[Federal Register Volume 59, Number 186 (Tuesday, September 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23834]


[[Page Unknown]]

[Federal Register: September 27, 1994]


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DEPARTMENT OF AGRICULTURE
7 CFR Part 457

 

Common Crop Insurance Regulations; Coarse Grains Crop Insurance 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) hereby adopts 
regulations for specific crop provisions to insure coarse grains (corn, 
grain sorghum, and soybeans). These provisions will supplement the 
Common Crop Insurance Policy which contains standard terms and 
conditions common to most crops. This rule consolidates the provisions 
for insuring coarse grains into one policy and provides insurance for 
corn intended to be harvested as silage and corn intended to be 
harvested as grain without the previously required corn silage option. 
The intended effect of this rule is to move specific crop provisions 
for insuring coarse grains from the General Crop Insurance Policy 
(Sec. 401.8) to the Common Crop Insurance Policy for ease of use by the 
public and conformance among policy terms.

EFFECTIVE DATE: October 27, 1994.

FOR FURTHER INFORMATION CONTACT:
Mari L. Dunleavy, Regulatory and Procedural Development, Federal Crop 
Insurance Corporation, U.S. Department of Agriculture, Washington, DC 
20250, telephone (202) 254-8314.

SUPPLEMENTARY INFORMATION: This action has been reviewed under USDA 
procedures established by Executive Order 12866 and Departmental 
Regulation 1512-1. 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 
March 1, 1999.
    This rule has been determined to be ``not significant'' for 
purposes of Executive Order 12866 and therefore, has not been reviewed 
by the Office of Management and Budget (OMB).
    In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. 
3501 et seq.), the information collection or record-keeping 
requirements included in this rule can be found in 7 CFR part 400, 
subpart H.
    It has been determined under section 6(a) of Executive Order 12612, 
Federalism, that this rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment. The 
policies and procedures contained in this rule will not have 
substantial direct effects on states of their political subdivisions, 
or on the distribution of power and responsibilities among various 
levels of government.
    This action will not have a significant impact on a substantial 
number of small entities. The amount of work required of the insurance 
companies delivering these policies will not increase from the amount 
of work required to deliver previous policies. The combination of a 
number of previously independent policies into one policy should ease 
program administration and increase efficiency. 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 Office of General Counsel has determined that these regulations 
meet the applicable standards provided in subsections 2(a) and 2(b)(2) 
of Executive Order 12788. 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.
    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.
    This rule will provide one policy form for insuring corn, grain 
sorghum, and soybeans and provide insurance for corn intended to be 
harvested as silage and corn intended to be harvested as grain without 
the previously required corn silage option. Using one policy for these 
three crops will: (1) Substantially reduce paperwork by issuing one 
policy form rather than the three separate policies previously used; 
(2) reduce the time involved to amend or revise the provisions by 
eliminating repetitious review processes; and (3) continue to allow 
insured the flexibility to elect any of the three coarse grain crops 
they wish to insure.
    By separate rule, FCIC will revise and later remove the corn, grain 
sorghum and soybean endorsements contained in 7 CFR 401.111, 7 CFR 
401.113 and 7 CFR 401.117 and the Corn Silage Option contained in 7 CFR 
401.112. These regulations will be amended to restrict the crop years 
of application to those prior to the crop year for which this rule will 
be effective.
    On Tuesday, May 31, 1994, FCIC published a notice of proposed 
rulemaking in the Federal Register at 59 FR 28016 proposing to revise 
the Common Crop Insurance Regulations by adding new provisions for 
corn, grain sorghum, and soybean crop insurance.
    Following publication of the proposed rule, the public was afforded 
30 days to submit written comments, data, and opinions. Comments were 
received from the crop insurance industry. The comments received and 
FCIC responses are as follows:
    Comment: Two comments suggested that the crop provisions should not 
be implemented for the 1995 crop year because:
    (1) Crop insurance reform will require many policy changes. 
Implementation of these crop provisions should be tabled until reform 
decisions are reached because impacts on policy terms are not yet 
clear. Delaying common policy implementation until it can be 
implemented in an orderly fashion should be beneficial to everyone 
concerned; and
    (2) The Common Crop Insurance Policy should be thoroughly reviewed 
and revised as needed before any additional crop provisions are 
implemented under it.
    Response: Program changes necessary to comply with crop insurance 
reform will have the same effects on either the existing policies or 
these Coarse Grains Crop Provisions. Any necessary changes can more 
easily be made to the Coarse Grains Crop Provisions as to the existing 
policies since only one policy will need to be amended. FCIC has 
recently completed a review of the Common Crop Insurance Policy Basic 
Provisions (Sec. 457.8). Any necessary changes required to be made to 
the Basic Provisions as a result of this review or as a result of 
reform will be required whether or not the Coarse Grains Crop 
Provisions have been implemented. Therefore, FCIC does not find it 
necessary to delay implementation for either of the reasons stated in 
the comments.
    Comment: Two comments were received regarding the proposed 
definition of ``Planted acreage.'' This definition requires the crop to 
be planted in rows far enough apart to permit mechanical cultivation 
unless otherwise provided by the Special Provisions, or allowed by 
written agreement.
    (1) One comment stated that drilling soybeans is a widespread 
practice and that the definition should include drilling as an 
insurable planting practice for soybeans. The comment also suggested 
that the Special Provisions could contain restrictions for any counties 
where drilled soybeans are uninsurable unless a written agreement is 
requested.
    (2) One comment assumed that the Special Provisions will continue 
to allow for drilling the crops in the same areas as in the past.
    Response: FCIC acknowledges that planting of soybeans and grain 
sorghum with a grain drill rather than a row planter is a common 
practice in some areas. The definition has been modified by removing 
the requirement to plant soybeans and grain sorghum in rows far enough 
apart to permit mechanical cultivation. Since the crop provisions allow 
insurance for drilled soybeans and grain sorghum, it will not be 
necessary for the Special Provisions to specifically allow such 
practice. If necessary, the Special Provisions which are provided to 
the insured could restrict the insurability of this planting method in 
a particular area.
