[Federal Register Volume 60, Number 92 (Friday, May 12, 1995)]
[Rules and Regulations]
[Pages 25601-25604]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11780]



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 Rules and Regulations
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  Federal Register / Vol. 60, No. 92 / Friday, May 12, 1995 / Rules and 
Regulations  
[[Page 25601]]

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AA79


Common Crop Insurance Regulations; Sugarcane 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 sugarcane. 
These provisions will supplement the Common Crop Insurance Policy 
(Sec. 457.8), which contains standard terms and conditions common to 
most crops. The intended effect of this rule is to move specific crop 
provisions for insuring sugarcane from the Sugarcane Crop Insurance 
Regulations (7 CFR 401.133) to the Common Crop Insurance Policy 
(Sec. 457.8) for ease of use by the public and conformance among policy 
terms.

EFFECTIVE DATE: May 12, 1995.

FOR FURTHER INFORMATION CONTACT: Diana Moslak, Federal Crop Insurance 
Corporation, U.S. Department of Agriculture, Washington, DC 20250. 
Telephone (202) 254-8314.

SUPPLEMENTARY INFORMATION: This action has been reviewed under United 
States Department of Agriculture (``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 February 1, 2000.
    This rule has been determined to be ``not significant'' for the 
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 contained in these regulations (7 CFR part 457) have been 
previously approved by OMB and assigned OMB No. 0563-0016.
    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 a 
substantial direct effect on states or their political subdivisions, or 
on the distribution of power and responsibilities among the various 
levels of government.
    This regulation will not have a significant impact on a substantial 
number of small entities. This action does not require any additional 
reporting burden on the insured farmer and the reinsured company. 
Therefore, this action is determined to be exempt from the provisions 
of the Regulatory Flexibility Act (5 U.S.C. 605) and no Regulatory 
Flexibility Analysis was prepared.
    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 require intergovernmental consultation with state and local 
officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.
    The Office of the General Counsel has determined that these 
regulations meet the applicable standards provided in subsections 
(2)(a) and 2(b)(2) of 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 or promulgated by the 
National Appeals Division 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.
    By separate rule, FCIC will amend 7 CFR 401.133 to restrict the 
crop years of application to those prior to the crop year for which 
this rule will be effective and later remove that section.
    On Tuesday, February 21, 1995, FCIC published a proposed rule in 
the Federal Register at 60 FR 9629 proposing to revise the Common Crop 
Insurance Regulations by adding new provisions for sugarcane crop 
insurance.
    Following publication of the proposed rule, the public was afforded 
30 days to submit written comments, data, and opinions. The comments 
received and FCIC responses are as follows:
    Comment: One comment received from an insurance association 
recommended deleting subsection 3.(b) so that sugarcane production 
reporting would include the most recent crop year, the same as other 
crops. The ``lag year'' procedure now followed for sugarcane occurs 
because production records are not available by the production 
reporting date. The comment noted that procedure permits updating the 
Actual Production History (APH) records with a ``temporary yield'' when 
an insured is unable to complete harvesting the crop or production 
records are unavailable from the processor. Using the ``temporary 
yield'' for the most recent crop year for sugarcane would eliminate the 
need for the ``lag year'' and special procedure for sugarcane in the 
1995 Crop Insurance Handbook.
    Response: Subsection 3.(b) allows producers to delay reporting 
production for one year because the actual production amount for 
sugarcane normally is not known until after the production reporting 
date for all other crops. The ``Temporary Yield'' procedure is intended 
to be a measure used in extreme circumstances, not as a routine event. 
Using ``temporary yields'' for reporting sugarcane production would 
result in additional paperwork to revise the APH once actual records 
are available. Therefore, FCIC finds that the recommendation would 
increase rather than reduce paperwork, and is not adopting the comment.
    Comment: One comment received from an insurance association 
questioned the language and intent of subparagraph 8.(a)(3)(ii). Was it 
the intent of the new language to change the date on which insurance 
attaches on second year stubble cane in Louisiana? [[Page 25602]] The 
current provision states that coverage begins on the later of April 15 
or 30 days after harvest after the second crop year of stubble cane. 
The proposed policy stated that coverage would begin on the later of 
April 15 or 30 days after harvest for the second crop year. If there is 
no intent to change this provision, it is recommended that the words 
``of stubble cane'' be added to subparagraph 8.(a)(3)(ii).
    Response: FCIC agrees with the comment and has amended paragraph 
8.(a)(3)(ii) accordingly.
    Comment: One comment received from an insurance association 
recommended that paragraph 11.(c)(1) be revised to count the appraisal 
of sugarcane cut for seed.
    Response: FCIC agrees with the comment and has amended paragraph 
11.(c)(1) accordingly.
    In addition to the changes indicated in the responses to comments, 
FCIC has made the following changes:
    1. The definition of ``crop year'' has been amended by deleting 
references made to the length of the insurance period. This language 
duplicated a portion of the provisions contained in section 8 
(Insurance Period).
    2. Paragraph 10.(a)(2) of the proposed crop provisions indicated 
that if notice to cut sugarcane for seed was not given, that an 
appraisal equal to the production guarantee would be made. Acreage cut 
for seed normally produces the highest yield of any acreage in the 
unit. Therefore, FCIC has changed the appraisal amount for such acreage 
to the APH yield.

