[Federal Register Volume 60, Number 235 (Thursday, December 7, 1995)]
[Rules and Regulations]
[Pages 62710-62730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29606]



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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation

7 CFR Parts 401, 443, and 457

RIN 0563-AB43


General Crop Insurance Regulations, Various Endorsements; Hybrid 
Seed Crop Insurance Regulations; and Common Crop Insurance Regulations, 
Various Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation.

ACTION: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (``FCIC'') hereby 
amends the General Crop Insurance Regulations, Hybrid Sorghum Seed and 
Rice Endorsements; the Hybrid Seed Crop Insurance Regulations; and the 
Common Crop Insurance Regulations, Small Grains, Cotton, Extra Long 
Staple Cotton, Sunflower Seed and Coarse Grains Crop Insurance 
Provisions, applicable beginning with the 1996 crop year for spring 
planted crops with contract change dates on or after the effective date 
of this rule, by revising prevented planting coverage. The intended 
effect of this regulation is to expand prevented planting benefits 
available under the various policies being amended.

DATES: The effective date of this rule is November 30, 1995. The 
comment period for information collections under the Paperwork 
Reduction Act of 1995 continues through January 8, 1996.

ADDRESSES: For information collection comments submission, see 
SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: For further information and a copy of 
the 

[[Page 62711]]
Cost-Benefit Analysis and Regulatory Flexibility Analysis to the 
General Crop Insurance Regulations; Hybrid Seed Crop Insurance 
Regulations; and Common Crop Insurance Regulations for implementation 
of the prevented planting provisions, contact Diana Moslak, Regulatory 
and Procedural Development Staff, Federal Crop Insurance Corporation, 
U.S. Department of Agriculture, Washington, D.C. 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 
does not constitute a review as to the need, currency, clarity, and 
effectiveness of these regulations under those procedures. The sunset 
review date established for Small Grains is July 1, 1998; Coarse 
Grains, Cotton, Extra Long Staple Cotton and Sunflower Seed is March 1, 
1999; Hybrid Seed is October 1, 1997; Hybrid Sorghum Seed is May 1, 
2000; and Rice is August 29, 1998.
    This rule has been determined to be ``economically significant'' 
for the purposes of Executive Order 12866 and, therefore, has been 
reviewed by the Office of Management and Budget (``OMB'').
    A Cost-Benefit Analysis is completed and is available to interested 
persons at the address listed above. In summary, the analysis finds 
that the expected Treasury costs of these changes are expected to range 
between $2.1 and $20.8 million. Added costs are due to higher 
reimbursements to reinsured companies and for premium subsidies for 
producers. The estimates assume the majority of producers will decline 
the coverage for the substitute crop, opting instead for a reduced 
premium on the intended crop. Nationwide, premium rates will increase 6 
to 7 percent for the added coverage. As examples of monetary impacts, 
this means an average increase in the producer paid premium of 20-25 
cents per acre for wheat in the Northern Plains; 30 cents for corn in 
Iowa; and 60-90 cents per acre for upland cotton. However, the premium 
rate increases will not be uniform. Instead, the highest risk areas 
(such as lowlands along rivers and similar conditions) can expect 
greater increases in premium to cover the added risk. Producers who 
farm such lands are expected to be the primary group that will retain 
this added coverage and elect to pay the additional premium. The 
changes to the prevented planting rules will provide producers with 
added assistance in extreme weather conditions in a manner that 
maintains the actuarial integrity of the Federal crop insurance 
program.

Paperwork Reduction Act of 1995

    The information collection requirements contained in these 
regulations were submitted to OMB for their approval under section 
3507(j) of the Paperwork Reduction Act of 1995, and received emergency 
approval through February 28, 1996. The agency is also seeking a valid 
approval for 3 years under section 3507(d). Public comments are due by 
January 8, 1996.
    The title of this information collection is ``Catastrophic Risk 
Protection Plan and Related Requirements including General Crop 
Insurance Regulations, Hybrid Seed Crop Insurance Regulations and 
Common Crop Insurance Regulations.'' The information to be collected 
includes: a crop insurance acreage report, an insurance application and 
continuous contract. Information collected from the acreage report and 
application is electronically submitted to FCIC by the reinsured 
companies. Some respondents may provide additional information for the 
purpose of selecting insurance options that apply to specific crops or 
specific areas in which a crop is produced. Potential respondents to 
this information collection are growers of crops that are eligible for 
Federal Crop Insurance.
    The information requested is necessary for the insurance company 
and FCIC to provide insurance, provide reinsurance, determine 
eligibility, determine the correct parties to the agreement, determine 
and collect premiums or other monetary amounts (or fees), and pay 
benefits.
    All information is reported annually. The reporting burden for this 
collection of information is estimated to average 16.9 minutes per 
response for each of the 3.6 responses from approximately 1,750,015 
respondents. The total annual burden on the public for this information 
collection is 2,668,750 hours. The total annual burden has increased 
from the 1995 requirements to reflect the paperwork burden on the 
reinsured companies.
    Comments were invited on the information collection requirements 
during the proposed rule stage. The comment period for information 
collections under the Paperwork Reduction Act of 1995 continues through 
January 8, 1996, on the following: (a) Whether the proposed collection 
of information is necessary for the proper performance of the functions 
of the agency, including whether the information shall have practical 
utility; (b) the accuracy of the agency's estimate of the burden of the 
proposed collection of information; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of the collection of information on respondents, 
including through the use of automated collection techniques or other 
forms of information technology.
    Comments should be submitted to the Desk Officer for Agriculture, 
Office of Information and Regulatory Affairs, Office of Management and 
Budget (OMB), Washington, D.C. 20503 and to Bonnie Hart, Information 
Management Branch, Consolidated Farm Service Agency, U.S. Department of 
Agriculture, Washington, D.C. 20250. Copies of the information 
collection may be obtained from Bonnie Hart at the above address. 
Telephone (202) 690-2857.
    It has been determined under section 6(a) of Executive Order 12612, 
Federalism, that this rule does not have sufficient federalism 
implication to warrant the preparation of a Federalism Assessment. The 
provisions contained in this rule will not have a substantial direct 
effect on states or their political subdivisions, or on the 
distribution of power and responsibilities among the various levels of 
government.
    The amount of work required of the insurance companies and FSA 
offices delivering the policies and the procedures therein may increase 
significantly from the amount of work currently required to deliver 
previous policies to which this regulation applies. Therefore, this 
action has been reviewed under the provisions of the Regulatory 
Flexibility Act (5 U.S.C. 605) and a Regulatory Flexibility Analysis is 
available to interested persons at the address listed above.
    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 
not have retroactive effect prior to the effective date. The provisions 
of this rule will preempt state and local laws to the extent such state 
and local laws are inconsistent herewith. The administrative appeal 
requirements of the National Appeals Division under 

[[Page 62712]]
Public Law 103-354 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.

Background

    Current regulations do not allow an insured producer to obtain a 
prevented planting guarantee for one crop and plant a substitute crop 
intended for harvest in the same crop year on the same land. By this 
rule a producer who purchases limited or additional coverage beginning 
with the 1996 crop year for spring crops with contract change dates on 
or after the effective date of this rule, will be eligible to: (1) 
Receive a prevented planting guarantee equal to 25 percent of the 
guarantee for timely planted acreage (20 percent for hybrid seed (corn) 
and 17.5 percent for cotton, ELS cotton, and rice) when acreage that is 
prevented from being planted is planted to a substitute crop after the 
10th day after the final planting date for the intended crop (10th day 
after the latest final planting date for each specific crop insured 
under the Small Grains Crop Provisions) and, as applicable, a 0/92 or 
50/92 program benefit; (2) exclude eligibility for prevented planting 
coverage when a substitute crop is planted in return for a reduction in 
the premium; and (3) receive prevented planting coverage on double 
cropped acreage (except for ELS cotton) if the producer can provide 
proof that planting of a second crop (double crop) following the 
harvest of an initial crop in the same crop year is a farming practice 
normally followed by that producer.
    By this rule, the prevented planting provisions will also: (1) 
Allow all insured producers to receive a 0/92 or 50/92 program benefit, 
as applicable, and a crop insurance prevented planting guarantee equal 
to 50 percent of the guarantee for timely planted acreage (40 percent 
for hybrid seed (corn) and 35 percent for cotton, ELS cotton, and rice) 
when acreage that is prevented from being planted is not planted to a 
substitute crop; (2) eliminate the provisions that require acreage 
eligible for a prevented planting guarantee to be prorated to all units 
that could have been planted in the crop year; (3) change the date that 
notice of loss is required from 3 days after the final planting date, 
or the date the producer discovers that planting will not be possible 
within the late planting period, to the acreage reporting date; and (4) 
allow prevented planted acreage planted with a conserving use cover 
crop to be hayed and grazed without affecting prevented planting 
benefits.
    On Wednesday, November 8, 1995, FCIC published a proposed rule in 
the Federal Register at 60 FR 56257 to revise prevented planting 
coverage under various policies. Following publication of that proposed 
rule, the public was afforded 15 days to submit written comments, data, 
and opinions. A total of 14 comments were received: 3 from Regional 
Service Offices; 5 from reinsured companies; 4 from crop insurance 
trade associations; 1 from a grower association; and 1 from a 
congressional office. The comments received and FCIC responses are as 
follows:
    Comment: One comment received from the crop insurance industry 
indicated that the proposed changes for 1996 are less than timely, as 
1996 training and marketing activities have already begun for the crops 
affected by the proposed rule. The comment recommends that FCIC move to 
process the final rule as soon as practical to minimize confusion in 
the 1996 crop year.
    Response: FCIC agrees that the 1996 prevented planting regulations 
need to be published and implemented as quickly as possible.
    Comment: Two comments received from the crop insurance industry 
recommended that whatever the final prevented planting provisions are, 
they should stand for the crop year without further change.
    Response: FCIC agrees with the comment and is committed to limit 
changes unless deemed essential.
    Comment: One comment received from the FSA stated that canola crop 
provisions need to be included and amended to conform to the 1996 
prevented planting changes since the canola policy has prevented 
planting provisions.
    Response: FCIC disagrees because canola is a pilot policy that has 
not been published in the Federal Register. No change will be made.
    Comment: One comment received from the crop insurance industry 
noted that the term ``Consolidated Farm Service Agency'' is used in the 
provisions and that the term used should now be ``Farm Service 
Agency.''
    Response: FCIC agrees and has made the necessary changes.
    Comment: One comment received from the legal counsel of a reinsured 
company stated that FCIC's proposed rulemaking is in violation of the 
Administrative Procedure Act.
    Response: The Office of General Counsel approved FCIC's proposed 
regulation for legal sufficiency. The short comment period was 
necessary due to pressure to provide an adequate program to producers 
by the applicable contract change dates. FCIC believes that adequate 
time was given for the public to comment, based on the number and 
length of comments received.
    Comment: One comment received from the crop insurance industry 
indicated that administrative costs and errors and omission exposure 
will increase at the point of sale to the extent the provisions must be 
explained adequately.
    Response: FCIC agrees that the provisions must be clearly 
communicated to avoid the exposures indicated in the comment. FCIC is 
making every effort to provide the new provisions as early as possible 
to allow adequate time for training, etc.
    Comment: Four comments received from the crop insurance industry 
indicated the need to allow modification of the already approved 1996 
Standard Reinsurance Agreement to recognize the increased 
administrative and underwriting costs associated with the increased 
benefits and potential adverse selection associated with this rule. 
This modification, in the form of an optional amendment, would allow 
the reinsured company the option of assigning policies with prevented 
planting losses to FCIC or to pre-designate that such policies will 
fall to a different fund and/or have a different retention percentage 
than that designated in the reinsured company's plan of operation. In 
addition, one of the comments proposes that provisions regarding excess 
loss adjustment expense that are being considered for the 1995 crop 
year be adopted for the 1996 Standard Reinsurance Agreement. One 
comment indicates that the proposal may be characterized as 
implementing into the subject policies the prevented planting benefits 
that were administratively adopted during the 1995 crop year, and that 
the changes made in 1995 appear to have significantly increased 
administrative and underwriting costs. One comment stated that 
reinsured companies must be provided with a means under the Standard 
Reinsurance Agreement to either cede the entire premium and losses 
associated with prevented planting to FCIC or to cede the premium and 
losses to a risk fund other than that in which the rest of a policy is 
placed. Until the adequacy of the rating can be tested, FCIC must bear 
all or substantially all of the risk of loss 

[[Page 62713]]
(and any gain) associated with these policies if a company is unwilling 
or unable to. One comment stated that FCIC has failed to minimize moral 
hazard and has proposed a program that it expects will be adversely 
selected against and will therefore damage the integrity and actuarial 
soundness of the crop insurance program. Without providing private 
insured companies with a means to cede the increased risk associated 
with the proposed provisions entirely or almost entirely to FCIC, the 
proposed rule would force private companies to bear losses due to 
programmatic decisions which they had no control over.
    Response: FCIC has promulgated premium rates that reflect the 1996 
prevented planting provisions; thus, FCIC is not compelled to provided 
additional options to select among reinsurance funds or assume all the 
risk associated with the program change. Promulgation of premium rates 
prior to publication of this final rule was permissible because the 
actuarial material also contained the premium rate that would be used 
if this rule were not made final. The additional excess loss adjustment 
expenses provided for the 1995 crop year were made to offset the 
expense of loss adjustments when the Company had to re-open completed 
claims, and to clear a considerable number of notices of loss to 
determine if payable prevented planting claims existed. It was also 
expected that additional expense was incurred to re-train agents and 
loss adjusters on the prevented planting changes and loss procedures. 
FCIC believes that administrative expense reimbursement and excess loss 
adjustment expense provided under the Standard Reinsurance Agreement 
effective for the 1996 reinsurance year are adequate to cover such 
expenses for the 1996 crop year.
    Comment: One comment received from the insurance industry indicated 
concern over whether enough premium differential is included in the 
prevented planting rates to adequately cover prevented planting 
payments on so called 0/92 acres. The comment indicated that providing 
both guaranteed deficiency payments and prevented planting payments 
invites policyholders to make an economic decision not to plant, and 
that these decisions will adversely impact the insurer. The comment 
indicated reservation over whether enough rate could be charged to 
counter this adverse selection opportunity.
    Response: Guaranteed deficiency payments such as under the so 
called 0/92 and 50/92 programs are independent of crop insurance 
payments. Therefore, the risk of insurance against prevented planting 
should be unaffected. However, farm management decisions can be and 
should be made based on economics. The 0/92 and 50/92 benefits already 
have a significant influence on producer reaction. There now is a moral 
hazard that a producer may be influenced to collect a prevented 
planting payment in addition to the 0/92 or 50/92 payment; however, the 
extent of the moral hazard is unknown. That moral hazard is greatly 
influenced by the assessment of the 0/92 and 50/92 program in any given 
year. For example, if the guaranteed deficiency payments are decreased 
or expected to decrease, then the 0/92 and 50/92 program payments are 
also minimized and the moral hazard for additional prevented planting 
payments are likely to disappear. The reverse is also true if the 
guaranteed deficiency payments are expected to increase. Therefore, the 
moral hazard can only be approximated by adding an additional rate to 
counter the expected adverse selection potential of the dual payments. 
County rates were increased based on the probability that some 
additional losses will accrue given the influence of the so called 0/92 
or 50/92 program.
    Comment: One comment received from the legal counsel of a reinsured 
company indicated an inconsistency with the coverage provided and the 
Federal Crop Insurance Reform Act of 1994 (the ``Reform Act''). The 
Reform Act indicates that for CAT coverage a prevented planting benefit 
will be paid only if a producer is unable to plant another crop. 
Current crop provisions and the proposed provisions provide a prevented 
planting benefit if a producer is prevented from planting the insured 
crop and elects not to plant a substitute crop.
    Response: FCIC agrees that this issue must be analyzed and 
modifications made if found necessary. However, the comment is not 
germane to this rule because it applies to regulations already in 
place.
    Comment: One comment received from the legal counsel of a reinsured 
company states that the proposed provisions are in conflict with 
section 506(o) of the Federal Crop Insurance Act (the ``Act'') which 
directs FCIC ``to take such actions as are necessary to improve the 
actuarial soundness of the Federal multiperil crop insurance 
coverage.'' Reasons cited include: (1) Increased moral hazard, 
particularly if market prices (and/or yields) are expected to be low 
and net returns for a substitute crop or 0-50/92 benefits are expected 
to be high; (2) elimination of provisions that required prevented 
planting acreage to be prorated to all units that could have been 
planted to the insured crop; and (3) the addition of provisions that 
provide prevented planting benefits for producers who follow a double-
cropping practice without sufficient premium to offset the risk.
    Response: In addition to maintaining an actuarially sound insurance 
program, FCIC is mandated to maintain fair and effective coverage for 
agricultural producers. FCIC must also make the administration of its 
programs efficient and practical. Virtually all insurance providers 
have indicated that previous provisions requiring proration of eligible 
acreage were complex, unmanageable, and not fair to producers in many 
cases. Producers have been eligible to collect deficiency payments on 
planted acres and certain prevented planting acreage. There is no 
justification for denying those benefits when producers are eligible 
for crop insurance benefits provided premium rates reflect the 
increased risk of loss. FCIC has developed premium rates for prevented 
planting based on sound rating principles, including those prevented 
planting situations that may develop in double-cropping areas. If data 
is available indicating that rates are insufficient to offset the risk, 
FCIC requests submission of such data so that it can be reviewed and 
any necessary changes can be made.
    Comment: One comment received from a commodity group and one 
comment received from the crop insurance industry stated that they have 
concerns about projected premium increases. They request that producers 
have the option of excluding prevented planting coverage in its 
entirety. Producers need to be able to assess the rate increase before 
purchasing crop insurance coverage to see if prevented planting 
coverage is economically feasible for them. They stated that the 
projected average cost increase is 6-8 percent and in some high rate 
areas may be as much as 20 percent. Producers cannot afford another 
premium increase.
    Response: Prevented planting coverage was made an integral part of 
the policy following the 1993 crop year to lessen the need for ad hoc 
disaster assistance for growers who were prevented from planting. If 
allowed to opt out of the coverage, FCIC believes that large numbers of 
growers would exclude the coverage. This assessment is based on the 
experience of 1993. This would result in a great deal of pressure 
either to institute insurance coverage after a loss has occurred or a 
great deal 