    Comment: One comment questioned requirements contained in the 
definition of ``Practical to replant.'' This definition indicated that 
the replanted acreage must have the potential to produce at least 
ninety percent (90%) of the production guarantee. Late planting 
provisions provide production guarantees much lower than the ninety 
percent (90%) potential requirement contained in the definition even 
though the late planted and replanted crop may be planted at the same 
time. The comment recommended removing the production potential 
requirement from the definition of ``Practical to replant.''
    Response: FCIC agrees that the production potential required by the 
definition of ``Practical to replant'' and the production guarantee for 
late planted acreage may be inconsistent depending on the time of 
planting. Acreage initially planted twenty-five (25) days after the 
final planting date would have a production guarantee equal to sixty 
(60%) of the guarantee for timely planted acreage, while the definition 
of ``Practical to replant'' would require acreage replanted at the same 
time to have a production potential equal to ninety percent (90%) of 
the production guarantee. However, expected yield does have an effect 
on whether it is practical to replant. The ninety percent (90%) 
production potential requirement has been removed from the definition 
of ``Practical to replant''. However, the expected yield must be 
sufficient to cover production costs and must be at a level that 
growers in the area would normally care for and harvest.
    Comment: One comment recommended changing the term ``approved 
yield'' to ``approved APH yield'' in the definition of ``Production 
guarantee'' to correspond with terminology in underwriting procedure.
    Response: Underwriting procedure contains several methods which may 
be used to determine approved yields. These include the use of yields 
which may not represent actual production history (APH). Using the term 
``APH'' could be misleading to readers not familiar with administrative 
procedures, and, therefore will not be used in the crop insurance 
policy.
    Comment: Three comments disagreed with the definition of ``Written 
agreement.'' This definition required written agreements to be 
requested at least 15 days prior to the sales closing date.
    (1) One comment recommended keeping the current deadlines for 
written agreements as specified in procedures. These procedures require 
that requests be made not later than 15 days after the acreage 
reporting date for most types of written agreements. Setting a deadline 
15 days prior to the sales closing date will either force insureds to 
submit requests for written agreements they may not need, or result in 
uninsurable acreage if requests are not made for all possible 
situations. Unnecessary requests will increase paperwork for the 
insured, agent, FCIC Regional Service Office and company. The comment 
also recommended deleting the last sentence of the definition, which 
required written agreements to contain all variable terms including, 
but not limited to, crop variety, guarantee, premium and price 
election. The comment did not believe it was necessary to include this 
information on every written agreement because many written agreements 
do not alter these items.
    (2) One comment recommended keeping the deadline of 15 days after 
the acreage reporting date because there are many instances when it is 
not known that a written agreement is necessary until the acreage is 
reported. The comment stated that the change would be an unreasonable 
requirement and would create difficulties since the sales closing dates 
will be 30 days earlier than in prior years.
    (3) One comment stated that it is hard to understand why the 
written agreement deadline is 15 days prior to the time a producer has 
to purchase coverage and that a more appropriate date should be 
established. The comment also stated that the sales closing dates are 
not listed in the proposed crop provisions. If these are to be the same 
dates as the cancellation and termination dates, the policy should so 
indicate.
    Response: The proposed definition was intended to require that 
requests for written agreements be made far enough ahead of the sales 
closing date to allow the insurer to make the offer, and the insured to 
accept the offer, by the sales closing date. Since the insurance policy 
is a written contract, both parties must have a meeting of the minds 
before the contract is valid. The terms and conditions of the policy 
must be known by the final date for establishing the insurance 
contract. In this program, the final date is the sales closing date. 
FCIC has determined that some situations may allow written agreements 
at other times. FCIC is preparing proposed written agreement 
regulations which will specify when written agreements must be 
completed. Until these regulations have been published, the written 
agreement must be completed by the sale closing date, or, in specific 
instances, a written agreement may be requested or approved after the 
sales closing date if the crop is physically inspected and a 
determination made that the crop has an expectancy of making the 
guaranteed yield. No prevented planting liability will be established 
as a result of any request submitted after the sales closing date. FCIC 
does not agree that the final sentence should be deleted. Specifying 
all variable terms in the written agreement is necessary to assure a 
clear understanding of the terms in effect.
    Although the sales closing dates normally will be the same as the 
cancellation and termination dates, this is not always the case. 
Therefore, the sales closing dates will not be included in the crop 
provisions. Federal regulations authorize the Manager of FCIC to extend 
the sales closing date in any county upon the Manager's determination 
that no adverse selection will result during the extended period. The 
extended date is placed on file in the applicable service offices and a 
notice is placed in the Federal Register. If the sales closing dates 
were contained in the crop provisions, the crop provisions would need 
to be amended each time a sales closing date is extended.
    Comment: One comment stated that unit division language contained 
in subsection 2.(b) should allow for situations where the insured 
creates a discernible break by some tillage operation. The proposed 
provision states that the insured must plant the crop in a manner that 
results in a clear and discernible break in the planting pattern at the 
boundaries of each optional unit. There is no required method of 
creating a boundary as long as a discernible break is provided.
    Response: The intent of the policy language is to allow separate 
optional units if acreage is farmed separately. Farming separately 
includes planting separately and keeping separate records of inputs, 
production, etc. Creating a boundary after the crop is planted by means 
of a tillage operation along a section line may or may not meet the 
policy requirement of planting the crop in a manner that results in a 
clear and discernable break at the units boundary. FCIC believes the 
present language clearly sets out the requirements for unit division.
    Comment: One comment stated that subsection 3.(b) requires the 
application to be revised when corn is harvested in a manner other than 
