[Federal Register Volume 61, Number 217 (Thursday, November 7, 1996)]
[Rules and Regulations]
[Pages 57578-57583]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28607]



[[Page 57578]]

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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AB03


Common Crop Insurance Regulations; Pear Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation.

ACTION: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes 
specific crop provisions for the insurance of pears. 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 Pear 
Endorsement with the Common Crop Insurance Policy for ease of use and 
consistency of terms.

EFFECTIVE DATE: December 9, 1996.

FOR FURTHER INFORMATION CONTACT: Louise Narber, 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 July 31, 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 written comments, data, and opinions on information 
collection requirements previously approved by OMB under OMB control 
number 0563-0003. No public comments were received.

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, and tribal 
governments and the private sector. 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. New provisions included in this rule will not 
impact small entities to a greater extent than large 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 also annually certify to the previous years production or receive 
an assigned 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 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

    On Thursday, April 25, 1996, FCIC published a proposed rule in the 
Federal Register at 61 FR 18293-18299 to add to the Common Crop 
Insurance Regulations (7 CFR part 457) a new section, 7 CFR 457.111, 
Pear 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 pears found at 7 CFR Sec. 401.140 
(Pear Endorsement), thereby limiting the effect of the current 
provisions to the 1997 and prior crop years. After the final rule 
becomes effective, the current provisions for insuring pears will be 
removed from Sec. 401.140 and that section 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 twenty-six (26) comments were received from the crop insurance 
industry and FCIC. The comments received, and FCIC's responses are as 
follows:

[[Page 57579]]