[[Page 62714]]
of pressure for some other form of financial assistance.
    Comment: One comment received from members of the House of 
Representatives of the United States Congress stated that most of West 
Texas has been given a large multiperil rate increase on cotton that 
producers simply cannot afford. They have been informed that some 
counties have suffered as much as a 20 percent rate increase for 1996. 
They stated that the provisions suggest that the primary benefits 
account for a 6-7 percent rate increase even if the secondary coverage 
is rejected. The impact analysis estimates the majority of producers 
will decline the coverage for the alternate crop, opting instead for a 
reduced premium on the intended crop. They stated that the prevented 
planting benefits appear to account for at least 13 percent of the 20 
percent rate increase. They feel the prevented planting provisions 
should be modified to allow producers to reject all prevented planting 
coverage in return for an additional reduction in premium in the amount 
of the 6-7 percent FCIC claims the primary coverage for prevented 
planting is worth. They stated that producers cannot afford a premium 
increase to pay for prevented planting coverage they do not need. In 
1995, West Texas experienced a rate increase that was largely absorbed 
by a 30-42.5 percent increase in subsidy payments. The 1996 rate 
increase will be borne by producers alone. This increase is an 
unnecessary burden on the agricultural community.
    Response: The rate increase not associated with the 1996 prevented 
planting program change is necessary to make the cotton crop insurance 
program actuarially sound. Primary prevented planting benefits account 
for only 0.2 percent to 0.4 percentage points of premium rate. 
Therefore, growers opting out of the primary prevented planting 
coverage would receive a very small credit. FCIC believes that basic 
prevented planting coverage should remain an integral part of the 
policy to ensure growers are covered in the event that prevented 
planting occurs (also see response to comment above).
    Comment: Seven comments received from the crop insurance industry 
and one comment received from FSA recommended amending the definition 
of prevented planting because: (1) The definition includes reference to 
``most producers in the surrounding area'' and the term ``most'' is not 
defined. As a result there is no way to apply the definition to any 
particular policyholder when there is a dispute over whether or not 
planting was actually prevented; (2) The day after the final planting 
date, a producer could plant a substitute crop and receive a prevented 
planting benefit; and (3) The provisions must require prevented 
planting conditions to have to exist through the whole late planting 
period before any prevented planting payment is due because: (a) 
Prevented planting should never have been allowed for producers who 
quit planting by the final planting date and made no effort to plant 
within the late planting period; (b) allowing the producer to declare 
prevented planting on the day after the final planting date defeats the 
purpose of the late planting provision and submits the program to 
unwarranted risk; (c) the producer may not plant an alternative crop or 
enter into 0/92 until after the late planting period has expired for 
the original crop and still collect a prevented planting payment (with 
the obvious requirement that weather conditions continue to prevent 
planting in the late planting period); (d) the prevented planting 
payment payable when an alternative crop is planted must be reduced 
from that level available if no alternative crop is planted; (e) in no 
circumstance could the producer switch to an alternative crop prior to 
the end of the late planting period and still collect a prevented 
planting payment (they would be free to plant whatever crop they wanted 
at any time, they just should not expect to collect a prevented 
planting payment on the original crop if they do not go through the 
late planting period of the original crop); and (f) moral hazards and 
abuse are created when producers are allowed to collect a substitute 
crop immediately after the final planting date. In most cases producers 
will plant the crop into the late planting period as a normal practice, 
but now we have created a disincentive to do so.
    Response: FCIC agrees that a more definitive term than ``most'' 
should be used and has replaced it with the term ``majority'' to 
reflect that more than 50 percent of the producers must have been 
prevented from planting.
    This definition was designed to accommodate extremely varied 
production areas and farming practices; including those in which 
growers do not plant after the final planting date and those in which 
growers often do plant a crop within the late planting period. Some 
farming areas have relatively short growing seasons which make the 
prospect of a successful crop doubtful if planted much beyond the final 
planting date. Other areas have much longer growing seasons and often 
allow a successful crop to be grown even if planted after the final 
planting date. In both long and short growing areas, some farming 
practices, such as the production of silage, allow a grower to plant 
after the final planting date and still produce an acceptable crop. 
Changing the definition to require that prevented planting conditions 
must have existed through the end of the late planting period before 
any prevented planting coverage would be provided would not accommodate 
growers who normally do not plant after the final planting date.
    FCIC agrees producers should be encouraged to plant their initially 
intended crop after the final planting date when it is practical to do 
so. Therefore, FCIC has amended these regulations to specify that 
prevented planting coverage will not be provided when a producer, 
prevented from planting the initially intended crop, plants a 
substitute crop within ten days after the final planting date for the 
initially intended crop.
    Comment: One comment received from the crop insurance industry 
suggested that FCIC's actuaries re-evaluate: (1) When the late planting 
period should start (i.e., final planting date); (2) whether the late 
planting period should be shortened; and (3) whether or not eligibility 
for a prevented planting payment should trigger at the time that 
shortened period is exhausted.
    Response: These evaluations are on-going. FCIC requests that any 
person who has data affecting these matters make it available for 
consideration.
    Comment: One comment received from a commodity group stated that 
they oppose the lower percentage level of insurance guarantee proposed 
for prevented planted cotton compared to other commodities. They 
contend the criteria that should be used to determine coverage for 
prevented planting should be applied consistently among commodities.
    Response: Data used by FCIC to determine prevented planting 
benefits indicated cotton producers incur a larger percentage of total 
production costs after planting than do producers of corn and other 
grain crops. Additional post-plant costs incurred by cotton producers 
include those for pest control and the costs associated with the 
ginning and handling of cotton. Therefore, no change will be made. FCIC 
is willing to work with producer groups and other interested parties to 
review existing data to revise levels of benefits when analyses 
indicate it is necessary.
    Comment: One comment received from the crop insurance industry 
recommended increasing the standard 

[[Page 62715]]
prevented planting payment from the current 50 percent to 60 percent.
    Response: The prevented planting payment of 50 percent adequately 
compensates the producer for the loss of production, taking into 
consideration cost, not incurred. FCIC has discovered that increasing 
the standard prevented planting payment reduces the incentive for 
producers to plant the intended crop by the end of the late planting 
period when it is possible and increases the cost to the program. 
Therefore, FCIC will not change the standard prevented planting 
payment.
    Comment: One comment received from counsel for a reinsured company 
on behalf of the crop insurance industry stated that the Reform Act 
contains a provision that allows a reduction in the benefit amount paid 
to a producer to reflect out-of-pocket expenses not incurred by a 
producer as a result of not planting, growing, or harvesting the crop 
for which a prevented claim is made. The comment indicates that this 
proposed rule is silent regarding this requirement for limited and 
additional coverage, but that FCIC is required by the Reform Act to 
include this provision for CAT coverage.
    Response: Prior to enactment of the Reform Act, prevented planting 
production guarantees for all coverages and crops were at least 50 
percent lower than the guarantee for a timely planted crop to avoid 
compensating producers in excess of their actual losses and provide 
actuarially sound coverage. This has not changed.
    Comment: One comment received from the crop insurance industry 
stated that the inclusion of drought as an insurable peril and lack of 
any firm definitions or procedural guidelines subjects the Company and 
FCIC to abuse and fraud.
    Response: FCIC does not believe that inclusion of drought as an 
insurable peril substantially subjects the company and FCIC to abuse 
and fraud. The burden is on the producer to prove that drought 
prevented a producer from planting. Further, the Soil Conservation and 
Extension Services have advised producers on occasion not to plant 
because it was so dry that planting the ground could result in severe 
wind erosion. The rule also requires a majority of producers to be 
affected by the cause of loss.
    Comment: One comment received from the crop insurance industry 
recommended that in an effort to increase the incentive to plant the 
original crop as opposed to simply collecting insurance and farm 
program benefits, it might be advisable to consider reducing the late 
planting period from 25 to 20 days, with the reductions in guarantees 
over the 20 days totalling 25 percent, to leave the person with a 
guarantee equal to 75 percent of their original level--( i.e. 1 percent 
per day for the first 10 days and 1.5 percent per day for the second 10 
days).
    Response: Under the current formula, the production guarantee is 
reduced only 1 percent for each of the first ten days and 2 percent for 
days 11-25. FCIC believes this formula provides adequate incentive for 
producers to plant crops early in the late planting period to keep 
their insurance production guarantee at the highest level possible. 
Changing the length of the late planting period and the percents of 
reduction could result in over insurance and increased crop insurance 
indemnities. Therefore, no change will be made.
    Comment: One comment received from FSA recommended that acreage 
that is planted to the insured crop after the late planting period be 
designated as late planted with a 50 percent reduction in guarantee. 
They stated that it is very confusing to have this acreage designated 
as prevented planting.
    Response: If acreage is prevented from being planted through the 
late planting period due to an insurable cause of loss, and is planted 
to the insured crop after the late planting period, the acreage will 
receive a 50 percent reduction in guarantee and must be reported as 
prevented planting acreage. This information is needed by FCIC for 
analytical purposes in reviewing crop insurance premium rates. 
Therefore, no change will be made.
    Comment: One comment received from the crop insurance industry 
recommended that the cover crop planted on prevented planting acres 
could only be hayed or grazed by the producer's own livestock. The 
producer could not sell hay or charge others to let livestock graze.
    Response: FCIC disagrees because it increases costs, is 
administratively difficult to enforce, and is contrary to legislative 
directives to simplify procedures. Therefore, no change will be made.
    Comment: One comment received from the crop insurance industry 
indicated that the ``background'' section of the proposal indicates 
that prevented planting acreage may be planted to a conserving use 
cover crop that may be hayed and grazed without limitation, but that 
the actual policy language indicates only that a cover crop not for 
harvest may be planted. The comment suggests modifying the policy 
language to indicate that haying and grazing is permissible if this is 
the intent.
    Response: Paragraph 12(a)(3)(i) of the Hybrid Sorghum Seed 
Endorsement states that prevented planting coverage is available ``if 
the acreage is left idle for the crop year, or if a cover crop is 
planted not for harvest. Prevented planting compensation hereunder will 
not be denied because the cover crop is hayed or grazed * * *'' This 
provision is also contained in a similar location in the proposed 
regulations for other crop policies. Therefore, no change is required. 
However, the ``background'' section will be amended to reflect that a 
conserving use cover crop may be hayed or grazed without affecting 
prevented planting benefits.
    Comment: One comment received from FSA stated that under the 
provision allowing for a production guarantee of 50 percent (40 percent 
for hybrid seed (corn) and 35 percent for cotton, ELS cotton and rice) 
of the timely planted guarantee, prevented planting compensation should 
not be allowed when the cover crop is hayed or grazed because the 
producer is receiving a benefit from that crop.
    Response: FCIC agrees that some value is gained when a cover crop 
is hayed or grazed. However, this benefit is of limited value in 
comparison with the income that would be gained if the intended crop 
could have been planted. In addition, the feed value obtained varies 
widely and may be negligible in some situations. It is FCIC's opinion 
that the administrative costs associated with keeping track of the 
disposition of feed production outweigh any benefit that could be 
derived.
    Comment: Eleven comments received from FSA and the crop insurance 
industry recommended eliminating the provision which provides a 
prevented planting guarantee equal to 25 percent of the production 
guarantee for timely planted acres (20 percent for hybrid seed (corn) 
and 17.5 percent for cotton, ELS cotton, and rice) when acreage that is 
prevented from being planted is planted to a substitute crop for 
harvest. The following reasons were given: (1) This protection was not 
intended or mandated by the Reform Act; (2) the previous disaster 
programs never provided this type of protection; (3) there is no budget 
to cover the subsidy or administrative expense for this protection; (4) 
the indemnity would be paid even if the substitute crop provided more 
economic value than the intended crop that was prevented from planting; 
(5) the moral risk is high; (6) there has been little demand for this 
kind of protection from producers, insurance companies or agents and 
if, or when, the demand occurs a ``pilot program'' should be developed 
and 

