[Federal Register Volume 61, Number 155 (Friday, August 9, 1996)]
[Proposed Rules]
[Pages 41527-41531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20194]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 61, No. 155 / Friday, August 9, 1996 / 
Proposed Rules  

[[Page 41527]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457


Common Crop Insurance Regulations; Walnut Crop Insurance 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes 
specific crop provisions for the insurance of walnuts. The provisions 
will be used in conjunction with the Common Crop Insurance Policy Basic 
Provisions, which contain standard terms and conditions common to most 
crops. The intended effect of this action is to provide policy changes 
to better meet the needs of the insured and to combine the current 
Walnut Crop Insurance Regulations with the Common Crop Insurance Policy 
for ease of use and consistency of terms.

DATES: Written comments, data, and opinions on this proposed rule will 
be accepted until close of business October 8, 1996, and will be 
considered when the rule is to be made final. The comment period for 
information collections under the Paperwork Reduction Act of 1995 
continues through October 7, 1996.

ADDRESSES: Interested persons are invited to submit written comments to 
the Chief, Product Development Branch, Federal Crop Insurance 
Corporation, United States Department of Agriculture, 9435 Holmes Road, 
Kansas City, MO 64131. Written comments will be available for public 
inspection and copying in room 0324, South Building, USDA, 14th and 
Independence Avenue, SW., Washington, DC, 8:15 a.m.-4:45 p.m., EDT 
Monday through Friday. For addresses see the Paperwork Reduction Act 
paragraph under SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: Arden Routh, Program Analyst, Research 
and Development Division, Product Development Branch, FCIC, at the 
Kansas City, MO address listed above. Telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866 and Departmental Regulation 1512-1

    This action has been reviewed under United States Department of 
Agriculture (USDA) procedures established by Executive Order No. 12866 
and Departmental Regulation 1512-1. This action constitutes a review as 
to the need, currency, clarity, and effectiveness of these regulations 
under those procedures. The sunset review date established for these 
regulations is April 30, 2001.
    This rule has been determined to be not significant for the 
purposes of Executive Order No. 12866 and, therefore, has not been 
reviewed by the Office of Management and Budget (OMB).

Paperwork Reduction Act of 1995

    The information collection requirements contained in the Walnut 
Crop Insurance Provisions have been submitted to OMB for approval under 
section 3507(j) of the Paperwork Reduction Act of 1995. This proposed 
rule will amend the information collection requirements under OMB 
control number 0563-0003 through September 30, 1998. The Federal Crop 
Insurance Corporation will be amending the information collection to 
adjust the estimated reporting hours and revising the usage of FCI-12-
P, Pre-Acceptance Perennial Crop Inspection Report as it applies to the 
Walnut Crop Insurance Provisions.
    Section 7 of the 1997 Walnut Crop Provisions adds interplanting as 
an insurable farming practice as long as it is interplanted with 
another perennial crop. This practice was not insurable under the 
previous Walnut Crop Insurance Regulations. Consequently, interplanting 
information will need to be collected using the FCI-12-P Pre-Acceptance 
Perennial Crop Inspection Report form for approximately 3 percent (3%) 
of the walnuts insureds who interplant their walnut crop. Standard 
interplanting language has been added to most perennial crops. 
Interplanting is an insurable practice as long as it does not adversely 
affect the insured crop. This is a benefit to agriculture because 
insurance is now available for more perennial crop producers and, as a 
result, less acreage will need to be placed into the noninsured crop 
disaster assistance program (NAP).
    The title of this information collection is ``Catastrophic Risk 
Protection Plan and Related Requirements including, Common Crop 
Insurance Regulations; Walnut Crop Insurance Provisions.'' The 
information to be collected includes a crop insurance acreage report, 
insurance application, and a continuous contract. Information collected 
from the acreage report and application is electronically submitted to 
FCIC by the reinsured companies. Potential respondents to this 
information collection are producers of walnuts that are eligible for 
Federal crop insurance.
    The information requested is necessary for the reinsured companies 
and FCIC to provide insurance and reinsurance, determine eligibility, 
determine the correct parties to the agreement or contract, determine 
and collect premiums or other monetary amounts, and pay benefits.
    All information is reported annually. The reporting burden for this 
collection of information is estimated to average 25 minutes per 
response for each of the 3.6 responses from approximately 1,755,015 
respondents. The total annual burden on the public for this information 
collection is 2,669,970.
    FCIC is requesting comments for 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 
gathering technology.
    Comments regarding paperwork reduction should be submitted to the 
Desk Officer for Agriculture, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, D.C. 20503 and to 
Bonnie Hart, Advisory and Corporate Operations Staff, Regulatory Review 
Group, Farm Service Agency, P.O. Box 2415, Ag Box 0572, U.S. Department 
of