    Comment: The crop insurance industry questioned whether Red 
Bartletts and Green Bartletts would be considered to be the same 
varietal group, and recommended retaining some kind of ``all other'' 
category so all varieties are addressed in some manner.
    Response: Type I and Type II were deleted from the pear provisions 
to allow varietal grouping by growing region. FCIC recognizes that 
varietal groups are still necessary since several varieties of pears in 
addition to Green Bartletts are grown in the Pacific Northwest. In 
regions where more than one varietal group is grown, separate groupings 
will be provided on the Special Provisions. No change has been made.
    Comment: The crop insurance industry recommended that the 
definition of ``irrigated practice'' should also address the quality of 
the water being applied.
    Response: FCIC disagrees. There is no clear criteria regarding the 
quality of water necessary to produce a crop. The highly variable 
factors involved would make such criteria difficult to develop and 
administer. Good farming practices would apply. No change has been made 
in the definition.
    Comment: The crop insurance industry questioned what was intended 
in the definition of ``production guarantee (per acre)'' by the phrase 
``and multiply the result by any applicable adjustment factor.''
    Response: Section 6(f) of the Basic Provisions states, ``If the 
information reported by you on the acreage report for a unit results in 
a lower premium than the actual premium determined to be due on the 
basis of the share, acreage, practice, type or other material 
information determined to actually exist, the production guarantee or 
amount of insurance on the unit will be reduced proportionately.* * *'' 
The definition of ``production guarantee'' simply reflects the 
possibility of such an adjustment.
    Comment: The crop insurance industry stated that providing insureds 
with optional units by section, section equivalent or farm serial 
number, or optional units by non-contiguous land could cause confusion 
and that producers may not understand their options.
    Response: Most policies offer optional units by section, section 
equivalent, irrigated land, or non-contiguous land. Insurance providers 
have adequately explained these policy choices to producers in the 
past. FCIC anticipates that insurance providers will continue to be 
able to explain available coverage options. No changes have been made.
    Comment: The crop insurance industry stated that optional units 
should be allowed by variety rather than varietal group (i.e., Red 
Bartlett and Green Bartlett are distinct varieties and should be 
allowed to be separate optional units).
    Response: Permitting unit division by variety could lead to 
extremely small insurance units and an increase in the frequency of 
losses and overall loss adjustment experiences. In some cases a few 
rows of a pollinator variety could qualify as an insurance unit. These 
extremely small insurance units would increase paperwork, 
administrative expenses, and spot losses. No change has been made.
    Comment: The crop insurance industry stated that 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: Only those optional units determined under the selected 
method for the crop year for which the acreage report is completed must 
be listed. Optional unit designations from past years, or that could 
have been established for the current year but were not, should not be 
listed on the current crop years' acreage report. This provision has 
been clarified.
    Comment: The crop insurance industry stated that the provisions 
refer to a pro rata refund when optional units are combined into basic 
units whenever 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 questioned if 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'' could cause 
confusion between the APH or policy crop year.
    Response: The last year used to determine the production guarantee 
refers to the most recent year included in the APH data base. Such year 
is always an APH crop year and may or may not be a year in which a 
policy was in force. FCIC believes the provision is clearly stated and 
has not made changes.
    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 say so much about when different 
varieties have different maximum prices.
    Response: The method to select price elections varies between 
insurance providers. While some require selection of a percentage, 
others require a selection of a specific dollar amount. The suggested 
changes will not work for all circumstances. No change has been made to 
the provisions.
    Comment: The crop insurance industry suggested that the insurance 
provider modify the APH yield for the next crop year when damage, 
removal of trees or change in practices may reduce yields from previous 
levels. They stated that there is no procedure for reducing the 
guarantee at the time of loss.
    Response: Guarantees are determined at the beginning of the crop 
year. These Pear Crop Provisions provide the authority to reduce the 
APH yield when tree damage has occurred or cultural practices have been 
performed that will reduce the insured crop from previous production 
levels at the time the guarantee is established or at any time the 
insurance provider discovers the damage, removal of trees or change in 
practice.
    Comment: The crop insurance industry questioned whether the sales 
closing date for pears in California will be changed to January 31 to 
match the new cancellation/termination dates.
    Response: The sales closing date for pears in California will be 
changed to January 31.
    Comment: The crop insurance industry questioned what is meant by 
``In accordance with the provisions of section 11 (Insurance Period) of 
the Basic Provisions (Sec. 457.8): (1) Coverage begins for each crop 
year on the later of the date we accept your application or: (i) In 
California, on February 1; or (ii) In all other states, on November 
21.'' They asked if the intent is to allow acceptance of applications 
after the sales closing date.
    Response: Section 11 of the Basic Provisions states that coverage 
begins on the later of the date of application, when the insured crop 
is planted, or the date specified in the crop provisions. This 
provision provides that date. FCIC has also clarified this provision to 
provide the date when coverage begins in the year of application when 
the producer's application is received by the insurance provider within 
10 days of the sales

[[Page 57580]]

