[Federal Register Volume 61, Number 251 (Monday, December 30, 1996)]
[Proposed Rules]
[Pages 68682-68688]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-33066]



[[Page 68682]]

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DEPARTMENT OF AGRICULTURE
7 CFR Parts 401 and 457


General Crop Insurance Regulations, Fresh Market Tomato Minimum 
Value Option, and Fresh Market Tomato (Dollar Plan) Endorsement; and 
Common Crop Insurance Regulations, Fresh Market Tomato (Dollar Plan) 
Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes 
specific crop provisions for the insurance of fresh market (dollar 
plan) tomatoes. 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, include the current Fresh Market Tomato (Dollar Plan) 
Endorsement and the Fresh Market Tomato Minimum Value Option with the 
Common Crop Insurance Policy for ease of use and consistency of terms, 
and to restrict the effect of the current Fresh Market Minimum Value 
Option and the Fresh Market Tomato (Dollar Plan) Endorsement to the 
1997 and prior crop years.

DATES: Written comments, data and opinions on this proposed rule will 
be accepted until close of business January 29, 1997, 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 February 25, 1997.

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, United States 
Department of Agriculture, 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: Linda Williams, Program Analyst, 
Research and Development Division, Product Development Branch, Federal 
Crop Insurance Corporation, at the Kansas City, MO, address listed 
above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

    The Office and Management Budget (OMB) has determined this rule to 
be exempt for the purposes of Executive Order No. 12866, and, 
therefore, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    The title of this information collection is ``Catastrophic Risk 
Protection Plan and Related Requirements including, Common Crop 
Insurance Regulations; Fresh Market Tomato (Dollar Plan) Crop Insurance 
Provisions.'' The information to be collected includes a crop insurance 
application and an 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 fresh market tomatoes 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 of 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 2,669,932 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 or 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.
    OMB is required to make a decision concerning the collections of 
information contained in these proposed regulations between 30 and 60 
days after submission to OMB. Therefore, a comment to OMB is best 
assured of having full effect if OMB receives it within 30 days of 
publication. This does not affect the deadline for the public to 
comment on the proposed regulation.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates 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) 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. 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. 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.

[[Page 68683]]

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 subsections 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.