[[Page 62716]]
implemented; (7) if a plan like this is offered it should be offered as 
a separate policy without government subsidy and delivered by the 
private insurance industry without any cost to the government; (8) the 
premium for the 25 percent protection (20 percent for hybrid seed 
(corn) and 17.5 percent for cotton, ELS cotton, and rice) has been 
increased as much as 30 percent in some counties. This protection 
should be offered as an option or a separate endorsement that does not 
affect the cost of the basic protection or require the producer to sign 
an exclusion; (9) the rating varies within a state from 5 percent to 30 
percent for no apparent reason; (10) it puts extreme pressure on the 
final planting date. For example, producers contemplating switching 
from corn to soybeans would normally plant whenever they thought they 
were better off with a normal soybean yield versus a reduced corn 
yield, but now some producers will want to wait until the final 
planting date for corn so they can have the prevented planting 
guarantee when planting a substitute crop; (11) intended acres are very 
hard to administer; (12) every crop could potentially show one crop as 
prevented planting with a substitute crop planted (i.e. a producer 
could report prevented planting corn with planted soybeans on field A 
and prevented planting soybeans with planted corn on field B when the 
producers intentions were to plant half of the fields to soybeans and 
half to corn); (13) it encourages producers to manipulate the program 
to the detriment of the American taxpayer; (14) acreage on which the 
producer is able to plant a crop for harvest is not acreage that is 
prevented from being planted; (15) the definition of ``indemnity'' in 
the Basic Insurance Principles states, ``For insurance purposes, it 
means that the producer is restored to approximately the same position 
from an economic standpoint that was occupied before the loss occurred. 
* * * Never, under any circumstances, would a gain be permitted.'' 
Under this provision, a gain is almost a given; (16) a producer would 
not plant two crops on the same acreage in the same crop year, except 
for a producer who normally double crops. That is unfair to producers 
in areas without excessive moisture who plant only one crop and may 
receive an indemnity on only that crop, not an additional 25 percent on 
an imaginary crop; (17) any time a producer can opt out of automatic 
coverage, adverse selection is assured; (18) the more endorsements, 
options, and exclusions that are added to a policy, the greater the 
likelihood of producers being unaware of all of their policy provisions 
and obligations which increases the appeals, litigation cases, agent 
error and omissions occurrences, and Congressional referrals; (19) the 
rate increases and factors that were used are inaccurate; (20) factors 
used to decrease premium if a producer opts out of this coverage are 
excessive; (21) the prevented planting provisions must increase the 
incentive to plant the original crop and decrease any incentive to 
simply not plant and collect insurance benefits; (22) adverse selection 
will also occur as producers will be able to opt out of prevented 
planting for a reduced charge; and (23) the most recent GAO report 
addresses the inadequacy of the current premium rates and that the 
programs rate structure was undermined when the Department provided 
more benefits in 1995 under the prevented planting provision and, if 
history is any indication, then premium rates will remain inadequate.
    Response: FCIC understands the concerns of the crop insurance 
industry, government employees, and others. Although the Reform Act did 
not mandate this protection, FCIC's decision to develop the proposed 
regulations for prevented planting was based on broad policy concerns 
that had to be considered along with actuarial concerns.
    When the present prevented planting provisions were developed for 
the 1994 crop year, FCIC knew that changes would be needed in future 
years as experience was gained. Many producers were prevented from 
planting in the 1995 crop year and voiced discontent with those 
provisions. It was concluded that there was an inconsistency in 
coverage that resulted in three different levels of claims payments for 
producers similarly affected by excessive moisture. Specifically, 
producers who planted an insured crop that failed were eligible for 
crop insurance indemnities for a loss in production; producers who were 
prevented from planting an insured crop and did not plant a subsequent 
crop were eligible for a crop insurance prevented planting payments, 
but producers who were prevented from planting an insured crop and 
planted a substitute crop were not eligible for any crop insurance 
payments. FCIC believes that this third group should be eligible for 
crop insurance payments to make them whole.
    To maintain actuarial integrity 1996 crop insurance premium rates 
were recalculated to reflect the prevented planting coverage changes. 
FCIC believes the coverage changes merely give producers another 
insurance choice when they are prevented from planting their initially 
intended crops. FCIC agrees producers should be encouraged to plant 
their initially intended crop after the final planting date when it is 
practical to do so. Therefore, FCIC is amending this regulation so that 
when Producers are prevented from planting their initially intended 
crop and plant a substitute crop within ten days after the final 
planting date for the initially intended crop, a prevented planting 
production guarantee will not be provided for such acreage. In 
addition, FCIC believes producers will make every effort to plant the 
crop of the greatest economic value as soon as possible. It would make 
little sense to delay planting to receive the 25 percent prevented 
planting payment and run the risk of not getting any crop planted. FCIC 
believes this amendment will help maintain the actuarial soundness of 
the prevented planting coverage.
    The proposed regulations do not provide the option to delete the 
primary prevented planting coverage. They do provide producers the 
option of declining eligibility for a prevented planting production 
guarantee when a substitute crop is planted. Producers may wish to 
delete this coverage in return for a reduction in the premium they are 
required to pay. Based on the forgoing reasons, no change will be made.
    Comment: One comment received from the crop insurance industry 
suggested that the option to receive prevented planting benefits and 
plant a substitute crop should be continuous until cancelled and should 
only be completed for producers who want the additional coverage, not 
for producers declining the coverage.
    Response: FCIC has determined that all producers should have 
complete prevented planting coverage unless they elect to exclude such 
coverage when a substitute crop is planted for harvest. Experience in 
1993 indicates that most producers were unaware of the availability of 
prevented planting coverage when it was a separately purchased 
coverage. Therefore, no change will be made.
    Comment: One comment received from counsel of a reinsured company 
stated that the policy provisions should be amended to read, ``Proof 
that you had the inputs available to plant and produce a crop other 
than a crop you planted the past year or a crop that is part of a 
regular rotation of the acres planted and for which you had insurance 
with the expectation of at least producing * * *.'' 

[[Page 62717]]

    Response: FCIC does not agree. The intent of prevented planting 
coverage is to provide coverage for the intended crop for the current 
crop year. FCIC does not intend to interfere with producers' responses 
to market signals. Therefore, no change will be made.
    Comment: Two comments received from the crop insurance industry 
expressed concern regarding how insurers will police provisions dealing 
with a substitute crop and recommended clarifying the following issues 
in the final rule. The comments state that it is difficult if not 
impossible to determine the crop and acreage originally intended to be 
planted and that the provisions will provide an opportunity for 
producers to claim prevented planting on acreage originally intended to 
be planted to a substitute crop. One of the comments further questioned 
whether a minor oilseed crop planted by a grower participating in the 
so called 0/92 program would be considered a substitute crop or not.
    Response: The acreage reporting provisions rely on the producer to 
indicate the specific acreage and crop that were prevented from being 
planted. On the surface these provisions would indicate a significant 
vulnerability, especially with regard to the substitute crop 
provisions. However, other provisions, including those that limit 
maximum eligible acreage and those that reduce eligible acreage by the 
amount of any timely and late planted acreage substantially reduce this 
vulnerability. For example, if a producer indicates acreage is 
prevented from being planted to corn and plants grain sorghum as a 
substitute crop, any other acreage planted to corn on the farm would 
reduce the amount of corn acreage eligible for a prevented planting 
production guarantee. Likewise, the acreage planted to grain sorghum 
would reduce the amount of any grain sorghum acreage that may have 
originally been eligible to receive a prevented planting production 
guarantee. Other provisions that give the insurer the right to require 
a producer to provide proof that the inputs were available to plant and 
produce the crop will also reduce vulnerabilities that might otherwise 
be associated with this coverage. A minor oilseed crop may be 
considered a substitute crop if it is planted after the originally 
intended crop was prevented from being planted. Growers qualifying for 
prevented planting coverage in this situation may qualify for the so 
called 0/92 program if the minor oilseed can be planted as a substitute 
crop under that program. Participation in the so called 0/92 program is 
not required to be eligible for crop insurance prevented planting 
benefits.
    Comment: One comment received from the crop insurance industry 
expresses concern that the wording that advises the producer of the 
choice to exclude prevented planting coverage is not prominent enough 
in the policy. The comment also suggests, concurrent with the final 
rule, that guidelines meeting Standard Reinsurance Agreement 
requirements be issued addressing the form ``approved by us'' that is 
required to opt out of prevented planting coverage when a substitute 
crop is planted.
    Response: Provisions indicating a producer's choice to exclude this 
coverage are contained in appropriate locations within the policy. On 
or before the sales closing date for the intended crop, a producer may 
``opt out'' of prevented planting coverage when a substitute crop is 
planted by entering the appropriate option code on the crop insurance 
application or contract change form.
    Comment: One comment received from the crop insurance industry and 
one comment received from FSA stated that the provision that requires a 
producer to provide proof that they had the inputs available to plant 
and produce a crop adds complication to the loss adjustment process and 
likely adds little to the ability to determine the producer's intent. 
If the provision is not eliminated, one of the comments recommends 
issuance, concurrent with the final rule, of procedure addressing what 
constitutes proof that the inputs were available.
    Response: Proof that the producer had the available inputes is not 
mandatory in all cases. Such proof should be required when producers 
are claiming they are prevented from planting a crop which they have 
never historically planted or there are other suspicious circumstances. 
Procedure is being drafted in the loss adjustment handbooks to include 
what constitutes such proof. Therefore, no change is necessary.
    Comment: One comment received from FSA indicated that they did not 
understand why producers would request deleting the prevented planting 
provisions from a policy.
    Response: The producers would not have the option of deleting the 
prevented planting provisions from the policy, instead they would be 
allowed only to exclude eligibility for that portion of the prevented 
planting coverage available when a substitute crop is planted in return 
for a reduction in the premium rate attributed to such coverage.
    Comment: One comment received from FSA stated that it seems 
pointless to add a requirement for producers to provide proof that they 
had inputs available to plant and produce the intended crop because 
seed and chemical receipts are too easily obtained by persons willing 
to manipulate FCIC's procedures.
    Response: FCIC disagrees with the comment. Falsifying such records 
could subject the producer, seed or chemical distributor to criminal or 
civil sanctions. Further, inputs such as seed and chemical receipts 
verify the intentions to plant and produce the insured crop. The 
producer who provides false documentation is, of course, open to 
substantial criminal and civil liability. Failure to produce this 
evidence when requested is cause for FCIC to deny prevented planting 
coverage. Therefore, no change will be made.
    Comment: One comment received from the crop insurance industry 
recommended deletion of the extended insurance period provisions for 
carry-over insureds. The comment indicated that the current sales 
closing date of March 15 in an area with normal planting times during 
April and May makes the likelihood of a prevented planting cause prior 
to March 15 very remote. If the provision is not deleted, it was 
recommended that the provision be clarified to address whether or not 
buying up from the CAT level for 1996 falls under the first year or the 
subsequent year provisions.
    Response: The Reform Act requires prevented planting coverage be 
provided for the period between the sales closing date of the previous 
crop year and the sales closing date of the current crop year. 
Therefore, no change will be made.
    Comment: One comment received from the crop insurance industry 
recommended that acreage of hybrid seed crops (and any other crop grown 
under a contract) eligible for prevented planting coverage be limited 
to the same number of acres under contract for the crop year.
    Response: FCIC agrees with the comment and has revised the hybrid 
corn and hybrid sorghum seed crop provisions accordingly.
    Comment: One comment received from the crop insurance industry 
recommended clarification of provisions that limit the eligible acreage 
to the number of acres planted to the insured crop during the previous 
crop year. Specifically, the comment asked if this provision means the 
number of acres the producer planted the previous year or the number of 
acres planted on the land in question; and what happens if the 

[[Page 62718]]
land changes hands from one year to the next or the producer farms 
different land from one year to the next.
    Response: FCIC agrees that the provision may be interpreted 
incorrectly. The intent is to limit eligible acreage within a FSA farm 
serial number to the total number of acres planted to the insured crop 
on the FSA farm serial number the previous crop year unless we agree to 
a greater number. The crop provisions have been clarified accordingly.
    Comment: One comment received from the crop insurance industry and 
two comments received from FSA question how the insurance provider was 
to agree in writing to insure eligible acreage. They also recommended 
that procedure be issued, concurrently with the final rule, to indicate 
the parameters and required elements of an ``agreement in writing'' to 
increase the number of acres that would be eligible for prevented 
planting coverage.
    Response: Presently, it is up to the insurance provider to develop 
a process by which they agree in writing when the producer requests to 
increase their eligible prevented planting acreage. FCIC agrees that 
further instructions are needed and will incorporate such instructions 
into the 1996 Catastrophic Risk Protection Handbook and the Crop 
Insurance Handbook.
    Comment: One comment received from the crop insurance industry 
recommended adding language to provisions regarding determination of 
eligible acreage that limits the eligible acreage to that indicated on 
a ``report of intended acreage.'' The comment further suggests that 
language be added to indicate that such report meets the criteria for 
the agreement in writing that is necessary to exceed the printed policy 
limitations for eligible acreage.
    Response: FCIC does not require nor prohibit the use of a ``report 
of intended acreage.'' However, coverage and premium are based on the 
actual acreage report filed by the producer, not the report of intended 
acreage. Therefore, no change is made. FCIC will consider the use of 
the ``report of intended acreage'' as an ``agreement in writing'' to 
exceed the printed policy limitations for eligible acreage.
    Comment: One comment received from the crop insurance industry 
stated that reference to the final planting date in the paragraph which 
states, ``prevented planting coverage will not be provided for any 
acreage * * * that does not constitute at least 20 acres or 20 percent 
(20%) of the acreage in the unit'' must be clarified. They did not 
understand if it applied to the final planting date for the planted 
crop or the final planting date for the other crop which the producer 
wants to declare as prevented planting.
    Response: In FCIC's opinion, this provision does not require 
clarification. This provision requires information regarding inputs 
only for the originally intended crop. Therefore, no change is made.
    Comment: One comment received from the crop insurance industry 
recommended deletion of the provision that states ``Any acreage you 
report in excess of the number of acres eligible for prevented planting 
coverage, or that exceeds the number of eligible acres physically 
located in a unit, will be deleted from your acreage report.'' The 
comment suggests replacing this provision with the following: ``Any 
acreage you report that does not qualify for prevented planting will be 
deleted from your acreage report.''
    Response: FCIC disagrees with the comment. The recommended 
replacement language that states ``does not qualify for prevented 
planting'' is not specific enough regarding the eligible acres for 
prevented planting. Producers need to understand that acreage deleted 
from the acreage report consists of both the acreage in excess of the 
number of acres eligible for prevented planting coverage and acres in 
excess of the number of eligible acres physically located in a unit.
    Comment: One comment received from FSA suggested that if the 
``Freedom to Farm'' concept is adopted and the producer is not 
restricted to a required number of acres of a crop, it will be 
difficult to believe the acreage reported as ``intended to be 
planted.''
    Response: At this time legislative changes in the farm bill are 
uncertain and it would be premature for FCIC to make changes based on 
assumptions. FCIC will make the necessary changes based on the law 
ultimately enacted. The restriction with regard to prior year's planted 
acreage continues regardless of changes in acreage bases.
    Comment: One comment received from FSA stated that the following 
phrase ``acreage that is less than 20 acres or 20 percent of the 
acreage in the unit will be considered intended to be planted to the 
insured crop planted on the adjoining acreage, unless you can show that 
you had the inputs available to plant and produce another insured crop 
on the acreage before the final planting date,'' will allow prevented 
planting coverage on less than 20 acres or 20 percent of the acreage in 
the unit if a producer could prove he was going to plant that to 
another crop. This scenario is unlikely and we are just allowing a 
loophole for producers to get prevented planting coverage on their 
potholes.
    Response: The proposed provisions state that, ``Prevented planting 
coverage will not be provided for any acreage that does not constitute 
at least 20 acres or 20 percent (20%) of the acreage in the unit, 
whichever is less * * *'' was intended to be used only to verify the 
crop intended to be planted on the acreage. For example, assume that a 
producer has one section of land comprised of three separate adjacent 
fields. The first field consists of the east \1/3\ of the section (100 
insurable acres), the second field consists of the central \1/3\ of the 
section (100 acres of which 85 acres are not insurable), and the third 
field consists of the west \1/3\ of the section (100 insurable acres). 
If the producer planted corn on the first and the third fields and is 
prevented from planting the 15 insurable acres in the second (middle/
adjacent) field, the 15 acres will be considered to have been intended 
to be planted to corn, unless the producer can show that inputs were 
available to plant and produce another crop on those 15 acres. If 
inputs are not available for another crop, the 15 acres would not be 
eligible for prevented planting because at least 20 acres in the unit 
were not prevented from planting.
    Comment: One comment received from the crop insurance industry 
stated that the language should be modified (subsection 13(d)(4)(iv)(D) 
of the Coarse Grains Provisions) to read: On which another crop is 
prevented from being planted, if you have already received a prevented 
planting indemnity, guarantee or amount of insurance for such acreage 
in the same crop year, unless you provide adequate records of acreage 
and production showing that the acreage has a history of double-
cropping in each of the last four crop years;
    Response: FCIC agrees with the comment and has revised the 
provisions accordingly.
    Comment: One comment received from the crop insurance industry 
stated that the language should be modified (subsection 13(d)(4)(iv)(E) 
of the Coarse Grains Provisions) to read: On which the insured crop is 
prevented from being planted, if any other crop is planted and fails, 
or is planted and harvested, hayed or grazed on such acreage in the 
same crop year (other than a cover crop as specified in paragraph 
(a)(3)(i) of this section, or a substitute crop allowed in paragraph 
(a)(3)(ii) of this section), unless you provide adequate records of 
acreage and production showing that the acreage has a history of 
double-cropping in each of the last four years; 

