[Federal Register Volume 61, Number 251 (Monday, December 30, 1996)]
[Proposed Rules]
[Pages 68674-68681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-33069]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 401 and 457
RIN 0563-AB03
Hybrid Sorghum Seed Endorsement; and Common Crop Insurance
Regulations, Hybrid Sorghum Seed 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 hybrid sorghum seed. 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 Hybrid Sorghum Seed Endorsement with the Common Crop Insurance
Policy for ease of use and consistency of terms, and to restrict the
effect of the current Hybrid Sorghum Seed 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 February 28, 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 28, 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: Ron Nesheim, 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 of Management and 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; Hybrid Sorghum Seed 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 hybrid sorghum seed 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 2,676,932 hours.
FCIC is requesting comments on 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.
[[Page 68675]]
The Office of Management and Budget (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. The producer
must also annually certify to the previous years production if adequate
records are available to support the certification. The producer must
maintain the production records to support the certified information
for at least three years. This regulation does not alter those
requirements. The amount of work required of the insurance companies
delivering and servicing these policies will not increase significantly
from the amount of work currently required. This rule does not have any
greater or lesser impact on the producer. Therefore, this action is
determined to be exempt from the provisions of the Regulatory
Flexibility Act (5 U.S.C. 605), and no Regulatory Flexibility Analysis
was prepared.
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order No. 12372
This program is not subject to the provisions of Executive Order
No. 12372, which require intergovernmental consultation with state and
local officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
Executive Order No. 12778
The Office of the General Counsel has determined that these
regulations meet the applicable standards provided in sections (2)(a)
and 2(b)(2) of Executive Order No. 12778. The provisions of this rule
will not have a retroactive effect prior to the effective date. The
provisions of this rule will preempt state and local laws to the extent
such state and local laws are inconsistent herewith. The administrative
appeal provisions published at 7 CFR parts 11 and 780 must be exhausted
before any action for judicial review may be brought.
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 457.112, Hybrid Sorghum Seed 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 hybrid sorghum seed found at 7 CFR
401.109 (Hybrid Sorghum Seed Endorsement). FCIC also proposes to amend
7 CFR 401.109 to limit its effect to the 1997 and prior crop years.
FCIC will later publish a regulation to remove section 401.109 and
reserve that section.
This rule makes minor editorial and format changes to improve the
Hybrid Sorghum Seed Endorsement's compatibility with the Common Crop
Insurance Policy. In addition, FCIC is proposing substantive changes in
the provisions for insuring hybrid sorghum seed as follows:
1. Section 1--Add definitions for the terms ``adjusted yield,''
``approved yield,'' ``bushel,'' ``certified seed test,'' ``county
yield,'' ``FSA,'' ``field run,'' ``good farming practices,'' ``hybrid
sorghum seed processor contract,'' ``insurable interest,''
``interplanted,'' ``local market price,'' ``minimum guaranteed
payment,'' ``non-seed amount,'' ``planted acreage,'' ``planting
pattern,'' ``practical to replant,'' ``sample,'' ``seed amount,''
``seed production,'' and ``written agreement'' for clarification.
2. Section 2--Unit division provisions are amended to include
producer's reporting responsibilities to qualify for optional units.
Also, clarifies that optional units are available if the hybrid sorghum
seed processor contract specifies that it is a specific number of acres
that are under contract and not a specified amount of production.
3. Section 4--Change the contract change date to November 30 in
order to maintain an adequate time period between the contract change
date and the revised cancellation date.
4. Section 5--Change the cancellation and termination dates to
March 15. This change is necessary to standardize the cancellation and
termination dates with the sales closing dates, which were changed to
30 days earlier for spring planted crops to comply with the
requirements of the Federal Crop Insurance Reform Act of 1994.
5. Section 6--Require the producer to certify that a hybrid sorghum
seed processor contract has been executed and certify the amount of any
minimum guaranteed payment from the seed company. Certification of a
hybrid seed processor contract on or before the acreage reporting date
is needed to establish the insurability of the crop before a loss is
likely and ensures a market for the crop. The producer must also
certify any minimum guaranteed payment under the contract because a
minimum guaranteed payment will affect insurance premium and the amount
of indemnity.
