[Federal Register Volume 62, Number 78 (Wednesday, April 23, 1997)]
[Proposed Rules]
[Pages 19691-19701]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10449]


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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. 78 / Wednesday, April 23, 1997 / 
Proposed Rules  

[[Page 19691]]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 422 and 457


Potato Crop Insurance Regulations and Common Crop Insurance 
Regulations

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 potatoes. 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 potato 
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 potato crop insurance regulations 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 23, 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: Rob Coultis, Insurance Management 
Specialist, 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, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    The information collection requirements contained in the potato 
crop insurance regulations were previously approved by OMB pursuant to 
the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB 
control number 0563-0003 through September 30, 1998.
    The amendments set forth in this proposed rule, however, revise the 
information required to be collected when a producer elects the new 
Northern Potato Crop Insurance Storage Endorsement. Producers must 
indicate an additional option code on either the application or 
contract change form to select this endorsement, an insignificant 
modification for the purposes of paperwork reduction. Other amendments 
set forth in this rule not contain additional information collections 
that require clearance by 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; Northern Potato Crop Insurance Provisions; 
Central and Southern Potato Crop Insurance Provisions; Northern Potato 
Quality Endorsement Crop Insurance Provisions; Northern Processing 
Potato Quality Endorsement Crop Insurance Provisions; Certified Seed 
Potato Endorsement Crop Insurance Provisions; and Northern Potato 
Storage Endorsement 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 potatoes 
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 on crop insurance programs 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.
    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.

[[Page 19692]]

Executive Order No. 12612

    It has been determined under section 6(a) of Executive Order No. 
12612, Federalism, that this rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment. The 
provisions contained in this rule will not have a substantial direct 
effect on States or their political subdivisions, or on the 
distribution of power and responsibilities among the various levels of 
government.

Regulatory Flexibility Act

    This regulation will not have a significant impact on a substantial 
number of small entities. New provisions included in this rule will not 
impact small entities to a greater extent than large entities. Under 
the current regulations, a producer is required to complete an 
application and acreage report. If the crop is damaged or destroyed, 
the insured is required to give notice of loss and provide the 
necessary information to complete a claim for indemnity.
    The insured must also annually certify to the previous years 
production 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. 12988

    This proposed rule has been reviewed under the provisions of 
Executive Order 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 duplicative 
regulations and improve those that remain in force.

Background

    FCIC proposes to add to the Common Crop Insurance Regulations (7 
CFR part 457), new sections: 7 CFR Sec. 457.142, Northern Potato Crop 
Insurance Provisions; 7 CFR Sec. 457.143, Northern Potato Quality 
Endorsement Crop Insurance Provisions; 7 CFR Sec. 457.144, Northern 
Processing Potato Quality Endorsement Crop Insurance Provisions; 7 CFR 
Sec. 457.145, Certified Seed Potato Endorsement Crop Insurance 
Provisions; 7 CFR Sec. 457.146, Northern Potato Storage Endorsement 
Crop Insurance Provisions; and 7 CFR Sec. 457.147, Central and Southern 
Potato 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 potatoes found at 7 
CFR part 422 (Potato Crop Insurance Regulations). FCIC also proposes to 
amend 7 CFR part 422 to limit its effect to the 1997 and prior crop 
years.
    This action will revise the potato crop insurance regulations by 
providing separate crop provisions for areas in which it is common to 
store potatoes after harvest (northern areas) and areas in which 
storage of production is less common (central and southern areas). It 
also will make available a new endorsement (Northern Potato Storage 
Endorsement) to provide coverage for damage that occurs within the 
insurance period but does not become evident until a later time. This 
rule also makes minor editorial and format changes to improve the 
Potato Crop Insurance Regulations' compatibility with the Common Crop 
Insurance Policy. In addition, FCIC is proposing substantive changes in 
the provisions for insuring potatoes as follows.

Northern Potato Crop Provisions

    1. Remove the definition of ``county'' to default to the definition 
contained in the Basic Provisions (Sec. 457.8). The current definition 
includes land identified by an FSA farm serial number for the county 
that is physically located in another county the new definition does 
not. This change will require land in another county to be insured 
using the actuarial materials for the county where the land is located 
and make this provision consistent with most other crops. Add 
definitions for ``certified seed,'' ``days,'' ``discard,'' ``FSA,'' 
``final planting date,'' ``good farming practices,'' ``grade 
inspection,'' ``hundredweight,'' ``interplanted,'' ``irrigated 
practice,'' ``local market,'' ``planted acreage,'' ``practical to 
replant,'' ``processor contract,'' ``production guarantee (per acre),'' 
``replanting,'' ``timely planted,'' and ``written agreement'' for 
clarification.
    2. Section 2--Clarify the guidelines under which basic units may be 
divided into optional units to be consistent with most other crops.
    3. Section 3(a)--Clarify that an insured may select only one price 
election for all potatoes insured in a county, unless the Special 
Provisions provide for separate price elections by type, in which case 
the insured may select one price election for each type designated in 
the Special Provisions.
    4. Sections 3(b) and (c)--Reduce the price used to determine the 
amount of an indemnity for unharvested acreage to 80 percent of the 
price election elected by the insured. This will take into account 
those costs not incurred by the insured when the crop is not harvested.
    5. Section 4--Change the contract change date to November 30 for 
all counties to maintain an adequate time period between this date and 
the revised cancellation dates (see item 6 below).
    6. Section 5--Change the cancellation and termination dates from 
April 15 to March 15. These changes are made to standardize the 
cancellation and termination date with the sales closing date. The 
sales closing dates were previously amended to comply with the 
requirement of the Federal Crop Insurance Reform Act of 1994 that 
spring planted crop sales closing dates be moved 30 days earlier.
    7. Section 8(b)--Provide that any acreage damaged prior to the 
final planting date, to the extent that the majority of growers in the 
area would not normally further care for the crop, must be replanted 
unless the insurer agrees that it is not practical to replant. This 
makes these provisions consistent with most other crops.