[[Page 62719]]

    Response: FCIC agrees with the comment and has revised the 
provisions accordingly.
    Comment: One comment received from the crop insurance industry 
stated that it is currently impossible to monitor the requirement that 
all acreage prevented from being planted be reported, especially when 
it is small acreage and production from planted acreage will likely 
exceed the combined guarantee. If this reporting requirement is 
retained, guidelines must be established to be able to enforce and 
possibly penalize, if not reported completely. Now may be the time to 
initiate reporting of intended acreage to be planted the following year 
at the same time that production is reported for the current crop year.
    Response: FCIC agrees that this potential exists and will continue 
to monitor this problem and to work on a solution. However, no change 
will be made at this time.
    Comment: One comment received from FSA suggested deleting the 
following sentence because it is repetitious, ``If you have a 
Catastrophic Risk Endorsement and receive a prevented planting 
indemnity, guarantee, or amount of insurance for a crop and are 
prevented from planting another crop on the same acreage, you may only 
receive the prevented planting indemnity, guarantee, or amount of 
insurance for the crop on which the prevented planting indemnity, 
guarantee, or amount of insurance is received.''
    Response: FCIC disagrees that the provision is repetitious. For CAT 
policies only, this provision specifically disallows more than one 
prevented planting benefit per acre for a crop year regardless of a 
past history of double cropping. It also prohibits a prevented planting 
production guarantee on acreage if another crop is planted for the 
insured crop year. Both of these benefits may be provided in certain 
situations under limited and additional coverage. Therefore, no change 
is made.
    Comment: One comment received from an attorney on behalf of the 
crop insurance industry indicated that allowing both a so called 0/92 
or 50/92 payment and a crop insurance prevented planting benefit is 
contrary to law. The comment states that the interim rule allowing both 
payments (published at 60 FR 35832 (July 12, 1995)) was a move back to 
ad hoc disaster payments.
    Response: The so called 0/92 and 50/92 payments are not payments 
for prevented planting. Producers do not have to have been prevented 
from planting to collect 0/92 or 50/92 payments. Payments under these 
programs are intended to compensate producers for price deficiencies 
(i.e. the difference between the target price and the market price. 
Since payments under the 0/92 and 50/92 programs are available for 
producers with crop failure, it would be inconsistent to deny the same 
benefit to producers who are prevented from planting.
    Comment: One comment received from the crop insurance industry 
suggested that additional definitions and clarifications need to be 
made that spell out the qualifications for double-cropped acreage such 
as what proof is needed and how many years of records are needed. 
Otherwise, they recommend excluding double cropped acreage.
    Response: The prevented planting provisions specify that the 
producer must provide adequate records of acreage and production that 
show the acreage has been double-cropped for each of the last four 
years. Therefore, no change is necessary.
    Comment: Two comments received from the crop insurance industry 
regarding allowing prevented planting payments on double-crop 
situations stated that: (1) It will generate additional prevented 
planting claims on acreage that would otherwise not be double-cropped. 
If these provisions are retained, ``adequate records of acreage and 
production in each of the last four years'' must be clearly defined to 
assure that the specific acreage has a definite history of double-
cropping; and (2) two prevented planting payments in double cropping 
situations may add unwanted incentives to encourage the farming of 
fragile and marginal lands in more arid regions.
    Response: FCIC does not believe that additional claims will be made 
for acreage that would not normally be double-cropped. The crop 
provisions clearly indicate that records of both acreage and production 
for the previous four crop years must be provided to qualify for 
benefits for more than one crop in a crop year. This provision should 
discourage claims on acreage that has not been double-cropped in the 
past. FCIC does not believe this benefit will encourage tillage of 
fragile and marginal lands in more arid regions. Growers will not 
double-crop this land for four consecutive years to qualify for 
prevented planting benefits in the fifth year.
    So that these policy changes can take effect beginning with 1996 
spring-planted crops, good cause is shown to make this rule effective 
immediately upon filing with the Federal Register and without the 30-
day period required by the Administrative Procedure's Act to avoid the 
pressures on FCIC to make changes after the contract change date as a 
result of a large number of producers being prevented from planting 
such as occurred during the 1995 crop year which resulted in confusion 
among producers, insurance companies, and FSA with respect to the 
program changes and increased losses.
    Prevented planting changes to these policies were made by interim 
rule for the 1995 crop year. Experience with those modifications 
require certain changes which have been made by this rule. However, the 
present policy effective for crop year 1995 fall-planted crops and 
scheduled to be effective for 1996 spring-planted crops do not 
adequately protect the producer who suffers a prevented planting loss. 
The contract change date for 1996 spring-planted crops is November 30, 
1995, and this rule must be effective for those crops. Therefore, good 
cause is shown to make this rule effective in less than 30 days after 
publication.

List of Subjects

7 CFR Part 401

    Crop insurance, Hybrid sorghum seed, Reporting and recordkeeping 
requirements, Rice.

7 CFR Part 443

    Crop insurance, Hybrid seed, Reporting and recordkeeping 
requirements.

7 CFR Part 457

    Crop insurance, Reporting and recordkeeping requirements, Small 
grains, Cotton, ELS cotton, Sunflower seed and coarse grains.

Final Rule

    In this document, 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 General Crop 
Insurance Regulations (7 CFR part 401) by amending the Hybrid Sorghum 
Seed (Sec. 401.109) and Rice (Sec. 401.120) Endorsements; the Hybrid 
Seed Crop Insurance Policy (7 CFR 443.7(d)); and the Common Crop 
Insurance Regulations (7 CFR part 457) by amending the Small Grains 
(Sec. 457.101), Cotton (Sec. 457.104), Extra Long Staple Cotton 
(Sec. 457.105), Sunflower Seed (Sec. 457.108), and Coarse Grains 
(Sec. 457.113) Crop Insurance Provisions; applicable beginning with the 
1996 crop year for spring crops with contract change dates on or after 
November 30, 1995.
    Accordingly, 7 CFR parts 401, 443, and 457 are amended as follows:
    
[[Page 62720]]


PART 401--[AMENDED]

    1. The authority citation for 7 CFR part 401 is revised to read as 
follows:

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

    2. Section 401.109 is amended by revising paragraphs 12(a)(3), 
12(b), and 12(d) of the Hybrid Sorghum Seed Endorsement to read as 
follows:


Sec. 401.109   Hybrid sorghum seed endorsement.

* * * * *

12. Late Planting and Prevented Planting

    (a) * * *
    (3) For prevented planting acreage, multiply the per acre amount 
of insurance for timely planted acreage by:
    (i) Fifty percent (0.50) and multiply the result by the 50 acres 
you were prevented from planting, if the acreage is eligible for 
prevented planting coverage, and if the acreage is left idle for the 
crop year, or if a cover crop is planted not for harvest. Prevented 
planting compensation hereunder will not be denied because the cover 
crop is hayed or grazed; or
    (ii) Twenty-five percent (0.25) and multiply the result by the 
50 acres you were prevented from planting, if the acreage is 
eligible for prevented planting coverage, and if you elect to plant 
a substitute crop for harvest after the 10th day following the final 
planting date for the insured crop. (This subparagraph (ii) is not 
applicable, and prevented planting coverage is not available 
hereunder, if you elected the Catastrophic Risk Protection 
Endorsement or you elected to exclude prevented planting coverage 
when a substitute crop is planted (see subparagraph 12(d)(1)(iii))).
    The total of the three calculations will be the amount of 
insurance for the unit. Your premium will be based on the result of 
multiplying the per acre amount of insurance for timely planted 
acreage by the 150 insured crop acres in the unit.
    (b) If you were prevented from planting, you must provide 
written notice to us not later than the acreage reporting date.
* * * * *
    (d) Prevented Planting (Including Planting After the Late 
Planting Period).
    (1) If you were prevented from planting the insured crop (see 
subsection 13(o)), you may elect:
    (i) To plant the insured crop during the late planting period. 
The amount of insurance for such acreage will be determined in 
accordance with paragraph 12(c)(1);
    (ii) Not to plant this acreage to any crop except a cover crop 
not for harvest. You may also elect to plant the insured crop after 
the late planting period. In either case, the amount of insurance 
for such acreage will be fifty percent (50%) of the amount of 
insurance for timely planted acres. For example, if your amount of 
insurance for timely planted acreage is 200 dollars per acre, your 
prevented planting amount of insurance would be 100 dollars per acre 
(200 dollars multiplied by 0.50). If you elect to plant the insured 
crop after the late planting period, production to count for such 
acreage will be determined in accordance with subsections 8b through 
e; or
    (iii) Not to plant the intended crop but plant a substitute crop 
for harvest, in which case:
    (A) No prevented planting amount of insurance will be provided 
for such acreage if the substitute crop is planted on or before the 
tenth day following the final planting date for the insured crop; or
    (B) An amount of insurance equal to twenty-five percent (25%) of 
the amount of insurance for timely planted acres will be provided 
for such acreage, if the substitute crop is planted after the tenth 
day following the final planting date for the insured crop. If you 
elected the Catastrophic Risk Protection Endorsement or excluded 
this coverage, and plant a substitute crop, no prevented planting 
coverage will be provided. For example, if your amount of insurance 
for timely planted acreage is 200 dollars per acre, your prevented 
planting amount of insurance would be 50 dollars per acre (200 
dollars multiplied by 0.25). You may elect to exclude prevented 
planting coverage when a substitute crop is planted for harvest and 
receive a reduction in the applicable premium rate. If you wish to 
exclude this coverage, you must so indicate, on or before the sales 
closing date, on your application or on a form approved by us. Your 
election to exclude this coverage will remain in effect from year to 
year unless you notify us in writing on our form by the applicable 
sales closing date for the crop year for which you wish to include 
this coverage. All acreage of the crop insured under this policy 
will be subject to this exclusion.
    (2) Proof may be required that you had the inputs available to 
plant and produce the intended crop with the expectation of at least 
producing the yield upon which your amount of insurance is based.
    (3) In addition to the provisions of section 7 (Insurance 
Period) of the General Crop Insurance Policy (Sec. 401.8), the 
insurance period for prevented planting coverage begins:
    (i) On the sales closing date contained in the Special 
Provisions for the insured crop in the county for the crop year the 
application for insurance is accepted; or
    (ii) For any subsequent crop year, on the sales closing date for 
the insured crop in the county for the previous crop year, provided 
continuous coverage has been in effect since that date. For example: 
If you make application and purchase a hybrid sorghum seed crop 
insurance policy for the 1996 crop year, prevented planting coverage 
will begin on the 1996 sales closing date for the insured crop in 
the county. If the hybrid sorghum seed coverage remains in effect 
for the 1997 crop year (is not terminated or cancelled during or 
after the 1996 crop year, except the policy may have been cancelled 
to transfer the policy to a different insurance provider, if there 
is no lapse in coverage), prevented planting coverage for the 1997 
crop year began on the 1996 sales closing date.
    (4) The acreage to which prevented planting coverage applies 
will not exceed the total eligible acreage on all Farm Service 
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted 
for any reconstitution that may have occurred on or before the sales 
closing date. Eligible acreage for each FSA Farm Serial Number is 
determined as follows:
    (i) Eligible acreage will not exceed the number of acres 
required to be grown in the current crop year under a contract 
executed with a seed company prior to the acreage reporting date.
    (ii) Acreage intended to be planted under an irrigated practice 
will be limited to the number of acres for which you had adequate 
irrigation facilities prior to the insured cause of loss which 
prevented you from planting.
    (iii) Prevented planting coverage will not be provided for any 
acreage:
    (A) That does not constitute at least 20 acres or 20 percent 
(20%) of the acreage in the unit, whichever is less (Acreage that is 
less than 20 acres or 20 percent of the acreage in the unit will be 
presumed to have been intended to be planted to the insured crop 
planted in the unit, unless you can show that you had the inputs 
available before the final planting date to plant and produce 
another insured crop on the acreage);
    (B) For which the actuarial table does not designate a premium 
rate unless a written agreement designates such premium rate;
    (C) Used for conservation purposes or intended to be left 
unplanted under any program administered by the United States 
Department of Agriculture;
    (D) On which another crop is prevented from being planted, if 
you have already received a prevented planting indemnity, guarantee 
or amount of insurance for the same acreage in the same crop year, 
unless you provide adequate records of acreage and production 
showing that the acreage has a history of double-cropping in each of 
the last four years;
    (E) On which the insured crop is prevented from being planted, 
if any other crop is planted and fails, or is planted and harvested, 
hayed or grazed on the same acreage in the same crop year, (other 
than a cover crop as specified in paragraph (a)(3)(i) of this 
section, or a substitute crop allowed in paragraph (a)(3)(ii) of 
this section) unless you provide adequate records of acreage and 
production showing that the acreage has a history of double-cropping 
in each of the last four years;
    (F) When coverage is provided under the Catastrophic Risk 
Protection Endorsement if you plant another crop for harvest on any 
acreage you were prevented from planting in the same crop year, even 
if you have a history of double cropping. If you have a Catastrophic 
Risk Protection Endorsement and receive a prevented planting 
indemnity, guarantee, or amount of insurance for a crop and are 
prevented from planting another crop on the same acreage, you may 
only receive the prevented planting indemnity, guarantee, or amount 
of insurance for the crop on which the prevented planting indemnity, 
guarantee, or amount of insurance is received; or
    (G) For which planting history or conservation plans indicate 
that the acreage would have remained fallow for crop rotation 
purposes.
    (iv) For the purpose of determining eligible acreage for 
prevented planting coverage, acreage for all units will be combined 
and be 

[[Page 62721]]
reduced by the number of acres of the insured crop timely planted and 
late planted. For example, assume you have 100 acres eligible for 
prevented planting coverage in which you have a 100 percent (100%) 
share. The acreage is located in a single FSA Farm Serial Number 
which you insure as two separate optional units consisting of 50 
acres each. If you planted 60 acres of 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 (i.e., 100 acres eligible for prevented planting 
coverage minus 100 acres planted equals zero).
    (5) In accordance with the provisions of section 3 (Report of 
Acreage, Share, and Practice (Acreage Report)) of the General Crop 
Insurance Policy (Sec. 401.8), you must report by unit any insurable 
acreage that you were prevented from planting. This report must be 
submitted on or before the acreage reporting date. For the purpose 
of determining acreage eligible for a prevented planting amount of 
insurance the total amount of prevented planting and planted acres 
cannot exceed the maximum number of acres eligible for prevented 
planting coverage. Any acreage you report in excess of the number of 
acres eligible for prevented planting coverage, or that exceeds the 
number of eligible acres physically located in a unit, will be 
deleted from your acreage report.
    (6) If the amount of premium you are required to pay (gross 
premium less our subsidy) for the prevented planting acreage exceeds 
the prevented planting liability on a unit, prevented planting 
coverage will not be provided for that unit (no premium will be due 
and no indemnity will be paid for such acreage).
* * * * *


Sec. 401.109  [Amended].

    3. Section 401.109 is amended by revising paragraph 13(o) to read 
as follows:
* * * * *

13. Meaning of Terms

* * * * *
    (o) Prevented planting--Inability to plant the insured crop with 
proper equipment by the final planting date designated in the 
Special Provisions for the insured crop in the county or the end of 
the late planting period. You must have been unable to plant the 
insured crop due to an insured cause of loss that has prevented the 
majority of producers in the surrounding area from planting the same 
crop.
* * * * *
    4. Section 401.120 is amended by revising paragraphs 10(a)(3), 
10(b), and 10(d) of the Rice Endorsement to read as follows:


Sec. 401.120  Rice endorsement.