6. Section 7(c)--Specify conditions under which a seed producer who
is also a seed company can establish an insurable interest in the
insured crop. There is an inherent conflict of interest when the
producer is also the processor
[[Page 68676]]
who will provide the records of the producer. These conditions are
needed to ensure the eligibility of the processor for crop insurance.
7. Section 8(c)--Clarify that any acreage damaged prior to the
final planting date must be replanted unless it is not practical to
replant.
8. Section 11(a)--Clarify the size of representative crop samples
required when damage is discovered.
9. Section 14--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
application for, and duration of, written agreements.
List of Subjects in 7 CFR 401 and 457
Hybrid sorghum seed endorsement, Crop insurance, Hybrid sorghum
seed.
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) and 1506(p).
2. Section 401.109 introductory paragraph is revised to read as
follows:
Sec. 401.109 Hybrid sorghum seed endorsement
The provisions of the Hybrid Sorghum Seed Endorsement for the 1988
through 1997 crop years are as follows:
* * * * *
PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE
1994 AND SUBSEQUENT CONTRACT YEARS
3. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l) and 1506(p).
4. Section 457.112 is added to read as follows:
Sec. 457.112 Hybrid Sorghum Seed Crop Insurance Provisions
The Hybrid Sorghum Seed Crop Insurance Provisions for the 1998 and
succeeding crop years are as follows:
FCIC policies:
Department of Agriculture
Federal Crop Insurance Corporation
Reinsured policies:
(Appropriate title for insurance provider)
Both FCIC and reinsured policies:
Hybrid Sorghum Seed 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
Adjusted yield--The yield per acre that results from multiplying
the approved yield by the coverage level percentage.
Amount of insurance per acre--The number of dollars determined by
multiplying the county yield for the coverage level you select by the
price election you select, and subtracting any minimum guaranteed
payment. If the minimum guaranteed payment is stated in a unit of
measure other than dollars, it will be converted to a dollar amount by
multiplying the number of bushels guaranteed by the price election you
selected.
Approved yield--The yield per acre that a specific type or variety
is expected to produce determined from yield records provided by the
seed company or other acceptable information.
Bushel--Fifty-six pounds avoirdupois of the insured crop.
Certified seed test--A warm germination test performed according to
specifications of the ``Rules for Testing Seeds'' of the Association of
Official Seed Analysts.
Commercial hybrid sorghum seed--The offspring produced by crossing
a male and female parent plant, each having a different genetic
character. This offspring is the product intended for use by an
agricultural producer to produce a commercial field sorghum crop for
grain or forage.
County yield--A yield contained in the Actuarial Table that is used
to calculate your amount of insurance.
Days--Calendar days.
Dollar value per bushel--The value determined by dividing your
amount of insurance for timely planted acreage by the adjusted yield.
FSA--The Farm Service Agency, an agency of the United States
Department of Agriculture, or a successor agency.
Female parent plants--Sorghum plants that are grown for the purpose
of producing commercial hybrid sorghum seed and have had their stamens
removed.
Field run--Commercial hybrid sorghum seed production before it has
been processed or screened.
Final planting date--The date contained in the Special Provisions
for the insured crop by which the crop must initially be planted in
order to be insured for the full amount of insurance per acre.
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 amount of insurance,
or are required by the hybrid sorghum seed processor contract and
recognized by the Cooperative State Research, Education, and Extension
Service as compatible with agronomic and weather conditions in the
county.
Harvest--Combining, threshing or picking of the female parent
plants to obtain commercial hybrid sorghum seed.
Hybrid sorghum seed processor contract--A written agreement between
the hybrid sorghum seed crop producer and a seed company containing, at
a minimum:
(a) The producer's promise to plant and grow male and female parent
plants, and to deliver all commercial hybrid sorghum seed produced from
such plants to the seed company;
(b) The seed company's promise to purchase all the commercial
hybrid sorghum seed produced by the producer; and
(c) Either a fixed price per unit of measure (bushels,
hundredweight, etc.) of the commercial hybrid sorghum seed or a formula
to determine the value of such seed. Any formula for establishing the
value must be based on data provided by a public third party that
establishes or provides pricing information to the general public,
based on prices paid in the open market (e.g., commodity futures
exchanges) to be acceptable for the purpose of this policy.