[[Page 41528]]

Agriculture, Washington, D.C. 20013-2415. Copies of the information 
collection may be obtained from Bonnie Hart at the above address, 
telephone (202) 690-2857.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Pub. L. 
104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, FCIC 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, or tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
1 year. When such a statement is needed for a rule, section 205 of the 
UMRA generally requires FCIC to identify and consider a reasonable 
number of regulatory alternatives and adopt the least costly, more 
cost-effective or least burdensome alternative that achieves the 
objectives of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of title II of the UMRA) for State, local, and tribal 
governments or the private sector. Thus, this rule is not subject to 
the requirements of sections 202 and 205 of the UMRA.

Executive Order No. 12612

    It has been determined under section 6(a) of Executive Order No. 
12612, Federalism, that this rule does not have sufficient federalism 
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.

Regulatory Flexibility Act

    This regulation will not have a significant impact on a substantial 
number of small entities. Under the current regulations, a producer is 
required to complete an application and acreage report. If the crop is 
damaged or destroyed, the insured is required to give notice of loss 
and provide the necessary information to complete a claim for 
indemnity. The insured must certify to the number of acres and 
production on an annual basis or receive a transitional yield. The 
producer must maintain the records to support the certified information 
for at least 3 years. This regulation does not alter those 
requirements. Therefore, the amount of work required of the insurance 
companies and FSA offices delivering and servicing these policies will 
not increase significantly from the amount of work currently required. 
This rule does not have any greater or lesser impact on the producer. 
Therefore, this action is determined to be exempt from the provisions 
of the Regulatory Flexibility Act ( 5 U.S.C. 605), and no Regulatory 
Flexibility Analysis was prepared.

Federal Assistance Program

    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.

Executive Order No. 12372

    This program is not subject to the provisions of Executive Order 
No. 12372 which require intergovernmental consultation with State and 
local officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.

Executive Order No. 12778

    The Office of the General Counsel has determined that these 
regulations meet the applicable standards provided in sections 2(a) and 
2(b)(2) of Executive Order No. 12778. The provisions of this rule will 
not have retroactive effect prior to the effective date. The provisions 
of this rule will preempt State and local laws to the extent such State 
and local laws are inconsistent herewith. The administrative appeal 
provisions in 7 CFR parts 11 and 780 must be exhausted before action 
for judicial review may be brought.

Environmental Evaluation

    This action is not expected to have 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.

National Performance Review

    This regulatory action is being taken as part of the National 
Performance Review Initiative to eliminate unnecessary or duplicative 
regulations and improve those that remain in force.

Background

    FCIC proposes to add to the Common Crop Insurance Regulations (7 
CFR part 457), a new section 7 CFR 457.122, Walnut Crop Insurance 
Provisions. The provisions will be effective for the 1997 and 
succeeding crop years. The proposed provisions will supersede and 
replace those found at 7 CFR part 446 (Walnut Crop Insurance 
Regulations). By separate rule, FCIC will revise 7 CFR part 446 to 
restrict its effect through the 1996 crop year and later remove that 
part.
    This rule makes minor editorial and format changes to improve the 
Walnut Crop Insurance Regulations' compatibility with the Common Crop 
Insurance Policy. In addition, FCIC is proposing substantive changes in 
the provisions for insuring walnuts as follows:
    1. Section 1--Add definitions for the terms ``days,'' ``good 
farming practices,'' ``interplanted,'' ``irrigated practice,'' ``net 
delivered weight,'' ``non-contiguous land,'' ``pound,'' ``production 
guarantee (per acre),'' and ``written agreement'' for the purpose of 
clarification.
    2. Section 2--Describe the guidelines under which basic units may 
be divided into optional units. The definition of ``unit'' under 
section 1 (tt) of the Basic Provisions (Sec. 457.8), provides for the 
division of units in accordance with applicable crop provisions. The 
current Walnut Crop Insurance Regulations does not provide guidelines 
for determining optional units. Section 2 of these crop provisions 
provides guidelines for optional unit division of walnut basic units 
that are consistent with many other perennial crop provisions. 
Consistent with the definition of ``unit'' in the Basic Provisions 
(Sec. 457.8), section 11 of the Walnut Crop Provisions will provide 
that, in settling a claim, loss will be determined on a unit basis and 
all optional units for which acceptable production records were not 
provided will be combined.
    3. Section 2(b)--Add provision that clarifies optional units must 
be on non-contiguous land. This does not change the walnut unit 
structure currently in effect.
    4. Section 3(a)--Specify that the insured may choose only one price 
election for all the walnuts in the county insured under the policy, 
unless the Special Provisions provide different price elections by 
variety or varietal group, in which case the insured may choose one 
price election for each walnut variety or varietal group designated in 
the Special Provisions. The price election the insured chooses for each 
walnut variety or varietal group must have the same percentage 
relationship to the maximum price offered. This helps protect against 
program abuse and simplifies administration of the program.
    5. Section 3(b)--Specify that the insured must report any damage, 
removal of trees, and any change in