reported, and that procedure should indicate how this revision is to be 
made.
    Response: Language in subsection 3.(b) does not require the 
application to be revised to elect a price election for the method of 
harvest (grain/silage) when the insured did not select an appropriate 
price election. The price specified in this provision will only be used 
to establish ``the dollar amount of production to count for indemnity 
purposes.'' If an insured only selected a grain price election and 
reported the acreage as intended for harvest as grain, but harvested 
the acreage for silage, the amount of insurance is determined by 
multiplying the production guarantee for grain by the price election 
selected by the insured for grain. The value of any silage production 
is determined by multiplying the number of tons of silage to count by a 
price that bears the same relationship to the maximum silage price 
election as the selected price for grain does to the maximum grain 
price. FCIC has amended this subsection to clarify that this price is 
assigned by us only for the purpose of determining the dollar value of 
production to count for indemnity purposes and will not affect the 
premium or amount of insurance.
    Comment: One comment assumed that since cancellation and 
termination dates were changed, that the sales closing dates will be 
changed to align with the new cancellation and termination dates.
    Response: The sales closing dates as contained in the Special 
Provisions will be changed generally to be the same as, but no later 
than, the new cancellation and termination dates.
    Comment: One comment expressed concerns regarding changes that will 
be required in underwriting and loss procedure since the new policy 
allows both grain and silage to be insured. The comment stated that 
procedure should be developed concurrently with policy language to 
avoid major confusion. Specifically, underwriting procedure should 
clearly address how grain and silage types are to be reported and 
insured, how production can or cannot be converted for APH purposes and 
whether appraisals are required if there is no loss, but the crop is 
harvested in a manner other than as reported. The comment also 
requested that FCIC consider previously submitted information when 
developing the procedure.
    Response: FCIC agrees with the comment and has begun drafting 
procedure to address underwriting and loss issues. Previously submitted 
correspondence will be considered in procedural development.
    Comment: One comment stated that a definition of ``silage variety'' 
is necessary. The comment stated that subparagraph 6.(b)(2)(ii) refers 
to ``a variety of corn adapted for silage use only,'' but that their 
understanding is that there are no varieties adapted strictly for use 
as silage. The comment asked if FCIC intends to designate silage 
varieties on the Special Provisions.
    Response: There is no uniform agreement regarding the existence or 
definition of a ``silage variety.'' However, due to ongoing attempts to 
develop new ``silage varieties,'' FCIC believes that language should 
remain in these crop provisions to prevent insuring corn on a grain 
basis for a variety of corn adapted for silage use only. Since there is 
no uniform agreement regarding the existence of silage varieties, a 
definition will not be added. FCIC has modified subparagraph 
6.(b)(2)(ii) to delete the term ``silage variety.'' If research 
succeeds in developing silage varieties, FCIC will evaluate placing 
specific silage variety restrictions in the Special Provisions.
    Comment: One comment suggested subsection 1.(m) conflicts with 
subsection 10.(a), stating that: (1) Subsection 1.(m) specifies that it 
may be considered practical to replant after the end of the late 
planting period if replanting is generally occurring in the area; and 
(2) subection 10.(a) specifies that a replant payment may be made if 
replanting occurs no later than 25 days after the final planting date. 
The comment further stated that if it is determined to be practical to 
replant after the late planting period, a replanting payment must be 
made and subsection 10.(a) should indicate the same.
    Response: FCIC agrees with the comment and has removed the 
provision in subsection 10.(a) that requires replanting within 25 days 
after the final planting date.
    Comment: One comment stated that subsections 10.(b) and 10.(c) are 
confusing because: (1) Subsection 10.(c) allows a replant payment, 
based on the total insured shares, to be made to one party if an 
agreement exists to that effect between the insured persons; and (2) 
subsection 10.(b) uses ``your share'' in calculating the maximum 
replant payment. The comment suggested that a qualifier should be added 
to subsection 10.(b) to reflect paying a replant payment based on the 
total insured share if 10.(c) applies. The comment also asked which 
company pays the entire replant payment when persons sharing in the 
crop are insured with different companies.
    Response: FCIC agreed that a replant payment should be calculated 
using the insured share or the share determined in subsection 10.(c), 
if applicable and has modified subsection 10.(b) accordingly. The 
proposed language contained in subsection 10.(c) would have required 
the company insuring the person given the right to the replant payment 
to pay the entire amount due. Upon further review, FCIC has determined 
it is not appropriate to require an insurer to pay replant payments 
based on a share in excess of the share they actually insure. 
Therefore, subsection 10.(c) has been revised to allow replant payments 
based on the total shares insured with the insurer.
    Comment: One comment questioned whether FCIC intends to incorporate 
language contained in subsection 10.(d) into every crop provision that 
provides for a replant payment. This language requires that when the 
crop is replanted using a practice that is uninsurable as an original 
planting, the liability for the unit will be reduced by the amount of 
the replanting payment which is attributable to the insured's share and 
that the premium amount will not be reduced.
    Response: As policies are revised, this provision will be added if 
appropriate for the specific crop.
    Comment: One comment questioned whether a person who insured grain 
and silage within one unit, but did not discover damage until after the 
beginning of grain harvest, could give timely notice of damage more 
than 15 days after the end of the insurance period for silage but 
within the period timely notice could be given for grain.
    Response: Notice would be considered timely as long as the silage 
acreage within the unit was not damaged. If the silage acreage within 
the unit was damaged, notice would be required within 72 hours of the 
insured's initial discovery of damage to the silage acreage (but not 
later than 15 days after the end of the insurance period for silage). 
FCIC has clarified paragraph 11.(b)(1).
    Comment: One comment recommended that subparagraph 12.(b)(2)(ii) be 
revised to read ``Multiplying each result by the price election for 
that type;'' because the phrase ``price election for each type'' 
indicates multiplying by both grain and silage price elections.
    Response: FCIC agrees with the comment and has modified the 
provision.
    Comment: One comment recommended either revising or deleting 
provisions that allow the inured to leave representative samples if 