closing date. These provisions were modified so they will not be 
interpreted as allowing late filed applications.
    Comment: The crop insurance industry recommended removing the 
requirement that a written agreement be renewed each year. If no 
substantive changes occur from one year to the next, the written 
agreement should be continuous.
    Response: Provisions regarding written agreements require that the 
guarantee, premium rate, and price election be included on the 
agreement. Since one or more of these items typically change each year, 
the agreement must be renewed every year. No change is made.
    Comment: The crop insurance industry stated that the Pear Quality 
Adjustment Endorsement should be removed from the crop provisions and 
drafted as a separate endorsement, which would only be issued to those 
insureds who elect the additional coverage. Otherwise CAT insureds and 
others may think such coverage is included as a part of their crop 
provisions. It was also suggested that the provisions in section 13(a) 
follow those contained in section 13(b).
    Response: FCIC believes that the quality adjustment endorsement 
should be included in the Pear Crop Insurance Provisions so that pear 
producers can readily see their coverage options. However, the 
endorsement has been clarified to state in section 13(a) that the 
endorsement does not apply if the insured insures the pears under the 
catastrophic risk protection (CAT) endorsement or has not specifically 
selected such coverage. Therefore, FCIC does not believe that persons 
insured under the Catastrophic Risk Protection Endorsement or others 
who did not elect this coverage will think they have this coverage. For 
further clarification, provisions contained in sections 13(a) and (b) 
of the proposed rule have been combined.
    Comment: The crop insurance industry is concerned that section 
13(c)(1)(ii) is more complicated than necessary. Their interpretation 
was that the production will be reduced to zero and that the total 
production would be considered cull production.
    Response: When more than sixty percent of the pears fail the grade 
standard the production will be reduced to zero and that production 
will be considered cull production. FCIC believes that the provisions 
are written as clearly as possible.
    Comment: The crop insurance industry stated that section 13(c)(2) 
is not necessary because such pears would be included under section 
13(c)(1) whenever an appraisal is made.
    Response: FCIC has reformatted the provisions but believes all the 
provisions are necessary for clarity.
    Comment: One comment received from an FCIC office recommended that 
production be adjusted when it does not grade ninety percent (90%) U.S. 
No. 2 grade or better in accordance with applicable United States 
Standards for Grades of Summer and Fall Pears, United States Standards 
for Grades of Winter Pears, or United States Standards for Grades of 
Pears for Processing, as applicable when the damage is caused by hail. 
Proposed provisions contained in section 13(c)(1) allowed adjustment 
only when production did not grade eighty percent (80%) U.S. No. 2 or 
better. The comment stated that the majority of orchards normally 
produce eighty-seven percent (87%) to ninety-five percent (95%) U.S. 
No. 2 grade or better and eighty percent (80%) did not give adequate 
protection to the producers. Although, five to thirteen percent of all 
pears are culls, very few of these pears are damaged by a cause of loss 
covered under the endorsement.
    Response: FCIC agrees that eighty percent (80%) may not provide 
adequate coverage and has increased the amount to ninety percent (90%).
    In addition to the changes described above, FCIC has made the 
following changes:
    1. Section 1--Clarify the definitions of ``FSA,'' ``non-
contiguous,'' and ``written agreement''. Delete the definition of 
``culls'' because fruit that is considered to be cull production for 
the purposes of this policy is sufficiently identified in section 13.
    2. Section 3(b)--Amend the provision to include any circumstance 
that may reduce the expected yield below the yield upon which the 
insurance guarantee is based. The proposed rule required an insured to 
report only damage, removal of trees, and changes in practices and 
there may be other circumstances that may affect the yield.
    3. Section 8(b)(1)--Clarify that if the producer acquires an 
insurable share after coverage begins but on or before the acreage 
reporting date, insurance attaches on the calendar date for the 
beginning of the insurance period.
    4. Section 8(b)(2)--Clarify that not only will insurance not attach 
but no premium will be due if the producer relinquishes an insurable 
interest in any insurable acreage of pears on or before the acreage 
reporting date of any crop year unless a transfer of coverage and right 
to an indemnity is completed and the insurance provider is notified in 
writing on or before the acreage reporting date. Clarify that the 
transferee must also be eligible for crop insurance.
    5. Section 10(b)--Simplify the provision to remove any ambiguity.
    6. Section 10(c)--Modify the provision to specify that the producer 
must notify the insurance provider at least 15 days prior to the 
beginning of harvest if the producer previously gave notice in 
accordance with section 14 of the Basic Provisions (Sec. 457.8). Also 
specify that if the producer fails to meet the requirements of this 
section, and such failure results in the insurance providers inability 
to inspect the damaged production, all such production will be 
considered undamaged and included as production to count.
    7. Section 11--Add a provision to specify that an amount of 
production not less than the production guarantee per acre will be 
counted if the producer fails to notify the insurer of acreage that is 
to be sold by direct marketing to conform to section 10(b). Also 
clarify the claim settlement calculation and the quality adjustment 
provisions for pears grown in California.
    8. Section 13--Clarify the pear quality adjustment endorsement 
provisions. Also, limit the cause of loss to hail only in section 
13(b)(1) to be consistent with optional coverage provided for apples in 
the same area.

