[Federal Register Volume 62, Number 70 (Friday, April 11, 1997)]
[Proposed Rules]
[Pages 17758-17762]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9421]


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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. 70 / Friday, April 11, 1997 / 
Proposed Rules  

[[Page 17758]]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 401 and 457

RIN 0563-AA79


General Crop Insurance Regulations, Safflower Seed Crop Insurance 
Endorsement; and Common Crop Insurance Regulations, Safflower 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 safflower. 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 safflower 
seed crop endorsement in the Common Crop Insurance Policy for ease of 
use and consistency of terms, and to restrict the effect of the current 
Safflower Seed Crop Insurance 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 May 12, 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: Ron Nesheim, Insurance Management 
Specialist, Research and Development Division, Product Development 
Division, 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, 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; Safflower 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 safflower 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.
    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 insured 
must also annually certify to the previous

[[Page 17759]]

years production if adequate records are available to support the 
certification, or receive a transitional yield. The producer must 
maintain the production records to support the certified information 
for at least 3 years. This regulation does not alter those 
requirements. The amount of work required of the insurance companies 
delivering and servicing these policies will not increase significantly 
from the amount of work currently required. This rule does not have any 
greater or lesser impact on the producer. Therefore, this action is 
determined to be exempt from the provisions of the Regulatory 
Flexibility Act (5 U.S.C. 605), and no Regulatory Flexibility Analysis 
was prepared.

Federal Assistance Program

    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.

Executive Order No. 12372

    This program is not subject to the provisions of Executive Order 
No. 12372, which require intergovernmental consultation with State and 
local officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.

Executive Order No. 12988

    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 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 duplicate 
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 457.125, Safflower 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 safflower found at 7 CFR 401.123 
(Safflower Seed Crop Endorsement). FCIC also proposes to amend 7 CFR 
401.123 to limit its effect to the 1997 and prior crop years. FCIC will 
later publish a regulation to remove and reserve Sec. 401.123.
    This rule makes minor editorial and format changes to improve the 
Safflower Seed Crop Endorsement's compatibility with the Common Crop 
Insurance Policy. In addition, FCIC is proposing substantive changes in 
the provisions for insuring safflower as follows:
    1. The name of the crop provision was shortened from ``Safflower 
Seed'' to ``Safflower''. Safflower can be used in either a singular or 
plural context. Changing the name of the crop provisions from 
``safflower seed'' to ``safflower'' removes any confusion with policies 
that use the word ``seed'' in their title and insure the production of 
seed for planting in a future year. Also, the Late Planting Agreement 
Option, that is applicable to Safflower provisions found at 7 CFR 
401.123, no longer applies. Both Late Planting and Prevented Planting 
provisions for safflower will be proposed in a separate rule.
    2. Section 1--Add definitions for the terms ``days,'' ``FSA,'' 
``final planting date,'' ``good farming practices,'' ``interplanted,'' 
``irrigated practice,'' ``local market price,'' ``nurse crop (companion 
crop),'' ``planted acreage,'' ``pounds,'' ``practical to replant,'' 
``production guarantee (per acre),'' ``replanting,'' and ``written 
agreement'' for clarification. Also, amend the definition of ``value 
per pound of damaged safflower''. It now reads, ``The price per pound 
for damaged safflower offered by buyers in the area in which you 
normally market safflower''. A floor of 50 percent of the average 
market price was previously used for computing safflower losses because 
of limited market outlets. There are now sufficient markets available 
to provide a valid price for damaged safflower production, so the 50 
percent floor has been removed.
    3. Section 2--Expand unit division provisions to include insured 
reporting responsibilities to qualify for optional units. Section 
2(e)(4)(ii) clarifies unit division for non-irrigated corners of center 
pivot irrigation systems.
    4. Section 3--Clarify that an insured may select only one price 
election for all the safflower in the county as designated in the 
Special Provisions.
    5. Section 5--Change the cancellation and termination dates to be 
30 days earlier than in the previous safflower crop insurance 
endorsement for states other than California. This change is intended 
to reduce program vulnerabilities that may exist under current program 
dates by reducing the opportunity for insureds to anticipate below-
normal yields. The change also corresponds with the change to the sales 
closing date which has been moved back 30 days to comply with the 
Federal Crop Insurance Reform Act of 1994.
    6. Section 6--Prohibit interplanting safflower with another crop, 
or planting safflower into an established grass or legume, unless 
allowed by Special Provisions or by written agreement.
    7. Section 9--Clarify that any losses caused by insufficient or 
improper application of pest control or disease control measures are 
not an insured cause of loss.
    8. Section 10--Allow producers to receive a replant payment. This 
is consistent with many other annual crops converted to the Common 
Policy and provides additional incentives to insured to make every 
effort to produce a crop.
    9. Section 11--The representative samples of unharvested safflower 
must not be harvested or destroyed until the earlier of inspection or 
15 days after harvest of the balance of the unit is completed.
    10. Section 12(a)--Clarify determining loss on a unit basis and 
requirements of production records.
    11. Section 12(c)--Clarify how to determine total production to 
count from all insurable acreage.
    12. Section 12(d)--Clarify when production qualifies for quality 
adjustment by adding a provision that clarifies when quality will be a 
factor in determining the loss.
    13. Section 12(d)(4)--Remove the language that limited quality 
adjustment to not less than 50 percent of the market price.
    14. Section 13--Add provisions for providing insurance coverage by 
written agreement. FCIC has a long-standing policy of permitting 
certain modifications of the insurance contract by written agreement 
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.