they disagree with the insurer's appraisal. In the event the provision 
cannot be deleted the comment recommended changing the provision so 
that the insurer can decide when using representative samples is 
appropriate. In many situations, samples are more susceptible to loss 
and do not accurately represent what the entire unit would have 
produced.
    Response: FCIC agrees that there are situations in which it may not 
be reasonable to leave representative strips from which production to 
count would ultimately be determined. The samples could be more 
vulnerable to damage than an entire field, or the insurer may be 
confident that the appraisal made accurately reflects production 
potential. However, the entire provision should not be removed. The 
provision has been changed to allow the insurer to determine those 
situations in which it is reasonable to leave representative samples to 
determine the amount of production to be counted. In cases where it is 
necessary to defer determinations, the insured must be advised how 
production to count will ultimately be determined and the consequences 
of failure to leave or care for the samples.
    Comment: One comment recommended amending subsection 12.(e) by 
specifically stating that moisture adjustment, if applicable, will be 
made prior to any adjustment for quality.
    Response: FCIC agrees with the comment and has modified subsection 
12.(e) accordingly.
    Comment: One comment recommended amending subsection 12.(f) to 
require that moisture adjustments for silage, if applicable, will be 
made prior to any adjustment for quality for grain-deficient silage.
    Response: Subsection 12.(f) contains the requirements that must be 
met for silage production to be adjusted for moisture and for grain-
deficiency. Current FCIC procedure specifies that when both adjustments 
apply, the silage moisture adjustment factor is to be multiplied by the 
silage grain-deficient factor and the result multiplied by the number 
of tons of silage that qualify for both adjustments. This method of 
adjustment results in a proportionate adjustment of the silage 
production based on both factors. FCIC does not agree with the comment 
because adjusting for moisture first may result in a disproportionate 
adjustment of the silage production. FCIC has not amended subsection 
12.(f).
    Comment: One comment assumed that moving to a factor-based quality 
adjustment process as specified in paragraph 12.(e)(4) removes any 
reliance on local market price, except for quality, such as aflatoxin, 
not addressed by the factor table in the Special Provisions. The 
comment also stated that if language in subparagraph 12.(e)(3)(ii) 
remains in the policy, an insured would have strong justification for 
requesting adjustment of production that meets the grade requirements 
in the policy, but which has a value less than the local market price. 
The comment recommends deletion of subparagraph 12.(e)(3)(ii).
    Response: FCIC agrees that quality adjustment should not apply if 
grain meets minimum grade requirements and other substances or 
conditions are not present causing a value less than the local market 
price. The Special Provisions will specify how the quality factor will 
be determined for quality deficiencies, substances and conditions. 
Subparagraph 12.(e)(3)(ii) has been deleted.
    Comment: One comment recommended that language in subsection 13.(b) 
be changed to require only one notice for prevented planting acreage 
rather than requiring notice three days after the final planting date 
and three days after the date the insured stops planting within the 
late planting period.
    Response: The crop provisions provide two distinct periods during 
which the insured may be prevented from planting (i.e., by the final 
planting date and during the late planting period). The notice 
requirement allows the insurer the opportunity to verify that the 
acreage could not have been planted during such periods. FCIC agrees 
that an insured should only be required to give one notice if it is 
sufficient to cover all acreage for prevented planting purposes. 
Subsection 13.(b) has been modified to clarify that written notice must 
be given not later than three days after the final planting date for 
acreage the insured was prevented from planting by the final planting 
date, and not later than three days after the date the insured 
discovers that planting will not be possible if the insured was not 
prevented from planting such acreage by the final planting date but was 
prevented from planting such acreage during the late planting period.
    Comment: One comment indicated that the proposed provisions in 
paragraph 13.(d)(3) will allow an insured to request a written 
agreement for prevented planting coverage for acreage exceeding the 
policy limitations, and to subsequently enroll in a USDA program that 
allows less acreage to be planted. The comment recommended revising the 
paragraph to limit eligible acreage to the amount allowed by any 
applicable USDA program, regardless of when the insured enrolls in such 
program or any previously approved written agreement.
    Response: FCIC agrees that if the farm is enrolled in a USDA 
program that limits the number of acres planted, acreage in excess of 
the amount allowed under a USDA program should not be eligible for 
prevented planting coverage. Paragraph 13.(d)(3) has been amended 
accordingly.
    Comment: One comment recommended that language be added to 
paragraph 13.(d)(3) to allow prevented planting coverage by written 
agreement for acreage added to the insured's farming operation after 
the sales closing date.
    Response: The insurance period for prevented planting coverage 
begins on the sales closing date. Allowing additional coverage to 
attach after the beginning of this period would likely result in 
coverage being requested primarily when conditions are favorable for a 
prevented planting indemnity. This adverse selection should be avoided 
to help maintain an actuarially sound program and to keep premium rates 
from rising to cover such losses. The definition of ``Written 
agreement'' has been amended to specifically disallow any prevented 
planting liability as a result of any request submitted after the sales 
closing date.
    In addition to the changes indicated in the responses to comments, 
FCIC has made the following changes:
    1. FCIC has modified paragraph 3.(a)(2) to require that the price 
elections for grain and silage have the same percentage relationship to 
the maximum price election offered for grain and silage.
    2 FCIC has modified subsection 5.(b) to simplify the cancellation 
and termination dates in Texas.
    3. The provisions in section 6 have been modified to allow 
insurance for coarse grains planted into an established grass or legume 
if allowed by the Special Provisions or by written agreement.
    4. FCIC has modified paragraph 12.(b)(2) to specify that the 
production guarantee for a unit will be computed by multiplying the 
insured acreage of each type (grain/silage) by the production guarantee 
for the applicable type. The proposed language contained in 
subparagraph 12.(b)(1)(i) has been modified in a similar manner.
    Accordingly, the rule, ``Common Crop Insurance Regulations; Coarse 
Grains Crop Insurance Provisions'' published at 59 FR 28016, revised as 
set out below, is hereby adopted as final rule.

