[Federal Register Volume 61, Number 168 (Wednesday, August 28, 1996)]
[Rules and Regulations]
[Pages 44145-44149]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21893]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
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Federal Register / Vol. 61, No. 168 / Wednesday, August 28, 1996 /
Rules and Regulations
[[Page 44145]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
Common Crop Insurance Regulations; Arizona-California Citrus Crop
Insurance Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes
specific crop provisions for the insurance of Arizona-California
citrus. 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
combine the current Arizona-California Citrus Crop Insurance
Regulations with the Common Crop Insurance Policy for ease of use and
consistency of terms.
EFFECTIVE DATE: August 28, 1996.
FOR FURTHER INFORMATION CONTACT: John Meyer, Program Analyst, Research
and Development Division, Product Development Branch, Federal Crop
Insurance Corporation, United States Department of Agriculture, 9435
Holmes Road, Kansas City, MO 64131, 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 June 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
Following publication of the proposed rule, the public was afforded
60 days to submit comments, data, and opinions on information
collection requirements previously approved by OMB under OMB control
number 0563-0003 through September 30, 1998. No public comments were
received.
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 of 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) of 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
implications 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. An insured must also annually certify to the previous years
production or receive a transitional yield. The producer must maintain
the production records to support the certified information for at
least 3 years. This regulation does not alter those requirements. The
amount of work required of the insurance companies 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 a 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 published at 7 CFR parts 11 and 780 must be exhausted
before any action for judicial review may be brought.
[[Page 44146]]
Environmental Evaluation
This action is not expected to have a 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
On Thursday, June 20, 1996, FCIC published a proposed rule in the
Federal Register at 61 FR 31464-31468 to add to the Common Crop
Insurance Regulations (7 CFR part 457), a new section, 7 CFR 457.121,
Arizona-California Citrus Crop Insurance Provisions. The new provisions
will be effective for the 1998 and succeeding crop years. These
provisions will replace the current provisions for insuring Arizona-
California citrus found at 7 CFR part 409 (Arizona-California Citrus
Crop Insurance Regulations), thereby limiting the effect of the current
provisions to the 1997 and prior crop years. After this final rule
becomes effective, the current provisions for insuring Arizona-
California citrus will be removed from 7 CFR part 409 and that part
will be reserved.
Following publication of that proposed rule, the public was
afforded 30 days to submit written comments, data, and opinions. A
total of 14 comments were received from the crop insurance industry.
The comments received, and FCIC's response are as follows:
Comment: The crop insurance industry commented that the proposed
rule did not contain any reference to acreage reporting and suggested
that such reference be added.
Response: Section 6 (Report of Acreage) of the Basic Provisions
provides information on the reporting of acreage and specifies that the
acreage reporting date will be included in the Special Provisions. No
changes have been made to these provisions.
Comment: The crop insurance industry questioned the need to define
``FSA'' in the provisions and recommended deletion.
Response: FCIC agrees and has deleted the definition for ``FSA''.
Comment: The crop insurance industry stated that the provisions
refer to a pro rata refund when optional units are combined into basic
units when the insured reported optional units but does not qualify.
They questioned on what basis a pro rata refund would be determined.
Response: The reference to a pro rata refund has been deleted and
the sentence changed to read, ``If failure to comply with these
provisions is determined to be inadvertent, and the optional units are
combined into a basic unit, that portion of the premium paid for the
purpose of electing optional units will be refunded to you for the
units combined.''
Comment: The crop insurance industry stated they did not understand
why all optional units must be identified on the acreage report for
each crop year. They said that listing every possible combination for
every crop on a policy could test the limits on the number of policy
lines allowed.
Response: Optional units are only allowed by non-contiguous land.
Only those optional units determined for the crop year for which the
acreage report is completed must be listed. Optional unit designation
from past years or that could have been established for the current
year, should not be listed on the current crop years' acreage report.
The phrase ``established for a crop year'' has been added to the
provisions for clarification.
Comment: The crop insurance industry suggested that the provision,
``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'', would cause
confusion between the APH or policy year.
Response: The APH is based on the actual production of the producer
for each crop year in which a crop is produced to a maximum of 10 crop
years. There is no requirement that the producer have insured the crop
before its production be included in the APH data base. FCIC believes
the provision is clearly stated and has not made changes.
Comment: The crop insurance industry questioned why optional units
were allowed only by non-contiguous land without the alternative of
optional units by section/legal description whereas in other citrus
policies optional units are offered by both criteria.
Response: Offering optional units by legal description would
increase the administrative burden on the program without offering any
benefit to producers, because most producers in Arizona and California
tend to farm within a section. No change has been made to these
provisions.
Comment: The crop insurance industry suggested that section 3(a)
begin with the phrase, ``You may select only one price percentage * *
*'' It would not then be necessary to include complex provisions
regarding different varieties with different maximum prices.