[[Page 19693]]

    8. Section 9--The end of the insurance period is changed from:
    (a) October 31 to October 15 in Nevada;
    (b) October 31 for Russet Burbanks and October 15 for all other 
types to a single date of October 20 in Maine; and
    (c) October 15 to October 31 in Ohio; Rhode Island; Humboldt, 
Modoc, and Siskiyou Counties, California; and for potato types other 
than Russets in Idaho, Oregon, and Washington.
    These changes were made to more accurately reflect the normal 
period in which potatoes are grown in the affected states or counties.
    9. Section 12(d)(1)(iii)--Increases the amount of production to 
count when production is harvested prior to full maturity. The 
production to count will be increased by 2% of harvested production per 
day for every day the potatoes were harvested prior to full maturity. 
This percentage is based on University studies of average bulking 
factors. This adjustment will not be made if production is harvested 
early to prevent a loss in quantity or quality of production due to 
disease. These changes will give consistency to the procedure for 
determining production lost to early harvest.
    10. Sections 12 (e) and (f)--Incorporate quality adjustment for 
production damaged by freeze or other causes that result in soft rot, 
wet breakdown, or other tuber rot condition into the crop provisions. 
Previously, such quality adjustments were optional.
    11. Section 13--Provides insurance coverage by written agreement in 
certain instances. 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 and duration of written agreements.

Central and Southern Potato Crop Provisions

    1. Remove the definition of ``county'' to default to the definition 
contained in the Basic Provisions (Sec. 457.8). The current definition 
includes land identified by an FSA farm serial number for the county 
that is physically located in another county the new definition does 
not. This change will require land in another county to be insured 
using the actuarial materials for the county where the land is located 
and make this provision consistent with most other crops. Add 
definitions for ``certified seed,'' ``days,'' ``discard,'' ``FSA,'' 
``final planting date,'' ``good farming practices,'' ``grade 
inspection,'' ``hundredweight,'' ``interplanted,'' ``irrigated 
practice,'' ``marketable lot,'' ``planted acreage,'' ``planting 
period,'' ``practical to replant,'' ``production guarantee (per 
acre),'' ``replanting,'' ``timely planted,'' and ``written agreement'' 
for clarification.
    2. Clarify the guidelines under which basic units may be divided 
into optional units, including for planting periods if allowed by the 
Special Provisions.
    3. Section 3(a)--Clarify that an insured may select only one price 
election for all potatoes insured in a county, unless the Special 
Provisions provide for separate price elections by type, in which case, 
the insured may select one price election for each type designated in 
the Special Provisions.
    4. Sections 3 (b) and (c)--Reduce the price used to determine the 
amount of an indemnity for unharvested acreage to 80 percent of the 
price election elected by the insured. This will take into account 
those costs not incurred by the insured when the crop is not harvested.
    5. Section 4--The contract change date has been changed to November 
30 in Oklahoma and Haskell County, Texas, and in all counties with a 
March 15 cancellation date, to maintain an adequate time period between 
these dates and the revised cancellation dates (see item 6 below).
    6. Section 5--The cancellation and termination dates have been 
changed to February 28 in Oklahoma and Haskell County, Texas to more 
accurately reflect the period in which potatoes are grown in these 
locations. The cancellation and termination dates have been changed to 
March 15 for those counties that currently have an April 15 date. These 
changes are made to standardize the cancellation and termination date 
with the sales closing date. The sales closing dates were previously 
amended to comply with the requirement of the Federal Crop Insurance 
Reform Act of 1994 that spring planted crop sales closing dates be 
moved 30 days earlier.
    7. Section 8(b)--Provides that any acreage damaged prior to the 
final planting date (on or before the last day of the applicable 
planting period in counties for which the Special Provisions designate 
separate planting periods), to the extent that the majority of growers 
in the area would not normally further care for the crop, must be 
replanted unless the insurer agrees that it is not practical to 
replant. This makes this provision consistent with most other crops.
    8. Section 12(d)(1)(iii)--Increases the amount of production to 
count when production is harvested prior to full maturity. This 
adjustment will not be made if production is harvested early to prevent 
a loss in quantity or quality of production due to disease.
    9. Section 13--Provides insurance coverage by written agreement in 
certain instances. 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.