    Accordingly, the rule, ``Common Crop Insurance Regulations; 
Sugarcane Crop Insurance Provisions'' published at 60 FR 9629 as 
revised and as set out below is hereby adopted as a final rule.

List of Subjects in 7 CFR Part 457

    Crop insurance; Sugarcane.

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 1996 and succeeding 
crop years, as follows:

PART 457--[AMENDED]

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

    Authority: 7 U.S.C. 1506(l).

    2. 7 CFR part 457 is amended by adding Sec. 457.116 to read as 
follows:


Sec. 457.116  Sugarcane crop insurance provisions.

    The Sugarcane Crop Insurance Provisions for the 1996 and succeeding 
crop years are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Sugarcane Crop Provisions

    If a conflict exists among the Basic Provisions (Sec. 457.8), 
these crop provisions, and the Special Provisions, the Special 
Provisions will control these crop provisions and the Basic 
Provisions; and these crop provisions will control the Basic 
Provisions.

1. Definitions

    (a) Crop year--The period within which the insured sugarcane is 
normally grown and designated by the calendar year in which the 
harvest of sugarcane normally begins in the county.
    (b) CFSA--Consolidated Farm Service Agency (previously the 
Agricultural Stabilization and Conservation Service).
    (c) Good farming practices--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 
Extension Service as compatible with agronomic and weather 
conditions in the area.
    (d) Harvest--Cutting and removing the mature sugarcane from the 
field.
    (e) 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.
    (f) 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.
    (g) Local market price--The price per pound for raw sugar 
offered by buyers in the area in which you normally market the 
sugarcane.
    (h) Plant cane--The insured crop which grows from seed planted 
for the crop year.
    (i) Production guarantee--The number of pounds determined by 
multiplying the approved yield per acre by the coverage level 
percentage you elect.
    (j) Stubble cane--The insured crop which grows from the stubble 
of sugarcane that was harvested the previous crop year.
    (k) Sugarcane--means either plant cane or stubble cane.
    (l) 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 
contained in the written agreement. Notwithstanding the sales 
closing date restrictions contained herein, in specific instances a 
written agreement may be applied for after the sales closing date, 
and approved if, after physical inspection of the acreage, it is 
determined that the crop has the expectancy of making at least the 
guaranteed yield. 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 Basic Provisions (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. Basic units may not be divided into optional units 
on any basis including, but not limited to, production practice, 
type, variety, and planting period other than as described 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 the optional 
units are combined, that portion of the premium paid for the purpose 
of electing optional units will be refunded to you pro rata for the 
units combined. 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 discernible 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 
permits us to 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 
Consolidated Farm Service Agency (``CFSA'') 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 discernible, each optional unit must 
be located in a separate [[Page 25603]] farm identified by a single 
CFSA 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 CFSA Farm Serial 
Number, optional units may be based on irrigated acreage or non-
irrigated acreage if both are located in the same Section, section 
equivalent or CFSA 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 may not continue into non-irrigated acreage 
in the same rows or planting pattern. Non-irrigated corners of a 
field in which a center-pivot irrigation system exists that do not 
qualify as a separate optional unit will be a part of the irrigated 
unit; however, other non-irrigated acreage within the unit being 
divided may qualify as a separate optional unit provided all 
requirements of this section are met.