Response: Methods used to select price elections vary between
insurance providers. While some require selection of a percentage,
others require selection of a specific dollar amount. The suggested
change will not work in all circumstances. No change has been made to
the provisions.
Comment: The crop insurance industry suggested that statements
listed in section 6(b)(1) ``That is not irrigated'' and 6(b)(2) ``That
has not reached the sixth growing season after being set out * * * ''
be changed to positive statements and listed under 6(a).
Response: FCIC agrees and has rewritten and rearranged the
provisions in this section.
Comment: The crop insurance industry questioned why a 10 day delay
was incorporated into section 8(a)(1) of the policy that states, `` * *
* for the first crop year, if the application is accepted by us after
November 20, insurance will attach on the 10th day after the
application, if approved, is received in our local agent's office * * *
'' and if the 10 day period would allow enough time to complete
inspections.
Response: The language in section 8(a)(1) has been changed as
follows, ``Coverage begins on November 21 of each crop year, except
that for the year of application, if your application is received after
November 11 but prior to November 21, insurance will attach on the 10th
day after your properly completed application is received in our local
office unless we inspect the acreage during the 10 day period and
determine that it does not meet insurability requirements. You must
provide any information that we require for the crop or to determine
the condition of the grove.'' These provisions were modified to be
consistent with other perennial crop provisions, to prevent adverse
selection, and for the producer to avoid unnecessary exposure to
uninsured losses during the waiting period. The insurance provider must
expedite its review of the application and any supporting documentation
filed by the producer, determine if a visual inspection is necessary,
and perform any necessary inspections within the 10 day period. The
period of 10 days is believed appropriate to meet the needs of both the
producer and the insurance provider.
[[Page 44147]]
Comment: The crop insurance industry stated that some flexibility
may be needed for obtaining signatures and for mail time if a transfer
takes place shortly before the acreage reporting date, but the transfer
form does not reach the company office until after the acreage
reporting date.
Response: Section 8(b)(2)(ii) (Insurance Period) states, ``We are
notified by you or the transferee in writing of such transfer on or
before the acreage reporting date;'' If the transferor or the
transferee signs the properly completed transfer form and gives the
form to the crop insurance agent on or before the acreage reporting
date, this requirement will be met. No change has been made to the
provisions.
Comment: The crop insurance industry believes that the policy
should not allow the producer to defer settlement and wait for a later,
generally lower, appraisal on insured acreage the producer intends to
abandon or no longer care for.
Response: The later appraisal will only be necessary if the
insurance provider agrees that such appraisal would result in a more
accurate determination, and if the producer continues to care for the
crop. If the producer does not care for the crop, the original
appraisal is used. If the insurance provider believes the original
appraisal is accurate, resolution of the dispute may be sought through
arbitration or appeal procedures, whichever is applicable. No change
will be made to these provisions.
Comment: The crop insurance industry suggested combining the
provisions contained in section 12(e) with the provisions in section
12(a).
Response: The provisions are clearly stated and have not been
combined.
Comment: The crop insurance industry stated that they believe the
written agreement should be continuous if no substantive changes occur
from one year to the next.
Response: The written agreement can only be valid for 1 year
because it must contain all the variable terms of the contract
including, but not limited to, crop type or variety, the guarantee,
premium rate, and price election. One or more of these variables often
changes from year to year. No change has been made to these provisions.
In addition, written agreements are, by design, temporary and should be
replaced by applicable policy provisions.
In addition to the changes described above, FCIC has made the
following changes to the Arizona-California Citrus Crop Provisions.
1. Section 1--Revised the definition of ``non-contiguous land'' so
that a producer who share rents acreage is not prohibited from having
optional units on non-contiguous land and to conform to other perennial
policies.
2. Section 1--Revised the definition of ``carton'' and ``production
guarantee (per acre)'' for clarification.
3. Section 1--Added definitions for ``crop'' and ``variety'' for
clarification.
4. Section 1--Removed the definition of ``type'' because the word
``type'' has been changed to ``crop'' throughout the provisions where
appropriate since the citrus type designations used in the past will be
replaced with individual crop codes beginning with the 1998 crop year.
5. Section 6--Added a provision to allow citrus sold by direct
marketing to be insurable, if specifically allowed by the Special
Provisions or by written agreement, to conform to other perennial
policies.
6. Section 8(b)--Revised the provisions for when an insured
relinquishes an insurable share on any insurable acreage of citrus on
or before the acreage reporting date for the crop year.
7. Section 10--Removed the provision requiring the producer to
notify the insurance provider within three days of the date harvest
should have started if the crop will not be harvested. Citrus is
harvested over a long period of time and this provision would be
difficult to administer.
