[Federal Register Volume 61, Number 186 (Tuesday, September 24, 1996)]
[Proposed Rules]
[Pages 49982-49987]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23993]


 ========================================================================
 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. 186 / Tuesday, September 24, 1996 / 
Proposed Rules  

[[Page 49982]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457


Common Crop Insurance Regulations; Grape Crop Insurance 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes 
specific crop provisions for the insurance of grapes. 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 include the current 
Grape Endorsement 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 November 25, 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 November 22, 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, S.W., Washington, D.C., 8:15 a.m. to 4:45 p.m., 
est Monday through Friday, except holidays.

FOR FURTHER INFORMATION CONTACT: John Meyer, 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

    This action has been reviewed under United States Department of 
Agriculture (USDA) procedures established by Executive Order No. 12866. 
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 these 
regulations were previously approved by OMB pursuant to the Paperwork 
Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB control number 
0563-0003 through September 30, 1998.
    Section 8 of the 1998 Grape 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 
present Grape Endorsement or the General Crop Insurance Policy to which 
it attached. Consequently, interplanting information will need to be 
collected using the FCI-12-P Pre-Acceptance Perennial Crop Inspection 
Report form for approximately 0.5 percent of the 5,408 insureds who 
interplant their grape 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 most 
perennial crop producers and, as a result, less acreage will need to be 
placed into the noninsured crop disaster assistance program (NAP).
    The amendments set forth in this proposed rule do not contain 
additional information collections that require clearance by OMB under 
the provisions of 44 U.S.C. chapter 35.
    The title of this information collection is ``Catastrophic Risk 
Protection Plan and Related Requirements including, Common Crop 
Insurance Regulations; Grape Crop Insurance Provisions.'' The 
information to be collected include: a crop insurance application and 
acreage report. Information collected from the application and acreage 
report is electronically submitted to FCIC by the reinsured companies. 
Potential respondents to this information collection are producers of 
grapes 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 16.9 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 hours.
    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, USDA, FSA, Advisory and Corporate Operations Staff, 
Regulatory Review Group, P.O. Box 2415, STOP 0572, Washington, D.C. 
20013-2415, telephone (202) 690-2857. Copies of the information 
collection may be obtained from Bonnie Hart at the above address.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local,

[[Page 49983]]

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 
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. 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. 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 action for judicial review may be brought.

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

    FCIC proposes to add to the Common Crop Insurance Regulations (7 
CFR part 457), a new section, 7 CFR 457.138, Grape Crop Insurance 
Provisions. The new provisions will be effective for the 1998 and 
succeeding crop years. These provisions will supersede and replace the 
current provisions for insuring grapes found at 7 CFR 401.130 (Grape 
Endorsement) thereby limiting the effect of the current provisions to 
the 1997 and prior crop years. Upon publication of the Grape Crop 
Provisions as a final rule, the current provisions for insuring grapes 
will be removed from Sec. 401.130 and that section will be reserved.
    This rule makes minor editorial and format changes to improve the 
Grape Endorsement's compatibility with the Common Crop Insurance 
Policy. In addition, FCIC is proposing substantive changes in the 
provisions for insuring grapes as follows:
    1. Section 1--Add definitions for the terms ``days,'' ``FSA,'' 
``good farming practice,'' ``interplanted,'' ``irrigated practice,'' 
''production guarantee,'' ``set out,'' ``varietal group,'' and 
``written agreement'' for the purpose of clarification.
    2. Section 3(a)--Specify that the insured may select only one price 
election for all the grapes 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 select one 
price election for each grape variety or varietal group designated in 
the Special Provisions. The price election the insured selects for each 
grape type must have the same relationship to the maximum price 
offered. This helps protect against adverse selection and simplifies 
administration of the program.
    3. Section 3(b)--Specify that in California only, an insured may 
apply for a written agreement to establish a price election for a 
variety they wish to insure, when that specific variety does not have a 
separate price election on the Special Provisions.
    4. Section 3(c)--Specify that the insured must report damage, 
removal of bearing vines, and any change in practice that may reduce 
yields. For the first year of insurance for acreage interplanted with 
another perennial crop or anytime the planting pattern of such acreage 
is changed, the insured must also report, the age and type, if 
applicable, of the interplanted crop, its planting pattern, and any 
other information needed to establish the approved yield. If the 
insured fails to notify the insurer of factors that may reduce yields 
from previous levels, the insurer will reduce the production guarantee 
at any time the insurer becomes aware of damage, removal of vines, or 
change in practices. This allows the insurance provider to limit 
liability, if necessary, before insurance attaches.
    5. Section 5--The cancellation and termination dates are changed to 
February 28 in California, and to November 20 in all other States 
except Idaho, Oregon, and Washington. Currently, the policy states 
January 31 in California, and December 10 in all other States except 
Idaho, Oregon, and Washington. The change in some States from December 
10 to November 20 was made to standardize the perennial crop policies. 
In California, the change was made at the request of a grower 
organization and will allow additional time for growers to make 
decisions