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

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) 
of the Basic Provisions (Sec. 457.8), you may select only one price 
election for all the sugarcane in the county insured under this 
policy.
    (b) Instead of reporting your sugarcane production for the 
previous crop year as required by subsection 3.(c) of the Basic 
Provisions (Sec. 457.8), there is a lag period of one year and you 
are required to report production from two crop years previously, 
e.g., 1994 crop year production must be reported by the required 
date for the 1996 crop year.

4. Contract Changes

    The contract change date is June 30 preceding the cancellation 
date (see the provisions of section 4 (Contract Changes) of the 
Basic Provisions (Sec. 457.8)).

5. Cancellation and Termination Dates

    In accordance with subsection 2.(f) of the Basic Provisions 
(Sec. 457.8), the cancellation and termination dates are September 
30.

6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the sugarcane 
in the county for which a premium rate is provided by the actuarial 
table:
    (a) In which you have a share;
    (b) That is grown for processing for sugar or for seed; and
    (c) That is not interplanted with another crop, unless a written 
agreement allows otherwise.

7. Insurable Acreage

    Paragraph 9.(a)(3) of the Basic Provisions (Sec. 457.8) is not 
applicable to the Sugarcane Crop Provisions.

8. Insurance Period

    (a) In addition to the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), insurance attaches:
    (1) At the time of planting for plant cane unless we agree in 
writing to a later date;
    (2) On the first day following harvest of the previous crop for 
stubble cane except as set out in paragraph 8.(a)(3);
    (3) On the later of April 15 or 30 days following harvest of the 
previous crop for stubble cane:
    (i) Damaged during the previous crop year in all states 
(includes Louisiana); and
    (ii) In Louisiana, after the second harvest from stubble cane.
    (b) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8) the calendar date for 
the end of the insurance period is:
    (1) January 31 in Louisiana; and
    (2) April 30 in all other states.

9. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur within the insurance 
period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or 
improper application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if applicable, due 
to an unavoidable cause of loss occurring within the insurance 
period.

10. Duties in the Event of Damage or Loss or Cutting the Sugarcane for 
Seed

    (a) In addition to your duties under section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), in 
the event of damage or loss:
    (1) All sugarcane stubble must remain intact for our inspection; 
and
    (2) You must give us notice at least 15 days before you begin 
cutting any sugarcane for seed. Your notice must include the unit 
number and the number of acres you intend to harvest as seed. After 
we receive such notice we will appraise the sugarcane for its sugar 
potential. If you do not give us this notice, the production to 
count for such acreage will be your approved yield.
    (b) In accordance with the requirements of section 14 (Duties in 
the Event of Damage or Loss) of the Basic Provisions (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 representative samples of 
the unharvested crop must be at least 10 feet wide and extend the 
entire length of each field in the unit. The stubble must not be 
destroyed and the required samples must not be harvested until the 
earlier of our inspection or 15 days after harvest of the balance of 
the unit is completed.

11. 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 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 of sugar) 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;
    (D) For which you fail to provide records of production that are 
acceptable to us; or
    (E) On which the sugarcane stubble is destroyed within 15 days 
after harvest is completed without our consent;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production;
    (iv) The difference between the production guarantee and the 
appraised production for acreage that has an inadequate stand. An 
appraisal for an inadequate stand will be made if the product of the 
number of stalks per acre multiplied by two and further multiplied 
by the percentage of sugar contained in the Special Provisions for 
this purpose does not equal the per-acre production guarantee; and
    (v) Potential production on insured acreage harvested for seed 
(see paragraph 10.(a)(2));
    (vi) 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 insurable acreage. Final 
records of sugar [[Page 25604]] production will be used to determine 
the amount of production to count. Preliminary mill estimates will 
not be used.
    (d) Harvested sugarcane may be adjusted for low quality if it is 
damaged by one or more freezes occurring within the insurance period 
to the extent that it cannot be processed for sugar by the boiling 
house operation. The amount of production to count for such 
sugarcane will be determined by dividing the dollar value of the 
damaged production by the local market price per pound for raw 
sugar. The prices used for this adjustment will be determined on the 
earlier of the date such quality-adjusted production is sold or the 
date of final inspection for the unit.

    Done in Washington, DC, on May 3, 1995.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 95-11780 Filed 5-11-95; 8:45 am]
BILLING CODE 3410-08-P