[[Page 41529]]

practice that may reduce yields. For the first year of acreage 
interplanted with another crop or anytime the planting pattern of such 
acreage is changed, the insured must also report the age of any 
interplanted crop, the planting pattern, and any other information 
needed to establish the approved yield. The acreage or the yield used 
to establish the production guarantee, or both, may be adjusted by us 
when the insurance provider becomes aware of the situation if the 
insured has not previously reported it. Interplanting is not provided 
under the current Walnut Crop Insurance Regulations. The change in 
policy language is based on FCIC's desire to insure the maximum amount 
of acreage.
    6. Section 7--Allow insurance for walnuts interplanted with another 
perennial crop in order to make insurance available on more acreage and 
reduce reliance on the noninsured crop disaster assistance program 
(NAP) for protection for crop losses.
    7. Section 8(a)--Clarify that if an application is accepted by us 
after February 1, insurance will attach on the 10th day after the 
application is received in the insurance provider's local office. 
However, full premium will be due for the partial year.
    8. Section 8(b)--Add provisions to clarify the procedures for 
insuring acreage when an insurable share is acquired or relinquished on 
or before the acreage reporting date.
    9. Section 9(b)(1)--Clarify that disease and insect infestation are 
excluded causes of loss unless adverse weather prevents the proper 
application of control measures, causes control measures to be 
ineffective when properly applied, or causes disease or insect 
infestation for which no effective control mechanism is available.
    10. Section 10--Add provisions that require an insured to notify 
the insurer of damage prior to harvest so that an inspection can be 
made in order to permit a timely appraisal. The provisions also 
prohibit the insured from selling or otherwise disposing of any damaged 
production until consent to do so is provided by the insurer.
    11. Section 11(d)--Add provisions for providing quality adjustment 
for mold damaged walnuts based on net delivered weight. This 
incorporated recommendations from producers, walnut industry, insurance 
industry, and FSA field offices. Mold damage is the primary cause of 
loss in quality and significantly reduces the value of the walnuts.
    12. Section 12--Add provisions for providing insurance coverage by 
written agreement. FCIC has a long-standing policy of permitting 
modification of certain provisions of insurance contracts by written 
agreement. Written agreements are not available under the current 
Walnut Crop Insurance Regulations. The new section will cover 
application for and duration of written agreements.

List of Subjects in 7 CFR Part 457

    Crop insurance, Walnuts.

Proposed Rule

    Pursuant to the authority contained in the Federal Crop Insurance 
Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance 
Corporation hereby proposes to amend the Common Crop Insurance 
Regulations (7 CFR part 457), effective for the 1997 and succeeding 
crop years, as follows:

PART 457--[AMENDED]

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

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

    2. 7 CFR part 457 is amended by adding a new Sec. 457.122 to read 
as follows:


Sec. 457.122  Walnut crop insurance provisions.

    The Walnut Crop Insurance Provisions for the 1997 and succeeding 
crop years are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Walnut Crop Provisions

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

1. Definitions

    Days--Calendar days.
    Good farming practices--The cultural practices generally in use 
in the county for the crop to make normal progress toward maturity 
and produce at least the yield used to determine the production 
guarantee, and are those generally recognized by the Cooperative 
Extension Service as compatible with agronomic and weather 
conditions in the county.
    Harvest--Removal of the walnuts from the orchard.
    Interplanted--Acreage on which two or more crops are planted in 
any form of alternating or mixed pattern.
    Irrigated practice--A method of producing a crop by which water 
is artificially applied during the growing season by appropriate 
systems and at the proper times, with the intention of providing the 
quantity of water needed to produce at least the yield used to 
establish the irrigated production guarantee on the irrigated 
acreage planted to the insured crop.
    Net delivered weight--Delivered weight of dry, hulled, in-shell 
walnuts, excluding foreign material.
    Non-contiguous land--Any two or more tracts of land whose 
boundaries do not touch at any point, except that land separated 
only by a public or private right-of-way, waterway, or an irrigation 
canal will be considered as contiguous.
    Pound--A unit of weight equal to 16 ounces avoirdupois.
    Production guarantee (per acre)--The number of pounds (whole in-
shell walnuts), determined by multiplying the approved yield per 
acre by the coverage level percentage you elect.
    Written agreement--A written document that alters designated 
terms of a policy in accordance with section 12.