[[Page 49984]]

regarding their insurance coverage without compromising program 
integrity.
    6. Section 7(e)--Specify that at least an average of 2 tons of 
grapes per acre must have been produced in at least 1 of the 3 most 
recent crop years of the actual production history base period for the 
crop to be insured, unless we inspect such acreage and give our 
approval in writing. Previous endorsement required a minimum of 2 tons 
per acre but did not clearly state that the minimum must have been 
produced in 1 of the 3 most recent crop years.
    7. Section 8--Allow insurance for grapes 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.
    8. Section 9(a)--Change the date insurance attaches from February 1 
to March 1 in California, and from December 11 to November 21 in all 
other States to be consistent with other perennial crops. Clarifies 
that for the year of application, if an application is received after 
February 19 (February 20 in years when February has 29 days) but prior 
to March 1 in California, or after November 11 but prior to November 21 
in all other States, insurance will attach on the 10th day after the 
properly completed application is received in the insurance provider's 
local office, unless we inspect the acreage during the 10 day period 
and determine that it does not meet insurability requirements.
    9. Section 9(b)--Add provisions to clarify insurability when an 
insurable share is acquired or relinquished on or before the acreage 
reporting date.
    10. Section 10(b)--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. 
Damage caused by phylloxera is not covered regardless of cause.
    11. Section 11(b)--Add provisions that require an insured to notify 
the insurer of damage prior to harvest in order to permit a timely 
appraisal. Also add provisions that prohibit the insured from selling 
or otherwise disposing of any damaged production until written consent 
is provided by the insurance provider.
    12. Section 12(c)--Add provisions for converting grape production 
harvested and dried for raisins to a fresh weight basis.
    13. Section 12(e)--Add provisions indicating that the average 
market price will be determined in all States by averaging the prices 
being paid by usual marketing outlets for the area during the week in 
which the damaged grapes were valued. In the current grape endorsement, 
in California the average market price is the price shown by the 
Federal State Market News California Wine Report for the same week in 
which the damaged grapes were valued.
    Also add provisions indicating that the value per ton of the 
qualifying damaged production and the average market price of undamaged 
grapes will be determined on the earlier of the date the damaged 
production is sold or the date of final inspection for the unit. The 
current grape endorsement does not list a specific time.
    14. Section 13--Add provisions for providing insurance coverage by 
written agreement. FCIC has a long-standing policy of permitting 
certain modifications of the insurance contract by written agreement. 
Written agreements are not available under the current Grape 
Endorsement. This amendment allows FCIC to tailor the policy to a 
specific insured in certain instances. The new section will cover the 
procedures for and duration of written agreements.

List of Subjects in 7 CFR Part 457

    Crop insurance, grape.
    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 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. 457.138 to read 
as follows:


Sec. 457.138  Grape Crop Insurance Provisions.

    The Grape Crop Insurance Provisions for the 1998 and succeeding 
crop years are as follows:

United States Department of Agriculture

Federal Crop Insurance Corporation

Grape Crop Provisions

    If a conflict exists among the Basic Provisions (Sec. 457.8), 
these crop provisions, and the Special Provisions, the Special 
Provisions will control these crop provisions and the Basic 
Provisions, and these crop provisions will control the Basic 
Provisions.
    1. Definitions.
    (a) Days--Calendar days.
    (b) FSA--The Farm Service Agency, an agency of the United States 
Department of Agriculture, or any successor agency.
    (c) 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 generally recognized by the Cooperative 
State Research, Education, and Extension Service as compatible with 
agronomic and weather conditions in the county.
    (d) Graft--To unite a shoot or bud (scion) with a rootstock or 
an existing vine in accordance with recommended practices to form a 
living union.
    (e) Harvest--Picking the clusters of grapes from the vines 
either by hand or machine.
    (f) Interplanted--Acreage on which two or more crops are planted 
in any form of alternating or mixed pattern.
    (g) 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.
    (h) Non-contiguous--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.
    (i) Production guarantee (per acre)--The number of grapes (tons) 
determined by multiplying the approved APH yield per acre by the 
coverage level percentage you elect.
    (j) Set out--Physically planting the desired variety of grape 
plant in the ground in a desired planting pattern.
    (k) Ton--Two thousand (2000) pounds avoirdupois.
    (l) Varietal group--Grapes with similar characteristics that are 
grouped for insurance purposes as specified in the Special 
Provisions.
    (m) Written agreement--A written document that alters designated 
terms of this policy in accordance with section 13.
    2. Unit Division.
    (a) In California only, a unit as defined in section 1 
(Definitions) of the Basic Provisions (Sec. 457.8), will be divided 
into basic units by each variety that you insure.
    (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