* * * * *

10. Late Planting and Prevented Planting

    (a) * * *
    (3) For prevented planting acreage, multiply the per acre 
production guarantee for timely planted acreage by:
    (i) Thirty-five percent (0.35) and multiply the result by the 50 
acres you were prevented from planting, if the acreage is eligible 
for prevented planting coverage, and if the acreage is left idle for 
the crop year, or if a cover crop is planted not for harvest. 
Prevented planting compensation hereunder will not be denied because 
the cover crop is hayed or grazed; or
    (ii) Seventeen and five tenths percent (0.175) and multiply the 
result by the 50 acres you were prevented from planting, if the 
acreage is eligible for prevented planting coverage, and if you 
elect to plant a substitute crop for harvest after the 10th day 
following the final planting date for the insured crop. (This 
subparagraph (ii) is not applicable, and prevented planting coverage 
is not available hereunder, if you elected the Catastrophic Risk 
Protection Endorsement or you elected to exclude prevented planting 
coverage when a substitute crop is planted (see subparagraph 
10(d)(1)(iii))).
    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) If you were prevented from planting, you must provide 
written notice to us not later than the acreage reporting date.
* * * * *
    (d) Prevented Planting (Including Planting After the Late 
Planting Period).
    (1) If you were prevented from planting rice (see subsection 
11(h)), you may elect:
    (i) To plant rice during the late planting period. The 
production guarantee for such acreage will be determined in 
accordance with paragraph 10(c)(1);
    (ii) Not to plant this acreage to any crop except a cover crop 
not for harvest. You may also elect to plant the insured crop after 
the late planting period. In either case, the production guarantee 
for such acreage will be thirty-five percent (35%) of the production 
guarantee for timely planted acres. For example, if your production 
guarantee for timely planted acreage is 2000 pounds per acre, your 
prevented planting production guarantee would be 700 pounds per acre 
(2000 pounds multiplied by 0.35). If you elect to plant the insured 
crop after the late planting period, production to count for such 
acreage will be determined in accordance with subsections 7b and c; 
or
    (iii) Not to plant the intended crop but plant a substitute crop 
for harvest, in which case:
    (A) No prevented planting production guarantee will be provided 
for such acreage if the substitute crop is planted on or before the 
tenth day following the final planting date for the insured crop; or
    (B) A production guarantee equal to seventeen and five tenths 
percent (17.5%) of the production guarantee for timely planted acres 
will be provided for such acreage, if the substitute crop is planted 
after the tenth day following the final planting date for the 
insured crop. If you elected the Catastrophic Risk Protection 
Endorsement or excluded this coverage and plant a substitute crop, 
no prevented planting coverage will be provided. For example, if 
your production guarantee for timely planted acreage is 2000 pounds 
per acre, your prevented planting production guarantee would be 350 
pounds per acre (2000 pounds multiplied by 0.175). You may elect to 
exclude prevented planting coverage when a substitute crop is 
planted for harvest and receive a reduction in the applicable 
premium rate. If you wish to exclude this coverage, you must so 
indicate, on or before the sales closing date, on your application 
or on a form approved by us. Your election to exclude this coverage 
will remain in effect from year to year unless you notify us in 
writing on our form by the applicable sales closing date for the 
crop year for which you wish to include this coverage. All acreage 
of the crop insured under this policy will be subject to this 
exclusion.
    (2) Proof may be required that you had the inputs available to 
plant and produce the intended crop with the expectation of at least 
producing the production guarantee.
    (3) In addition to the provisions of section 7 (Insurance 
Period) of the General Crop Insurance Policy (Sec. 401.8), the 
insurance period for prevented planting coverage begins:
    (i) On the sales closing date contained in the Special 
Provisions for rice in the county for the crop year the application 
for insurance is accepted; or
    (ii) For any subsequent crop year, on the sales closing date for 
the insured crop in the county for the previous crop year, provided 
continuous coverage has been in effect since that date. For example: 
If you make application and purchase a rice crop insurance policy 
for the 1996 crop year, prevented planting coverage will begin on 
the 1996 sales closing date for the insured crop in the county. If 
the rice coverage remains in effect for the 1997 crop year (is not 
terminated or cancelled during or after the 1996 crop year, except 
the policy may have been cancelled to transfer the policy to a 
different insurance provider, if there is no lapse in coverage), 
prevented planting coverage for the 1997 crop year began on the 1996 
sales closing date.
    (4) The acreage to which prevented planting coverage applies 
will not exceed the total eligible acreage on all Farm Service 
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted 
for any reconstitution that may have occurred on or before the sales 
closing date. Eligible acreage for each FSA Farm Serial Number is 
determined as follows:
    (i) If you participate in any program administered by the United 
States Department of Agriculture that limits the number of acres 
that may be planted for the crop year, the acreage eligible for 
prevented planting coverage will not exceed the total acreage 
permitted to be planted to the insured crop.
    (ii) If you do not participate in any program administered by 
the United States Department of Agriculture that limits the number 
of acres that may be planted, and unless we agree in writing on or 
before the sales closing date, eligible acreage will not exceed the 
greater of:
    (A) The FSA base acreage for the insured crop, including acres 
that could be flexed from another crop, if applicable; 

[[Page 62722]]

    (B) The number of acres planted to rice on the FSA Farm Serial 
Number during the previous crop year; or
    (C) One hundred percent (100%) of the simple average of the 
number of acres planted to rice during the crop years that you 
certified to determine your yield.
    (iii) Prevented planting coverage will not be provided for any 
acreage:
    (A) That does not constitute at least 20 acres or 20 percent 
(20%) of the acreage in the unit, whichever is less (Acreage that is 
less than 20 acres or 20 percent of the acreage in the unit will be 
presumed to have been intended to be planted to the insured crop 
planted in the unit, unless you can show that you had the inputs 
available before the final planting date to plant and produce 
another insured crop on the acreage);
    (B) For which the actuarial table does not designate a premium 
rate unless a written agreement designates such premium rate;
    (C) Used for conservation purposes or intended to be left 
unplanted under any program administered by the United States 
Department of Agriculture;
    (D) On which another crop is prevented from being planted, if 
you have already received a prevented planting indemnity, guarantee 
or amount of insurance for the same acreage in the same crop year, 
unless you provide adequate records of acreage and production 
showing that the acreage has a history of double-cropping in each of 
the last four years;
    (E) On which the insured crop is prevented from being planted, 
if any other crop is planted and fails, or is planted and harvested, 
hayed or grazed on the same acreage in the same crop year, (other 
than a cover crop as specified in paragraph (a)(3)(i) of this 
section, or a substitute crop allowed in paragraph (a)(3)(ii) of 
this section) unless you provide adequate records of acreage and 
production showing that the acreage has a history of double-cropping 
in each of the last four years;
    (F) When coverage is provided under the Catastrophic Risk 
Protection Endorsement if you plant another crop for harvest on any 
acreage you were prevented from planting in the same crop year, even 
if you have a history of double cropping. If you have a Catastrophic 
Risk Protection Endorsement and receive a prevented planting 
indemnity, guarantee, or amount of insurance for a crop and are 
prevented from planting another crop on the same acreage, you may 
only receive the prevented planting indemnity, guarantee, or amount 
of insurance for the crop on which the prevented planting indemnity, 
guarantee, or amount of insurance is received; or
    (G) For which planting history or conservation plans indicate 
that the acreage would have remained fallow for crop rotation 
purposes.
    (iv) For the purpose of determining eligible acreage for 
prevented planting coverage, acreage for all units will be combined 
and be reduced by the number of rice acres timely planted and late 
planted. For example, assume you have 100 acres eligible for 
prevented planting coverage in which you have a 100 percent (100%) 
share. The acreage is located in a single FSA Farm Serial Number 
which you insure as two separate optional units consisting of 50 
acres each. If you planted 60 acres of rice on one optional unit and 
40 acres of rice on the second optional unit, your prevented 
planting eligible acreage would be reduced to zero (i.e., 100 acres 
eligible for prevented planting coverage minus 100 acres planted 
equals zero).
    (5) In accordance with the provisions of section 3 (Report of 
Acreage, Share, and Practice (Acreage Report) of the General Crop 
Insurance Policy (Sec. 401.8), you must report by unit any insurable 
acreage that you were prevented from planting. This report must be 
submitted on or before the acreage reporting date. For the purpose 
of determining acreage eligible for a prevented planting production 
guarantee the total amount of prevented planting and planted acres 
cannot exceed the maximum number of acres eligible for prevented 
planting coverage. Any acreage you report in excess of the number of 
acres eligible for prevented planting coverage, or that exceeds the 
number of eligible acres physically located in a unit, will be 
deleted from your acreage report.
    (6) If the amount of premium you are required to pay (gross 
premium less our subsidy) for the prevented planting acreage exceeds 
the prevented planting liability on a unit, prevented planting 
coverage will not be provided for that unit (no premium will be due 
and no indemnity will be paid for such acreage).
* * * * *
    5. Section 401.120 is amended by revising paragraph 11(h) to read 
as follows:
* * * * *

11. Meaning of Terms

* * * * *
    (h) Prevented planting--Inability to plant the insured crop with 
proper equipment by the final planting date designated in the 
Special Provisions for the insured crop in the county or the end of 
the late planting period. You must have been unable to plant the 
insured crop due to an insured cause of loss that has prevented the 
majority of producers in the surrounding area from planting the same 
crop.
* * * * *

PART 443--[AMENDED]

    6. The authority citation for 7 CFR part 443 is revised to read as 
follows:

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

    7. Section 443.7(d) is amended by revising paragraphs 17(a)(3), 
17(b), and 17(d) of the Hybrid Seed Crop Insurance Policy to read as 
follows:


Sec. 443.7  The application and policy.

* * * * *
    (d) * * *

17. Late Planting and Prevented Planting

    (a) * * *
    (3) For prevented planting acreage, multiply the per acre amount 
of insurance for timely planted acreage by:
    (i) Forty percent (0.40) and multiply the result by the 50 acres 
you were prevented from planting, if the acreage is eligible for 
prevented planting coverage, and if the acreage is left idle for the 
crop year, or if a cover crop is planted not for harvest. Prevented 
planting compensation hereunder will not be denied because the cover 
crop is hayed or grazed; or
    (ii) Twenty percent (0.20) and multiply the result by the 50 
acres you were prevented from planting, if the acreage is eligible 
for prevented planting coverage, and if you elect to plant a 
substitute crop for harvest after the 10th day following the final 
planting date for the insured crop. (This subparagraph (ii) is not 
applicable, and prevented planting coverage is not available 
hereunder, if you elected the Catastrophic Risk Protection 
Endorsement or you elected to exclude prevented planting coverage 
when a substitute crop is planted (see subparagraph 17(d)(1)(iii))).
    The total of the three calculations will be the amount of 
insurance for the unit. Your premium will be based on the result of 
multiplying the per acre amount of insurance for timely planted 
acreage by the 150 insured crop acres in the unit.
    (b) If you were prevented from planting, you must provide 
written notice to us not later than the acreage reporting date.
* * * * *
    (d) Prevented Planting (Including Planting After the Late 
Planting Period).
    (1) If you were prevented from planting the insured crop (see 
subsection 18(w)), you may elect:
    (i) To plant the insured crop during the late planting period. 
The amount of insurance for such acreage will be determined in 
accordance with paragraph 17(c)(1);
    (ii) Not to plant this acreage to any crop except a cover crop 
not for harvest. You may also elect to plant the insured crop after 
the late planting period. In either case, the amount of insurance 
for such acreage will be forty percent (40%) of the amount of 
insurance for timely planted acres. For example, if your amount of 
insurance for timely planted acreage is 200 dollars per acre, your 
prevented planting amount of insurance would be 80 dollars per acre 
(200 dollars multiplied by 0.40). If you elect to plant the insured 
crop after the late planting period, production to count for such 
acreage will be determined in accordance with subsection 9e.; or
    (iii) Not to plant the intended crop but plant a substitute crop 
for harvest, in which case:
    (A) No prevented planting amount of insurance will be provided 
for such acreage if the substitute crop is planted on or before the 
tenth day following the final planting date for the insured crop; or
    (B) An amount of insurance equal to twenty percent (20%) of the 
amount of insurance for timely planted acres will be provided for 
such acreage, if the substitute crop is planted after the tenth day 
following the final planting date for the insured crop. If you 
elected the Catastrophic Risk Protection Endorsement or excluded 
this coverage, and plant a substitute crop, no prevented planting 
coverage will be provided. For example, if your amount of insurance 
for timely planted acreage is 200 

[[Page 62723]]
dollars per acre, your prevented planting amount of insurance would be 
40 dollars per acre (200 dollars multiplied by 0.20). You may elect 
to exclude prevented planting coverage when a substitute crop is 
planted for harvest and receive a reduction in the applicable 
premium rate. If you wish to exclude this coverage, you must so 
indicate, on or before the sales closing date, on your application 
or on a form approved by us. Your election to exclude this coverage 
will remain in effect from year to year unless you notify us in 
writing on our form by the applicable sales closing date for the 
crop year for which you wish to include this coverage. All acreage 
of the crop insured under this policy will be subject to this 
exclusion.
    (2) Proof may be required that you had the inputs available to 
plant and produce the intended crop with the expectation of at least 
producing the yield upon which your amount of insurance is based.
    (3) In addition to the provisions of section 7 (Insurance 
Period), the insurance period for prevented planting coverage 
begins:
    (i) On the sales closing date contained in the Special 
Provisions for the insured crop in the county for the crop year the 
application for insurance is accepted; or
    (ii) For any subsequent crop year, on the sales closing date for 
the insured crop in the county for the previous crop year, provided 
continuous coverage has been in effect since that date. For example: 
If you make application and purchase a hybrid seed crop insurance 
policy for the 1996 crop year, prevented planting coverage will 
begin on the 1996 sales closing date for the insured crop in the 
county. If the hybrid seed coverage remains in effect for the 1997 
crop year (is not terminated or canceled during or after the 1996 
crop year, except the policy may have been canceled to transfer the 
policy to a different insurance provider, if there is no lapse in 
coverage), prevented planting coverage for the 1997 crop year began 
on the 1996 sales closing date.
    (4) The acreage to which prevented planting coverage applies 
will not exceed the total eligible acreage on all Farm Service 
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted 
for any reconstitution that may have occurred on or before the sales 
closing date. Eligible acreage for each FSA Farm Serial Number is 
determined as follows:
    (i) Eligible acreage will not exceed the number of acres 
required to be grown in the current crop year under a contract 
executed with a seed company prior to the acreage reporting date.
    (ii) Acreage intended to be planted under an irrigated practice 
will be limited to the number of acres for which you had adequate 
irrigation facilities prior to the insured cause of loss which 
prevented you from planting.
    (iii) Prevented planting coverage will not be provided for any 
acreage:
    (A) That does not constitute at least 20 acres or 20 percent 
(20%) of the acreage in the unit, whichever is less (Acreage that is 
less than 20 acres or 20 percent of the acreage in the unit will be 
presumed to have been intended to be planted to the insured crop 
planted in the unit, unless you can show that you had the inputs 
available before the final planting date to plant and produce 
another insured crop on the acreage);
    (B) For which the actuarial table does not designate a premium 
rate unless a written agreement designates such premium rate;
    (C) Used for conservation purposes or intended to be left 
unplanted under any program administered by the United States 
Department of Agriculture;
    (D) On which another crop is prevented from being planted, if 
you have already received a prevented planting indemnity, guarantee 
or amount of insurance for the same acreage in the same crop year, 
unless you provide adequate records of acreage and production 
showing that the acreage has a history of double-cropping in each of 
the last four years;
    (E) On which the insured crop is prevented from being planted, 
if any other crop is planted and fails, or is planted and harvested, 
hayed or grazed on the same acreage in the same crop year, (other 
than a cover crop as specified in paragraph (a)(3)(i) of this 
section, or a substitute crop allowed in paragraph (a)(3)(ii) of 
this section) unless you provide adequate records of acreage and 
production showing that the acreage has a history of double-cropping 
in each of the last four years;
    (F) When coverage is provided under the Catastrophic Risk 
Protection Endorsement if you plant another crop for harvest on any 
acreage you were prevented from planting in the same crop year, even 
if you have a history of double cropping. If you have a Catastrophic 
Risk Protection Endorsement and receive a prevented planting 
indemnity, guarantee, or amount of insurance for a crop and are 
prevented from planting another crop on the same acreage, you may 
only receive the prevented planting indemnity, guarantee, or amount 
of insurance for the crop on which the prevented planting indemnity, 
guarantee, or amount of insurance is received; or
    (G) For which planting history or conservation plans indicate 
that the acreage would have remained fallow for crop rotation 
purposes.
    (iv) For the purpose of determining eligible acreage for 
prevented planting coverage, acreage for all units will be combined 
and be reduced by the number of acres of the insured crop timely 
planted and late planted. For example, assume you have 100 acres 
eligible for prevented planting coverage in which you have a 100 
percent (100%) share. The acreage is located in a single FSA Farm 
Serial Number which you insure as two separate optional units 
consisting of 50 acres each. If you planted 60 acres of 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 (i.e., 100 acres eligible for prevented planting 
coverage minus 100 acres planted equals zero).
    (5) In accordance with the provisions of section 3 (Report of 
Acreage, Share, Type and Practice), you must report by unit any 
insurable acreage that you were prevented from planting. This report 
must be submitted on or before the acreage reporting date. For the 
purpose of determining acreage eligible for a prevented planting 
amount of insurance the total amount of prevented planting and 
planted acres cannot exceed the maximum number of acres eligible for 
prevented planting coverage. Any acreage you report in excess of the 
number of acres eligible for prevented planting coverage, or that 
exceeds the number of eligible acres physically located in a unit, 
will be deleted from your acreage report.
    (6) If the amount of premium you are required to pay (gross 
premium less our subsidy) for the prevented planting acreage exceeds 
the prevented planting liability on a unit, prevented planting 
coverage will not be provided for that unit (no premium will be due 
and no indemnity will be paid for such acreage).
* * * * *
    8. Section 443.7(d) is amended by revising paragraph 18(w) to read 
as follows:
* * * * *

