[Federal Register Volume 62, Number 68 (Wednesday, April 9, 1997)]
[Proposed Rules]
[Pages 17103-17107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9008]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / 
Proposed Rules  

[[Page 17103]]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 447 and 457


Popcorn Crop Insurance Regulations; and Common Crop Insurance 
Regulations, Popcorn 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 popcorn. 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 Popcorn 
Crop Insurance Regulations with the Common Crop Insurance Policy for 
ease of use and consistency of terms, and to restrict the effect of the 
current Popcorn Crop Insurance Regulations to the 1997 and prior crop 
years.

DATES: Written comments on this proposed rule will be accepted until 
close of business May 9, 1997 and will be considered when the rule is 
to be made final.

ADDRESSES: Interested persons are invited to submit written comments to 
the Director, Product Development Division, Federal Crop Insurance 
Corporation, United States Department of Agriculture, 9435 Holmes Road, 
Kansas City, MO 64131.

FOR FURTHER INFORMATION CONTACT: Linda Williams, Insurance Management 
Specialist, Research and Development, Product Development Division, 
Federal Crop Insurance Corporation, at the Kansas City, MO, address 
listed above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The Office of Management and Budget (OMB) has determined this rule 
to be exempt for the purposes of Executive Order 12866, and therefore, 
this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    The amendments set forth in this proposed rule contains information 
collection that requires clearance by the Office of Management and 
Budget (OMB) under the provisions of 44 U.S.C. chapter 35.
    The title of this information collection is ``Catastrophic Risk 
Protection Plan and Related Requirements including, Common Crop 
Insurance Regulations; Popcorn 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 popcorn that are eligible for Federal crop insurance.
    The information requested is necessary for the reinsured companies 
and FCIC to provide insurance and reinsurance, determine eligibility, 
determine the correct parties to the agreement or contract, determine 
and collect premiums or other monetary amounts, and pay benefits.
    All information is reported annually. The reporting burden for this 
collection of information is estimated to average 16.9 minutes per 
response for each of the 3.6 responses from approximately 1,755,015 
respondents. The total annual burden on the public for this information 
collection is 2,669,970 hours.
    FCIC is requesting comments 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.
    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 12612

    It has been determined under section 6(a) of Executive Order 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 larger entities. Under 
the current regulations, a producer is required to complete an 
application and an 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

[[Page 17104]]

claim for indemnity. The insured also must 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 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 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.

Executive Order 12988

    The provisions of this rule will not have 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 part 
11 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 457.126, Popcorn 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 popcorn found at 7 CFR part 447 
(Popcorn Crop Insurance Regulations). FCIC also proposes to amend 7 CFR 
part 447 to limit its effect to the 1997 and prior crop years. FCIC 
will later publish a regulation to remove and reserve 7 CFR part 447.
    This rule makes minor editorial and format changes to improve the 
Popcorn Crop Insurance Regulations' compatibility with the Common Crop 
Insurance Policy. In addition, FCIC is proposing substantive changes in 
the provisions for insuring popcorn as follows:
    1. Section 1--Add definitions for the terms ``base contract 
price,'' ``days,'' ``FSA,'' ``final planting date,'' ``good farming 
practices,'' ``interplanted,'' ``irrigated practice,'' ``merchantable 
popcorn,'' ``planted acreage,'' ``pound,'' ``practical to replant,'' 
``processor,'' ``processor contract,'' ``production guarantee,'' 
``timely planted'' and ``written agreement'' for clarification.
    2. Section 3--Clarify that an insured may select only one price 
election for all the popcorn in the county insured under the policy, 
unless the Special Provisions provide different price elections by 
type, in which case the insured may select one price election for each 
popcorn type designated in the Special Provisions.
    3. Section 4--Change the contract change date to November 30 for 
all counties that currently have April 15 cancellation and termination 
dates. This change is made to maintain an adequate time period between 
this date and the cancellation dates revised to correspond to the 
changes in the sales closing date to comply with the Federal Crop 
Insurance Reform Act of 1994, for producers to make informed risk 
management decisions.
    4. Section 5--Change the cancellation and termination dates from 
April 15 to January 15 for certain Texas counties. The cancellation and 
termination dates for all other Texas counties and all other states are 
changed from April 15 to March 15. These changes are made to 
standardize the cancellation and termination dates with the sales 
closing dates.
    5. Section 6--Require the insured to provide a copy of the 
processor contract to the insurance provider on or before on the 
acreage reporting date to establish liability and insurability before a 
loss is likely to occur.
    6. Section 7(a)(4)--Permit consideration for requests for a written 
agreement to insure popcorn that is interplanted with another crop or 
planted into an established grass or legume.
    7. Section 7(c)--Specify the requirements under which a popcorn 
producer who is also a processor may establish an insurable interest in 
the insured crop.
    8. Section 8--Clarify that any acreage damaged prior to the final 
planting date to the extent that the majority of growers in the area 
would normally not further care for the crop must be replanted unless 
the insurance provider agrees that it is not practical to replant.
    9. Section 9(a)--Add provisions for the insurance period to end 
when the popcorn should have been harvested or when enough popcorn is 
delivered to fulfill the producer's processor contract. This 
requirement is consistent with other crops produced under a processor 
contract.
    10. Section 12--Require that representative samples of the 
unharvested crop must be 10 feet wide and extend the entire length of 
each field in the unit and cannot be harvested or destroyed until the 
earlier of our inspection or 15 days after harvest is completed.
    11. Section 13(c)(1)(iv)--Require the insured to leave intact, and 
provide sufficient care for, representative samples 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.
    12. 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 provides for individual written 
agreements consistent with FCIC's usual policy.