Good cause is shown to make this rule effective upon publication in
the Federal Register. This rule improves the Arizona-California citrus
crop insurance coverage and brings it under the Common Crop Insurance
Policy Basic Provisions for consistency among policies. The contract
change date required for new policies is August 31, 1996. It is
therefore imperative that these provisions be made final before that
date so that the reinsured companies and insureds may have sufficient
time to implement the new provisions. Therefore, public interest
requires the agency to act immediately to make these provisions
available for the 1998 crop year.
List of Subjects in 7 CFR Part 457
Crop insurance, Arizona-California citrus.
Final Rule
Pursuant to the authority contained in the Federal Crop Insurance
Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance
Corporation hereby amends the Common Crop Insurance Regulations (7 CFR
part 457), effective for the 1998 and succeeding crop years, to read as
follows:
PART 457--[AMENDED]
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), and 1506(p).
2. 7 CFR part 457 is amended by adding a new Sec. 457.121 to read
as follows:
Sec. 457.121 Arizona-California Citrus Crop Insurance Provisions
The Arizona-California Citrus Crop Insurance Provisions for the
1998 and succeeding crop years are as follows:
United States Department of Agriculture
Federal Crop Insurance Corporation
Arizona-California Citrus 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
Carton--The standard container for marketing the fresh packed
citrus fruit crop as shown below. In the absence of marketing
records on a carton basis, production will be converted to cartons
on the basis of the following average net pounds of packed fruit in
a standard packed carton.
------------------------------------------------------------------------
Container size Fruit crop Pounds
------------------------------------------------------------------------
Container #58........................ Navel oranges, Valencia 38
oranges & Sweet
oranges.
Container #58........................ Lemons................. 40
Container #59........................ Grapefruit............. 32
Container #63........................ Tangerines (including 25
Tangelos) & Mandarin
oranges.
------------------------------------------------------------------------
Crop--Citrus fruit as listed in the Special Provisions.
Crop year--The period beginning with the date insurance attaches
to the citrus crop and extending through normal harvest time. It is
designated by the calendar year following the year in which the
bloom is normally set.
Days--Calendar days.
Dehorning--Cutting of any scaffold limb to a length that is not
greater than one-fourth (\1/4\) the height of the tree before
cutting.
Direct marketing--Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper or buyer. Examples of direct
marketing include selling through an on-farm or roadside stand,
farmer's market, and permitting the general public to enter the
field for the purpose of picking all or a portion of the crop.
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
[[Page 44148]]
generally recognized by the Cooperative Extension Service as
compatible with agronomic and weather conditions in the county.
Harvest--The severance of mature citrus from the tree by
pulling, picking, or any other means, or by collecting marketable
fruit from the ground.
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.
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.
Production guarantee (per acre)--The number of citrus (cartons)
determined by multiplying the approved APH yield per acre by the
coverage level percentage you elect.
Scaffold limb--A major limb attached directly to the trunk.
Set out--Transplanting a tree into the grove.
Variety--Subclass of crop as listed in the Special Provisions.
Written agreement--A written document that alters designated
terms of a policy in accordance with section 12.
2. Unit Division
(a) A unit as defined in section 1 (Definitions) of the Basic
Provisions (Sec. 457.8), will be divided into basic units by each
citrus crop designated in the Special Provisions.
(b) Unless limited by the Special Provisions, these basic units
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.
(c) 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.
(d) 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 into a basic unit, that portion of the premium
paid for the purpose of electing optional units will be refunded to
you for the units combined.
(e) All optional units established for a crop year must be
identified on the acreage report for that crop year.
(f) 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; and
(2) You must have records of marketed production 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
(a) In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities)
of the Basic Provisions (Sec. 457.8), you may select only one price
election and coverage level for each citrus fruit crop designated in
the Special Provisions that you elect to insure. The price election
you choose for each crop need not bear the same percentage
relationship to the maximum price offered by us for each crop. For
example, if you choose one hundred percent (100%) of the maximum
price election for sweet oranges, you may choose seventy-five
percent (75%) of the maximum price election for grapefruit. However,
if separate price elections are available by variety within each
crop, the price elections you choose for each variety must have the
same percentage relationship to the maximum price offered by us for
each variety within the crop.
(b) In lieu of reporting your citrus production of marketable
fresh fruit for the previous crop year, as required by section 3 of
the Basic Provisions (Sec. 457.8), there is a lag period of one
year. Each crop year, you must report your production from two crop
years ago, e.g., on the 1998 crop year production report, you will
provide your 1996 crop year production.
(c) In addition, 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 type, if applicable:
(1) The number of trees damaged, dehorned or removed; any change
in practices or any other circumstance 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
following: interplanted perennial crop; damage; dehorning; removal
of trees; change in practices and any other circumstance on the
yield potential of the insured crop. If you fail to notify us of any
circumstance that may reduce your yields from previous levels, we
will reduce your production guarantee as necessary at any time we
become aware of the circumstance.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is August 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 November 20.
6. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all the acreage in
the county of each citrus crop designated in the Special Provisions
that you elect to insure and for which a premium rate is provided by
the actuarial table:
(a) In which you have a share;
(b) That is adapted to the area;
(c) That is irrigated;
(d) That is grown in a grove that, if inspected, is considered
acceptable by us;
(e) That is not sold by direct marketing, unless allowed by the
Special Provisions or by written agreement; and
(f) That has reached at least the sixth growing season after
being set out. However, we may agree to insure acreage that has not
reached this age if we inspect and approve a written agreement to
insure such acreage.
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, citrus interplanted with
another perennial crop is insurable unless we inspect the acreage
and determine it does not meet the requirements contained in your
policy.
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 November 21 of each crop year, except
that for the year of application, if your application is received
after November 11 but prior to November 21, insurance will attach on
the 10th day after your properly completed application is received
in our local office unless we inspect the acreage during the 10 day
period and determine that it does not meet insurability
requirements. You must provide any information that we require for
the crop or to determine the condition of the grove.
(2) The calendar date for the end of the insurance period for
each crop year is:
(i) August 31 for Navel oranges and Southern California lemons;
(ii) November 20 for Valencia oranges; and
(iii) July 31 for all other citrus crops.
(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
for the crop year, and after an inspection we
[[Page 44149]]
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 citrus on or before the acreage reporting date for the
crop year, insurance will not be considered to have attached to and
no premium will be due, and no indemnity paid, 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;
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date; and
(iii) The transferee is eligible for crop insurance.
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
grove;
(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 damage or loss of production due to:
(1) Disease or insect infestation, unless adverse weather
conditions:
(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;
(2) Inability to market the citrus 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), the
following will apply:
(a) If the Special Provisions permit or a written agreement
authorizing direct marketing exists, you must notify us at least 15
days before any production from any unit will be sold by direct
marketing. We will conduct an appraisal that will be used to
determine your production to count for production that is sold by
direct marketing. If damage occurs after this appraisal, we will
conduct an additional appraisal. These appraisals, and any
acceptable records provided by you, will be used to determine your
production to count. Failure to give timely notice that production
will be sold by direct marketing will result in an appraised amount
of production to count of not less than the production guarantee per
acre if such failure results in our inability to make the required
appraisal.
(b) If you intend to claim an indemnity on any unit, you must
notify us before beginning to harvest any damaged production so that
we may have an opportunity to inspect it. 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
section, 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 acceptable production records:
(1) For any optional unit, we will combine all optional units
for which such 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 for each crop, or variety if
applicable, by its respective production guarantee;
(2) Multiplying the results of section 11(b)(1) by the
respective price election for each crop, or variety, if applicable;
(3) Totaling the results of section 11(b)(2);
(4) Multiplying the total production to be counted of each
variety, if applicable (see section 11(c)), by the respective price
election;
(5) Totaling the results of section 11(b)(4);
(6) Subtracting this result of section 11(b)(5) from the result
of section 11(b)(3); and
(7) Multiplying the result of section 11(b)(6) by your share;
(c) The total production to count (in cartons) 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) For which you fail to provide acceptable production records;
(C) That is damaged solely by uninsured causes; or
(D) From which production is sold by direct marketing, if direct
marketing is specifically permitted by the Special Provisions or a
written agreement, and you fail to meet the requirements contained
in section 10;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production determined to be marketable as
fresh packed fruit; 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 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;
(2) All harvested production marketed as fresh packed fruit from
the insurable acreage; and
(3) All citrus that was disposed of or sold without an
inspection or written consent.
(d) Any production will be considered marketed or marketable as
fresh packed fruit unless, due solely to insured causes, such
production was not marketed or marketable as fresh packed fruit.
(e) Citrus that cannot be marketed as fresh packed fruit due to
insurable causes will not be considered production to count.
(f) If we determine that frost protection equipment was not
properly utilized or not properly reported, the indemnity for the
unit will be reduced by the percentage of premium reduction allowed
for frost protection equipment. You must, at our request, provide us
records showing the start-stop times by date for each period the
frost protection equipment was used.
12. Written Agreement
Designated terms of this policy may be altered by written
agreement in accordance with the following:
(a) You must apply in writing for each written agreement no
later than the sales closing date, except as provided in section
12(e);
(b) The application for written agreement must contain all terms
of the contract between you and us 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 one 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); and
(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 and written
agreement provisions.
Signed in Washington, D.C., on August 22, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-21893 Filed 8-27-96; 8:45 am]
BILLING CODE 3410-FA-P