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 457.139, Fresh Market Tomato 
(Dollar Plan) Crop Insurance Provisions. The new provisions will be 
effective for the 1998 and succeeding crop years. These provisions will 
replace and supersede the current provisions for insuring fresh market 
tomatoes (dollar plan) found at 7 CFR 401.137 (Fresh Market Tomato 
Minimum Value Option) and 7 CFR 401.139 (Fresh Market Tomato (Dollar 
Plan) Endorsement). FCIC also proposes to amend Sec. 401.137 and 
Sec. 401.139 to limit their effect to the 1997 and prior crop years. 
FCIC will later publish a regulation to remove and reserve Sec. 401.137 
and Sec. 401.139.
    This rule makes minor editorial and format changes to improve the 
Fresh Market Tomato Minimum Value Option and the Fresh Market Tomato 
(Dollar Plan) Endorsement's compatibility with the Common Crop 
Insurance Policy. In addition, FCIC is proposing substantive changes in 
the provisions for insuring fresh market tomatoes (dollar plan) as 
follows:
    1. Section 1--Add definitions for the terms ``carton,'' ``days,'' 
``FSA,'' ``good farming practices,'' ``interplanted,'' ``irrigated 
practice,'' ``planted acreage,'' ``practical to replant,'' ``row 
width,'' ``tropical depression,'' and ``written agreement'' for 
clarification.
    Clarify the definition of crop year to specify that the crop year 
begins on the first day of the earliest planting period for fall-
planted tomatoes and continues through the end of the insurance period 
for spring-planted tomatoes.
    Clarify the definition of excess rain to specify that it is an 
amount of precipitation that is sufficient to directly damage the crop. 
Previous regulations defined excessive rain as a minimum of 10 inches 
of rain within a 24-hour period. This change will provide coverage for 
crop damage that occurs when a lesser amount of precipitation is 
received.
    Change the definition of freeze to specify that freeze occurs when 
low air temperatures cause ice to form in the cells of the plant or its 
fruit to encompass conditions found in both frost and freeze.
    Change the definition of harvest to clarify and remove the term 
marketable. Tomatoes picked from the vine are considered harvested 
whether marketable or not.
    2. Section 3(a)--Clarify that an insured may select only one 
coverage level (and the corresponding amount of insurance designated in 
the Actuarial Table for the applicable planting period and practice) 
for all the tomatoes planted in the county insured under the policy.
    3. Section 3(b)--Clarify that the amounts of insurance the insured 
chooses for each planting period and practice must have the same 
percentage relationship to the maximum amount of insurance offered by 
FCIC for each planting period and practice.
    4. Section 8(c)(4)--Clarify that plum or cherry tomatoes are not 
insurable unless allowed by a written agreement. Previous regulations 
did not provide crop insurance coverage for plum or cherry tomatoes. 
This change will allow expansion of fresh market tomato crop insurance 
coverage into other areas.
    5. Section 9(b)(2)--Allow an insured to elect not to replant 
damaged tomatoes that were initially planted within the fall or winter 
planting periods, provided the final planting date for the planting 
period has passed and damage occurs after 30 days of transplanting or 
after 60 days of direct seeding. With this election, the insured may 
collect an indemnity and that particular acreage will be uninsurable 
for the next planting period. The insured may also elect to replant 
such tomato acreage, collect a replanting payment under section 12, and 
maintain the initial planting period coverage. This change incorporates 
and standardizes procedures utilized in the fresh market vegetable 
crops.
    6. Section 10(f)(2)--Change the calendar date for the end of the 
insurance period from 140 days to 125 days after the date of 
transplanting or replanting with transplants. This change incorporates 
the actual number of days for transplanted tomatoes to reach maturity 
and for the crop to be harvested.
    7. Section 11(a)(6)--Tropical depression has replaced cyclone as an 
insured cause of loss. This change will standardize tropical depression 
as an insured cause of loss among fresh market vegetable crops.
    8. Section 14(b)(2)--Modify claim for indemnity calculations by 
providing calculations for catastrophic risk protection coverage and 
for coverage other than catastrophic risk protection. This provision 
includes the use of the catastrophic risk protection price election 
equivalent to determine the total dollar of production to count for 
indemnity purposes. This change is necessary to assure that producers 
that are insured based on a dollar amount of insurance are indemnified 
comparable to producers that are insured based on an actual production 
history (APH) yield basis.
    9. Section 14(c)--Remove the provision requiring that unharvested 
potential production in excess of 30 cartons after the second harvest 
for ground culture tomatoes (third harvest for staked tomatoes) be 
included in the value of appraised production to be counted. Consistent 
with other fresh market vegetable crops, this provision will be 
contained in the loss adjustment procedures.
    10. Section 14(c)(2)(iv)--Require the insured to continue to care 
for acreage when the insured does not agree with the appraisal on that 
acreage. Production to count for such acreage will be determined using 
the harvested production if the crop is harvested, or our reappraisal 
if the crop is not harvested.
    11. Section 14(c)(3)--Change the value to count for harvested 
production to the dollar amount obtained by subtracting the allowable 
cost from the price received (this resulting price must not be less 
than the minimum value shown in the Special Provisions), and 
multiplying this result by the number of cartons harvested. Current 
regulations allow the value of sold production to be

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as low as zero. Also, clarify that harvested mature tomatoes that are 
damaged or defective due to insurable causes and are not marketable 
will not be counted as production. These changes are made to assure 
that the minimum value specified in the Special Provisions will be the 
lowest value considered for any marketable harvested production unless 
the insured selected the minimum value option.
    12. Section 15--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 
for some policies. 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.
    13. Section 16--Permit the insured to select the minimum value 
option by electing Option I or Option II on the application. A separate 
form no longer will be required.

List of Subjects in 7 CFR Parts 401 and 457

    Crop insurance, Fresh market tomatoes.

Proposed Rule

    Accordingly, for the reasons set forth in the preamble, the Federal 
Crop Insurance Corporation hereby proposes to amend 7 CFR parts 401 and 
457, as follows:

PART 401--GENERAL CROP INSURANCE REGULATIONS--REGULATIONS FOR THE 
1988 AND SUBSEQUENT CONTRACT YEARS

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

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

    2. Section 401.137 introductory paragraph is revised to read as 
follows:


Sec. 401.137  Fresh market tomato minimum value option.