Northern Potato Quality Endorsement

    1. Section 3(b)--Exclude coverage for acreage grown for the 
production of seed. Such acreage often is grown under management 
practices designed to produce potatoes smaller than those required by 
grading standards for fresh or processing use. These management 
practices are incompatible with the protection provided under the 
Potato Quality Endorsement against under-sized production.
    2. Section 4(a)--Provide additional quality adjustment for 
production with internal defects that cannot be sorted from undamaged 
production. Current provisions do not provide adequate, or in some 
cases, any adjustment when the entire crop is not marketable due to 
internal defects and has to be destroyed.
    3. Section 5--Clarify that production which is harvested or 
appraised prior to reaching full maturity that does not grade U.S. No. 
2 solely as a result of size will be considered to grade U.S. No. 2.

Northern Processing Potato Quality Endorsement

    1. The Processing Quality Endorsement has been rewritten so that it 
will attach to and amend the Quality Endorsement. This allows removal 
of duplicative provisions since the primary difference between the two 
endorsements is the coverage provided for low specific gravity and dark 
fry color in the processing endorsement. The combination will also 
result in quality protection for all of a producer's acreage, not just 
the acreage covered by the processor contract.
    2. Section 6(a)(1)(i)--Change the value of undamaged production 
from the highest price election to the base contract price in order to 
more accurately reflect lost value.

Certified Seed Potato Endorsement

    1. Section 4--Limit the insurable certified seed acreage to not 
greater than 125% of the average number of acres entered into the state 
certification program in the three previous years, unless a written 
agreement allows more acreage to be insured. This change is

[[Page 19694]]

made to reduce vulnerability to program abuse caused by persons 
declaring large acreages insured for seed but intending to produce 
potatoes for human consumption.
    2. Rotation requirements and standards for parent seed have been 
removed from the endorsement. These requirements are established and 
administered by individual state certification authorities and vary by 
state.

List of Subjects in 7 CFR Parts 422 and 457

    Crop insurance, Potato crop insurance regulations, Potatoes.

Proposed Rule

    Accordingly, for the reasons set forth in the preamble, the Federal 
Crop Insurance Corporation hereby proposes to amend 7 CFR parts 422 and 
457 as follows:

PART 422--POTATO CROP INSURANCE REGULATIONS

    1. The authority citation for 7 CFR part 422 is revised to read as 
follows:

    Authority: 7 U.S.C. 1506(1), 1506(p).

    2. The subpart heading preceding Sec. 422.1 is revised to read as 
follows:

Subpart--Regulations for the 1986 through 1997 Crop Years (1987 
through 1997 Crop Years in Certain California Counties and Florida)

    3. Section 422.7 is amended by revising the introductory text of 
paragraph (d) to read as follows:


Sec. 422.7  The application and policy.

* * * * *
    (d) The application for the 1986 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 Potato Crop Insurance Policy for 
the 1986 through 1997 crop years (1987 through 1997 crop years in 
certain California counties and Florida) 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 457.142 is added to read as follows:


Sec. 457.142  Northern Potato Crop Insurance Provisions.

    The Northern Potato 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:

NORTHERN POTATO CROP PROVISIONS

    These provisions will be applicable in: Alaska; Humboldt, Modoc, 
and Siskiyou Counties, California; Colorado; Connecticut; Idaho; 
Indiana; Iowa; Maine; Massachusetts; Michigan; Minnesota; Montana; 
Nebraska; Nevada; New York; North Dakota; Ohio; Oregon; 
Pennsylvania; Rhode Island; South Dakota; Utah; Washington; 
Wisconsin; and Wyoming.
    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

    Certified seed--Potatoes for planting a potato crop in a 
subsequent crop year that have been found to meet the standards of 
the public agency that is responsible for the seed certification 
process within the state in which they were grown.
    Days--Calendar days.
    Discard--Disposal of production by you, or a person acting for 
you, without receiving any value for it.
    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.
    Grade inspection--An inspection prior to the sale, storage, or 
disposal of any lot of potatoes, or any portion of a lot, in which 
the potatoes are evaluated and quality (grade) determinations are 
made by us, a laboratory approved by us, or a potato grader licensed 
or certified by the applicable State or the United States Department 
of Agriculture.
    Harvest--The digging of potatoes.
    Hundredweight--One hundred (100) pounds avoirdupois.
    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--The area in which the insured potatoes are 
normally sold.
    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. Acreage planted in any 
other manner will not be insurable unless otherwise provided by the 
Special Provisions or by written agreement.
    Practical to replant--In lieu of the definition of ``Practical 
to replant'' contained in section 1 of the Basic Provisions 
(Sec. 457.8), practical to replant is defined as our determination, 
after loss or damage to the insured crop, based on factors, 
including but not limited to moisture availability, condition of the 
field, marketing windows, and time to crop maturity, that replanting 
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.
    Processor contract--A written agreement between the producer and 
a processor, containing at a minimum:
    (a) The producer's commitment to plant and grow potatoes, and to 
deliver the potato production to the processor;
    (b) The processor's commitment to purchase the production stated 
in the contract; and
    (c) A price that will be paid to the producer for the production 
stated in the contract.
    Production guarantee (per acre)--The number of hundredweights 
determined by multiplying the approved actual production history 
yield per acre by the coverage level percentage you elect.
    Replanting--Performing the cultural practices necessary to 
prepare the land to replace the potato seed and then replacing the 
potato 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 this policy in accordance with section 13 of these Crop 
Provisions.