Inadequate germination--Germination of less than 80 percent of the
commercial hybrid sorghum seed as determined by using a certified seed
test on clean seed.
Insurable interest--Your share of the financial loss that occurs in
the event seed production is reduced by a cause of loss defined under
this crop insurance contract.
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.
[[Page 68677]]
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 amount of insurance on the irrigated acreage planted to the
insured crop.
Late planted--Acreage planted to the insured crop during the late
planting period.
Late planting period--The period that begins the day after the
final planting date for the insured crop and ends 25 days after the
final planting date.
Local market price--The cash price offered by buyers in the area
for any production from the female parent plants that is not considered
commercial hybrid sorghum seed under the terms of this policy.
Male parent plants--Sorghum plants grown for the purpose of
pollinating female parent plants.
Minimum guaranteed payment--A minimum amount (usually stated in
dollars or bushels) specified in your hybrid sorghum seed processor
contract that will be paid or credited to you by the seed company
regardless of the quantity of seed produced.
Non-seed amount--The dollar amount obtained by multiplying the
number of bushels of non-seed production to count by the local market
price determined on the earlier of the date the non-seed production is
sold or the date of final inspection for the unit.
Planted acreage--Land in which seed has been placed by a machine
appropriate for the insured crop and planting method, at the correct
depth, into a seedbed that has been properly prepared for the planting
method and production practice. The insured crop must be planted in
rows wide enough to permit mechanical cultivation. Acreage planted in
any other manner will not be insurable unless otherwise provided by the
Special Provisions or by written agreement.
Planting pattern--The arrangement of the rows of the male and
female parent plants in a field. An example of a planting pattern is
four consecutive rows of female parent plants, two consecutive rows of
male parent plants.
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 field, time to crop maturity,
and marketing window, that replanting the insured crop will allow the
crop to adequately pollinate and attain maturity prior to the calendar
date for the end of the insurance period. It will not be considered
practical to replant after the end of the late planting period unless
replanting is generally occurring in the area. Determination of
practical to replant will take into consideration the planting dates
specified in the hybrid sorghum seed processor contract in accordance
with section 8(c).
Prevented planting--Inability to plant:
(a) The female parent plant seed with proper equipment by:
(1) The final planting date designated in the Special Provisions
for the insured crop in the county; or
(2) The end of the late planting period; or
(b) The male parent plant seed with proper equipment at a time
sufficient to assure adequate pollination of the female parent plants
in accordance with the production management practices of the seed
company. You must have been unable to plant the female or male parent
plant seed due to an insured cause of loss that has prevented the
majority of producers in the surrounding area from planting the same
crop.
Sample--For the purpose of the certified seed test, at least 3
pounds of field run sorghum seed for each type or variety of commercial
hybrid sorghum seed grown on the unit.
Seed amount--The dollar amount obtained by multiplying the number
of bushels of seed production to count for each type or variety of
commercial hybrid sorghum seed grown on the unit by the applicable
dollar value per bushel for that type or variety, and totaling the
products of each type or variety.
Seed company--A corporation that possesses all licenses for
marketing commercial hybrid sorghum seed required by the state in which
it is domiciled or operates, and which possesses or has contracted
facilities with enough storage and drying capacity to accept and
process the insured crop within a reasonable amount of time after
harvest.
Seed production--All seed produced by female parent plants with a
germination rate of at least 80 percent, as determined by a certified
seed test.
Timely planted--Planted on or before the final planting date
designated in the Special Provisions for the insured crop in the
county.
Type--Grain sorghum, forage sorghum, or sorghum sudan parent
plants.
Variety--The name, number or code assigned to a specific genetic
cross by the seed company or the Special Provisions for the insured
crop in the county.
Written agreement--A written document that alters designated terms
of this policy in accordance with section 14.
