
year policy, therefore, good cause is found to make this rule final 
upon publication.

Background

    During the 1992 crop year the California Fig Advisory Board amended 
the State Marketing Order for Dried Figs. Prior to the amendment, figs 
were graded merchantable or substandard. The amended marketing order 
provides three grades: regular dried figs (previously merchantable); 
manufacturing grade (new grade added); and substandard.
    The current fig endorsement contained in 7 CFR 401.125 specifies in 
subsection 7.(b) that the total production to be counted for a unit 
will include all harvested and appraised marketable figs as defined by 
the Marketing Order for Dried Figs, as amended. Paragraph 7.(b)(1) of 
the current fig endorsement further specifies that substandard 
production will not be counted as production if such production is 
inspected by the insurer and the insurer gives written consent to the 
insured to deliver the figs to the substandard pool. If substandard 
production is not inspected or written consent is not given prior to 
delivery to the substandard pool, all such production will be counted 
as marketable production.
    Figs which now grade manufacturing under the new marketing order 
would have graded substandard under the previous marketing order and 
would not have counted as production if written consent was given prior 
to delivery to the substandard pool. However, due to the new marketing 
order, manufacturing grade figs are sold through normal marketing 
outlets and therefore, consistent with the current fig crop insurance 
regulations, are considered production to count. The price received for 
manufacturing grade figs is considerably lower than the price received 
for regular dried figs. In 1992, manufacturing grade figs sold for 35 
cents a pound and regular dried figs sold for 82 cents per pound. Under 
the current figs endorsement, manufacturing grade and regular dried 
figs are counted equally as production to count. The new Fig Crop 
Insurance Provisions provide a method to allow an insured to sell his 
manufacturing grade figs while also providing the insurer with a method 
to include the sale as a part of the insured production.
    This rule is being promulgated to provide for a quality adjustment 
on production to count in order to offset the lower price received for 
manufacturing grade figs resulting from an insurable cause of loss.

List of Subjects in 7 CFR Part 457

    Crop insurance, Figs.

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) in the following instances:

PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE 
1994 AND SUBSEQUENT CONTRACT YEARS

    1. The authority citation for 7 CFR part 457 continues to read as 
follows:

    Authority: 7 U.S.C. 1506, 1516.

    2. 7 CFR part 457 is amended by adding a new section, Sec. 457.110 
Fig Crop Insurance Provisions, to read as follows:


Sec. 457.110  Fig Crop Insurance Provisions.

    The Fig Crop Insurance Provisions for the 1994 and subsequent crop 
years are as follows:

United States Department of Agriculture--Federal Crop Insurance 
Corporation

Fig Crop Provisions

    If a conflict exists between the Common Crop Insurance Policy 
(Sec. 457.8) and the Special Provisions, the Special Provisions will 
control. If a conflict exists between these Crop Provisions and the 
Special Provisions, the Special Provisions will control.

1. Definitions

    (a) Good farming practices--The cultural practices necessary for 
the insured crop to make usual and normal progress toward maturity 
and which can be expected to produce at least the yield used to 
determine the production guarantee. Good farming practices are 
generally those in use in the county for production of the insured 
crop and are recognized by the Cooperative Extension Service as 
compatible with agronomic and weather conditions in the area.
    (b) Harvest--The picking of the figs from the trees or ground by 
hand or machine for the purpose of removal from the orchard.
    (c) 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 for the insured crop.
    (d) Manufacturing grade production--Production that meets the 
minimum grade standards and is defined as ``manufacturing grade'' by 
the Marketing Order for Dried Figs, as amended, which is in effect 
on the date insurance attaches.
    (e) Marketable figs--Figs that grade manufacturing grade or 
better in accordance with the Marketing Order for Dried Figs, as 
amended, which is in effect on the date insurance attaches.
    (f) Noncontiguous land--Land which is not touching at any point, 
except that land which is separated by only a public or private 
right-of-way will be considered contiguous.
    (g) Production guarantee--The number of pounds determined by 
multiplying the approved yield per acre by the coverage level 
percentage you elect.
    (h) Substandard production--Production that does not meet 
minimum grade standards and is defined as ``substandard'' by the 
Marketing Order for Dried Figs, as amended, which is in effect on 
the date insurance attaches.

2. Unit Division

    In addition to the provisions of subsection 1.(tt) of the Common 
Crop Insurance Policy (Sec. 457.8), a unit will consist of all the 
insurable acreage of an insurable type of fig in the county. Unless 
limited by the Special Provisions, these units may be further 
divided into optional units if, for each optional unit you claim, 
all the conditions of subsections 2.(a), and (b) are met, or if we 
agree in writing. Optional units must be established at the time you 
file your report of acreage for each crop year.
    (a) You must have verifiable records of acreage and production 
for each optional unit for at least the last crop year used to 
determine your production guarantee.
    (b) The acreage of insured figs must be located on noncontiguous 
land. Basic units may not be divided into optional units on any 
basis (production practice, type, variety, planting period, etc.) 
other than as described under this section. If you do not comply 
fully with these conditions, we will combine all optional units 
which are not established in compliance with these provisions into 
the basic unit from which they were formed. We may do this at any 
time we discover that you have failed to comply with these 
conditions. If failure to comply with these provisions is determined 
to be inadvertent, and if the optional units are recombined, the 
premium paid for electing optional units will be refunded to you.