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) 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) If you do not comply fully with these provisions, we will 
combine all optional

[[Page 19695]]

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 a crop year must be 
identified on the acreage report for that crop year.
    (e) The following requirements must be met for each optional 
unit:
    (1) You must have provided records by the production reporting 
date, 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) 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:
    (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 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 or 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. 
However, 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

    (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 potatoes 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 potato 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.
    (b) If any acreage of the insured crop is not harvested, the 
price used to determine whether or not an indemnity is owed for such 
acreage will be 80 percent of your price election.
    (c) Any acreage of potatoes damaged to the extent that the 
majority of producers in the area would not normally further care 
for the potatoes will be deemed to have been destroyed even though 
you may continue to care for it. The price election for unharvested 
acreage will apply to such acreage.

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. Annual Premium

    In lieu of the premium computation method contained in section 7 
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual 
premium amount is computed by multiplying the production guarantee 
by the price election for harvested acreage, the premium rate, the 
insured acreage, your share at the time of planting, and any 
applicable premium adjustment factors contained in the Actuarial 
Table.

7. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the potatoes 
in the county for which a premium rate is provided by the Actuarial 
Table:
    (a) In which you have a share;
    (b) Planted with certified seed unless otherwise permitted by 
the Special Provisions;
    (c) Planted for harvest as certified seed stock, or for human 
consumption, unless specified otherwise in the Special Provisions;
    (d) That are 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.

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 
that:
    (a) Does not meet the rotation requirements shown in the Special 
Provisions; or
    (b) Is damaged before the final planting date to the extent that 
the majority of producers in the area would normally not further 
care for it, unless it is replanted or we agree that it is not 
practical to replant.

9. 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 the date immediately following 
planting as follows (exceptions for specific counties, varieties or 
types as may be contained in the Special Provisions):
    (a) October 1 in Alaska;
    (b) October 10 in Nebraska and Wyoming;
    (c) October 15 in Colorado; Indiana; Iowa; Michigan; Minnesota; 
Montana; Nevada; North Dakota; South Dakota; Utah; and Wisconsin;
    (d) October 20 in Maine; and
    (e) October 31 in Humboldt, Modoc, and Siskiyou Counties, 
California; Connecticut; Idaho; Massachusetts; New York; Ohio; 
Oregon; Pennsylvania; Rhode Island; and Washington.

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 within 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 peril listed in section 10(a) (1) through (7) that occurs 
during the insurance period.
    (b) In addition to the causes of loss not insured against as 
listed in section 12 of the Basic Provisions (Sec. 457.8), we will 
not insure against any loss of production due to:
    (1) Damage that occurs or becomes evident after the end of the 
insurance period, including, but not limited to, damage that occurs 
or becomes evident in storage; or
    (2) Causes, such as freeze after certain dates, that are limited 
by the Special Provisions.

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

[[Page 19696]]

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.
    (b) We must be given the opportunity to perform a grade 
inspection on any unit for which you have given notice of damage.

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 units, we will combine all optional units 
for which acceptable production records were not provided; or
    (2) For any basic units, we will allocate any commingled 
production to such units in proportion to our liability on the 
harvested acreage for the units.
    (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 of section 12(b)(2);
    (4) Multiplying the total production to be counted of each type, 
if applicable, (see section 12(d)) by the respective price election;
    (5) Totaling the results of section 12(b)(4);
    (6) Subtracting the results of section 12(b)(5) from the result 
in section 12(b)(3); and
    (7) Multiplying the result of section 12(b)(6) by your share.
    (c) The extent of any loss must be determined no later than the 
time the potatoes are placed in storage, if the production is stored 
prior to sale, or the date they are delivered to a buyer, 
wholesaler, packer, broker, or other handler if production is not 
stored.
    (d) The total production to count (in hundredweight) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is put to another use without our consent;
    (C) That is damaged solely by uninsured causes;
    (D) From which any production is disposed of without a grade 
inspection; or
    (E) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Production lost due to harvest prior to full maturity. 
Production to count from such acreage will be determined by 
increasing the amount of harvested production by 2 percent per day 
for each day the potatoes were harvested prior to the date the 
potatoes would have reached full maturity. The date the potatoes 
would have reached full maturity will be determined using the normal 
number of days to full maturity for the variety, growing area, and 
planting date. This adjustment will not be made if the potatoes are 
damaged by an insurable cause of loss, and leaving the crop in the 
field would either reduce production or decrease quality;
    (iv) Unharvested production (unharvested production may be 
adjusted in accordance with sections 12 (e), (f), and (g)); and
    (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 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 stage 
guarantee will be limited as specified in section 3 even if the 
representative samples are harvested; and 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 (the 
amount of production prior to the sorting or discarding of any 
production).
    (e) Potato production is eligible for quality adjustment if:
    (1) The potatoes have freeze damage, soft rot or wet breakdown, 
or other tuber rot conditions as defined in the United States 
Standards for Grades of Potatoes;
    (2) Freeze damage, soft rot, wet breakdown, or other tuber rot 
condition is present at or prior to the end of the insurance period;
    (3) The amount (percentage) of damage is determined no later 
than the end of the insurance period; and
    (4) A grade inspection is performed.
    (f) Potato production that is eligible for quality adjustment, 
as specified in section 12(e), with 5 percent damage (by weight) or 
less will be adjusted 0.1 percent for each 0.1 percent of damage 
through 5.0 percent.
    (g) Potato production that is eligible for quality adjustment, 
as specified in section 12(e), with 5.1 percent damage (by weight) 
or more will be adjusted as follows:
    (1) For potatoes damaged by freeze, production will be reduced 
0.1 percent for each 0.1 percent of damage through 5.0 percent, 0.5 
percent for each 0.1 percent of damage in from 5.1 through 15.0 
percent, and by 1.0 percent for each 0.1 percent of damage from 15.1 
through 19.5 percent.
    (2) For potatoes that have soft rot, wet breakdown or other 
tuber rot conditions due to late blight or any other insurable cause 
(except freeze), production to count will be determined as follows:
    (i) For potatoes sold within 7 days of harvest, by dividing the 
price received per hundredweight by the highest price election 
designated in the Special Provisions for the insured potato type, 
and multiplying the result (not to exceed 1.0) by the number of 
hundredweight of sold production. If production is sold for a price 
lower than the value appropriate and representative of the local 
market, we will determine the value of the production based on the 
price you could have received in the local market;
    (ii) For harvested potatoes discarded within 7 days of harvest 
and appraised unharvested production that could:
    (A) Not have been sold, the production to count will be zero; or
    (B) Have been sold, the production will be reduced as follows 
(all percentage points of damage will be rounded to the nearest 0.1 
percent):
    (1) 0.1 percent for each 0.1 percent of damage through 5.0 
percent;
    (2) 0.5 percent for each 0.1 percent of damage from 5.1 percent 
through 6.0 percent;
    (3) 1.0 percent for each 0.1 percent of damage from 6.1 through 
8.0 percent;
    (4) 2.0 percent for each 0.1 percent of damage from 8.1 through 
9.0 percent; and
    (5) 2.5 percent for each 0.1 percent of damage from 9.1 through 
11.0 percent.
    (iii) For potatoes remaining in storage 8 or more days after 
harvest, adjustment will be made in accordance section 
12(g)(2)(ii)(B).