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), (basic
unit) may be divided into optional units only if, for each optional
unit, you meet all the conditions of this section or if a written
agreement to such division exists.
(b) Optional units are available if the hybrid sorghum seed
processor contract specifies that it is a specific number of acres that
are under contract and not a specified amount of production.
(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 may
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 additional premium paid
for the optional units that have been combined will be refunded to you.
(d) All optional units you selected for the 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 used to determine your amount of insurance.
(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 meet one or more of the following
criteria, as applicable:
Optional Units by Section, Section Equivalent, or FSA Farm Serial
Number: Optional units may be established if
[[Page 68678]]
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 unique FSA Farm Serial
Number.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of
the Basic Provisions (Sec. 457.8), you may select only one price
election for all the hybrid sorghum seed in the county insured under
this policy unless the Special Provisions provide different price
elections by type or variety, in which case you may elect one price
election for each hybrid sorghum seed type or variety designated in the
Special Provisions. The price elections you choose for each type or
variety must have the same percentage relationship to the maximum price
offered by us for each type or variety. For example, if you choose 100
percent of the maximum price election for one specific type or variety,
you must also choose 100 percent of the maximum price election for all
other types or varieties.
(b) The production reporting requirements contained in section 3
(Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities) of the Basic Provisions (Sec. 457.8) are not applicable to
this contract.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is November 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 March 15.
6. Report of Acreage
In addition to the requirements of section 6 (Report of Acreage) of
the Basic Provisions (Sec. 457.8), you must:
(a) Report, by type and variety, the location and insurable acreage
of the insured crop;
(b) Report any acreage that is uninsured, including that portion of
the total acreage occupied by male parent plants; and
(c) Certify that you have a hybrid sorghum seed processor contract
and, if applicable, report the amount of any minimum guaranteed
payment.
7. Insured Crop
(a) In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all the female parent
plants in the county for which a premium rate is provided by the
actuarial table:
(1) In which you have a share;
(2) That are grown under a hybrid sorghum seed processor contract
executed before the acreage reporting date;
(3) That are planted for harvest as commercial hybrid sorghum seed
in accordance with the requirements of the hybrid sorghum seed
processor contract; and
(4) That are not (unless allowed by the Special Provisions or by
written agreement):
(i) Planted with a mixture of female and male parent seed in the
same row;
(ii) Planted for any purpose other than for commercial hybrid
sorghum seed;
(iii) Interplanted with another crop; or
(iv) Planted into an established grass or legume.
(b) An instrument in the form of a ``lease'' under which you retain
control of the acreage on which the insured crop is grown and that
provides for delivery of the crop under substantially the same terms as
a hybrid sorghum seed processor contract will be treated as a contract
under which you have an insurable interest in the crop.
(c) A commercial hybrid sorghum seed producer who is also a
commercial hybrid sorghum seed company may be able to establish an
insurable interest if the following requirements are met:
(1) The seed company must be a corporation and have an insurable
interest in the hybrid sorghum seed crop;
(2) The Board of Directors of the seed company must have instituted
a corporate resolution that sets forth essentially the same terms as a
hybrid sorghum seed processor contract. Such corporate resolution will
be considered a contract under the terms of the hybrid sorghum seed
crop insurance policy;
(3) Sales records for at least the previous years' seed production
must be provided to confirm that the seed company has produced and sold
seed. If such records are not available, the crop may only be insured
under the Coarse Grains Crop Provisions; and
(4) Our inspection of the storage and drying facilities determines
that they satisfy the requirements for a seed company.
8. Insurable Acreage
In addition to the provisions of section 9 (Insurable Acreage) of
the Basic Provisions (Sec. 457.8), we will not insure any acreage:
(a) Planted and occupied exclusively by male parent plants;
(b) Not in compliance with the rotation requirements contained in
the Special Provisions or, if applicable, required by the hybrid
sorghum seed processor contract; or
(c) Of the insured crop damaged before the final planting date, to
the extent that the remaining stand will not produce at least 90
percent of the adjusted yield, unless such acreage is replanted or we
agree that it is not practical to replant. If we determine that it is
practical to replant and the seed company will not extend the planting
date stipulated in the hybrid sorghum seed processor contract, we will
delete the affected acreage from your report of acreage, and that
acreage will not be insured under these crop provisions.