    The provisions of the Fresh Market Tomato Minimum Value Option for 
the 1991 through the 1997 crop years are as follows:
* * * * *
    3. Section 401.139 introductory paragraph is revised to read as 
follows:


Sec. 401.139  Fresh market tomato (dollar plan) endorsement.

     The provisions of the Fresh Market Tomato Crop Insurance 
Endorsement for the 1991 through the 1997 crop years are as follows:
* * * * *

PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE 
1994 AND SUBSEQUENT CONTRACT YEARS

     4. The authority citation for 7 CFR part 457 continues to read as 
follows:

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

    5. 7 CFR part 457 is amended by adding a new Sec. 457.139 to read 
as follows:


Sec. 457.139  Fresh Market Tomato (Dollar Plan) Crop Insurance 
Provisions.

    The Fresh Market Tomato (Dollar Plan) Crop Insurance Provisions for 
the 1998 and succeeding crop years are as follows:
    FCIC policies:

United States Department of Agriculture

Federal Crop Insurance Corporation

    Reinsured policies:

(Appropriate title for insurance provider)
    Both FCIC and reinsured policies:

Fresh Market Tomato (Dollar Plan) 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

    Acre--43,560 square feet of land when row widths do not exceed six 
feet, or if row widths exceed six feet, the land area on which at least 
7,260 linear feet of rows are planted.
    Carton--Twenty-five (25) pounds of the insured crop.
    Crop year--In lieu of the definition of ``crop year'' contained in 
section 1 (Definitions) of the Basic Provisions (Sec. 457.8), crop year 
is a period of time that begins on the first day of the earliest 
planting period for fall-planted tomatoes and continues through the 
last day of the insurance period for spring-planted tomatoes. The crop 
year is designated by the calendar year in which spring-planted 
tomatoes are harvested.
    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.
    Excess rain--An amount of precipitation sufficient to directly 
damage the crop.
    FSA--The Farm Service Agency, an agency of the United States 
Department of Agriculture, or a successor agency.
    Freeze--The formation of ice in the cells of the plant or its 
fruit, caused by low air temperatures.
    Good farming practices--The cultural practices generally in use in 
the county for the crop to make normal progress toward maturity and are 
those recognized by the Cooperative State Research, Education, and 
Extension Service as compatible with agronomic and weather conditions 
in the county.
    Harvest--The picking of tomatoes on the unit.
    Interplanted--Acreage on which two or more crops are planted in a 
manner that does not permit separate agronomic maintenance or harvest 
of the insured crop.
    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 for the insured crop to make normal progress toward 
maturity.
    Mature green tomato--A tomato that:
    (1) Has a glossy waxy skin that cannot be torn by scraping;
    (2) Has well-formed, jelly-like substance in the locules;
    (3) Has seeds that are sufficiently hard so as to be pushed aside 
and not cut by a sharp knife in slicing; and
    (4) Shows no red color.
    Plant stand--The number of live plants per acre prior to the 
occurrence of an insurable cause of loss.
    Planted acreage--Land in which, for each planting period, 
transplants or seed have been placed manually or by a machine 
appropriate for the insured crop and planting method, at the correct 
depth, into soil that has been properly prepared for the planting 
method and production practice. For each planting period, tomatoes must 
initially be planted in rows. Acreage planted in any other manner will 
not be insurable unless otherwise provided by the Special Provisions or 
by written agreement.
    Planting period--The period of time designated in the Actuarial 
Table in which the tomatoes must be planted to be considered fall, 
winter or spring-planted tomatoes.
    Potential production--The number of cartons of mature green or ripe 
tomatoes with a classification size of 6 x 7 (2-\8/32\ inch minimum 
diameter) or larger, that the tomato plants will or would have produced 
per acre by the end of the