18. Meaning of Terms

* * * * *
    (w) Prevented planting--Inability to plant the insured crop with 
proper equipment by the final planting date designated in the 
Special Provisions for the insured crop in the county or the end of 
the late planting period. You must have been unable to plant the 
insured crop due to an insured cause of loss that has prevented the 
majority of producers in the surrounding area from planting the same 
crop.
* * * * *

PART 457--[AMENDED]

    9. The authority citation for 7 CFR part 457 is revised to read as 
follows:

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

    10. Section 457.101 is amended by revising paragraph l(p) of the 
Small Grains Crop Provisions to read as follows:


Sec. 457.101  Small Grains Crop Insurance.

* * * * *

1. Definitions

* * * * *
    (p) Prevented planting--Inability to plant the insured crop with 
proper equipment by the latest final planting date designated in the 
Special Provisions for the insured crop in the county or the end of 
the late planting period. You must have been unable to plant the 
insured crop due to an insured cause of loss that has prevented the 
majority of producers in the surrounding area from planting the same 
crop.
* * * * *
    11. Section 457.101 is amended by revising paragraphs 12(a)(3), 
12(b), and 12(d) to read as follows:
* * * * *

12. Late Planting and Prevented Planting

    (a) * * *
    (3) For prevented planting acreage, multiply the per acre 
production guarantee for timely planted acreage by:
    (i) Fifty percent (0.50) and multiply the result by the 50 acres 
you were prevented 

[[Page 62724]]
from planting, if the acreage is eligible for prevented planting 
coverage, and if the acreage is left idle for the crop year, or if a 
cover crop is planted not for harvest. Prevented planting 
compensation hereunder will not be denied because the cover crop is 
hayed or grazed; or
    (ii) Twenty-five percent (0.25) and multiply the result by the 
50 acres you were prevented from planting, if the acreage is 
eligible for prevented planting coverage, and if you elect to plant 
a substitute crop for harvest after the 10th day following the 
latest final planting date for the insured crop. (This subparagraph 
(ii) is not applicable, and prevented planting coverage is not 
available hereunder, if you elected the Catastrophic Risk Protection 
Endorsement or you elected to exclude prevented planting coverage 
when a substitute crop is planted (see subparagraph 12(d)(1)(iii))).
    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) If you were prevented from planting, you must provide 
written notice to us not later than the acreage reporting date.
* * * * *
    (d) Prevented Planting (Including Planting After the Late 
Planting Period).
    (1) If you were prevented from planting the insured crop (see 
subsection 1(p)), 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 12(c)(1);
    (ii) Not to plant this acreage to any crop except a cover crop 
not for harvest. You may also elect to plant the insured crop after 
the late planting period. In either case, the production guarantee 
for such acreage will be 50 percent (50%) of the production 
guarantee for timely planted acres. In counties for which the 
Special Provisions designate a spring final planting date, the 
prevented planting guarantee will be based on your approved yield 
for spring-planted acreage of the insured crop. For example, if your 
production guarantee for timely planted acreage is 30 bushels per 
acre, your prevented planting production guarantee would be 15 
bushels per acre (30 bushels multiplied by 0.50). If you elect to 
plant the insured crop after the late planting period, production to 
count for such acreage will be determined in accordance with 
subsections 11(c) through (e); or
    (iii) Not to plant the intended crop but plant a substitute crop 
for harvest, in which case:
    (A) No prevented planting production guarantee will be provided 
for such acreage if the substitute crop is planted on or before the 
tenth day following the latest final planting date for the insured 
crop; or
    (B) A production guarantee equal to twenty-five percent (25%) of 
the production guarantee for timely planted acres will be provided 
for such acreage, if the substitute crop is planted after the tenth 
day following the latest final planting date for the insured crop. 
If you elected the Catastrophic Risk Protection Endorsement or 
excluded this coverage, and plant a substitute crop, no prevented 
planting coverage will be provided. For example, if your production 
guarantee for timely planted acreage is 30 bushels per acre, your 
prevented planting production guarantee would be 7.5 bushels per 
acre (30 bushels multiplied by 0.25). You may elect to exclude 
prevented planting coverage when a substitute crop is planted for 
harvest and receive a reduction in the applicable premium rate. If 
you wish to exclude this coverage, you must so indicate, on or 
before the sales closing date, on your application or on a form 
approved by us. Your election to exclude this coverage will remain 
in effect from year to year unless you notify us in writing on our 
form by the applicable sales closing date for the crop year for 
which you wish to include this coverage. All acreage of the crop 
insured under this policy will be subject to this exclusion.
    (2) Proof may be required that you had the inputs available to 
plant and produce the intended crop with the expectation of at least 
producing the production guarantee.
    (3) 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:
    (i) On the sales closing date contained in the Special 
Provisions for the insured crop in the county for the crop year the 
application for insurance is accepted; or
    (ii) For any subsequent crop year, on the sales closing date for 
the insured crop in the county for the previous crop year, provided 
continuous coverage has been in effect since that date. For example: 
If you make application and purchase insurance for wheat for the 
1996 crop year, prevented planting coverage will begin on the 1996 
sales closing date for the insured crop in the county. If the wheat 
coverage remains in effect for the 1997 crop year (is not terminated 
or cancelled during or after the 1996 crop year, except the policy 
may have been cancelled to transfer the policy to a different 
insurance provider, if there is no lapse in coverage), prevented 
planting coverage for the 1997 crop year began on the 1996 sales 
closing date.
    (4) The acreage to which prevented planting coverage applies 
will not exceed the total eligible acreage on all Farm Service 
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted 
for any reconstitution that may have occurred on or before the sales 
closing date. Eligible acreage for each FSA Farm Serial Number is 
determined as follows:
    (i) If you participate in any program administered by the United 
States Department of Agriculture that limits the number of acres 
that may be planted for the crop year, the acreage eligible for 
prevented planting coverage will not exceed the total acreage 
permitted to be planted to the insured crop.
    (ii) If you do not participate in any program administered by 
the United States Department of Agriculture that limits the number 
of acres that may be planted, and unless we agree in writing on or 
before the sales closing date, eligible acreage will not exceed the 
greater of:
    (A) The FSA base acreage for the insured crop, including acres 
that could be flexed from another crop, if applicable;
    (B) The number of acres planted to the insured crop on the FSA 
Farm Serial Number during the previous crop year; 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 you certified to determine your yield.
    (iii) Acreage intended to be planted under an irrigated practice 
will be limited to the number of acres for which you had adequate 
irrigation facilities prior to the insured cause of loss which 
prevented you from planting.
    (iv) Prevented planting coverage will not be provided for any 
acreage:
    (A) That does not constitute at least 20 acres or 20 percent 
(20%) of the acreage in the unit, whichever is less (Acreage that is 
less than 20 acres or 20 percent of the acreage in the unit will be 
presumed to have been intended to be planted to the insured crop 
planted in the unit, unless you can show that you had the inputs 
available before the final planting date to plant and produce 
another insured crop on the acreage);
    (B) For which the actuarial table does not designate a premium 
rate unless a written agreement designates such premium rate;
    (C) Used for conservation purposes or intended to be left 
unplanted under any program administered by the United States 
Department of Agriculture;
    (D) On which another crop is prevented from being planted, if 
you have already received a prevented planting indemnity, guarantee 
or amount of insurance for the same acreage in the same crop year, 
unless you provide adequate records of acreage and production 
showing that the acreage has a history of double-cropping in each of 
the last four years;
    (E) On which the insured crop is prevented from being planted, 
if any other crop is planted and fails, or is planted and harvested, 
hayed or grazed on the same acreage in the same crop year, (other 
than a cover crop as specified in paragraph (a)(3)(i) of this 
section, or a substitute crop allowed in paragraph (a)(3)(ii) of 
this section) unless you provide adequate records of acreage and 
production showing that the acreage has a history of double-cropping 
in each of the last four years;
    (F) When coverage is provided under the Catastrophic Risk 
Protection Endorsement if you plant another crop for harvest on any 
acreage you were prevented from planting in the same crop year, even 
if you have a history of double cropping. If you have a Catastrophic 
Risk Protection Endorsement and receive a prevented planting 
indemnity, guarantee, or amount of insurance for a crop and are 
prevented from planting another crop on the same acreage, you may 
only receive the prevented planting indemnity, guarantee, or amount 
of insurance for the crop on which the prevented planting indemnity, 
guarantee, or amount of insurance is received; or
    (G) For which planting history or conservation plans indicate 
that the acreage would have remained fallow for crop rotation 
purposes.
    (v) For the purpose of determining eligible acreage for 
prevented planting coverage, 

[[Page 62725]]
acreage for all units will be combined and be reduced by the number of 
acres of the insured crop that are timely planted and late planted, 
if the late planting period is applicable. For example, assume you 
have 100 acres eligible for prevented planting coverage in which you 
have a 100 percent (100%) share. The acreage is located in a single 
FSA Farm Serial Number which you insure as two separate optional 
units consisting of 50 acres each. If you planted 60 acres of 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 (i.e., 100 acres eligible for 
prevented planting coverage minus 100 acres planted equals zero).
    (5) In accordance with the provisions of section 6 (Report of 
Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must 
report by unit any insurable acreage that you were prevented from 
planting. This report must be submitted on or before the acreage 
reporting date for spring-planted acreage of the insured crop in 
counties for which the Special Provisions designates a spring final 
planting date, or the acreage reporting date for fall-planted 
acreage of the insured crop in counties for which the Special 
Provisions designates a fall final planting date only. For the 
purpose of determining acreage eligible for a prevented planting 
production guarantee the total amount of prevented planting and 
planted acres cannot exceed the maximum number of acres eligible for 
prevented planting coverage. Any acreage you report in excess of the 
number of acres eligible for prevented planting coverage, or that 
exceeds the number of eligible acres physically located in a unit, 
will be deleted from your acreage report.
* * * * *
    12. Section 457.104 is amended by revising paragraph 1(n) of the 
Cotton Crop Provisions to read as follows:


Sec. 457.104  Cotton crop insurance provisions.

* * * * *

1. Definitions

* * * * *
    (n) Prevented planting--Inability to plant the insured crop with 
proper equipment by the final planting date designated in the 
Special Provisions for the insured crop in the county or the end of 
the late planting period. You must have been unable to plant the 
insured crop due to an insured cause of loss that has prevented the 
majority of producers in the surrounding area from planting the same 
crop.
* * * * *
    13. Section 457.104 is amended by revising paragraphs 12(a)(3), 
12(b), and 12(d) to read as follows:
* * * * *

12. Late Planting and Prevented Planting

    (a) * * *
    (3) For prevented planting acreage, multiply the per acre 
production guarantee for timely planted acreage by:
    (i) Thirty-five percent (0.35) and multiply the result by the 50 
acres you were prevented from planting, if the acreage is eligible 
for prevented planting coverage, and if the acreage is left idle for 
the crop year, or if a cover crop is planted not for harvest. 
Prevented planting compensation hereunder will not be denied because 
the cover crop is hayed or grazed; or
    (ii) Seventeen and five tenths percent (0.175) and multiply the 
result by the 50 acres you were prevented from planting, if the 
acreage is eligible for prevented planting coverage, and if you 
elect to plant a substitute crop for harvest after the 10th day 
following the final planting date for the insured crop. (This 
subparagraph (ii) is not applicable, and prevented planting coverage 
is not available hereunder, if you elected the Catastrophic Risk 
Protection Endorsement or you elected to exclude prevented planting 
coverage when a substitute crop is planted (see subparagraph 
12(d)(1)(iii))).
    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) If you were prevented from planting, you must provide 
written notice to us not later than the acreage reporting date.
* * * * *
    (d) Prevented Planting (Including Planting After the Late 
Planting Period).
    (1) If you were prevented from planting cotton (see subsection 
1(n)), you may elect:
    (i) To plant cotton during the late planting period. The 
production guarantee for such acreage will be determined in 
accordance with paragraph 12(c)(1);
    (ii) Not to plant this acreage to any crop except a cover crop 
not for harvest. You may also elect to plant the insured crop after 
the late planting period. In either case, the production guarantee 
for such acreage will be thirty-five percent (35%) of the production 
guarantee for timely planted acres. For example, if your production 
guarantee for timely planted acreage is 700 pounds per acre, your 
prevented planting production guarantee would be 245 pounds per acre 
(700 pounds multiplied by 0.35). If you elect to plant the insured 
crop after the late planting period, production to count for such 
acreage will be determined in accordance with subsections 11 (c) and 
(d); or
    (iii) Not to plant the intended crop but plant a substitute crop 
for harvest, in which case:
    (A) No prevented planting production guarantee will be provided 
for such acreage if the substitute crop is planted on or before the 
tenth day following the final planting date for the insured crop; or
    (B) A production guarantee equal to seventeen and five tenths 
percent (17.5%) of the production guarantee for timely planted acres 
will be provided for such acreage, if the substitute crop is planted 
after the tenth day following the final planting date for the 
insured crop. If you elected the Catastrophic Risk Protection 
Endorsement or excluded this coverage, and plant a substitute crop, 
no prevented planting coverage will be provided. For example, if 
your production guarantee for timely planted acreage is 700 pounds 
per acre, your prevented planting production guarantee would be 
122.5 pounds per acre (700 pounds multiplied by 0.175). You may 
elect to exclude prevented planting coverage when a substitute crop 
is planted for harvest and receive a reduction in the applicable 
premium rate. If you wish to exclude this coverage, you must so 
indicate, on or before the sales closing date, on your application 
or on a form approved by us. Your election to exclude this coverage 
will remain in effect from year to year unless you notify us in 
writing on our form by the applicable sales closing date for the 
crop year for which you wish to include this coverage. All acreage 
of the crop insured under this policy will be subject to this 
exclusion.
    (2) Proof may be required that you had the inputs available to 
plant and produce the intended crop with the expectation of at least 
producing the production guarantee.
    (3) 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:
    (i) On the sales closing date contained in the Special 
Provisions for the insured crop in the county for the crop year the 
application for insurance is accepted; or
    (ii) For any subsequent crop year, on the sales closing date for 
the insured crop in the county for the previous crop year, provided 
continuous coverage has been in effect since that date. For example: 
If you make application and purchase a cotton crop insurance policy 
for the 1996 crop year, prevented planting coverage will begin on 
the 1996 sales closing date for the cotton crop in the county. If 
the cotton coverage remains in effect for the 1997 crop year (is not 
terminated or cancelled during or after the 1996 crop year, except 
the policy may have been cancelled to transfer the policy to a 
different insurance provider, if there is no lapse in coverage), 
prevented planting coverage for the 1997 crop year began on the 1996 
sales closing date.
    (4) The acreage to which prevented planting coverage applies 
will not exceed the total eligible acreage on all Farm Service 
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted 
for any reconstitution that may have occurred on or before the sales 
closing date. Eligible acreage for each FSA Farm Serial Number is 
determined as follows:
    (i) If you participate in any program administered by the United 
States Department of Agriculture that limits the number of acres 
that may be planted for the crop year, the acreage eligible for 
prevented planting coverage will not exceed the total acreage 
permitted to be planted to the insured crop.
    (ii) If you do not participate in any program administered by 
the United States Department of Agriculture that limits the number 
of acres that may be planted, and unless we agree in writing on or 
before the sales closing date, eligible acreage will not exceed the 
greater of:
    (A) The FSA base acreage for the insured crop, including acres 
that could be flexed from another crop, if applicable;
    (B) The number of acres planted to cotton on the FSA Farm Serial 
Number during the previous crop year; or 