[[Page 49985]]

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, that 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 measurement 
of 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.
    (g) Each optional unit must also meet one or more of the 
following criteria, as applicable:
    (1) In California only, optional units may be established if 
each optional unit is located on non-contiguous land.
    (2) In all states except California, each optional unit must 
meet one or more of the following criteria:
    (i) Optional Units by Section, Section Equivalent, or FSA Farm 
Serial Number: Optional units may be established if each optional 
unit is located in a separate legally identified section. In the 
absence of sections, we may consider parcels of land legally 
identified by other methods of measure including, but not limited to 
Spanish grants, railroad surveys, leagues, labors, or Virginia 
Military Lands, as the equivalent of sections for unit purposes. In 
areas that have not been surveyed using the systems identified 
above, or another system approved by us, or in areas where such 
systems exist but boundaries are not readily discernable, each 
optional unit must be located in a separate farm identified by a 
single FSA Farm Serial Number.
    (ii) Optional Units on Acreage Including Both Irrigated and Non-
irrigated Practices: In addition to, or instead of, establishing 
optional units by section, section equivalent, or FSA Farm Serial 
Number, optional units may be based on irrigated acreage or non-
irrigated acreage if both are located in the same section, section 
equivalent, or FSA Farm Serial Number. The irrigated acreage may not 
extend beyond the point at which your irrigation system can deliver 
the quantity of water needed to produce the yield on which the 
guarantee is based and you may not continue into non-irrigated 
acreage in the same rows or planting pattern.
    (iii) Optional Units on Acreage Located on Non-contiguous Land: 
In addition to, or instead of, establishing optional units by 
section, section equivalent, FSA Farm Serial Number, or irrigated/
non-irrigated land, optional units may be established if each 
optional unit is located on non-contiguous land.
    (iv) Optional Units on Acreage by Varietal Group: In addition 
to, or instead of, establishing optional units by section, section 
equivalent, FSA Farm Serial Number, irrigated/non-irrigated land or 
on non-contiguous land, optional units may be established by 
varietal group when separate varietal groups are specified in the 
Special Provisions.
    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) In California, you may select only one price election and 
coverage level for each grape variety in the county insured under 
this policy. In all other states, you may select only one price 
election for all the grapes in the county insured under this policy 
unless the Special Provisions provide different price elections by 
varietal group, in which case you may select one price election for 
each varietal group designated in the Special Provisions. The price 
elections you choose for each varietal group must have the same 
percentage relationship to the maximum price offered by us for each 
varietal group. For example, if you choose 100 percent (100%) of the 
maximum price election for one varietal group, you must also choose 
100 percent (100%) of the maximum price election for all other 
varietal groups.
    (b) In California only, if the Special Provisions do not provide 
a separate price election for a specific variety you wish to insure, 
you may apply for a written agreement to establish a price election. 
Your application for the written agreement must include:
    (1) The number of tons sold for at least the two most recent 
crop years; and
    (2) The price received for all production of the variety in the 
years for which production records are provided.
    (c) 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 bearing vines, 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 vines on insurable and uninsurable 
acreage;
    (3) The age of the vines 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 the type or variety or 
varietal group, if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request to establish the 
yield upon which your production guarantee is based.
    We will reduce the yield used to establish your production 
guarantee, based on our estimate of the effect of the following: 
interplanted perennial crop; removal of vines; damage; 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 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 for all States except California, 
and October 31 preceding the cancellation date for California.
    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 February 28 (February 29 in years when 
February has 29 days) in California and November 20 in all other 
states.
    6. Report of Acreage.
    In addition to the requirements of section 6 (Report of Acreage) 
of the Basic Provisions (Sec. 457.8), you must report the grape 
varieties in California or the varietal groups in all other States.
    7. Insured Crop.
    In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the grapes (In 
California, any insurable variety that you elect to insure; in all 
other States, all insurable varieties.) 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 for wine, juice, raisins, or canning;
    (c) That are grown in a vineyard that, if inspected, is 
considered acceptable by us;
    (d) That, after being set out or grafted, have reached the 
number of growing seasons designated by the Special Provisions; or
    (e) That have produced an average of two tons of grapes per acre 
during at least one of the three crop years immediately preceding 
the insured crop year, unless we inspect and allow insurance on such 
acreage.
    8. 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, grapes interplanted with 
another perennial crop are insurable unless we inspect the acreage 
and determine that it does not meet the requirements contained in 
your policy.
    9. Insurance Period.
    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on March 1 in California and November 21 in 
all other States of each crop year, except that for the year of 
application if your application is received after February 19 
(February 20 in years when February has 29 days) but prior to March 
1 in California, or after November 11 but prior to November 21 in 
all other States, 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