[[Page 68685]]

insurance period, assuming normal growing conditions and practices.
     Practical to replant--In lieu of the definition of ``Practical to 
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8), 
practical to replant is defined as our determination, after loss or 
damage to the insured crop, based on factors, including but not limited 
to moisture availability, condition of the field, marketing windows, 
and time to crop maturity, that replanting to the insured crop will 
allow the crop to attain maturity prior to the calendar date for the 
end of the insurance period (inability to obtain plants or seed will 
not be considered when determining if it is practical to replant).
    Replanting--Performing the cultural practices necessary to replace 
the tomato seed or transplants and then replacing the tomato seed or 
transplants in the insured acreage with the expectation of growing a 
successful crop.
    Ripe tomato--A tomato that has a definite break in color from green 
to tannish-yellow, pink or red.
    Row width--The widest distance from the center of one row of plants 
to the center of an adjacent row of plants.
    Tropical depression--A system identified by the U.S. Weather 
Service as a tropical depression, and for the period of time so 
designated, including tropical storms, gales, and hurricanes.
    Written agreement--A written document that alters designated terms 
of this policy in accordance with section 15.

2. Unit Division

    (a) A unit as defined in section 1 (Definitions) of the Basic 
Provisions (Sec. 457.8), (basic unit) will be divided by planting 
period.
    (b) Unless limited by the Special Provisions, these basic units may 
be further divided into optional units if, for each optional unit you 
meet all the conditions of this section or if a written agreement for 
such further division exists.
    (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 
planted acreage and production for each optional unit for at least the 
last crop year in which the insured crop was planted;
    (2) You must plant the crop in a manner that results in a clear and 
discernable break in the planting pattern at the boundaries of each 
optional unit;
    (3) 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; and
    (4) Each optional unit must be 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.

3. Amounts of Insurance and Production Stages

    (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 coverage 
level (and the corresponding amount of insurance designated in the 
Actuarial Table for the applicable planting period and practice) for 
all the tomatoes in the county insured under this policy.
    (b) The amount of insurance you choose for each planting period and 
practice must have the same percentage relationship to the maximum 
price offered by us for each planting period and practice. For example, 
if you choose 100 percent of the maximum amount of insurance for a 
specific planting period and practice, you must also choose 100 percent 
of the maximum amount of insurance for all other planting periods and 
practices.
    (c) The amount of insurance available under the catastrophic risk 
protection plan of insurance will be specified in the Actuarial Table.
    (d) The production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8), do not apply to 
fresh market dollar plan tomatoes.
    (e) The amounts of insurance per acre are progressive by stages as 
follows:

----------------------------------------------------------------------------------------------------------------
                                Percent of                                                                      
                                amount of                                                                       
                                insurance                                                                       
            Stage                per acre    Length of time if direct seeded     Length of time if transplanted 
                                 that you                                                                       
                                 selected                                                                       
----------------------------------------------------------------------------------------------------------------
1............................           50  From planting through the 59th     From planting through the 29th   
                                             day after planting.                day after planting.             
2............................           75  From the 60th day after planting   From the 30th day after planting 
                                             until the beginning of stage 3.    until the beginning of stage 3. 
3............................           90  From the 90th day after planting   From the 60th day after planting 
                                             until the beginning of the final   until the beginning of the final
                                             stage.                             stage.                          
Final........................          100  Begins the earlier of 105 days     Begins the earlier of 75 days    
                                             after planting, or the beginning   after planting, or the beginning
                                             of harvest.                        of harvest.                     
----------------------------------------------------------------------------------------------------------------

    (f) Any acreage of tomatoes damaged in the first, second, or third 
stage to the extent that the majority of producers in the area would 
not normally further care for it, will be deemed to have been 
destroyed. The indemnity payable for such acreage will be based on the 
stage the plants had achieved when the damage occurred.

[[Page 68686]]

4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is April 30 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 July 31.

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 on or before the 
acreage reporting date contained in the Special Provisions for each 
planting period:
    (a) All the acreage of tomatoes in the county insured under this 
policy in which you have a share; and
    (b) The row width.

7. Annual Premium

    In lieu of the premium amount determinations contained in section 7 
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual 
premium amount for each cultural practice (e.g. fall direct seeded 
irrigated) is determined by multiplying the final stage amount of 
insurance per acre by the premium rate for the cultural practice as 
established in the Actuarial Table, by the insured acreage, by your 
share at the time coverage begins, and by any applicable premium 
adjustment factors contained in the Actuarial Table.