2. Unit Division

    (a) Unless limited by the Special Provisions, a unit as defined 
in section 1 (Definitions) of the Basic Provisions (Sec. 457.8), may 
be divided into optional units if, for each optional unit, you meet 
all the conditions of this section or if a written agreement to such 
division exists.
    (b) Basic units may not be divided into optional units on any 
basis including, but not limited to, production practice, type, and 
variety, other than as described in this section.
    (c) If you do not comply fully with these provisions, we will 
combine all optional units that are not in compliance with these 
provisions into the basic unit from which they were formed. We will 
combine the optional units at any time we discover that you have 
failed to comply with these provisions. If failure to comply with 
these provisions is determined to be inadvertent, and the optional 
units are combined, that portion of the premium paid for the purpose 
of electing optional units will be refunded to you pro rata for the 
units combined.
    (d) All optional units must be identified on the acreage report 
for each crop year.
    (e) The following requirements must be met for each optional 
unit:
    (1) You must have records, which can be independently verified, 
of acreage and production for each optional unit for at least the 
last crop year used to determine your production guarantee;
    (2) You must have records of marketed or stored production from 
each optional unit maintained in such a manner that permits us to 
verify the production from each optional unit, or the production 
from each unit must be kept separate until loss adjustment is 
completed by us; and
    (3) Each optional unit must be located on non-contiguous land.

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

    In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) 
of the Basic Provisions (Sec. 457.8):
    (a) You may choose only one price election for all the walnuts 
in the county insured under this policy unless the Special 
Provisions provide different price elections by variety or varietal 
group, in which case you may choose one price election for each

[[Page 41530]]

walnut variety or varietal group designated in the Special 
Provisions. The price elections you choose for each variety or 
varietal group must have the same percentage relationship to the 
maximum price offered by us for each variety or varietal group. For 
example, if you choose 100 percent (100%) of the maximum price 
election for a specific variety or varietal group, you must also 
choose 100 percent (100%) of the maximum price election for all 
other varieties or varietal groups.
    (b) You must report, by the production reporting date designated 
in section 3 (Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities) of the Basic Provisions (Sec. 457.8), by 
variety or varietal group if applicable:
    (1) Any damage, removal of trees, or change in practices that 
may reduce the expected yield below the yield upon which the 
insurance guarantee is based, and the number of affected acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted 
with another perennial crop, and anytime the planting pattern of 
such acreage is changed:
    (i) The age of the interplanted crop, and type if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to 
establish your approved yield.
    We will reduce the yield used to establish your production 
guarantee as necessary, based on our estimate of the effect of the 
interplanted perennial crop, removal of trees, damage, or change in 
practices on the yield potential of the insured crop. If you fail to 
notify us of any circumstances that may reduce yields from previous 
levels, we will reduce your production guarantee as necessary at any 
time we become aware of the circumstances.

4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is October 31 
preceding the cancellation date.

5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation 
and termination dates are January 31.

6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the 
commercially grown English Walnuts (excluding black walnuts) in the 
county for which a premium rate is provided by the actuarial table:
    (a) In which you have a share;
    (b) That are grown on tree varieties that:
    (1) Were commercially available when the trees were set out;
    (2) Are adapted to the area; and
    (3) Are grown on a root stock that is adapted to the area;
    (c) That are grown on trees in an orchard that, if inspected, 
are considered acceptable by us;
    (d) That are grown on trees that have reached at least the ninth 
growing season after being set out, unless we agree in writing to 
insure such trees; and
    (e) That are in a unit that consists of at least five (5.0) 
acres, unless we agree in writing to insure a smaller unit.

7. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8) that prohibit insurance attaching 
to a crop planted with another crop, walnuts interplanted with 
another perennial crop are insurable unless we inspect the acreage 
and determine it does not meet insurability requirements.