List of Subjects in 7 CFR Parts 447 and 457

    Crop insurance, Popcorn, Popcorn crop insurance regulations.

Proposed Rule

    Accordingly, for the reasons set forth in the preamble, the Federal 
Crop Insurance Corporation hereby proposes to amend 7 CFR parts 447 and 
457, as follows:

PART 447--POPCORN CROP INSURANCE REGULATIONS

    1. The authority citation for 7 CFR part 447 is revised to read as 
follows:

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


[[Page 17105]]


    2. The subpart heading preceding Section 447.1 is revised to read 
as follows:

Subpart--Regulations for the 1987 Through the 1997 Crop Years

    3. Section 447.7 is amended by revising the introductory text of 
paragraph (d) to read as follows:


Sec. 447.7  The application and policy.

* * * * *
    (d) The application for the 1987 and succeeding crop years is found 
at subpart D of part 400-General Administrative Regulations (7 CFR 
400.37, 400.38). The provisions of the Popcorn Insurance Policy for the 
1987 through 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. Section 457.126 is added to read as follows:


Sec. 457.126  Popcorn crop insurance provisions.

    The Popcorn 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:

Popcorn Crop Insurance 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.
    Base contract price--The price stipulated on the contract 
executed between you and the processor before any adjustments for 
quality.
    Days--Calendar days.
    FSA--The Farm Service Agency, an agency of the United States 
Department of Agriculture or a successor agency.
    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 production guarantee.
    Good farming practices--The cultural practices generally in use 
in the county for the crop to make normal progress toward maturity 
and produce at least the yield used to determine the production 
guarantee, and are those required by the popcorn processor contract 
and recognized by the Cooperative State Research, Education and 
Extension Service as compatible with agronomic and weather 
conditions in the county.
    Harvest--Removing the grain or ear from the stalk either by hand 
or by machine.
    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 to produce at least the yield used to 
establish the irrigated production guarantee on the irrigated 
acreage planted to the insured crop.
    Merchantable popcorn--Popcorn that meets the provisions of the 
processor contract.
    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. Popcorn must initially be 
placed in rows far enough apart 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.
    Pound--Sixteen (16) ounces avoirdupois.
    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, marketing 
windows, condition of the field, and time to crop maturity, that 
replanting the insured crop will allow the crop to attain maturity 
prior to the calendar date for the end of the insurance period. It 
will not be considered practical to replant unless production from 
the replanted acreage can be delivered under the terms of the 
processor contract.
    Processor--Any business enterprise regularly engaged in 
processing popcorn for human consumption, that possesses all 
licenses, permits or approved inspections for processing popcorn 
required by the state in which it operates, and that possesses 
facilities, or has contractual access to such facilities, with 
enough equipment to accept and process contracted popcorn within a 
reasonable amount of time after harvest.
    Processor contract--A written agreement between the producer and 
a processor, containing at a minimum:
    (a) The producer's commitment to plant and grow popcorn, and to 
deliver the popcorn production to the processor;
    (b) The processor's commitment to purchase all the production 
stated in the contract;
    (c) A date, if specified on the processor's contract, by which 
the crop must be harvested to be accepted; and
    (d) A base contract price.
    Production guarantee (per acre)--The number of pounds determined 
by multiplying the approved APH yield per acre by the coverage level 
percentage you elect.
    Replanting--Performing the cultural practices necessary to 
replace the popcorn seed and then replacing the popcorn seed in the 
insured acreage with the expectation of growing a successful crop.
    Timely planted--Planted on or before the final planting date 
designated in the Special Provisions for the insured crop in the 
county.
    Written agreement--A written document that alters designated 
terms of a policy in accordance with section 15.
    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, if for each 
optional unit you meet all the conditions of this section or if a 
written agreement to such division exists.
    (b) Basic units may not be divided into optional units on any 
basis including, but not limited to, production practice, type, 
variety, and planting period, other than as described in this 
section.
    (c) Optional units will be available only if the processor 
contract stipulates the number of acres that are under contract and 
not a specific amount of production.
    (d) If you do not comply fully with these provisions, we will 
combine all optional units that are not in compliance with these 
provisions into the basic unit from which they were formed. We will 
combine the optional units at any time we discover that you have 
failed to comply with these provisions. If failure to comply with 
these provisions is determined to be inadvertent, and the optional 
units are combined into a basic unit, that portion of the premium 
paid for the purpose of electing optional units will be refunded to 
you for the units combined.
    (e) All optional units must be identified on the acreage report 
for each crop year.
    (f) 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 production 
guarantee;
    (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) For each crop year, records of marketed production or 
measurement of stored production from each optional unit must be 
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:
    (i) Optional Units by Section, Section Equivalent, or FSA Farm 
Serial Number: Optional units may be established if each optional 
unit is located in a separate legally identified section. In the 
absence of sections, we may consider parcels of land legally 
identified by other methods of measure including, but not limited to 
Spanish grants, railroad surveys, leagues, labors, or Virginia 
Military Lands, as the equivalent of sections