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, 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 our 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.

    6. Section 457.147 is added to read as follows:


Sec. 457.147  Central and Southern Potato Crop Insurance Provisions.

    The Central and Southern Potato Crop Insurance Provisions for the 
1998 and succeeding crop years are as follows:

    FCIC policies:

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

    Reinsured policies:

[[Page 19697]]

(Appropriate title for insurance provider)

    Both FCIC and reinsured policies:

CENTRAL AND SOUTHERN POTATO CROP PROVISIONS

    These provisions will be applicable in: Alabama; all California 
counties except Humboldt, Modoc and Siskiyou; Delaware; Florida; 
Maryland; Missouri; New Jersey; New Mexico; North Carolina; 
Oklahoma; Texas; and Virginia.
    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

    Certified seed--Potatoes for planting a potato crop in a 
subsequent crop year that have been found to meet the standards of 
the public agency that is responsible for the seed certification 
process within the State in which they were grown.
    Days--Calendar days.
    Discard--Disposal of production by you, or a person acting for 
you, without receiving any value for it.
    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.
    Grade inspection--An inspection prior to the sale, storage, or 
disposal of any lot of potatoes, or any portion of a lot, in which 
the potatoes are evaluated and quality (grade) determinations are 
made by us, a laboratory approved by us, or a potato grader licensed 
or certified by the applicable State or the United States Department 
of Agriculture.
    Harvest--The digging of potatoes.
    Hundredweight--One hundred (100) pounds avoirdupois.
    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.
    Marketable lot--A quantity of production that can be separated 
from other quantities of production by grade characteristics, load, 
location or another distinctive feature.
    Planted acreage--Land in which seed has been placed in the soil 
by a machine appropriate for the insured crop and planting method, 
at the correct depth, into a seedbed which has been properly 
prepared for the planting method and production practice. Acreage 
planted in any other manner will not be insurable unless otherwise 
provided by the Special Provisions or by written agreement.
    Planting period--The period of time between the calendar dates 
designated in the Special Provisions for the planting of spring-
planted, summer-planted, fall-planted, or winter-planted potatoes.
    Practical to replant--In lieu of the definition of ``Practical 
to replant'' contained in section one of the Basic Provisions 
(Sec. 457.8), practical to replant is defined as our determination, 
after loss or damage to the insured crop, based on factors, 
including but not limited to moisture availability, condition of the 
field, marketing windows, and time to crop maturity, that replanting 
to the insured crop will allow the crop to attain maturity prior to 
the calendar date for the end of the insurance period. It will not 
be considered practical to replant after the end of the late 
planting period, or the end of the planting period in which initial 
planting took place in counties for which the Special Provisions 
designates separate planting periods, unless replanting is generally 
occurring in the area.
    Production guarantee (per acre)--The number of hundredweights 
determined by multiplying the approved actual production history 
yield per acre by the coverage level percentage you elect.
    Replanting--Performing the cultural practices necessary to 
prepare the land to replace the potato seed and then replacing the 
potato 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 this policy in accordance with section 13 of these crop 
provisions.