8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on February 1 of each crop year, except that 
for the first crop year, if the application is accepted by us after 
January 31, insurance will attach on the 10th day after the 
application is received in your insurance provider's local office.
    (2) The calendar date for the end of the insurance period for 
each crop year is November 15.
    (b) In addition to the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage 
after coverage begins, but on or before the acreage reporting date 
of any crop year and after an inspection we consider the acreage 
acceptable, insurance will be considered to have attached to such 
acreage on the calendar date for the beginning of the insurance 
period.
    (2) If you relinquish your insurable share on any insurable 
acreage of walnuts on or before the acreage reporting date of any 
crop year, insurance will not be considered to have attached to, and 
no premium or indemnity will be due for, such acreage for that crop 
year unless:
    (i) A transfer of coverage and right to an indemnity or a 
similar form approved by us is completed by all affected parties; 
and
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date.

9. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of 
Loss) of the Basic Provisions (Sec. 457.8), insurance is provided 
only against the following causes of loss that occur during the 
insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not 
been controlled or pruning debris has not been removed from the 
orchard;
    (3) Wildlife;
    (4) Earthquake;
    (5) Volcanic eruption; or
    (6) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not 
insure against any damage or loss of production due to:
    (1) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or 
causes properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available; or
    (2) Inability to market the walnuts for any reason other than 
actual physical damage from an insurable cause specified in this 
section. For example, we will not pay you an indemnity if you are 
unable to market due to quarantine, boycott, or refusal of any 
person to accept production.

10. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), if 
you intend to claim an indemnity on any unit, you must notify us 
prior to the beginning of harvest so that we may inspect the damaged 
production. You must not sell or dispose of the damaged crop until 
after we have given you written consent to do so. If you fail to 
meet the requirements of this subsection, all such production will 
be considered undamaged and included as production to count.

11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event 
you are unable to provide production records:
    (1) For any optional unit, we will combine all optional units 
for which acceptable production records were not provided; or
    (2) For any basic unit, we will allocate any commingled 
production to such units in proportion to our liability on the 
harvested acreage for each unit.
    (b) In the event of loss or damage covered by this policy, we 
will settle your claim by:
    (1) Multiplying the insured acreage by the respective production 
guarantee;
    (2) Multiplying each result in paragraph (1) by the respective 
price election for each variety or varietal group;
    (3) Totaling the results in paragraph (2);
    (4) Multiplying the total production to be counted of each 
variety or varietal group if applicable, (see subsection 11(c)) by 
the respective price election;
    (5) Totaling the results in paragraph (4);
    (6) Subtracting the total in paragraph (5) from the total in 
paragraph (3); and
    (7) Multiplying the result in paragraph (6) by your share.
    (c) The total production to count (whole in-shell pounds) from 
all insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) Damaged solely by uninsured causes; or
    (C) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for 
that acreage will end. If you do not agree with our appraisal, we 
may defer the claim only if you

[[Page 41531]]

agree to continue to care for the crop. We will then make another 
appraisal when you notify us of further damage or that harvest is 
general in the area unless you harvested the crop, in which case we 
will use the harvested production. If you do not continue to care 
for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count; and
    (2) All harvested production from the insurable acreage.
    (d) Mature walnut production damaged due to an insurable cause 
of loss which occurs within the insurance period may be adjusted for 
quality based on an inspection by the Dried Fruit Association or as 
determined by us. Walnut production that has mold damage greater 
than 8 percent (8%), based on the net delivered weight, will be 
reduced by the factor contained in the Special Provisions. Walnut 
production that has mold damage greater than 30 percent (30%), based 
on the net delivered weight, will not be considered as production to 
count.

12. Written Agreements

    Designated terms of this policy may be altered by written 
agreement. The following conditions will apply:
    (a) You must apply in writing for each written agreement no 
later than the sales closing date, except as provided in subsection 
12(e).
    (b) The application for written agreement must contain all terms 
of the contract between the insurance provider and the insured that 
will be in effect if the written agreement is not approved.
    (c) If approved, the written agreement will include all variable 
terms of the contract, including, but not limited to, crop type or 
variety, the guarantee, premium rate, and price election.
    (d) Each written agreement will only be valid for 1 year. If the 
written agreement is not specifically renewed the following year, 
insurance coverage for subsequent crop years will be in accordance 
with the printed policy.
    (e) An application for written agreement submitted after the 
sales closing date may be approved if, after a physical inspection 
of the acreage, it is determined that no loss has occurred and the 
crop is insurable in accordance with the policy provisions.

    Signed in Washington D.C., on August 1, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-20194 Filed 8-8-96; 8:45 am]
BILLING CODE 3410-FA-P