3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities

    In addition to the requirements under section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) 
of the Common Crop Insurance Policy (Sec. 457.8), you may select 
only one price election for each fig type designated in the Special 
Provisions, and insured in the county under this policy.

4. Contract Changes

    The contract change date is October 31 preceding the 
cancellation date (see the provisions under section 4 (Contract 
Changes) of the Common Crop Insurance Policy (Sec. 457.8)).

5. Cancellation and Termination Dates

    The cancellation and termination dates are February 28.

6. Report of Acreage

    By applying for fig crop insurance, you authorize us to have 
access to and to determine or verify your production and acreage 
from records maintained by the California Fig Advisory Board and the 
fig packer.

7. Insured Crop

    The crop insured will be all the commercially grown dried figs 
that are grown in the county on insurable acreage, and for which a 
premium rate is provided by the actuarial table:
    (a) In which you have a share;
    (b) That are grown for harvest as dried figs;
    (c) That are irrigated;
    (d) That have reached the seventh growing season after being set 
out; and
    (e) For which acceptable production records for at least the 
previous crop year are provided;
    (f) That are not figs:
    (1) Grown on acreage with less than 90 percent of a stand based 
on the original planting pattern unless we agree, in writing, to 
insure such figs;
    (2) Which we inspect and consider not acceptable;
    (3) Grown for the crop year the application is filed unless 
inspected and accepted by us; or
    (4) Grown on acreage acquired for the crop year unless such 
acreage has been inspected and accepted by us.

8. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of 
the Common Crop Insurance Policy (Sec. 457.8), insurance attaches on 
each unit the later of the date you submit your application or March 
1 of the crop year and ends at the earliest of:
    (a) Total destruction of the fig crop;
    (b) The date harvest of the figs (by type) should have started 
on any acreage that will not be harvested;
    (c) Harvest of the figs;
    (d) Final adjustment of a loss;
    (e) Abandonment of the crop; or
    (f) October 31 of the crop year.

9. Causes of Loss

    (a) In addition to the provisions under section 12 (Causes of 
Loss) of the Common Crop Insurance Policy (Sec. 457.8), any loss 
covered by this policy must occur within the insurance period. The 
specific causes of loss for figs are:
    (1) Adverse weather conditions;
    (2) Earthquake;
    (3) Fire;
    (4) Volcanic eruption;
    (5) Wildlife; or
    (6) Failure of the irrigation water supply.
    (b) In addition to the causes of loss not insured against 
contained in section 12 (Causes of Loss) of the Common Crop 
Insurance Policy (Sec. 457.8), we will not insure against:
    (1) Any loss of production due to fire, where weeds and other 
forms of undergrowth have not been controlled or tree pruning debris 
has not been removed from the grove; or
    (2) The inability to market the fruit as a direct result of 
quarantine, boycott, or refusal of any entity to accept production.

10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event 
you are unable to provide records of production that are acceptable 
to us for any:
    (1) Optional unit, we will combine all optional units for which 
acceptable records of production were not provided; or
    (2) 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 by:
    (1) Multiplying the insured acreage by the production guarantee;
    (2) Subtracting from this the total production to count;
    (3) Multiplying the remainder by your price election; and
    (4) Multiplying this result by your share.
    (c) The total production (pounds) to count from all insurable 
acreage on the unit will include all harvested and appraised 
marketable figs.
    (1) Figs, which due to insurable causes, grade manufacturing 
grade will be adjusted by:
    (i) Dividing the value per pound of the manufacturing grade 
production by the highest price election available for the insured 
type; and
    (ii) Multiplying the result (not to exceed 1) by the number of 
pounds of such manufacturing grade production.
    (2) Figs, which due to insurable causes, grade substandard and 
are delivered to the substandard pool will not be considered 
production to count, provided all the insured's substandard 
production is inspected by us and we give written consent to such 
delivery prior to delivery. If we do not give written consent prior 
to the delivery to the substandard pool, all production will be 
counted as undamaged marketable production. Substandard production 
for which we give written consent to you prior to delivery to the 
substandard pool, which is not delivered to the substandard pool, 
and is sold by you, will be considered production to count and 
adjusted as follows:
    (i) Dividing the value per pound received for such substandard 
production by the highest price election available for the insured 
type; and
    (ii) Multiplying the result (not to exceed 1) by the number of 
pounds of such substandard production.
    (3) Appraised production to be counted will include:
    (i) Potential production lost due to uninsured causes and 
failure to follow recognized good fig farming practices;
    (ii) Not less than the production guarantee for the figs on any 
acreage:
    (A) That is abandoned without our consent;
    (B) Damaged solely by uninsured causes;
    (c) If the figs are destroyed by you without our consent; or
    (D) For which you fail to provide records of production that are 
acceptable to us;
    (iii) Unharvested production which would be marketable if 
harvested; and
    (iv) Potential production on insured acreage that you want to 
abandon and no longer care for if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for 
that acreage will end if you abandon the crop. If agreement on the 
appraised amount of production is not reached:
    (A) We may require you to continue to care for the crop so that 
a subsequent appraisal may be made or the crop harvested to 
determine actual production. You must notify us within three days of 
the date harvest should have started if the crop is not harvested; 
or
    (B) You may elect to continue to care for the crop. We will 
determine the amount of production to count for the acreage using 
the harvested production or our reappraisal if the crop is not 
harvested.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 94-4551 Filed 2-28-94; 8:45 am]
BILLING CODE 3410-08-M