List of Subjects in 7 CFR Part 457

    Crop insurance, Pears, Reporting and recordkeeping requirements.

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, 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), 1506(p) .

    2. 7 CFR part 457 is amended by adding a new Sec. 457.111 to read 
as follows:


Sec. 457.111  Pear crop insurance provisions.

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

    FCIC Policies:

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

    Reinsured Policies:

[[Page 57581]]

(Appropriate title for insurance provider)

    Both FCIC and Reinsured Policies:

Pear 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.
    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.
    FSA--The Farm Service Agency, an agency of the United States 
Department of Agriculture, or a successor agency.
    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.
    Harvest--The picking of mature pears from the trees or the 
collecting of marketable pears 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.
    Marketable--Pear production acceptable for processing or other 
human consumption even if failing to meet any U.S. or applicable 
state grading standard.
    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.
    Production guarantee (per acre)--The quantity of pears (in tons) 
determined by multiplying the approved APH yield per acre by the 
coverage level percentage you elect, and multiplying the result by 
any applicable adjustment factor provided in section 6(f) of the 
Basic Provisions (Sec. 457.8).
    Ton--Two thousand (2,000) pounds avoirdupois.
    Varietal group--Types of pears with similar characteristics that 
are grouped for insurance purposes as specified in the Special 
Provisions.
    Written agreement--A written document that alters designated 
terms of this 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), a 
basic unit, 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 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.
    (d) All optional units established for a crop year must be 
identified on the acreage report for that 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; 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.
    (3) Each optional unit must meet one or more of the following 
criteria as applicable:
    (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; or
    (ii) Optional Units on Acreage Located on Non-Contiguous Land: 
In lieu of establishing optional units by section, section 
equivalent or FSA Farm Serial Number, optional units may be 
established if each optional unit is located on non-contiguous land.
    (iii) Optional Units on Acreage by Varietal Group: In addition 
to, or instead of, establishing optional units by section, section 
equivalent, FSA Farm Serial Number, or on non-contiguous land, 
optional units may be established by varietal group when provided 
for 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) You may select only one price election for all the pears 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 one hundred percent (100%) of the maximum price election 
for one varietal group, you must also choose one hundred percent 
(100%) of the maximum price election for all other 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 
varietal group:
    (1) Any damage, removal of trees, 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 any time 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; removal of trees; damage; change in practices or 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 that 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 October 31 
preceding the cancellation date for states with a January 31 
cancellation date and August 31 preceding the cancellation date for 
all other states.

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:

[[Page 57582]]



------------------------------------------------------------------------
                                           Cancellation and termination 
                 States                               dates             
------------------------------------------------------------------------
California.............................  January 31.                    
All other states.......................  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 pears in 
the county for which a premium rate is provided by the actuarial 
table:
    (a) In which you have a share;
    (b) That are of varieties adapted to the area;
    (c) That are grown on trees that have produced an average of at 
least five (5) tons of pears per acre in at least one of the four 
previous crop years unless the Special Provisions or a written 
agreement establishes a lower production level; and
    (d) That are grown in an orchard that, if inspected, is 
considered acceptable by us.

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, pears 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.

8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins:
    (i) In California, on February 1 of each crop year, except that 
for the year of application, if your application is received after 
January 22 but prior to February 1, 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 orchard; or
    (ii) In all other states, 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 orchard.
    (2) The calendar date for the end of the insurance period for 
each crop year is:
    (i) September 15 for Bartlett (green and red) and Star Crimson 
(Crimson Red) varietal groups; or
    (ii) October 15 for all other varietal groups.
    (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 interest on any insurable 
acreage of pears on or before the acreage reporting date of any 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 within 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) Earthquake;
    (4) Volcanic eruption; or
    (5) Failure of the 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) Failure of the fruit to color properly; or
    (3) Inability to market the pears 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) You must notify us within 3 days of the date harvest should 
have started if the crop will not be harvested.
    (b) 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.
    (c) 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.