9. Insurance Period
(a) In addition to the provisions of section 11 (Insurance Period)
of the Basic Provisions (Sec. 457.8), insurance attaches after:
(1) The female parent plant seed is completely planted in
accordance with the hybrid sorghum seed processor contract and the
production practices of the seed company, on or before the final
planting date designated in the Hybrid Sorghum Seed Special Provisions,
except as allowed in section 13(c); and
(2) The male parent plant seed is completely planted in accordance
with production practices for the variety being produced.
(b) In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8), the calendar date for the
end of the insurance period is the November 30 immediately following
planting.
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;
[[Page 68679]]
(3) Insects, but not damage due to insufficient or improper
application of pest control measures;
(4) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(5) Wildlife;
(6) Earthquake;
(7) Volcanic eruption; or
(8) 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 not insured against under
section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), we
will not insure against any loss of production due to:
(1) The use of unadapted, incompatible, or genetically deficient
male or female parent plant seed;
(2) Frost or freeze after the date set by the Special Provisions;
(3) Failure to follow the requirements stated in the hybrid sorghum
seed processor contract or production management practices of the seed
company;
(4) Inadequate germination, even if it's the result of an insured
cause of loss, unless you have provided adequate notice under section
11(b)(1) and the crop is inspected and the loss is appraised by us
before harvest is completed; or
(5) Failure to plant the male parent plant seed at a time or in a
manner sufficient to assure adequate pollination of the female parent
plants, unless you are prevented from planting the male parent plant
seed.
11. Duties in the Event of Damage or Loss
(a) In accordance with the requirements of section 14 (Duties in
the Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the
representative samples of the unharvested crop must be at least one
complete planting pattern of the male and female parent plant rows and
extend the entire length of each field in the unit. The samples must
not be harvested or destroyed until the earlier of our inspection or 15
days after harvest of the balance of the unit is completed.
(b) In addition to your duties under section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8):
(1) You must give us notice of probable loss at least 15 days
before the beginning of harvest if you anticipate inadequate
germination on any unit; and
(2) You must provide a completed copy of your hybrid sorghum seed
processor contract.
12. 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) You will not receive an indemnity payment on a unit if the seed
company refuses to provide us with records we require to determine the
dollar value per bushel of production for each variety.
(c) In the event of loss or damage covered by this policy, we will
settle your claim on any unit by:
(1) Multiplying the insured acreage by its respective amount of
insurance per acre;
(2) Subtracting the total of the production to count for the seed
amount and the non-seed amount from the result of section 12(c)(1); and
(3) Multiplying the result of section 12(c)(2) by your share.
(d) The total production (bushels) to count from all insurable
acreage on the unit will include all seed and non-seed production as
specified in section (e) through (g) below.
(e) Production to be counted as seed production will include:
(1) All appraised production as follows:
(i) Not less than the adjusted yield for acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide acceptable production records;
(ii) Production lost due to uninsured causes;
(iii) Mature unharvested production with a germination rate of at
least 80 percent of the commercial hybrid sorghum seed as determined by
a certified seed test. Any such production may be adjusted in
accordance with section 12(g);
(iv) Immature appraised production;
(v) 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 if you put the acreage to another use or abandon the
crop. If agreement on the appraised amount of production is not
reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to
leave intact, and provide sufficient care for, representative samples
of the crop in locations acceptable to us (The amount of production to
count for such acreage will be based on the harvested production or
appraisals from the samples at the time harvest should have occurred.
If you do not leave the required samples intact, or fail to provide
sufficient care for the samples, our appraisal made prior to giving you
consent to put the acreage to another use will be used to determine the
amount of production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production,
or our reappraisal if additional damage occurs and the crop is not
harvested; and
(2) Harvested production that you deliver as commercial hybrid
sorghum seed to the seed company stated in your hybrid sorghum seed
processor contract, regardless of quality, unless the production has
inadequate germination.