[[Page 17106]]

for unit purposes. In areas that have not been surveyed using the 
systems identified above, or another system approved by us, or in 
areas where such systems exist but boundaries are not readily 
discernable, each optional unit must be located in a separate farm 
identified by a single FSA Farm Serial Number.
    (ii) Optional Units on Acreage Including Both Irrigated and Non-
irrigated Practices: In addition to, or instead of, establishing 
optional units by section, section equivalent, or FSA Farm Serial 
Number, optional units may be based on irrigated acreage and non-
irrigated acreage if both are located in the same section, section 
equivalent, or FSA Farm Serial Number. To qualify as separate 
irrigated and non-irrigated optional units, the non-irrigated 
acreage may not continue into the irrigated acreage in the same rows 
or planting pattern. The irrigated acreage may not extend beyond the 
point at which the irrigation system can deliver the quantity of 
water needed to produce the yield on which the guarantee is based, 
except the corners of a field in which a center-pivot irrigation 
system is used will be considered as irrigated acreage if separate 
acceptable records of production from the corners are not provided. 
If the corners of a field in which a center-pivot irrigation system 
is used do not qualify as a separate non-irrigated optional unit, 
they will be a part of the unit containing the irrigated acreage. 
Non-irrigated acreage that is not a part of a field in which a 
center-pivot irrigation system is used may qualify as a separate 
optional unit provided that all requirements of this section are 
met.
    3. Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities.
    In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) 
of the Basic Provisions (Sec. 457.8), you may select only one price 
election for all the popcorn in the county insured under this policy 
unless the Special Provisions provide different price elections by 
type, in which case you may select one price election for each 
popcorn type designated in the Special Provisions. The price 
elections you choose for each type must have the same percentage 
relationship to the maximum price offered by us for each type. For 
example, if you choose 100 percent (100%) of the maximum price 
election for one type, you must also choose 100 percent (100%) of 
the maximum price election for all other types.
    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:

------------------------------------------------------------------------
                                                   Cancellation and     
              State and county                    termination dates     
------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,    Jan. 15.                   
 Wilson, Karnes, Goliad, Victoria, and                                  
 Jackson Counties Texas, and all Texas                                  
 counties lying south thereof.                                          
All other Texas counties and all other       Mar. 15.                   
 states.                                                                
------------------------------------------------------------------------