List of Subjects in 7 CFR Part 457

    Crop Insurance; corn, grain sorghum, soybean.

Final Rule

    Accordingly, 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 1995 and succeeding 
crop years, 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 Sec. 457.113 Coarse Grains 
Crop Insurance Provisions to read as follows:


Sec. 457.113  Coarse Grains Crop Insurance Provisions.

    The Coarse Grains Crop Insurance Provisions for the 1995 and 
succeeding crop year are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Coarse Grains Crop Provisions

    If a conflict exists among the Common Crop Insurance Policy 
(Sec. 457.8), these crop provisions, and the Special Provisions, the 
Special Provisions will control these crop provisions and the common 
policy and these crop provisions will control the common policy.

1. Definitions

    (a) Coarse grains--Corn, grain sorghum, and soybeans.
    (b) Days--Calendar days.
    (c) 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.
    (d) Good farming practices--Good farming practices are the 
cultural practices generally in use in the county for the insured 
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 Extensive Service as compatible with 
agronomic and weather conditions in the area.
    (e) Grain sorghum--The crop defined as sorghum under the United 
States Grain Standards Act.
    (f) Harvest--Combining, threshing, or picking the insured crop 
for grain, or cutting for hay, silage, or fodder.
    (g) 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.
    (h) 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.
    (i) Late planted--Acreage planted to the insured crop during the 
late planting period.
    (j) 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.
    (k) Local market price--The cash grain price per bushel for the 
U.S. No. 2 yellow corn, U.S. No. 2 grain sorghum, or U.S. No. 1 
soybeans, offered by buyers in the area in which you normally market 
the insured crop. The local market price will reflect the maximum 
limits of quality deficiencies allowable for the U.S. No. 2 grade 
for yellow corn and grain sorghum, or U.S. No. 1 grade for soybeans. 
Factors not associated with grading under the Official United 
Standards for Grain, including but not limited to protein and oil, 
will not be considered.
    (l) 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 which as been properly prepared for 
the planting method and production practice. Coarse grains must 
initially be planted in rows to be considered planted. Corn must be 
planted in rows far enough apart to permit mechanical cultivation. 
Planting in any other manner will be considered as a failure to 
follow recognized good farming practices and any loss of production 
will not be insured unless otherwise provided by the Special 
Provisions or by written agreement to insure such crop.
    (m) Practical to replant--In lieu of subsection 1.(ff) of the 
Common Crop Insurance Policy (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, and time to crop maturity that 
replanting to the insured crop will allow the crop to attain 
maturity prior to the calendar date for the end of the insurance 
period. It will not be considered practical to replant after the end 
of the late planting period unless replanting is generally occurring 
in the area.
    (n) Prevented planting--Inability to plant the insured crop with 
proper equipment by:
    (1) The final planting date designated in the Special Provisions 
for the insured crop in the county; or
    (2) 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 most producers in the 
surrounding area from planting due to similar insurable causes. The 
insured cause of prevented planting must occur between the sales 
closing date and the final planting date for the insured crop in the 
county or within the late planting period.
    (o) Production guarantee--The number of bushels (tons for corn 
insured as silage) determined by multiplying the approved yield per 
acre by the coverage level percentage you elect.
    (p) Replanting--Performing the cultural practices necessary to 
replace the seed of the same insured crop, and replacing the seed 
for the same crop in the insured acreage with the expectation of 
growing a successful crop.
    (q) Silage--A product that results from severing the plant from 
the land and chopping it for the purpose of livestock feed.
    (r) Timely planted--Planted on or before the final planting date 
designated in the Special Provisions for the insured crop in the 
county.
    (s) Ton--Two thousand (2000) pounds avoirdupois.
    (t) Written agreement--Designated terms of this policy may be 
altered by written agreement. Each agreement must be applied for by 
the insured in writing no later than the sales closing date and is 
valid for one year only. If not specifically renewed the following 
year, continuous insurance will be in accordance with the printed 
policy. All variable terms including, but not limited to, crop 
variety, guarantee, premium rate and price election must be set out 
in the written agreement. In specific instances, a written agreement 
may be applied for after the sales closing date and approved if, 
after a physical inspection of the acreage, there is a determination 
that the crop has the expectance of making at least the guaranteed 
yield. However, no prevented planting liability will be established 
as a result of any request submitted after the closing date. All 
applications for written agreements as submitted by the insured must 
contain all variable terms of the contract between the company and 
the insured that will be in effect if the written agreement is 
disapproved.

2. Unit Division

    Unless limited by the Special Provisions, a unit as defined in 
subsection 1.(tt) of the Common Crop Insurance Policy (Sec. 457.8), 
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. All optional units must be reflected on the 
acreage report for each crop year.
    (a) 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.
    (b) 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.
    (c) You must have records of measurement of stored or marketed 
production from each optional unit maintained in such a manner that 
we can verify the production from each optional unit or the 
production from each unit must be kept separate until after loss 
adjustment under the policy is completed.
    (d) Each optional unit must meet one or more of the following 
criteria as applicable:
    (1) Optional Units by Section, Section Equivalent, or ASCS 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 which 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 ASCS Farm Serial Number.
    (2) 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 ASCS Farm Serial 
Number, optional units may be established based on irrigated acreage 
or non-irrigated acreage if both are located in the same Section, 
section equivalent, or ASCS Farm Serial Number.
    The irrigated acreage may not extend beyond the point at which 
your irrigation system can deliver the quantity of water needed to 
produce the yield on which your guarantee is based and you may not 
continue into non-irrigated acreage in the same rows or planting 
pattern. You must plant, cultivate, fertilize, or otherwise care for 
the irrigated acreage in accordance with recognized good irrigated 
farming practices.
    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 provisions, we will combine all optional units which are 
not in compliance with these provisions into the basic unit from 
which they were formed. We may 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 all the optional units are combined, the 
premium paid for the purpose of electing optional units will be 
refunded to you.

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 Common Crop Insurance Policy (Sec. 457.8) you may select:
    (1) For grain sorghum and soybeans, only one price election for 
each crop in the county insured under this policy; and
    (2) For corn, only one price election for all the corn in the 
county insured as grain under this policy, and only one price 
election for all the corn in the county insured as silage under this 
policy. The price elections you choose for grain and silage must 
have the same percentage relationship to the maximum price election 
offered by us for grain and silage. For example, if you choose one 
hundred percent (100%) of the maximum grain price election and you 
also insure corn on a silage basis, you must choose one hundred 
percent (100%) of the maximum silage price election.
    (b) For corn only, if you harvest the crop in a manner other 
than the manner you reported (for example, you reported grain but 
harvested as silage) and you did not select a price election for the 
type harvested, we will assign a price election for the type 
harvested that bears the same percentage relationship to the maximum 
price election you selected for the type reported (for example, if 
you selected a grain price election in the amount of eighty percent 
(80%) of the maximum price election for grain and you did not select 
a silage price election, we will assign a silage price election in 
the amount of eighty percent (80%) of the maximum price election for 
silage specified in the Special Provisions if you harvest for 
silage). This assigned price election will be used only to determine 
the dollar value of production to count for indemnity purposes and 
will not be used to determine the amount of insurance or premium.

4. Contract Changes

    The contract change date is November 30 preceding the 
cancellation date (see the provisions of section 4 (Contract 
Changes) of the Common Crop Insurance Policy (Sec. 457.8)).

5. Cancellation and Termination Dates

    In accordance with subsection 2.(f) of the Common Crop Insurance 
Policy (Sec. 457.8), the cancellation and termination dates are:

------------------------------------------------------------------------
                                                       Cancellation and 
                  State and county                     termination dates
------------------------------------------------------------------------
(a) For corn and grain sorghum:                                         
  Val Verde, Edwards, Kerr, Kendall, Bexar, Wilson,   January 15.       
   Karnes, Goliad, Victoria, and Jackson Counties,                      
   Texas, and all Texas counties lying south thereof.                   
  El Paso, Hudspeth, Culberson, Reeves, Loving,       February 15.      
   Winkler, Ector, Upton, Reagan, Sterling, Coke,                       
   Tom Green, Concho, McCulloch, San Saba, Mills,                       
   Hamilton, Bosque, Johnson, Tarrant, Wise, Cooke                      
   Counties, Texas, and all Texas counties lying                        
   south and east thereof to and including Terrell,                     
   Crockett, Sutton, Kimble, Gillespie, Blanco,                         
   Comal, Guadalupe, Gonzales, De Witt, Lavaca,                         
   Colorado, Wharton, and Matagorda Counties, Texas.                    
  Alabama; Arizona; Arkansas; California; Florida;    February 28.      
   Georgia; Louisiana; Mississippi; Nevada; North                       
   Carolina; and South Carolina.                                        
  All other Texas counties and all other states.....  March 15.         
(b) For soybeans:                                                       
  Jackson, Victoria, Goliad, Bee, Live Oak,           February 15.      
   McMullen, LaSalle, and Dimmit Counties, Texas and                    
   all Texas counties lying south thereof.                              
  Alabama; Arizona; Arkansas; California; Florida;    February 28.      
   Georgia; Louisiana; Mississippi; Nevada; North                       
   Carolina; and South Carolina; and El Paso,                           
   Hudspeth, Culberson, Reeves, Loving, Winkler,                        
   Ector, Upton, Reagan, Sterling, Coke, Tom Green,                     
   Concho, McCulloch, San Saba, Mills, Hamilton,                        
   Bosque, Johnson, Tarrant, Wise, Cooke Counties,                      
   Texas, and all Texas counties lying south and                        
   east thereof to and including Maverick, Zavala,                      
   Frio, Atascosa, Karnes, De Witt, Lavaca,                             
   Colorado, Wharton, and Matagorda Counties, Texas.                    
  All other Texas counties and all other states.....  March 15.         
------------------------------------------------------------------------

6. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Common 
Crop Insurance Policy (Sec. 457.8), the crop insured will be each 
coarse grain crop you elect to insure for which premium rates are 
provided by the actuarial table:
    (1) In which you have a share;
    (2) That is adapted to the area based on days to maturity and is 
compatible with agronomic and weather conditions in the area; and
    (3) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop except as allowed in 
paragraph 6.(b)(1); or
    (ii) Planted into an established grass or legume.
    (b) For corn only, in addition to the provisions of subsection 
6.(a), the corn crop insured will be all corn that is:
    (1) Planted for harvest either as grain or as silage (see 
subsection 6.(c)). A mixture of corn and sorghum (grain or forage-
type) will be insured as corn silage if the sorghum does not 
constitute more than twenty percent (20%) of the plants;
    (2) Yellow dent or white corn, including mixed yellow and white, 
waxy or high-lysine corn, and excluding:
    (i) High-amylose, high-oil, high-protein, flint, flour, Indian, 
or blue corn, or a variety genetically adapted to provide forage for 
wildlife or any other open pollinated corn, unless a written 
agreement allows insurance of such excluded crops.
    (ii) A variety of corn adapted for silage use only when the corn 
is reported for insurance as grain.
    (c) For corn only, if the actuarial table for the county 
provides a premium rate for:
    (1) Both grain and silage, all insurable acreage will be insured 
as the type or types reported by you on or before the acreage 
reporting date;
    (2) Grain but not silage, all insurable acreage will be insured 
as grain unless a written agreement allows insurance on all or a 
portion of the insurable acreage as silage; or
    (3) Silage but not grain, all insurable corn acreage will be 
insured as silage unless a written agreement allows insurance on all 
or a portion of the insurable acreage as grain.
    (d) For grain sorghum only, in addition to the provisions of 
subsection 6.(a), the grain sorghum crop insured will be all of the 
grain sorghum in the county:
    (1) That is planted for harvest as grain;
    (2) That is a combine-type hybrid grain sorghum (grown from 
hybrid seed); and
    (3) That is not a dual-purpose type of grain sorghum (a type 
used for both grain and forage), unless a written agreement allows 
insurance of such grain sorghum.
    (e) For soybeans only, in addition to the provisions of 
subsection 6.(a), the soybean crop insured will be all of the 
soybeans in the county that are planted for harvest as beans.

7. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) 
of the Common Crop Insurance Policy (Sec. 457.8), any acreage of the 
insured crop damaged before the final planting date, to the extent 
that the remaining stand will not produce at least ninety percent 
(90%) of the production guarantee, must be replanted unless we agree 
that replanting is not practical (see subsection 1.(m)).

8. Insurance Period

    In accordance with the provisions under section 11 (Insurance 
Period) of the Common Crop Insurance Policy (Sec. 457.8), the 
calendar date for the end of the insurance period is the date 
immediately following planting as follows:

(a) For corn insured as grain:                                          
  (1) Val Verde, Edwards, Kerr, Kendall, Bexar,       September 30.     
   Wilson, Karnes, Goliad, Victoria, and Jackson                        
   Counties, Texas, and all Texas counties lying                        
   south thereof.                                                       
  (2) Clark, Cowlitz, Grays Harbor, Island,           October 31.       
   Jefferson, King, Kitsap, Lewis, Pierce, Skagit,                      
   Snohomish, Thurston, Wahkiakum, and Whatcom                          
   Counties, Washington.                                                
  (3) All other counties and states.................  December 10.      
(b) For corn insured as silage:                                         
  All states........................................  September 30.     
(c) For grain sorghum:                                                  
  (1) Val Verde, Edwards, Kerr, Kendall, Bexar,       September 30.     
   Wilson, Karnes, Goliad, Victoria, and Jackson                        
   Counties, Texas, and all Texas counties lying                        
   south thereof.                                                       
  (2) All other Texas counties and all other states.  December 10.      
(d) For soybeans: All states........................  December 10.      
                                                                        

9. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) 
of the Common Crop Insurance Policy (Sec. 457.8), insurance is 
provided only against the following causes of loss which 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 applicable, due 
to an unavoidable cause of loss occurring within the insurance 
period.

10. Replanting Payments

    (a) In accordance with section 13 (Replanting Payment) of the 
Common Crop Insurance Policy (Sec. 457.8), replanting payments for 
coarse grains are allowed if the coarse grains are damaged by an 
insurable cause of loss to the extent that the remaining stand will 
not produce at least ninety percent (90%) of the production 
guarantee for the acreage and it is practical to replant (see 
subsection 1.(m)).
    (b) The maximum amount of the replanting per acre will be the 
lesser of twenty percent (20%) of the production guarantee or the 
number of bushels (tons for corn insured as silage) set out herein, 
multiplied by your price election multiplied by your insured share 
or the share determined under 10.(c), if applicable. The number of 
bushels or tons are 8 bushels for corn grain; 1 ton for corn silage; 
7 bushels for grain sorghum; and 3 bushels for soybeans.
    (c) When more than one person insures the same crop on a share 
basis, a replanting payment based on the total shares insured by us 
may be made to the insured person who incurs the total cost of 
replanting. Payment will be made in this manner only if an agreement 
exists between the insured persons which:
    (1) Requires one person to incur the entire cost of replanting; 
or
    (2) Gives the right to all replanting payments to one person.
    (d) When the insured crop is replanted using a practice that is 
uninsurable as an original planting, the liability for the unit will 
be reduced by the amount of the replanting payment which is 
attributable to your share. The premium amount will not be reduced.

11. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 (Duties in 
the Event of Damage or Loss) of the Common Crop Insurance Policy 
(Sec. 457.8), if you initially discover damage to any insured crop 
within 15 days of or during harvest, you must leave representative 
samples of the unharvested crop for our inspection. The samples must 
be at least 10 feet wide and extend the entire length of each field 
in the unit, and 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.
    (b) For any corn unit that has separate dates for the end of the 
insurance period (grain and silage):
    (1) In lieu of paragraph 14.(a)(2) of the Common Crop Insurance 
Policy (Sec. 457.8), if damage occurs:
    (i) Before the earliest end of insurance period date (grain or 
silage), you must give us notice within 72 hours of your initial 
discovery of damage (but not later than 15 days after that earliest 
end of insurance period date); or
    (ii) If damage does not occur before the earliest end of 
insurance period date (grain or silage), but occurs before the 
latest end of insurance period date (grain or silage), you must give 
notice within 72 hours of your initial discovery of damage (but not 
later than 15 days after that latest end of insurance period date).
    (2) In lieu of subsection 14.(c) of the Common Crop Insurance 
Policy (Sec. 457.8), in addition to complying with all other notice 
requirements, you must submit a claim for indemnity declaring the 
amount of your loss not later than 60 days after the latest date for 
the end of insurance period for the unit. This claim must include 
all the information we require to settle the claim.

12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event 
you are unable to provide records of production:
    (1) For any optional unit, we will combine all optional units 
for which acceptable records of production 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:
    (1) For grain sorghum and soybeans by:
    (i) Multiplying the insured acreage by the production guarantee;
    (ii) Subtracting from this the total production to count;
    (iii) Multiplying the remainder by your price election; and
    (iv) Multiplying this result by your share.
    (2) For corn by:
    (i) Multiplying the insured acreage of each type (grain/silage) 
by the production guarantee for the applicable type;
    (ii) Multiplying each result by the price election for the 
applicable type;
    (iii) Adding these values;
    (iv) Multiplying the production to count of each type (see 
subsection 12.(d)) by the price election for that type (see the 
provisions under section 3 (Insurance Guarantees, Coverage Levels, 
and Prices for Determining Indemnities));
    (v) Adding these dollar values;
    (vi) Subtracting the result of step (v) from the result of step 
(iii); and
    (vii) Multiplying the result by your share.
    (c) The total production in bushels (tons for corn silage) (see 
subsection 12.(d)) to count 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) Damaged solely by uninsured causes; or
    (D) For which you fail to provide records of production that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may 
be adjusted for quality deficiencies and excess moisture in 
accordance with subsection 12.(e)); and
    (iv) Potential production on insured acreage you want to put to 
another use or you wish 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 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) The production to count for corn will be in bushels for 
grain and in tons for silage as follows:
    (1) For harvested acreage, according to the method of harvest; 
and
    (2) For unharvested acreage, according to the information 
contained on your acreage report;

except as otherwise provided in paragraph 12.(c)(1).
    (e) Mature coarse grain production (excluding corn insured or 
harvested as silage) may be adjusted for excess moisture and quality 
deficiencies. If moisture adjustment is applicable it will be made 
prior to any adjustment for quality. Corn insured or harvested as 
silage will be adjusted for excess moisture and quality only as 
specified in subsection 12.(f).
    (1) Production will be reduced by 0.12 percent for each 0.1 
percentage point of moisture in excess of:
    (i) Fifteen percent (15%) for corn (If moisture exceeds 30 
percent (30%), production will be reduced 0.2 percent for each 0.1 
percentage point above 30 percent (30%));
    (ii) Fourteen percent (14%) for grain sorghum; and
    (iii) Thirteen percent (13%) for soybeans.
    We may obtain samples of the production to determine the 
moisture content.
    (2) Production will be eligible for quality adjustment if:
    (i) Deficiencies in quality, in accordance with the Official 
United States Standards for Grain, result in:
    (A) Corn not meeting the grade requirements for U.S. No. 4 
(grades U.S. No. 5 or worse) because of test weight or kernel damage 
(excluding heat damage) or having a musty, sour, or commercially 
objectionable foreign odor;
    (B) Grain sorghum not meeting the grade requirements for U.S. 
No. 4 (grades U.S. Sample grade) because of test weight or kernel 
damage (excluding heat damage) or having a musty, sour, or 
commercially objectionable foreign odor (except smut odor), or meets 
the special grade requirements for smutty grain sorghum; or
    (C) Soybeans not meeting the grade requirements for U.S. No. 4 
(grades U.S. Sample grade) because of test weight or kernel damage 
(excluding heat damage) or having a musty, sour, or commercially 
objectionable foreign odor (except garlic odor), or which meet the 
special grade requirements for garlicky soybeans; or
    (ii) Substances or conditions are present that are identified by 
the Food and Drug Administration or other public health 
organizations of the United States as being injurious to human or 
animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these crop 
provisions;
    (ii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us 
or by a disinterested third party approved by us; and
    (iii) The samples are analyzed by a grader licensed under the 
authority of the United States Grain Standards Act or the United 
States Warehouse Act with regard to deficiencies in quality, or by a 
laboratory approved by us with regard to substances or conditions 
injurious to human or animal health. (Test weight for quality 
adjustment purposes may be determined by our loss adjuster.)
    (4) Coarse grain production that is eligible for quality 
adjustment, as specified in paragraphs 12.(e) (2) and (3), will be 
reduced by the quality adjustment factor contained in the Special 
Provisions.
    (f) For corn insured or harvested as silage:
    (1) Whenever our appraisal of grain content is less than 4.5 
bushels of grain per ton of silage, the silage production will be 
reduced by 1 percentage point for each 0.1(1/10) of a bushel less 
than 4.5 bushels per ton (If we cannot make a grain appraisal before 
harvest and you do not leave a representative unharvested sample, in 
accordance with the policy no reduction for grain-deficient silage 
will be made.); and
    (2) If the normal silage harvesting period has ended, or for any 
acreage harvested as silage or appraised as silage prior to October 
1, we may increase the silage production to count to 65 percent 
(65%) moisture equivalent to reflect the normal moisture content of 
silage harvested during the normal silage harvesting period.
    (g) Any production harvested from plants growing in the insured 
crop may be counted as production of the insured crop on a weight 
basis.