(f) Production to be counted as non-seed production will include
all harvested or mature appraised production that does not qualify as
seed production to count as specified in section 12(e). Any such
production may be adjusted in accordance with section 12(g).
(g) For the purpose of determining the quantity of mature
production:
(1) Commercial hybrid sorghum seed production will be:
(i) Increased 0.12 percent for each 0.1 percentage point of
moisture below 13.0 percent; or
(ii) Decreased 0.12 percent for each 0.1 percentage point of
moisture in excess of 13.0 percent.
(2) When records of commercial hybrid sorghum seed production
provided by the seed company have been adjusted to a basis of 13.0
percent moisture and 56 pound avoirdupois bushels, section 12(g)(1)
above will not apply to harvested production. In such cases, records of
the seed company used for determining the next years approved yield
will also be used to determine the amount of production to count:
provided, such production records are calculated on the same basis as
that used to determine the approved yield.
13. Late Planting and Prevented Planting
(a) In lieu of provisions contained in the Basic Provisions
(Sec. 457.8) regarding acreage initially planted after the final
planting date and the applicability of a
[[Page 68680]]
Late Planting Agreement Option, insurance will be provided for acreage
planted to the insured crop during the late planting period (see
section 13(c)), and acreage you were prevented from planting (see
section 13(d)). These coverages provide reduced amounts of insurance.
The premium amount for late planted acreage and eligible prevented
planting acreage will be the same as that for timely planted acreage.
If the amount of premium you are required to pay (gross premium less
our subsidy) for late planted acreage or prevented planting acreage
exceeds the liability on such acreage, coverage for those acres will
not be provided, no premium will be due, and no indemnity will be paid
for such acreage.
(b) You must provide written notice to us not later than the
acreage reporting date if you were prevented from planting.
(c) Late Planting
(1) For hybrid sorghum seed acreage planted during the late
planting period, the amount of insurance for each acre will be reduced
for each day planted after the final planting date by:
(i) One percent per day for the 1st through the 10th day; and
(ii) Two percent per day for the 11th through the 25th day.
(2) In addition to the requirements of section 6 (Report of
Acreage) of the Basic Provisions (Sec. 457.8), you must report the
dates the acreage is planted within the late planting period.
(3) If planting of hybrid sorghum seed continues after the final
planting date, or you are prevented from planting during the late
planting period, the acreage reporting date will be the later of:
(i) The acreage reporting date contained in the Special Provisions
for the insured crop; or
(ii) Five days after the end of the late planting period.
(d) Prevented Planting (Including Planting After the Late Planting
Period)
(1) If you were prevented from timely planting hybrid sorghum seed,
you may elect:
(i) To plant hybrid sorghum seed during the late planting period.
The amount of insurance for such acreage will be determined in
accordance with section 13(c)(1);
(ii) Not to plant this acreage to any crop except a cover crop not
for harvest. You may also elect to plant the insured crop after the
late planting period. In either case, the amount of insurance for such
acreage will be 50 percent of the amount of insurance for timely
planted acres. For example, if your amount of insurance for timely
planted acreage is $200 per acre, your prevented planting amount of
insurance would be $100 per acre ($200 multiplied by 0.50). If you
elect to plant the insured crop after the late planting period,
production to count for such acreage will be determined in accordance
with section 12; or
(iii) Not to plant the intended crop but plant a substitute crop
for harvest, in which case:
(A) No prevented planting amount of insurance will be provided for
such acreage if the substitute crop is planted on or before the 10th
day following the final planting date for the insured crop; or
(B) An amount of insurance equal to 25 percent of the amount of
insurance for timely planted acres will be provided for such acreage,
if the substitute crop is planted after the 10th day following the
final planting date for the insured crop. If you elected the
Catastrophic Risk Protection Endorsement or excluded this coverage, and
plant a substitute crop, no prevented planting coverage will be
provided. For example, if your amount of insurance for timely planted
acreage is $200 per acre, your prevented planting amount of insurance
would be $50 per acre ($200 multiplied by 0.25). You may elect to
exclude prevented planting coverage when a substitute crop is planted
for harvest and receive a reduction in the applicable premium rate. If
you wish to exclude this coverage, you must so indicate, on or before
the sales closing date, on your application or on a form approved by
us. Your election to exclude this coverage will remain in effect from
year to year unless you notify us in writing on our form by the
applicable sales closing date for the crop year for which you wish to
include this coverage. All acreage of the crop insured under this
policy will be subject to this exclusion.