2. Unit Division

    (a) Unless limited by the Special Provisions, in addition to the 
provisions defining a unit in section 1 (Definitions) of the Basic 
Provisions (Sec. 457.8), (basic unit) each planting in an area where 
the Special Provisions allow separate planting periods will be 
considered to be a separate basic unit.
    (b) Basic units 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.
    (c) Basic units may not be divided into optional units on any 
basis including, but not limited to, production practice, type, and 
variety, other than as described under this section.
    (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 additional 
premium paid for the optional units that have been combined will be 
refunded to you.
    (e) All optional units you selected for a crop year must be 
identified on the acreage report for that crop year.
    (f) The following requirements must be met for each optional 
unit:
    (1) You must have provided records by the production reporting 
date, 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) 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 
after 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 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 or 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 your 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. 
However, 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.

[[Page 19698]]

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 potatoes 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 potato 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.
    (b) If any acreage of the insured crop is not harvested, the 
price used to determine whether or not an indemnity is owed for such 
acreage will be 80 percent of your price election.
    (c) Any acreage of potatoes damaged to the extent that the 
majority of producers in the area would not normally further care 
for the potatoes will be deemed to have been destroyed even though 
you may continue to care for it. The price election for unharvested 
acreage will apply to such acreage.

4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is:
    (a) June 30 preceding the cancellation date for counties with a 
September 30 cancellation date;
    (b) September 30 preceding the cancellation date for counties 
with a November 30 or December 31 cancellation date; and
    (c) November 30 preceding the cancellation date for counties 
with a February 28 or March 15 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:

------------------------------------------------------------------------
            State and county                           Dates            
------------------------------------------------------------------------
Manatee, Hardee, Highlands, Okeechobee,   September 30.                 
 and St. Lucie Counties, Florida, and                                   
 all Florida counties lying south                                       
 thereof.                                                               
All California; and all Texas counties    November 30.                  
 except Bailey, Castro, Dallam, Deaf                                    
 Smith, Floyd, Gaines, Hale, Hartley,                                   
 Haskell, Knox, Lamb, Parmer, Swisher,                                  
 and Yoakum.                                                            
Alabama; Delaware; Maryland; Missouri;    December 31.                  
 New Jersey; North Carolina; Virginia;                                  
 and all Florida Counties except                                        
 Manatee, Hardee, Highlands, Okeechobee,                                
 and St. Lucie Counties, Florida, and                                   
 all Florida counties lying south                                       
 thereof.                                                               
Oklahoma; Haskell and Knox County, Texas  February 28.                  
Bailey, Castro, Dallam, Deaf Smith,       March 15.                     
 Floyd, Gaines, Hale, Hartley, Lamb,                                    
 Parmer, Swisher, and Yoakum counties,                                  
 Texas; and New Mexico.                                                 
------------------------------------------------------------------------

6. Annual Premium

    In lieu of the premium computation method contained in section 7 
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual 
premium amount is computed by multiplying the production guarantee 
by the price election for harvested acreage, the premium rate, the 
insured acreage, your share at the time of planting, and any 
applicable premium adjustment factors contained in the Actuarial 
Table.

7. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the potatoes 
in the county for which a premium rate is provided by the Actuarial 
Table:
    (a) In which you have a share;
    (b) Planted with certified seed unless otherwise permitted by 
the Special Provisions;
    (c) Planted for harvest as certified seed stock, or for human 
consumption, unless specified otherwise in the Special Provisions;
    (d) That are 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.

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 
that:
    (a) Does not meet the rotation requirements shown in the Special 
Provisions; or
    (b) Is damaged before the final planting date or before the end 
of the applicable planting period in counties for which the Special 
Provisions designate separate planting periods, to the extent that 
the majority of producers in the area would normally not further 
care for it, unless it is replanted or we agree that it is not 
practical to replant.

9. 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 the date immediately following 
planting as follows (exceptions for specific counties, varieties or 
types may be contained in the Special Provisions):
    (a) July 15 in Missouri; North Carolina; and all Texas counties 
except Bailey, Castro, Dallam, Deaf Smith, Floyd, Gaines, Hale, 
Haskell, Hartley, Knox, Lamb, Parmer, Swisher, and Yoakum.
    (b) July 25 in Virginia.
    (c) August 15 in Oklahoma; and Haskell and Knox Counties, Texas.
    (d) In Alabama; California; and Florida, the dates established 
by the Special Provisions for each planting period; and
    (e) October 15 in Bailey, Castro, Dallam, Deaf Smith, Floyd, 
Gaines, Hale, Hartley, Lamb, Parmer, Swisher, and Yoakum Counties, 
Texas; Delaware; Maryland; New Jersey; and New Mexico.

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 which occur within 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 peril listed in section 10(a) (1) through (7) that occurs 
during the insurance period.
    (b) In addition to the causes of loss not insured against as 
listed in section 12 (Causes of Loss) of the Basic Provisions 
(Sec. 457.8), we will not insure against any loss of production due 
to:
    (1) Damage that occurs or becomes evident after the end of the 
insurance period, including, but not limited to, damage that occurs 
after potatoes have been placed in storage; or
    (2) Causes, such as freeze after certain dates, that are limited 
by the Special Provisions.