 8. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the tomatoes in the county 
for which a premium rate is provided by the Actuarial Table:
    (a) In which you have a share;
    (b) That are:
    (1) Planted to be harvested and sold as fresh market tomatoes;
    (2) Planted within the planting periods designated in the Actuarial 
Table;
    (3) Grown under an irrigated practice;
    (4) Grown on acreage covered by plastic mulch except where the 
Special Provisions allows otherwise;
    (5) Grown by a person who in at least one of the three previous 
crop years:
    (i) Grew tomatoes for commercial sale; or
    (ii) Participated in managing a fresh market tomato farming 
operation;
    (c) That are not:
    (1) Interplanted with another crop;
    (2) Planted into an established grass or legume;
    (3) Grown for direct marketing; or
    (4) Plum or cherry type tomatoes, unless allowed by written 
agreement.

9. Insurable Acreage.

    (a) In lieu of the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8), that prohibit insurance attaching if 
a crop has not been planted in at least one of the three previous crop 
years, we will insure newly cleared land or former pasture land planted 
to fresh market tomatoes.
    (b) In addition to the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8):
    (1) You must replant any acreage of tomatoes damaged during the 
planting period in which initial planting took place whenever less than 
50 percent of the plant stand remains: and
    (i) It is practical to replant;
    (ii) If, at the time the crop was damaged, the final day of the 
planting period has not passed; and
    (iii) The damage occurs within 30 days of transplanting or 60 days 
of direct seeding.
    (2) Whenever tomatoes initially are planted during the fall or 
winter planting periods and the conditions specified in sections 
9(b)(1) (ii) and (iii) are not satisfied, you may elect:
    (i) To replant such acreage and collect any replant payment due as 
specified in section 12. The initial planting period coverage will 
continue for such replanted acreage.
    (ii) Not to replant such acreage and receive an indemnity based on 
the stage of growth the plants had attained at the time of damage. 
However, such an election will result in the acreage being uninsurable 
in the subsequent planting period.
    (3) We will not insure any acreage which, in the preceding planting 
period was planted to tomatoes (except as allowed in sections 9(b) (1) 
and (2)), peppers, eggplants, or tobacco unless the soil has been 
fumigated or otherwise properly treated.

10. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8), coverage begins on each unit or part of 
a unit the later of the date we accept your application, or when the 
tomatoes are planted in each planting period. Coverage ends at the 
earliest of:
    (a) Total destruction of the tomatoes on the unit;
    (b) Abandonment of the tomatoes on the unit;
    (c) The date harvest should have started on the unit on any acreage 
which will not be harvested;
    (d) Final adjustment of a loss on the unit;
    (e) Final harvest; or
    (f) The calendar date for the end of the insurance period as 
follows:
    (1) 140 days after the date of direct seeding or replanting with 
seed; and
    (2) 125 days after the date of transplanting or replanting with 
transplants.

11. 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) Excess rain;
    (2) Fire;
    (3) Freeze;
    (4) Hail;
    (5) Tornado;
    (6) Tropical depression; or
    (7) Failure of the irrigation water supply, if caused by an insured 
cause of loss that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not 
insure against any loss of production due to:
    (1) Disease;
    (2) Insect infestation; or
    (3) Failure to market the tomatoes, unless such failure is due to 
actual physical damage caused by an insured cause of loss that occurs 
during the insurance period.

12. Replanting Payments

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if, due to an 
insured cause of loss, more than 50 percent of the plant stand will not 
produce tomatoes and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the result obtained by multiplying $175.00 by your insured share.
    (c) In lieu of the provisions contained in section 13 (Replanting 
Payment) of the Basic Provisions (Sec. 457.8), limiting a replanting 
payment to one each crop year, only one replanting payment will be made 
for acreage planted during each planting period within the crop year.

13. Duties in the Event of Damage or Loss

    In addition to the requirements contained in section 14 (Duties in 
the Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), if 
you intend to claim an indemnity on any unit you must also give us 
notice not later than 72 hours after the earliest of:

[[Page 68687]]

    (a) The time you discontinue harvest of any acreage on the unit;
    (b) The date harvest normally would start if any acreage on the 
unit will not be harvested; or
    (c) The calendar date for the end of the insurance period.