13. Late Planting and Preventing Planting

    (a) In lieu of paragraph 8.(b)(2) and subsection 1.(aa) of the 
Common Crop Insurance Policy (Sec. 457.8), insurance will be 
provided for acreage planted to the insured crop during the late 
planting period (see subsection 13.(c)), and acreage you were 
prevented from planting (see subsection 13.(d)). These coverages 
provide reduced production guarantees. The reduced guarantees will 
be combined with the production guarantee for timely planted acreage 
for each unit. 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 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 be paid for such acreage). (For 
example, assume you insure one unit in which you have a 100 percent 
(100%) 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 are unplanted and 
eligible for prevented planting coverage. To calculate the amount of 
any indemnity which may be due to you, the production guarantee for 
the unit will be computed as follows:
    (1) For timely planted acreage, multiply the per acre production 
guarantee for timely planted acreage by the 50 acres planted timely;
    (2) For late planted acreage, multiply the per acre production 
guarantee for timely planted acreage by 93 percent (0.93) and 
multiply the result by the 50 acres planted late; and
    (3) For prevented planting acreage, multiply the per acre 
production guarantee for timely planted acreage by 50 percent (0.5) 
and multiply the result by the 50 acres eligible for prevented 
planting coverage.
    The total of the three calculations will be the production 
guarantee for the unit. 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.)
    (b) You must provide written notice to us if you were prevented 
from planting (see subsection 1.(n)). This notice must be given not 
later than three (3) days after:
    (1) The final planting date for acreage you were prevented from 
planting by the final planting date if you have unplanted acreage 
that may be eligible for prevented planting coverage; and
    (2) The date you discover that planting will not be possible 
within the late planting period for acreage that may be eligible for 
prevented planting coverage if you were not prevented from planting 
such acreage by the final planting date, but were prevented from 
planting such acreage during the late planting period.
    (c) Life Planting
    (1) For acreage planted to the insured crop after the final 
planting date but on or before 25 days after the final planting 
date, the production guarantee for each acre will be reduced for 
each day planted after the final planting date by:
    (i) One percent (.01) for the first through the tenth day; and
    (ii) Two percent (.02) for the eleventh through the twenty-fifth 
day.
    (2) In addition to the requirements of section 6 (Report of 
Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must 
report the dates the acreage is planted within the late planting 
period.
    (3) If planting of the insured crop continues after the final 
planting data, 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 planting the insured crop (see 
subsection 1.(n)), you may elect:
    (i) To plant the insured crop during the late planting period 
(the production guarantee for such acreage will be determined in 
accordance with paragraph 13.(c)(1));
    (ii) Not to plant this acreage to any crop that is intended for 
harvest in the same crop year, (the production guarantee for such 
acreage will be fifty percent (0.5) of the production guarantee for 
timely planted acres, (For example, if your production guarantee for 
timely planted acreage is 30 bushels per acre, your prevented 
planting production guarantee would be equivalent to 15 bushels per 
acre (30 bushels multiplied by 0.5). This paragraph does not 
prohibit the preparation and care of the acreage for conservation 
practices, such as planting a cover crop, as long as such crop is 
not intended for harvest.); or
    (iii) To plant the insured crop after the late planting period, 
(the production guarantee for such acreage will be fifty percent 
(0.5) of the production guarantee for timely planted acres, (For 
example, if your production guarantee for timely planted acreage is 
30 bushels per acre, your prevented planting production guarantee 
would be equivalent to 15 bushels per acre (30 bushels multiplied by 
0.5). Production to count for such acreage will be determined in 
accordance with subsections 12.(c) through (g)).
    (2) In addition to the provisions of section 11 (Insurance 
Period) of the Common Crop Insurance Policy (Sec. 457.8), the 
insurance period for prevented planting coverage begins on the sales 
closing date contained in the Special Provisions for the insured 
crop in the county.
    (3) The acreage to which prevented planting coverage applies 
will be limited as follows:
    (i) If you participate in any program administered by the United 
States Department of Agriculture for the crop year which limits the 
number of acres that may be planted, prevented planting acreage will 
not exceed the ASCS base acreage for the insured crop, reduced by 
any acreage reduction applicable to the farm under such program.
    (ii) If you do not participate in any program administered by 
the United States Department of Agriculture which limits the number 
of acres that may be planted, unless a written agreement exists to 
the contrary, eligible acreage will not exceed the greater of:
    (A) The ASCS base acreage for the insured crop, if applicable;
    (B) The number of acres planted to the insured crop on each ASCS 
Farm Serial Number during the previous crop year (adjusted for any 
reconstitution which may have occurred prior to the sales closing 
date); or
    (C) One hundred percent (100%) of the simple average of the 
number of acres planted to the insured crop during the crop years 
that were used to determine your yield.
    (iii) Acreage intended to be planted under an irrigated practice 
will be limited to the number of acres properly prepared to carry 
out an irrigated practice.
    (iv) A prevented planting production guarantee will no be 
provided for:
    (A) Any acreage that does not constitute at least 20 acres or 20 
percent (20%) of the acres in the unit, whichever is less;
    (B) Land for which the actuarial table does not designate a 
premium rate unless a written agreement is in place designating such 
premium rate;
    (C) Land used for conservation purposes or intended to be or 
considered to have been left unplanted under any program 
administered by the United States Department of Agriculture;
    (D) Land on which any crop, other than the insured crop, has 
been planted and is intended for harvest, or has been harvested in 
the same crop year; or
    (E) Land which planting history or conservation plans indicate 
would remain fallow for crop rotation purposes.
    (v) 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 acres of the insured crop timely 
planted and planted after the final planting date. (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 ASCS Farm Serial Number which you insure as two separate 
optional units consisting of 50 acres each. If you planted 60 acres 
of the insured crop on one optional unit and 40 acres of the insured 
crop on the second optional unit, your prevented planting eligible 
acreage would be reduced to zero. (100 acres eligible for prevented 
planting coverage minus 100 acres planted equals zero). If you 
report more insured crop acreage under this contract than is 
eligible for prevented planting coverage, we will allocate the 
eligible acreage to insured units based on the number of prevented 
planting acres and share you reported for each unit.)
    (4) When the ASCS Farm Serial Number covers more than one unit, 
or a unit consists of more than one ASCS Farm Serial Number, the 
covered acres will be pro-rated based on the number of acres in each 
unit or ASCS Farm Serial Number that could have been planted to the 
insured crop in the crop year.
    (5) In accordance with the provisions of section 6 (Report of 
Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must 
report any insurable acreage you were prevented from planting. This 
report must be submitted on or before the acreage reporting date, 
even though you may elect to plant the acreage after the late 
planting period. Any acreage you report as eligible for prevented 
planting coverage which is not eligible will be deleted from 
prevented planting coverage.

    Done in Washington, DC, on September 13, 1994.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 94-23834 Filed 9-26-94; 8:45 am]
BILLING CODE 3410-08-M