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 
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.
    (b) We must be given the opportunity to perform a grade 
inspection on any unit for which you have given notice of damage.

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 units, we will combine all optional units 
for which acceptable production records were not provided; or
    (2) For any basic units, we will allocate any commingled 
production to such units in proportion to our liability on the 
harvested acreage for the units.

[[Page 19699]]

    (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 of section 12(b)(2);
    (4) Multiplying the total production to be counted of each type, 
if applicable (see section 12(d)), by the respective price election;
    (5) Totaling the results of section 12(b)(4);
    (6) Subtracting the results of section 12(b)(5) from the result 
in section 12(b)(3); and
    (7) Multiplying the result of section 12(b)(6) by your share.
    (c) The extent of any loss must be determined no later than the 
time potatoes are placed in storage, if the production is stored 
prior to sale, or the date they are delivered to a buyer, 
wholesaler, packer, broker, or other handler if production is not 
stored.
    (d) The total production to count (in hundredweight) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is put to another use without our consent;
    (C) That is damaged solely by uninsured causes;
    (D) From which any production is disposed of without a grade 
inspection; or
    (E) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Production lost due to harvest prior to full maturity. 
Production to count from such acreage will be determined by 
increasing the amount of harvested production by 2 percent per day 
for each day the potatoes were harvested prior to the date the 
potatoes would have reached full maturity as determined by us. The 
date the potatoes would have reached full maturity will be 
determined using the normal number of days to full maturity for the 
variety, growing area, and planting date. This adjustment will not 
be made if the potatoes are damaged by an insurable cause of loss, 
and leaving the crop in the field would either reduce production or 
decrease quality.
    (iv) Unharvested production (unharvested production may be 
adjusted in accordance with section 12(e)); and
    (v) Potential production on insured acreage that you intend to 
put to another use or abandon and no longer care for, if you and we 
agree on the appraised amount of production. Upon such agreement, 
the insurance period for that acreage will end if when 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 stage 
guarantee will be limited as specified in section 3 even if the 
representative samples are harvested; and 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 
determined in accordance with section 12(e).
    (e) With the exception of production with external defects, only 
marketable lots of mature potatoes will be production to count for 
loss adjustment purposes. Production not meeting the standards for 
grading U.S. No. 2 due to external defects will be determined on an 
individual potato basis for all unharvested potatoes and for any 
harvested potatoes if we determine it is practical to separate the 
damaged production. All determinations must be based upon a grade 
inspection.
    (1) Marketable lots of potatoes will include:
    (i) Those that are stored;
    (ii) Those sold as seed;
    (iii) Those sold for human consumption; and
    (iv) All unsold harvested and appraised production meeting the 
standards for grading U.S. No. 2 or better on a sample basis.
    (2) Marketable lots will also include any potatoes that we 
determine:
    (i) Could have been sold for seed or human consumption in the 
general marketing area;
    (ii) Were not sold as a result of uninsured causes including, 
but not limited to, failure to meet chipper or processor standards 
for fry color or specific gravity; or
    (iii) Were disposed of without our prior written consent and 
such disposition prevented our determination of marketability.
    (3) Unless included in section 12(e) (1) or (2), a potato lot 
will not be considered marketable if, due to insurable causes of 
damage, it:
    (i) Is partially damaged, and is salvageable only for starch, 
alcohol, or livestock feed;
    (ii) Is discarded;
    (iii) Is left unharvested and does not meet the standards for 
grading U.S. No. 2 or better due to internal defects; or
    (iv) Does not meet the standards for grading U.S. No. 2 or 
better due to external defects, is harvested, and from which we 
determine it is not practical to separate the damaged production.

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, 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 our 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.

    7. Section 457.143 is added to read as follows:


Sec. 457.143  Northern potato crop insurance--quality endorsement.

    The Northern Potato Crop Insurance Quality Endorsement provisions 
for the 1998 and succeeding 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:

NORTHERN POTATO CROP INSURANCE

QUALITY ENDORSEMENT

    1. In return for payment of the additional premium designated in 
the Actuarial Table, this endorsement is attached to and made part 
of your Northern Potato Crop Provisions (Sec. 457.142) subject to 
the terms and conditions described herein.
    2. You must elect this endorsement on or before the sales 
closing date for the initial crop year in which you wish to insure 
your potatoes under this endorsement. This endorsement will continue 
in effect until canceled. It may be canceled by either you or us for 
any succeeding crop year by giving written notice to the other party 
on or before the cancellation date.
    3. All acreage of potatoes insured under the Northern Potato 
Crop Provisions (Sec. 457.142) will be insured under this 
endorsement except:
    (a) Any acreage specifically excluded by the Actuarial Table; 
and
    (b) Any acreage grown for seed.
    4. We will adjust production to count (determined in accordance 
with section 15 of the Basic Provisions (Sec. 457.8) and section 11 
of the Northern Potato Crop Provisions (Sec. 457.142)) from (1) 
unharvested acreage; (2) harvested acreage that is stored after a 
grade inspection; or (3) that is marketed after a grade inspection 
and contains potatoes that grade less than U.S. No. 2 due to:
    (a) Internal defects (the number of potatoes with such defects 
must be in excess of the tolerance allowed for U.S. No. 2 grade