    6. Report of Acreage.
    In addition to the provisions of section 6 (Report of Acreage) 
of the Basic Provisions (Sec. 457.8), you must provide a copy of the 
processor contract to us on or before the acreage reporting date.
    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 popcorn in 
the county for which a premium rate is provided by the actuarial 
table:
    (1) In which you have a share;
    (2) That is planted for harvest as popcorn;
    (3) That is grown under, and in accordance with the requirements 
of, a processor contract executed before the acreage reporting date 
and is not excluded from the processor contract at anytime during 
the crop year; and
    (4) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop; or
    (ii) Planted into an established grass or legume.
    (b) You will be considered to have a share in the insured crop 
if, under the processor contract, you retain possession of the 
acreage on which the popcorn is grown, and the processor contract 
provides for delivery of popcorn under specified conditions and at a 
stipulated base contract price, and you retain an insurable interest 
in the crop.
    (c) A popcorn producer who is also a processor may be able to 
establish an insurable interest if the following requirements are 
met:
    (1) The processor must meet the requirements as defined in these 
crop provisions and have an insurable interest in the popcorn crop;
    (2) The Board of Directors or officers of the processor must 
have instituted a resolution that sets forth essentially the same 
terms as a processor contract. Such resolution will be considered a 
contract under the terms of the popcorn crop insurance policy; and
    (3) Our inspection of the processing facilities determines that 
they satisfy the definition of a processor contained in these crop 
provisions.
    8. Insurable Acreage.
    In addition to the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8), any acreage of the insured 
crop damaged before the final planting date, to the extent that the 
majority of growers in the area would normally not further care for 
the crop, must be replanted unless we agree that it is not practical 
to replant.
    9. Insurance Period.
    In lieu of the provisions contained in section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), regarding the end of 
the insurance period, insurance ceases on each unit or part of a 
unit at the earliest of:
    (a) The date the popcorn:
    (1) Was destroyed;
    (2) Should have been harvested;
    (3) Was abandoned; or
    (4) Was harvested;
    (b) The date you have harvested sufficient production to fulfill 
your processor contract;
    (c) Final adjustment of a loss; or
    (d) December 10 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;
    (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 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 do not 
insure against any loss of production due to:
    (1) Damage resulting from frost or freeze after the date 
designated by the Special Provisions;
    (2) Failure to follow the requirements contained in the 
processor contract; or
    (3) Damage that occurs to unharvested production after you 
deliver the production required by the processor contract.
    11. Replanting Payment.
    (a) In accordance with section 13 (Replanting Payment) of the 
Basic Provisions (Sec. 457.8), a replanting payment is allowed if 
the crop is damaged by an insurable cause of loss to the extent that 
the remaining stand will not produce at least 90 percent (90%) of 
the production guarantee for the acreage and it is practical to 
replant.
    (b) The maximum amount of the replanting payment per acre will 
be the lesser of 20 percent (20%) of the production guarantee or 150 
pounds, multiplied by your price election, multiplied by your 
insured share.
    (c) When popcorn is replanted using a practice that is 
uninsurable as an original planting, the liability for the unit will 
be reduced by the amount of the replanting payment. The premium 
amount will not be reduced.
    12. Duties In The Event of Damage or Loss.
    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 10 
feet wide and extend the entire length of each field in the unit. 
The samples must not be destroyed until the earlier of our 
inspection or 15 days after harvest of the balance of the unit is 
completed.

[[Page 17107]]

    13. Settlement of Claim.
    (a) We will determine your loss on a unit basis. In the event 
you are unable to provide acceptable production records:
    (1) For any optional unit, we will combine all optional units 
for which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled 
production to such units in proportion to our liability on the 
harvested acreage for each unit.
    (b) In the event of loss or damage covered by this policy, we 
will settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee, by type if applicable;
    (2) Multiplying each result of section 13(b)(1) by the 
respective price election, by type if applicable;
    (3) Totaling the results of section 13(b)(2);
    (4) Multiplying the total production to be counted of each type, 
if applicable, (see subsection 13(c)) by the respective price 
election;
    (5) Totaling the results of section 13(b)(4);
    (6) Subtracting the result of section 13(b)(5) from the result 
in section 13(b)(3); and
    (7) Multiplying the result of section 13(b)(6) by your share.
    (c) The total production to count (in pounds) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may 
be adjusted for quality deficiencies and excess moisture in 
accordance with section 13(d));
    (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) 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) All harvested production from the insurable acreage.
    (3) Any production from yellow or white dent corn will be 
counted as popcorn on a weight basis and any production harvested 
from plants growing in the insured crop may be counted as popcorn 
production on a weight basis.
    (4) Any ear production for which we cannot determine a shelling 
factor will be considered to have an 80 percent (80%) shelling 
factor.
    (d) Mature popcorn may be adjusted for excess moisture and 
quality deficiencies. If moisture adjustment is applicable, it will 
be made prior to any adjustment for quality.
    (1) Production will be reduced by 0.12 percent for each 0.1 
percentage point for moisture in excess of 15 percent (15%). We may 
obtain samples of the production to determine the moisture content.
    (2) Popcorn production will be eligible for quality adjustment 
if, due to an insurable cause of loss that occurs within the 
insurance period, it is not merchantable popcorn and is rejected by 
the processor. The production will be adjusted by:
    (i) Dividing the value per pound of the damaged popcorn by the 
base contract price per pound for undamaged popcorn; and
    (ii) Multiplying the result by the number of pounds of such 
popcorn.
    14. 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 
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 April 2, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-9008 Filed 4-8-97; 8:45 am]
BILLING CODE 3410-FA-P