14. 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 in each stage by the amount of 
insurance per acre for the final stage;
    (2) Multiplying each result in section 14(b)(1) by the percentage 
for the applicable stage (see section 3(e));
    (3) Total the results of section 14(b)(2);
    (4) Subtracting either of the following values from the result of 
section 14(b)(3):
    (i) For other than catastrophic risk protection coverage, the total 
value of production to be counted (see section 14(c)); or
    (ii) For catastrophic risk protection coverage, the result of 
multiplying the total value of production to be counted (see section 
14(c)) by:
    (A) Sixty percent for the 1998 crop year; or
    (B) Fifty-five percent for 1999 and subsequent crop years; and
    (3) Multiplying the result of section 14(b)(4) by your share.
    (c) The total value of production to count from all insurable 
acreage on the unit will include:
    (1) Not less than the amount of insurance per acre for the stage 
for any acreage:
    (i) That is abandoned;
    (ii) Put to another use without our consent;
    (iii) That is damaged solely by uninsured causes; or
    (iv) For which you fail to provide acceptable production records;
    (2) The value of the following appraised production will not be 
less than the dollar amount obtained by multiplying the number of 
cartons of appraised tomatoes times the minimum value per carton shown 
in the Special Provisions for the planting period:
    (i) Potential production on any acreage that has not been harvested 
the second time for ground-culture tomatoes (the third time for staked 
tomatoes);
    (ii) Unharvested mature green tomatoes (unharvested production that 
is damaged or defective due to insurable causes and is not marketable 
will not be counted as production to count);
    (iii) Production lost due to uninsured causes; and
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not 
reached:
    (A) We may require you to continue to care for the crop so that a 
subsequent appraisal may be made or the crop harvested to determine 
actual production (If we require you to continue to care for the crop 
and you do not do so, the original appraisal will be used); or
    (B) You may elect to continue to care for the crop, in which case 
the amount of production to count for the acreage will be the harvested 
production, or our reappraisal if the crop is not harvested.
    (3) The total value of all harvested production from the insurable 
acreage will be the dollar amount obtained by subtracting the allowable 
cost contained in the Special Provisions from the price received for 
each carton of tomatoes (this result may not be less than the minimum 
value shown in the Special Provisions for any carton of tomatoes), and 
multiplying this result by the number of cartons of tomatoes harvested. 
Harvested production that is damaged or defective due to insurable 
causes and is not marketable, will not be counted as production to 
count.

15. 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 15(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, and premium rate;
    (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.

16. Minimum Value Option

    (a) The provisions of this option are continuous and will be 
attached to and made a part of your insurance policy, if:
    (1) You elect either Option I or Option II of the Minimum Value 
Option on your application, or on a form approved by us, on or before 
the sales closing date for the initial crop year in which you wish to 
insure fresh market tomatoes (dollar plan) under this option, and pay 
the additional premium indicated in the Actuarial Table for this 
optional coverage; and
    (2) You have not elected coverage under the Catastrophic Risk 
Protection Endorsement.
    (b) In lieu of the provisions contained in section 14(c)(3), the 
total value of harvested production will be determined as follows:
    If you selected Option I of the Minimum Value Option, the total 
value of harvested production will be as follows:
    (i) For sold production, the dollar amount obtained by subtracting 
the allowable cost contained in the Special Provisions from the price 
received for each carton of tomatoes (this result may not be less than 
$2.00 for any carton of tomatoes), and multiplying this result by the 
number of cartons of tomatoes sold; and
    (ii) For marketable production that is not sold, the dollar amount 
obtained by multiplying the number of cartons of such tomatoes on the 
unit by the minimum value shown in the Special Provisions for the 
planting period (harvested production that is damaged or defective due 
to insurable causes and is not marketable will not be counted as 
production).
    (2) If you selected Option II of the Minimum Value Option, the 
total value of harvested production will be as provided in section 
16(b)(1), except that the dollar amount specified in section 
(16)(b)(1)(i) may not be less than zero.
    (c) This option may be canceled by either you or us for any 
succeeding crop year by giving written notice on or before the 
cancellation date preceding

[[Page 68688]]

the crop year for which the cancellation of this option is to be 
effective.

    Signed in Washington, D.C. on December 20, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-33066 Filed 12-27-96; 8:45 am]
BILLING CODE 3410-FA-P