List of Subjects in 7 CFR Parts 401 and 457

    Crop insurance, Safflower, Safflower seed crop endorsement.

Proposed Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance

[[Page 17760]]

Corporation hereby proposes to revise 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).

    Section 401.8 is amended by revising the introductory text of 
paragraph (d) to read as follows:


Sec. 401.8  The application and policy.

* * * * *
    (d) The application for the 1988 and succeeding crop years is found 
at subpart D of part 400, General Administrative Regulations (7 CFR 
400.37 and 400.38). The provisions of the Safflower Insurance Policy 
for the 1988 through 1997 crop years are as follows:


Sec. 401.123  [Amended]

    3. In Sec. 401.123 the introductory paragraph is revised to read as 
follows: The provisions of the Safflower Seed Crop Insurance 
Endorsement for the 1988 through the 1997 crop year.
* * * * *

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(1), 1506(p).

    5. Section 457.125 is added to read as follows:


Sec. 457.125  Safflower crop insurance provisions.

    The Safflower 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:

SAFFLOWER 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

    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 recognized by the Cooperative State 
Research, Education, and Extension Service as compatible with 
agronomic and weather conditions in the county.
    Harvest--Collecting the safflower seed by combining or 
threshing.
    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.
    Local market price--The cash price per pound for undamaged 
safflower (test weight of 35 pounds per bushel or higher and seed 
damage less than 25 percent) offered by buyers in the area in which 
you normally market the insured crop.
    Nurse crop (companion crop)--A crop planted into the same 
acreage as another crop, that is intended to be harvested 
separately, and which is planted to improve growing conditions for 
the crop with which it is grown.
    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. Safflower 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.
    Pound--Sixteen 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, condition of the 
field, time to crop maturity, and marketing window, 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 after the end of the late planting 
period unless replanting is generally occurring in the area.
    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 safflower seed and then replacing the safflower seed in 
the insured acreage with the expectation of growing a successful 
crop.
    Value per pound of damaged safflower--The cash price per pound 
for damaged safflower (test weight below 35 pounds per bushel or 
seed damage in excess of 25 percent) offered by buyers in the area 
in which you normally market safflower.
    Written agreement--A written document that alters designated 
terms of this policy in accordance with section 13.

2. Unit Division

    (a) Unless limited by the Special Provisions, a unit as defined 
in section 1 (Definitions) of the Basic Provisions (Sec. 457.8), a 
basic unit may be divided into optional units if, for each optional 
unit you meet all the conditions of this section, or if a written 
agreement to such division exists.
    (b) Basic units may not be divided into optional units on any 
basis other than as described in this section.
    (c) If you do not comply fully with these provisions, we will 
combine all optional units that are not in compliance with these 
provisions into the basic unit from which they were formed. We will 
combine the optional units at any time we discover that you have 
failed to comply with these provisions. If failure to comply with 
these provisions is determined to be inadvertent, and the optional 
units are combined into a basic unit, that portion of the 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 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 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

[[Page 17761]]

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 (in those 
counties where ``non-irrigated'' practice is allowed in the 
actuarial table) 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 other 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 safflower 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 safflower 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 of the maximum price 
election for one type, you must also choose 100 percent 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 August 31 
preceding the cancellation date for California, and December 31 
preceding the cancellation date for all other states.

5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation 
and termination dates are:

------------------------------------------------------------------------
                                           Cancellation and termination 
                  State                                dates            
------------------------------------------------------------------------
California..............................  December 31.                  
All other states........................  March 15.                     
------------------------------------------------------------------------

6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all safflower in 
the county for which a premium rate is provided by the actuarial 
table:
    (a) In which you have a share;
    (b) That is planted for harvest as safflower;
    (c) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Interplanted with another crop; or
    (2) Planted into an established grass or legume.

7. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8), we will not insure:
    (a) Safflower planted on land on which safflower, sunflower 
seed, any variety of dry beans, soybeans, mustard, rapeseed, or 
lentils were grown the preceding crop year, unless other rotation 
requirements are specified in the Special Provisions or we agree in 
writing to insure such acreage; or
    (b) Any acreage of safflower damaged before the final planting 
date, to the extent that the majority of producers in the area would 
normally not further care for the crop, unless the crop is replanted 
or we agree that it is not practical to replant.

8. Insurance Period

    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 October 31 immediately following 
planting.

9. Causes of Loss

    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:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or 
improper application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if caused by an 
insured cause of loss that occurs during the insurance period.

10. 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 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 of the production guarantee or 160 
pounds, multiplied by your price election, multiplied by your 
insured share.
    (c) When safflower is replanted using a practice that is 
uninsurable as an original planting, the liability on the unit will 
be reduced by the amount of the replanting payment. The premium 
amount will not be reduced.

11. 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 harvested or destroyed until the earlier of 
our inspection or 15 days after harvest of the balance of the unit 
is completed.

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 the unit.
    (b) In the event of loss or damage covered by this policy, we 
will settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying each result in section 12(b)(1) by the 
respective price election;
    (3) Totaling the results in section 12(b)(2);
    (4) Multiplying the total production to be counted of each type 
if applicable, (see section 12(c)) by the respective price election;
    (5) Totaling the results in section 12(b)(4);
    (6) Subtracting the total from the total in section 12(b)(5) 
from the total in section 12(b)(3); and
    (7) Multiplying the result in section 12(b)(6) by your share.
    (c) The total production to count (in 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) 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) Unharvested production (mature unharvested production may 
be adjusted for quality deficiencies and excess moisture in 
accordance with section 12(d)); 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) 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

[[Page 17762]]

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.
    (d) Mature safflower 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 of moisture in excess of 8 percent. We may obtain 
samples of the production to determine the moisture content.
    (2) Production will be eligible for quality adjustment if such 
production:
    (i) Has a test weight below 35 pounds per bushel;
    (ii) Has seed damage in excess of 25 percent; or
    (iii) Contains substances or conditions that are identified by 
the Food and Drug Administration or other public health 
organizations of the United States as being injurious to human or 
animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these crop 
provisions and that occurred within the insurance period;
    (ii) The deficiencies, substances, or conditions result in a net 
price for damaged production that is less than the local market 
price;
    (iii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us 
or by a disinterested third party approved by us; and
    (iv) The samples are analyzed by a grader licensed to grade 
safflower under the authority of the Agricultural Marketing Act or 
the United States Warehouse Act with regard to deficiencies in 
quality, or by a laboratory approved by us with regard to substances 
or conditions injurious to human or animal health. Test weight for 
quality adjustment purposes may be determined by our loss adjuster.
    (4) Safflower production that is eligible for quality 
adjustment, as specified in sections 12(d)(2) and (3), will be 
reduced as follows:
    (i) In accordance with the qualifying adjustment factor 
provisions contained in the Special Provisions; or
    (ii) If quality adjustment factor provisions are not contained 
in the Special Provisions:
    (A) Determine the value per pound of damaged safflower and the 
local market price of undamaged safflower on the earlier of the date 
such quality adjusted production is sold or the date of final 
inspection for the unit. Discounts used to establish the net price 
of the damaged production will be limited to those which are usual, 
customary, and reasonable. The price will not be reduced for:
    (1) Moisture content;
    (2) Damage due to uninsured causes; or
    (3) Drying, handling, processing, or any other costs associated 
with normal harvesting, handling, and marketing of safflower. (We 
may obtain prices from any buyer of our choice. If we obtain prices 
from one or more buyers located outside your local market area, we 
will reduce such prices by the additional costs required to deliver 
the production to those buyers.)
    (B) Divide the price per pound of damaged safflower by the local 
market price per pound of undamaged safflower to determine the 
quality adjustment factor; and
    (C) Multiply the adjustment factor by the number of pounds of 
the damaged production remaining after any reduction due to 
excessive moisture to determine the net production to count.
    (e) Any production harvested from other plants growing in the 
insured crop may be counted as production of the insured crop on a 
weight basis.

13. 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 
13(e);
    (b) The application for a written agreement must contain all 
variable terms of the contract between you and us that will be in 
effect if the written agreement is not approved;
    (c) If approved by us, 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 4, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-9421 Filed 4-10-97; 8:45 am]
BILLING CODE 3410-FA-P