[[Page 62726]]

    (C) One hundred percent (100%) of the simple average of the 
number of acres planted to cotton during the crop years that you 
certified to determine your yield.
    (iii) Acreage intended to be planted under an irrigated practice 
will be limited to the number of acres for which you had adequate 
irrigation facilities prior to the insured cause of loss which 
prevented you from planting.
    (iv) Prevented planting coverage will not be provided for any 
acreage:
    (A) That does not constitute at least 20 acres or 20 percent 
(20%) of the acreage in the unit, whichever is less (Acreage that is 
less than 20 acres or 20 percent of the acreage in the unit will be 
presumed to have been intended to be planted to the insured crop 
planted in the unit, unless you can show that you had the inputs 
available before the final planting date to plant and produce 
another insured crop on the acreage);
    (B) For which the actuarial table does not designate a premium 
rate unless a written agreement designates such premium rate;
    (C) Used for conservation purposes or intended to be left 
unplanted under any program administered by the United States 
Department of Agriculture;
    (D) On which another crop is prevented from being planted, if 
you have already received a prevented planting indemnity, guarantee 
or amount of insurance for the same acreage in the same crop year, 
unless you provide adequate records of acreage and production 
showing that the acreage has a history of double-cropping in each of 
the last four years;
    (E) On which the insured crop is prevented from being planted, 
if any other crop is planted and fails, or is planted and harvested, 
hayed or grazed on the same acreage in the same crop year, (other 
than a cover crop as specified in paragraph (a)(3)(i) of this 
section, or a substitute crop allowed in paragraph (a)(3)(ii) of 
this section) unless you provide adequate records of acreage and 
production showing that the acreage has a history of double-cropping 
in each of the last four years;
    (F) When coverage is provided under the Catastrophic Risk 
Protection Endorsement if you plant another crop for harvest on any 
acreage you were prevented from planting in the same crop year, even 
if you have a history of double cropping. If you have a Catastrophic 
Risk Protection Endorsement and receive a prevented planting 
indemnity, guarantee, or amount of insurance for a crop and are 
prevented from planting another crop on the same acreage, you may 
only receive the prevented planting indemnity, guarantee, or amount 
of insurance for the crop on which the prevented planting indemnity, 
guarantee, or amount of insurance is received; or
    (G) For which planting history or conservation plans indicate 
that the acreage would have remained fallow for crop rotation 
purposes.
    (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 cotton acres timely planted and late 
planted. For example, assume you have 100 acres eligible for 
prevented planting coverage in which you have a 100 percent (100%) 
share. The acreage is located in a single FSA Farm Serial Number 
which you insure as two separate optional units consisting of 50 
acres each. If you planted 60 acres of cotton on one optional unit 
and 40 acres of cotton on the second optional unit, your prevented 
planting eligible acreage would be reduced to zero (i.e., 100 acres 
eligible for prevented planting coverage minus 100 acres planted 
equals zero).
    (5) In accordance with the provisions of section 6 (Report of 
Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must 
report by unit any insurable acreage that you were prevented from 
planting. This report must be submitted on or before the acreage 
reporting date. For the purpose of determining acreage eligible for 
a prevented planting production guarantee the total amount of 
prevented planting and planted acres cannot exceed the maximum 
number of acres eligible for prevented planting coverage. Any 
acreage you report in excess of the number of acres eligible for 
prevented planting coverage, or that exceeds the number of eligible 
acres physically located in a unit, will be deleted from your 
acreage report.
* * * * *
    14. Section 457.105 is amended by revising paragraph 1(l) of the 
ELS Cotton Crop Provisions to read as follows:


Sec. 457.105  Extra long staple cotton crop insurance provisions.

* * * * *

1. Definitions

* * * * *
    (l) Prevented planting--Inability to plant the insured crop with 
proper equipment by the final planting date designated in the 
Special Provisions for the insured crop in the county. You must have 
been unable to plant the insured crop due to an insured cause of 
loss that has prevented the majority of producers in the surrounding 
area from planting the same crop.
* * * * *
    15. Section 457.105 is amended by revising paragraphs 12(a)(2) and 
12 (b) through (h) to read as follows:
* * * * *

12. Prevented Planting

    (a) * * *
    (2) For prevented planting acreage, multiply the per acre 
production guarantee for timely planted acreage by:
    (i) Thirty-five percent (0.35) and multiply the result by the 50 
acres you were prevented from planting, if the acreage is eligible 
for prevented planting coverage, and if the acreage is left idle for 
the crop year, or if a cover crop is planted not for harvest. 
Prevented planting compensation hereunder will not be denied because 
the cover crop is hayed or grazed; or
    (ii) Seventeen and five tenths percent (0.175) and multiply the 
result by the 50 acres you were prevented from planting, if the 
acreage is eligible for prevented planting coverage, and if you 
elect to plant a substitute crop for harvest after the 10th day 
following the final planting date for the insured crop. (This 
subparagraph (ii) is not applicable, and prevented planting coverage 
is not available hereunder, if you elected the Catastrophic Risk 
Protection Endorsement or you elected to exclude prevented planting 
coverage when a substitute crop is planted (see subsection 
12(b)(2))).
    The total of the two 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 100 acres in the unit.
    (b) If you were prevented from planting ELS cotton (see 
subsection 1(l)), you may elect:
    (1) Not to plant this acreage to any crop except a cover crop 
not for harvest. You may also elect to plant the insured crop after 
the final planting date. In either case, the production guarantee 
for such acreage will be thirty-five percent (35%) of the production 
guarantee for timely planted acres. For example, if your production 
guarantee for timely planted acreage is 600 pounds per acre, your 
prevented planting production guarantee would be 210 pounds per acre 
(600 pounds multiplied by 0.35). If you elect to plant the insured 
crop after the final planting date, production to count for such 
acreage will be determined in accordance with subsections 11(c) 
through (f); or
    (2) Not to plant the intended crop but plant a substitute crop 
for harvest, in which case:
    (A) No prevented planting production guarantee will be provided 
for such acreage if the substitute crop is planted on or before the 
tenth day following the final planting date for the insured crop; or
    (B) A production guarantee equal to seventeen and five tenths 
percent (17.5%) of the production guarantee for timely planted acres 
will be provided for such acreage, if the substitute crop is planted 
after the tenth day following the final planting date for the 
insured crop. If you elected the Catastrophic Risk Protection 
Endorsement or excluded this coverage, and plant a substitute crop, 
no prevented planting coverage will be provided. For example, if 
your production guarantee for timely planted acreage is 700 pounds 
per acre, your prevented planting production guarantee would be 
122.5 pounds per acre (700 pounds multiplied by 0.175). You may 
elect to exclude prevented planting coverage when a substitute crop 
is planted for harvest and receive a reduction in the applicable 
premium rate. If you wish to exclude this coverage, you must so 
indicate, on or before the sales closing date, on your application 
or on a form approved by us. Your election to exclude this coverage 
will remain in effect from year to year unless you notify us in 
writing on our form by the applicable sales closing date for the 
crop year for which you wish to include this coverage. All acreage 
of the crop insured under this policy will be subject to this 
exclusion.
    (c) Proof may be required that you had the inputs available to 
plant and produce the intended crop with the expectation of at least 
producing the production guarantee.
    (d) In addition to the provisions of section 11 (Insurance 
Period) of the Common Crop Insurance Policy (Sec. 457.8), the 
insurance 

[[Page 62727]]
period for prevented planting coverage begins:
    (i) On the sales closing date contained in the Special 
Provisions for the insured crop in the county for the crop year the 
application for insurance is accepted; or
    (ii) For any subsequent crop year, on the sales closing date for 
the insured crop in the county for the previous crop year, provided 
continuous coverage has been in effect since that date. For example: 
If you make application and purchase an ELS cotton crop insurance 
policy for the 1996 crop year, prevented planting coverage will 
begin on the 1996 sales closing date for the insured crop in the 
county. If the ELS cotton coverage remains in effect for the 1997 
crop year (is not terminated or cancelled during or after the 1996 
crop year, except the policy may have been cancelled to transfer the 
policy to a different insurance provider, if there is no lapse in 
coverage), prevented planting coverage for the 1997 crop year began 
on the 1996 sales closing date.
    (e) If you were prevented from planting, you must provide 
written notice to us not later than the acreage reporting date.
    (f) The acreage to which prevented planting coverage applies 
will not exceed the total eligible acreage on all Farm Service 
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted 
for any reconstitution that may have occurred on or before the sales 
closing date. Eligible acreage for each FSA Farm Serial Number is 
determined as follows:
    (1) If you participate in any program administered by the United 
States Department of Agriculture that limits the number of acres 
that may be planted for the crop year, the acreage eligible for 
prevented planting coverage will not exceed the total acreage 
permitted to be planted to the insured crop.
    (2) If you do not participate in any program administered by the 
United States Department of Agriculture that limits the number of 
acres that may be planted, and unless we agree in writing on or 
before the sales closing date, eligible acreage will not exceed the 
greater of:
    (i) The FSA base acreage for the insured crop, including acres 
that could be flexed from another crop, if applicable;
    (ii) The number of acres planted to ELS cotton on the FSA Farm 
Serial Number during the previous crop year; or
    (iii) One hundred percent (100%) of the simple average of the 
number of acres planted to ELS cotton during the crop years that you 
certified to determine your yield.
    (3) Acreage intended to be planted under an irrigated practice 
will be limited to the number of acres for which you had adequate 
irrigation facilities prior to the insured cause of loss which 
prevented you from planting.
    (4) Prevented planting coverage will not be provided for any 
acreage:
    (i) That does not constitute at least 20 acres or 20 percent 
(20%) of the acreage in the unit, whichever is less (Acreage that is 
less than 20 acres or 20 percent of the acreage in the unit will be 
presumed to have been intended to be planted to the insured crop 
planted in the unit, unless you can show that you had the inputs 
available before the final planting date to plant and produce 
another insured crop on the acreage);
    (ii) For which the actuarial table does not designate a premium 
rate unless a written agreement designates such premium rate;
    (iii) Used for conservation purposes or intended to be left 
unplanted under any program administered by the United States 
Department of Agriculture;
    (iv) On which another crop is prevented from being planted, if 
you have already received a prevented planting indemnity, guarantee 
or amount of insurance for the same acreage in the same crop year;
    (v) On which the insured crop is prevented from being planted, 
if any other crop is planted and fails, or is planted and harvested, 
hayed or grazed on the same acreage in the same crop year, (other 
than a cover crop as specified in paragraph (a)(2)(i) of this 
section, or a substitute crop allowed in paragraph (a)(2)(ii) of 
this section);
    (vi) When coverage is provided under the Catastrophic Risk 
Protection Endorsement if you plant another crop for harvest on any 
acreage you were prevented from planting in the same crop year. If 
you have a Catastrophic Risk Protection Endorsement and receive a 
prevented planting indemnity, guarantee, or amount of insurance for 
a crop and are prevented from planting another crop on the same 
acreage, you may only receive the prevented planting indemnity, 
guarantee, or amount of insurance for the crop on which the 
prevented planting indemnity, guarantee, or amount of insurance is 
received; or
    (vii) For which planting history or conservation plans indicate 
that the acreage would have remained fallow for crop rotation 
purposes.
    (5) 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 ELS cotton acres timely planted. For 
example, assume you have 100 acres eligible for prevented planting 
coverage in which you have a 100 percent (100%) share. The acreage 
is located in a single FSA Farm Serial Number which you insure as 
two separate optional units consisting of 50 acres each. If you 
planted 60 acres of ELS cotton on one optional unit and 40 acres of 
ELS cotton on the second optional unit, your prevented planting 
eligible acreage would be reduced to zero. (i.e., 100 acres eligible 
for prevented planting coverage minus 100 acres planted equals 
zero).
    (g) In accordance with the provisions of section 6 (Report of 
Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must 
report by unit any insurable acreage that you were prevented from 
planting. This report must be submitted on or before the acreage 
reporting date. For the purpose of determining acreage eligible for 
a prevented planting production guarantee the total amount of 
prevented planting and planted acres cannot exceed the maximum 
number of acres eligible for prevented planting coverage. Any 
acreage you report in excess of the number of acres eligible for 
prevented planting coverage, or that exceeds the number of eligible 
acres physically located in a unit, will be deleted from your 
acreage report.
    (h) Late planting provisions are not available under these crop 
provisions.
* * * * *
    16. Section 457.108 is amended by revising paragraph 1(l) of the 
Sunflower Seed Crop Provisions to read as follows:


Sec. 457.108  Sunflower seed crop insurance provisions.