[[Page 49986]]

information that we require for the crop or to determine the 
condition of the vineyard.
    (2) The calendar date for the end of the insurance period for 
each crop year is the date during the calendar year in which the 
grapes are normally harvested, as follows:
    (i) October 10 in Mississippi and Texas;
    (ii) November 10 in California, Idaho, Oregon, and Washington; 
and
    (iii) November 20 in all other states.
    (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 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 grapes on or before the acreage reporting date for the 
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;
    (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.
    10. 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 
vineyard;
    (3) Wildlife;
    (4) Earthquake;
    (5) Volanic 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:
    (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) Phylloxera, regardless of cause; or
    (3) Inability to market the grapes 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.
    11. 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) You must notify us within 3 days of the date harvest should 
have started if the crop will not be harvested.
    (b) If you intend to claim an indemnity on any unit, you must 
notify us at least 15 days prior to the beginning of harvest if you 
previously gave notice in accordance with section 14 of the Basic 
Provisions (Sec. 457.8), 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 section and such failure results in 
our inability to inspect the damaged production, all such production 
will be considered undamaged and included as production to count.
    12. 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 by its respective production 
guarantee;
    (2) Multiplying each result in section 12(b)(1) by the 
respective price election for each variety or varietal group;
    (3) Totaling the results in section 12(b)(2);
    (4) Multiplying the total production to count of each variety or 
varietal group, if applicable, (see section 12 (c)-(e)) by the 
respective price election;
    (5) Totaling the results of section 12(b)(4);
    (6) Subtracting the total in section 12(b)(5) from the total in 
section 12(b)(3); and
    (7) Multiplying the result in section 12(b)(6) by your share.
    (c) The total production to count (in tons) 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) That is damaged solely by uninsured causes; or
    (C) For which you fail to provide production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may 
be adjusted for quality deficiencies in accordance with subsection 
12(e)); 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; and
    (2) All harvested production from the insurable acreage. Grape 
production that is harvested and dried for raisins will be converted 
to a fresh weight basis by multiplying the number of tons of raisin 
production by 4.5.
    (d) If any grapes are harvested before normal maturity or for a 
special use (such as Champagne or Botrytis-affected grapes), the 
production of such grapes will be increased by the factor obtained 
by dividing the price per ton received for such grapes by the price 
per ton for fully matured grapes of the type for which the claim is 
being made.
    (e) Mature marketable grape production may be adjusted for 
quality deficiencies as follows:
    (1) Production will be eligible for quality adjustment if, due 
to insurable causes, it has a value of less than 75 percent of the 
average market price of undamaged grapes of the same or similar 
variety. The value per ton of the qualifying damaged production and 
the average market price of undamaged grapes will be determined on 
the earlier of the date the damaged production is sold or the date 
of final inspection for the unit. The average market price of 
undamaged production will be calculated by averaging the prices 
being paid by usual marketing outlets for the area during the week 
in which the damaged grapes were valued.
    (2) Grape production that is eligible for quality adjustment, as 
specified in subsection 12(e)(1) will be reduced by:
    (i) Dividing the value per ton of the damaged grapes by the 
maximum price election available for such grapes to determine the 
quality adjustment factor; and
    (ii) Multiplying this result (not to exceed 1.000) by the number 
of tons of the eligible damaged grapes.
    13. 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 
13(e);
    (b) The application for a written agreement must contain all 
variable 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 a 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.


[[Page 49987]]


    Signed in Washington, DC, on September 12, 1996.
Phyllis W. Honor,
Acting Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-23993 Filed 9-23-96; 8:45 am]
BILLING CODE 3410-FA-P