11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event 
you are unable to provide separate, 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 varietal group if 
applicable, by its respective production guarantee;
    (2) Multiplying the results of section 11(b)(1) by the 
respective price election for each varietal group, if applicable;
    (3) Totaling the results of section 11(b)(2);
    (4) Multiplying the total production to be counted of each 
varietal group, if applicable, 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 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 sold by direct marketing if you fail to meet the 
requirements contained in section 10;
    (C) That is damaged solely by uninsured causes; or
    (D) 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 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

[[Page 57583]]

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) For all states except California, all harvested and 
appraised marketable pear production from the insurable acreage.
    (3) For California, all harvested and appraised production that:
    (i) Meets the standards for first grade canning as defined by 
the California Pear Advisory Board or for U.S. Number 1 as defined 
by the United States Standards for Grades of Summer and Fall Pears, 
or Pears for Processing, or for U.S. Extra Number 1 or U.S. Number 1 
as defined by the United States Standards for Grades of Winter 
Pears;
    (ii) Is accepted by a processor for canning or packing; or
    (iii) Is marketable for any purpose. However, if the pears are 
damaged by an insured cause, the production to count will be reduced 
by the greater of the following amounts:
    (A) The excess over ten percent (10%) of pears that are size 180 
or smaller for varieties other than Forelle, Seckel or Winter Nelis; 
or
    (B) The result of dividing the value per ton of such pears by 
the highest price election for the insured varietal group, 
subtracting this result from 1.000, and multiplying this difference 
(if positive) by the number of tons of such pears.

12. Written Agreements

    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 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.

13. Pear Quality Adjustment Endorsement

    (a) This endorsement applies to any crop year: Provided,
    (1) The insured pears are located in a State other than 
California and the actuarial table designates a premium rate for 
this endorsement;
    (2) You have not elected to insure your pears under the 
Catastrophic Risk Protection (CAT) Endorsement;
    (3) You elected it on your application or other form approved by 
us, and did so on or before the sales closing date for the initial 
crop year for which you wish it to be effective. By doing so, you 
agreed to pay the additional premium designated in the actuarial 
table for this optional coverage; and
    (4) You or we did not cancel it in writing on or before the 
cancellation date. Your election of CAT coverage for any crop year 
after this endorsement is effective will be considered as notice of 
cancellation by you.
    (b) If the pear production is damaged by hail and if eleven 
percent (11%) or more of the harvested and appraised production does 
not grade at least U.S. No. 2 in accordance with applicable United 
States Standards for Grades of Summer and Fall Pears, United States 
Standards for Grades of Winter Pears, or United States Standards for 
Grades of Pears for Processing, as applicable, due solely to hail, 
the amount of production to count will be reduced as follows:
    (i) By two percent (2%) for each full one percent (1%) in excess 
of ten percent (10%), when eleven percent (11%) through sixty 
percent (60%) of the pears fail the grade standard; or
    (ii) By one hundred percent (100%) when more than sixty percent 
(60%) of the pears fail the grade standard.
    The difference between the reduced production determined in 
section 13(b) and the total production will be considered as cull 
production.
    (c) Pears that are knocked to the ground by wind or that are 
frozen and cannot be packed or marketed as fresh pears will be 
considered one hundred percent (100%) cull production.
    (d) Marketable production that grades less than U.S. No. 2 due 
to causes not covered by this endorsement will not be reduced.
    (e) Fifteen percent (15%) of all production considered as cull 
production in accordance with section 13 (b) and (c) will be 
production to count.

    Signed in Washington, D.C., on October 31, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-28607 Filed 11-6-96; 8:45 am]
BILLING CODE 3410-FA-P