* * * * *

1. Definitions

* * * * *
    (1) Prevented planting--Inability to plant the insured crop with 
proper equipment by the final planting date designated in the 
Special Provisions for the insured crop in the county or the end of 
the late planting period. You must have been unable to plant the 
insured crop due to an insured cause of loss that has prevented the 
majority of producers in the surrounding area from planting the same 
crop.
* * * * *
    17. Section 457.108 is amended by revising paragraphs 13(a)(3), 
13(b), and 13(d) to read as follows:
* * * * *

13. Late Planting and Prevented Planting

    (a) * * *
    (3) For prevented planting acreage, multiply the per acre 
production guarantee for timely planted acreage by:
    (i) Fifty percent (0.50) and multiply the result by the 50 acres 
you were prevented from planting, if the acreage is eligible for 
prevented planting coverage, and if the acreage is left idle for the 
crop year, or if a cover crop is planted not for harvest. Prevented 
planting compensation hereunder will not be denied because the cover 
crop is hayed or grazed; or
    (ii) Twenty-five percent (0.25) and multiply the result by the 
50 acres you were prevented from planting, if the acreage is 
eligible for prevented planting coverage, and if you elect to plant 
a substitute crop for harvest after the 10th day following the final 
planting date for the insured crop. (This subparagraph (ii) is not 
applicable, and prevented planting coverage is not available 
hereunder, if you elected the Catastrophic Risk Protection 
Endorsement or you elected to exclude prevented planting coverage 
when a substitute crop is planted (see subsection 13(d)(1)(iii))).
    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) If you were prevented from planting, you must provide 
written notice to us not later than the acreage reporting date .
* * * * *
    (d) Prevented Planting (Including Planting After the Late 
Planting Period)
    (1) If you were prevented from planting sunflowers (see 
subsection 1(l)), you may elect:
    (i) To plant sunflower seed during the late planting period. The 
production guarantee for such acreage will be determined in 
accordance with paragraph 13(c)(1); 

[[Page 62728]]

    (ii) Not to plant this acreage to any crop except a cover crop 
not for harvest. You may also elect to plant the insured crop after 
the late planting period. In either case, the production guarantee 
for such acreage will be fifty percent (50%) of the production 
guarantee for timely planted acres. For example, if your production 
guarantee for timely planted acreage is 900 pounds per acre, your 
prevented planting production guarantee would be 450 pounds per acre 
(900 pounds multiplied by 0.50). If you elect to plant the insured 
crop after the late planting period, production to count for such 
acreage will be determined in accordance with subsections 12 (c) 
through (e); or
    (iii) Not to plant the intended crop but plant a substitute crop 
for harvest, in which case:
    (A) No prevented planting production guarantee will be provided 
for such acreage if the substitute crop is planted on or before the 
tenth day following the final planting date for the insured crop; or
    (B) A production guarantee equal to twenty-five percent (25%) of 
the production guarantee for timely planted acres will be provided 
for such acreage, if the substitute crop is planted after the tenth 
day following the final planting date for the insured crop. If you 
elected the Catastrophic Risk Protection Endorsement or excluded 
this coverage, and plant a substitute crop, no prevented planting 
coverage will be provided. For example, if your production guarantee 
for timely planted acreage is 900 pounds per acre, your prevented 
planting production guarantee would be 225 pounds per acre (900 
pounds multiplied by 0.25). You may elect to exclude prevented 
planting coverage when a substitute crop is planted for harvest and 
receive a reduction in the applicable premium rate. If you wish to 
exclude this coverage, you must so indicate, on or before the sales 
closing date, on your application or on a form approved by us. Your 
election to exclude this coverage will remain in effect from year to 
year unless you notify us in writing on our form by the applicable 
sales closing date for the crop year for which you wish to include 
this coverage. All acreage of the crop insured under this policy 
will be subject to this exclusion.
    (2) Proof may be required that you had the inputs available to 
plant and produce the intended crop with the expectation of at least 
producing the production guarantee.
    (3) In addition to the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the insurance period 
for prevented planting coverage begins:
    (i) On the sales closing date contained in the Special 
Provisions for the insured crop in the county for the crop year the 
application for insurance is accepted; or
    (ii) For any subsequent crop year, on the sales closing date for 
the insured crop in the county for the previous crop year, provided 
continuous coverage has been in effect since that date. For example: 
If you make application and purchase a sunflower seed crop insurance 
policy for the 1996 crop year, prevented planting coverage will 
begin on the 1996 sales closing date for the insured crop in the 
county. If the sunflower seed coverage remains in effect for the 
1997 crop year (is not terminated or cancelled during or after the 
1996 crop year, except the policy may have been cancelled to 
transfer the policy to a different insurance provider, if there is 
no lapse in coverage), prevented planting coverage for the 1997 crop 
year began on the 1996 sales closing date.
    (4) The acreage to which prevented planting coverage applies 
will not exceed the total eligible acreage on all Farm Service 
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted 
for any reconstitution that may have occurred on or before the sales 
closing date. Eligible acreage for each FSA Farm Serial Number is 
determined as follows:
    (i) If you participate in any program administered by the United 
States Department of Agriculture that limits the number of acres 
that may be planted for the crop year, the acreage eligible for 
prevented planting coverage will not exceed the total acreage 
permitted to be planted to the insured crop.
    (ii) If you do not participate in any program administered by 
the United States Department of Agriculture that limits the number 
of acres that may be planted, and unless we agree in writing on or 
before the sales closing date, eligible acreage will not exceed the 
greater of:
    (A) The FSA base acreage for the insured crop, including acres 
that could be flexed from another crop, if applicable;
    (B) The number of acres planted to sunflower seed on the FSA 
Farm Serial Number during the previous crop year; or
    (C) One hundred percent (100%) of the simple average of the 
number of acres planted to sunflower seed during the crop years that 
you certified to determine your yield.
    (iii) Acreage intended to be planted under an irrigated practice 
will be limited to the number of acres for which you had adequate 
irrigation facilities prior to the insured cause of loss which 
prevented you from planting.
    (iv) Prevented planting coverage will not be provided for any 
acreage:
    (A) That does not constitute at least 20 acres or 20 percent 
(20%) of the acreage in the unit, whichever is less (Acreage that is 
less than 20 acres or 20 percent of the acreage in the unit will be 
presumed to have been intended to be planted to the insured crop 
planted in the unit, unless you can show that you had the inputs 
available before the final planting date to plant and produce 
another insured crop on the acreage);
    (B) For which the actuarial table does not designate a premium 
rate unless a written agreement designates such premium rate;
    (C) Used for conservation purposes or intended to be left 
unplanted under any program administered by the United States 
Department of Agriculture;
    (D) On which another crop is prevented from being planted, if 
you have already received a prevented planting indemnity, guarantee 
or amount of insurance for the same acreage in the same crop year, 
unless you provide adequate records of acreage and production 
showing that the acreage has a history of double-cropping in each of 
the last four years;
    (E) On which the insured crop is prevented from being planted, 
if any other crop is planted and fails, or is planted and harvested, 
hayed or grazed on the same acreage in the same crop year, (other 
than a cover crop as specified in paragraph (a)(3)(i) of this 
section, or a substitute crop allowed in paragraph (a)(3)(ii) of 
this section), unless you provide adequate records of acreage and 
production showing that the acreage has a history of double-cropping 
in each of the last four years;
    (F) When coverage is provided under the Catastrophic Risk 
Protection Endorsement if you plant another crop for harvest on any 
acreage you were prevented from planting in the same crop year, even 
if you have a history of double cropping. If you have a Catastrophic 
Risk Protection Endorsement and receive a prevented planting 
indemnity, guarantee, or amount of insurance for a crop and are 
prevented from planting another crop on the same acreage, you may 
only receive the prevented planting indemnity, guarantee, or amount 
of insurance for the crop on which the prevented planting indemnity, 
guarantee, or amount of insurance is received; or
    (G) For which planting history or conservation plans indicate 
that the acreage would have remained fallow for crop rotation 
purposes.
    (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 sunflower acres timely planted and 
late planted. For example, assume you have 100 acres eligible for 
prevented planting coverage in which you have a 100 percent (100%) 
share. The acreage is located in a single FSA Farm Serial Number 
which you insure as two separate optional units consisting of 50 
acres each. If you planted 60 acres of sunflower seed on one 
optional unit and 40 acres of sunflower seed on the second optional 
unit, your prevented planting eligible acreage would be reduced to 
zero (i.e.,100 acres eligible for prevented planting coverage minus 
100 acres planted equals zero).
    (5) In accordance with the provisions of section 6 (Report of 
Acreage) of the Basic Provisions (Sec. 457.8), you must report by 
unit any insurable acreage that you were prevented from planting. 
This report must be submitted on or before the acreage reporting 
date. For the purpose of determining acreage eligible for a 
prevented planting production guarantee the total amount of 
prevented planting and planted acres cannot exceed the maximum 
number of acres eligible for prevented planting coverage. Any 
acreage you report in excess of the number of acres eligible for 
prevented planting coverage, or that exceeds the number of eligible 
acres physically located in a unit, will be deleted from your 
acreage report.
* * * * *
    18. Section 457.113 is amended by revising paragraph 1(n) of the 
Coarse Grains Crop Provisions to read as follows:


Sec. 457.113  Coarse grains crop insurance provisions.

* * * * *

1. Definitions

* * * * * 

[[Page 62729]]

    (n) Prevented planting--Inability to plant the insured crop with 
proper equipment by the final planting date designated in the 
Special Provisions for the insured crop in the county or the end of 
the late planting period. You must have been unable to plant the 
insured crop due to an insured cause of loss that has prevented the 
majority of producers in the surrounding area from planting the same 
crop.
* * * * *
    19. Section 457.113 is amended by revising paragraphs 13(a)(3), 
13(b), and 13(d) to read as follows:
* * * * *

13. Late Planting and Prevented Planting

    (a) * * *
    (3) For prevented planting acreage, multiply the per acre 
production guarantee for timely planted acreage by:
    (i) Fifty percent (0.50) and multiply the result by the 50 acres 
you were prevented from planting, if the acreage is eligible for 
prevented planting coverage, and if the acreage is left idle for the 
crop year, or if a cover crop is planted not for harvest. Prevented 
planting compensation hereunder will not be denied because the cover 
crop is hayed or grazed; or
    (ii) Twenty-five percent (0.25) and multiply the result by the 
50 acres you were prevented from planting, if the acreage is 
eligible for prevented planting coverage, and if you elect to plant 
a substitute crop for harvest after the 10th day following the final 
planting date for the insured crop. (This subparagraph (ii) is not 
applicable, and prevented planting coverage is not available 
hereunder, if you elected the Catastrophic Risk Protection 
Endorsement or you elected to exclude prevented planting coverage 
when a substitute crop is planted (see subsection 13(d)(1)(iii)).)
    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) If you were prevented from planting, you must provide 
written notice to us not later than the acreage reporting date.
* * * * *
    (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 except a cover crop 
not for harvest. You may also elect to plant the insured crop after 
the late planting period. In either case, the production guarantee 
for such acreage will be fifty percent (50%) 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 15 bushels per acre 
(30 bushels multiplied by 0.50). If you elect to plant the insured 
crop after the late planting period, production to count for such 
acreage will be determined in accordance with subsections 12(c) 
through (g); or
    (iii) Not to plant the intended crop but plant a substitute crop 
for harvest, in which case:
    (A) No prevented planting production guarantee will be provided 
for such acreage if the substitute crop is planted on or before the 
tenth day following the final planting date for the insured crop; or
    (B) A production guarantee equal to twenty-five percent (25%) of 
the production guarantee for timely planted acres will be provided 
for such acreage, if the substitute crop is planted after the tenth 
day following the final planting date for the insured crop. If you 
elected the Catastrophic Risk Protection Endorsement or excluded 
this coverage, and plant a substitute crop, no prevented planting 
coverage will be provided. For example, if your production guarantee 
for timely planted acreage is 30 bushels per acre, your prevented 
planting production guarantee would be 7.5 bushels per acre (30 
bushels multiplied by 0.25). You may elect to exclude prevented 
planting coverage when a substitute crop is planted for harvest and 
receive a reduction in the applicable premium rate. If you wish to 
exclude this coverage, you must so indicate, on or before the sales 
closing date, on your application or on a form approved by us. Your 
election to exclude this coverage will remain in effect from year to 
year unless you notify us in writing on our form by the applicable 
sales closing date for the crop year for which you wish to include 
this coverage. All acreage of the crop insured under this policy 
will be subject to this exclusion.
    (2) Proof may be required that you had the inputs available to 
plant and produce the intended crop with the expectation of at least 
producing the production guarantee.
    (3) 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:
    (i) On the sales closing date contained in the Special 
Provisions for the insured crop in the county for the crop year the 
application for insurance is accepted; or
    (ii) For any subsequent crop year, on the sales closing date for 
the insured crop in the county for the previous crop year, provided 
continuous coverage has been in effect since that date. For example: 
If you make application and purchase insurance for corn for the 1996 
crop year, prevented planting coverage will begin on the 1996 sales 
closing date for corn in the county. If the corn coverage remains in 
effect for the 1997 crop year (is not terminated or canceled during 
or after the 1996 crop year, except the policy may have been 
canceled to transfer the policy to a different insurance provider, 
if there is no lapse in coverage), prevented planting coverage for 
the 1997 crop year began on the 1996 sales closing date.
    (4) The acreage to which prevented planting coverage applies 
will not exceed the total eligible acreage on all Farm Service 
Agency (FSA) Farm Serial Numbers in which you have a share, adjusted 
for any reconstitution that may have occurred on or before the sales 
closing date. Eligible acreage for each FSA Farm Serial Number is 
determined as follows:
    (i) If you participate in any program administered by the United 
States Department of Agriculture that limits the number of acres 
that may be planted for the crop year, the acreage eligible for 
prevented planting coverage will not exceed the total acreage 
permitted to be planted to the insured crop.
    (ii) If you do not participate in any program administered by 
the United States Department of Agriculture that limits the number 
of acres that may be planted, and unless we agree in writing on or 
before the sales closing date, eligible acreage will not exceed the 
greater of:
    (A) The FSA base acreage for the insured crop, including acres 
that could be flexed from another crop, if applicable;
    (B) The number of acres planted to the insured crop on the FSA 
Farm Serial Number during the previous crop year; 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 you certified to determine your yield.
    (iii) Acreage intended to be planted under an irrigated practice 
will be limited to the number of acres for which you had adequate 
irrigation facilities prior to the insured cause of loss which 
prevented you from planting.
    (iv) Prevented planting coverage will not be provided for any 
acreage:
    (A) That does not constitute at least 20 acres or 20 percent 
(20%) of the acreage in the unit, whichever is less (Acreage that is 
less than 20 acres or 20 percent of the acreage in the unit will be 
presumed to have been intended to be planted to the insured crop 
planted in the unit, unless you can show that you had the inputs 
available before the final planting date to plant and produce 
another insured crop on the acreage);
    (B) For which the actuarial table does not designate a premium 
rate unless a written agreement designates such premium rate;
    (C) Used for conservation purposes or intended to be left 
unplanted under any program administered by the United States 
Department of Agriculture;
    (D) On which another crop is prevented from being planted, if 
you have already received a prevented planting indemnity, guarantee 
or amount of insurance for the same acreage in the same crop year, 
unless you provide adequate records of acreage and production 
showing that the acreage has a history of double-cropping in each of 
the last four years;
    (E) On which the insured crop is prevented from being planted, 
if any other crop is planted and fails, or is planted and harvested, 
hayed or grazed on the same acreage in the same crop year, (other 
than a cover crop as specified in paragraph (a)(3)(i) of this 
section, or a substitute crop allowed in paragraph (a)(3)(ii) of 
this section), unless you provide adequate records of acreage and 
production showing that the acreage has a history of double-cropping 
in each of the last four years;
    (F) When coverage is provided under the Catastrophic Risk 
Protection Endorsement if 

[[Page 62730]]
you plant another crop for harvest on any acreage you were prevented 
from planting in the same crop year, even if you have a history of 
double cropping. If you have a Catastrophic Risk Protection 
Endorsement and receive a prevented planting indemnity, guarantee, 
or amount of insurance for a crop and are prevented from planting 
another crop on the same acreage, you may only receive the prevented 
planting indemnity, guarantee, or amount of insurance for the crop 
on which the prevented planting indemnity, guarantee, or amount of 
insurance is received; or
    (G) For which planting history or conservation plans indicate 
that the acreage would have remained fallow for crop rotation 
purposes.
    (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 late planted. For example, assume you have 100 acres 
eligible for prevented planting coverage in which you have a 100 
percent (100%) share. The acreage is located in a single FSA Farm 
Serial Number which you insure as two separate optional units 
consisting of 50 acres each. If you planted 60 acres of 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 (i.e.,100 acres eligible for prevented planting 
coverage minus 100 acres planted equals zero).
    (5) In accordance with the provisions of section 6 (Report of 
Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must 
report by unit any insurable acreage that you were prevented from 
planting. This report must be submitted on or before the acreage 
reporting date. For the purpose of determining acreage eligible for 
a prevented planting production guarantee the total amount of 
prevented planting and planted acres cannot exceed the maximum 
number of acres eligible for prevented planting coverage. Any 
acreage you report in excess of the number of acres eligible for 
prevented planting coverage, or that exceeds the number of eligible 
acres physically located in a unit, will be deleted from your 
acreage report.

    Done in Washington, DC, on November 27, 1995.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 95-29606 Filed 11-30-95; 4:56 pm]
BILLING CODE 3410-08-P