(2) Amounts of insurance for timely, late, and prevented planting
acreage within a unit will be combined to determine the amount of
insurance for the unit. For example, assume you insure one unit in
which you have a 100 percent share. The unit consists of 185 acres of
the same type and variety of which 150 acres are occupied by the female
parent plants. (The acreage occupied by the male parent plants (35
acres) is not insurable, and is not eligible for coverage under this
section.) The unit consists of 150 acres, of which 50 acres were
planted timely, 50 acres were planted 7 days after the final planting
date (late planted), and 50 acres were not planted but are eligible for
a prevented planting amount of insurance. The amount of insurance for
the unit will be computed as follows:
(i) For the timely planted acreage, multiply the per acre amount of
insurance for timely planted acreage by the 50 acres planted timely;
(ii) For the late planted acreage, multiply the per acre amount of
insurance for timely planted acreage by 93 percent and multiply the
result by the 50 acres planted late; and
(iii) For prevented planting acreage, multiply the per acre amount
of insurance for timely planted acreage by:
(A) Fifty percent and multiply the result by the 50 acres you were
prevented from planting, if the acreage is eligible for prevented
planting coverage, and if the acreage is left idle for the crop year,
or if a cover crop is planted not for harvest. Prevented planting
compensation hereunder will not be denied because the cover crop is
hayed or grazed; or
(B) Twenty-five percent and multiply the result by the 50 acres you
were prevented from planting, if the acreage is eligible for prevented
planting coverage, and if you elect to plant a substitute crop for
harvest after the 10th day following the final planting date for the
insured crop. (This paragraph (B) is not applicable, and prevented
planting coverage is not available under these crop provisions, if you
elected the Catastrophic Risk Protection Endorsement or you elected to
exclude prevented planting coverage when a substitute crop is planted
(see section 13(d)(1)(iii)).
Your premium will be based on the result of multiplying the per
acre amount of insurance for timely planted acreage by the 150 acres in
the unit.
(3) You must have the inputs available to plant and produce the
intended crop with the expectation of at least producing the approved
yield. Proof that these inputs were available may be required.
(4) In addition to the provisions of section 11 (Insurance Period)
of the Basic Provisions (Sec. 457.8), the insurance period for
prevented planting coverage begins:
(i) On the sales closing date contained in the Special Provisions
for the insured crop in the county for the crop year the application
for insurance is accepted; or
(ii) For any subsequent crop year, on the sales closing date for
the insured crop in the county for the previous crop year, provided
continuous coverage has been in effect since that date. For example: If
you make application and purchase insurance for hybrid sorghum seed for
the 1998 crop year, prevented planting coverage will begin on the 1998
sales closing date for hybrid sorghum seed in the county. If the hybrid
sorghum seed coverage remains in effect
[[Page 68681]]
for the 1999 crop year (is not terminated or canceled during or after
the 1998 crop year), prevented planting coverage for the 1999 crop year
began on the 1998 sales closing date. Cancellation for the purpose of
transferring the policy to a different insurance provider when there is
no lapse in coverage will not be considered terminated or canceled
coverage for the purpose of the preceding sentence.
(5) The acreage to which prevented planting coverage applies will
not exceed the total eligible acreage on all FSA Farm Serial Numbers in
which you have a share, adjusted for any reconstitution that may have
occurred on or before the sales closing date. Eligible acreage for each
FSA Farm Serial Number is determined as follows:
(i) If you participate in any program administered by the United
States Department of Agriculture that limits the number of acres that
may be planted for the crop year, the acreage eligible for prevented
planting coverage will not exceed the total acreage permitted to be
planted to the insured crop.
(ii) If you do not participate in any program administered by the
United States Department of Agriculture that limits the number of acres
that may be planted, and unless we agree in writing on or before the
sales closing date, eligible acreage will not exceed the greater of:
(A) The number of acres planted to the hybrid sorghum seed on the
FSA Farm Serial Number during the previous crop year; or
(B) One-hundred percent of the simple average of the number of
acres planted to hybrid sorghum seed during the crop years that you
certified to determine your yield.
(iii) Acreage intended to be planted under an irrigated practice
will be limited to the number of acres for which you had adequate
irrigation facilities prior to the insured cause of loss which
prevented you from planting.
(iv) A prevented planting amount of insurance will not be provided
for any acreage:
(A) That does not constitute at least 20 acres or 20 percent of the
acreage in the unit, whichever is less (Acreage that is less than 20
acres or 20 percent of the acreage in the unit will be presumed to have
been intended to be planted to the insured crop planted in the unit,
unless you can show that you had the inputs available before the final
planting date to plant and produce another insured crop on the
acreage);
(B) For which the actuarial table does not designate a premium rate
unless a written agreement designates such premium rate;
(C) Used for conservation purposes or intended to be left unplanted
under any program administered by the United States Department of
Agriculture;
(D) On which another crop is prevented from being planted, if you
have already received a prevented planting indemnity, guarantee, or
amount of insurance for the same acreage in the same crop year, unless
you provide adequate records of acreage and production showing that the
acreage was double-cropped in each of the last 4 years in which the
insured crop was grown on the acreage;
(E) which the insured crop is prevented from being planted, if any
other crop is planted and fails, or is planted and harvested, hayed or
grazed on the same acreage in the same crop year, (other than a cover
crop as specified in section (d)(2)(iii)(A) of this section, or a
substitute crop allowed in section (d)(2)(iii)(B), unless you provide
adequate records of acreage and production showing that the acreage was
double-cropped in each of the last 4 years in which the insured crop
was grown on the insured acreage;
(F) When coverage is provided under the Catastrophic Risk
Protection Endorsement if you plant another crop for harvest on any
acreage you were prevented from planting in the same crop year, even if
you have a history of double-cropping. If you have a Catastrophic Risk
Protection Endorsement and receive a prevented planting indemnity,
guarantee, or amount of insurance for a crop and are prevented from
planting another crop on the same acreage, you may only receive the
prevented planting indemnity, guarantee, or amount of insurance for the
crop on which the prevented planting indemnity, guarantee, or amount of
insurance is received; or
(G) For which planting history or conservation plans indicate that
the acreage would have remained fallow for crop rotation purposes.
(v) For the purpose of determining eligible acreage for prevented
planting coverage, acreage for all units will be combined and be
reduced by the number of hybrid sorghum seed acres timely planted and
late planted. For example, assume you have 100 acres eligible for
prevented planting coverage in which you have a 100 percent share. The
acreage is located in a single FSA Farm Serial Number which you insure
as two separate optional units consisting of 50 acres each. If you
planted 60 acres of hybrid sorghum seed on one optional unit and 40
acres of hybrid sorghum seed on the second optional unit, your
prevented planting eligible acreage would be reduced to zero (i.e.,100
acres eligible for prevented planting coverage minus 100 acres planted
equals zero).
(6) In accordance with the provisions of section 6 (Report of
Acreage) of the Basic Provisions (Sec. 457.8), you must report by unit
any insurable acreage that you were prevented from planting. This
report must be submitted on or before the acreage reporting date. For
the purpose of determining acreage eligible for a prevented planting
amount of insurance, the total amount of prevented planting and planted
acres cannot exceed the maximum number of acres eligible for prevented
planting coverage. Any acreage you report in excess of the number of
acres eligible for prevented planting coverage, or that exceeds the
number of eligible acres physically located in a unit, will be deleted
from your acreage report.
14. 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 14(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.
Signed in Washington, D.C., on December 20, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-33069 Filed 12-27-96; 8:45 am]
BILLING CODE 3410-FA-P