[[Page 19700]]

potatoes on a lot basis and must not be separable from undamaged 
production using methods normally used by potato packers or 
processors), will be adjusted as follows:
    (1) For potatoes sold within 7 days of harvest, by multiplying 
the production to count by the factor (not to exceed 1.0) that 
results from dividing the market value per hundredweight of the 
damaged production by the highest available price election. If 
production is sold for a price lower than the value appropriate and 
representative of the local market, we will determine the value of 
the production based on the price you could have received in the 
local market.
    (2) For harvested potatoes discarded within 7 days of harvest 
and appraised unharvested production that could:
    (i) Not have been sold, the production to count will be zero; or
    (ii) Have been sold, the production to count will be determined 
in accordance with section 4(a)(1).
    (3) For potatoes remaining in storage 8 or more days after 
harvest, production to count will be determined in accordance with 
section 4(b).
    (b) Factors other than those specified in section 4(a), by 
multiplying by a factor (not to exceed 1.0) that is determined as 
follows:
    (1) Production damaged by freeze or a cause that results in soft 
rot or wet breakdown will be removed from representative samples of 
the production;
    (2) The percentage of remaining potatoes that grade U.S. No. 2 
or better will be determined by dividing the weight of potatoes that 
grade U.S. No. 2 or better in the remainder of section 4(b)(1) by 
the total weight of the remainder of section 4(b)(1); and
    (3) The percentage determined in section 4(b)(2) above will be 
divided by the applicable percentage factor contained in the Special 
Provisions.
    5. Potatoes harvested or appraised prior to full maturity that 
do not grade U.S. No. 2 due solely to size will be considered to 
have met U.S. No. 2 standards unless the potatoes are damaged by an 
insurable cause of loss, and leaving the crop in the field would 
either reduce production or decrease quality.
    6. Production to count for potatoes destroyed, stored or 
marketed without a grade inspection will be 100 percent of the gross 
weight of such potatoes.
    7. All determinations must be based upon a grade inspection.
    8. The Actuarial Table may provide ``U.S. No. 1'' in place of 
``U.S. No. 2'' as used in this endorsement.

    8. Section 457.144 is added to read as follows:


Sec. 457.144  Northern potato crop insurance--processing quality 
endorsement.

    The Northern Potato Crop Insurance Processing Quality Endorsement 
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:

NORTHERN POTATO CROP INSURANCE

PROCESSING QUALITY ENDORSEMENT

    1. In return for payment of the additional premium designated in 
the Actuarial Table, this endorsement is attached to and made part 
of your Northern Potato Crop Provisions (Sec. 457.142) and Quality 
Endorsement (Sec. 457.143) subject to the terms and conditions 
described herein.
    2. You must have a Northern Potato Quality Endorsement 
(Sec. 457.143) in place and elect this endorsement on or before the 
sales closing date for the initial crop year in which you wish to 
insure your potatoes under this endorsement. This endorsement may be 
canceled by either you or us for any succeeding crop year by giving 
written notice to the other party on or before the cancellation 
date.
    3. All terms of the Northern Potato Quality Endorsement 
(Sec. 457.143) not modified by this endorsement will be applicable 
to acreage covered under this endorsement.
    4. A processor contract must be executed with a potato processor 
for the potato types insured under this endorsement and a copy 
submitted to us on or before the acreage reporting date for 
potatoes. If you elect this endorsement, all insurable acreage of 
production under contract with the processor must be insured under 
this endorsement.
    5. When the processor contract requires the processor to 
purchase a stated amount of production, rather than all of the 
production from a stated number of acres, the insured acreage will 
be determined by dividing the stated amount of production by the 
approved yield for the acreage.
    6. In lieu of the provisions contained in section 4 of the 
Northern Potato Quality Endorsement (7 CFR Sec. 457.143), production 
that is rejected by the processor will be adjusted as follows:
    (a) Production to count (determined in accordance with section 
15 of the Basic Provisions (Sec. 457.8) and section 11 of the 
Northern Potato Crop Provisions (Sec. 457.142)) from (1) unharvested 
acreage; (2) harvested acreage that is stored after a grade 
inspection; or (3) that is marketed after a grade inspection and 
contains potatoes that:
    (1) Grade less than U.S. No. 2 due to internal defects, a 
specific gravity of less than 1.070, or a fry color of No. 3 or 
darker due to either sugar exceeding 10 percent or sugar ends 
exceeding 19 percent (the number of potatoes with such defects must 
be in excess of the tolerance allowed for U.S. No. 2 grade potatoes 
on a lot basis and must not be separable from undamaged production 
using methods normally used by potato processors), will be adjusted 
as follows:
    (i) For potatoes sold within 7 days of harvest, by multiplying 
the production to count by the factor (not to exceed 1.0) that 
results from dividing the market value per hundredweight of the 
damaged production by the base contract price. If production is sold 
for a price lower than the value appropriate and representative of 
the local market, we will determine the value of the production 
based on the price you could have received in the local market.
    (ii) For harvested potatoes discarded within 7 days of harvest 
and appraised unharvested production that could:
    (A) Not have been sold, the production to count will be zero; or
    (B) Have been sold, the production to count will be determined 
in accordance with section 6(a)(1)(i).
    (iii) For potatoes remaining in storage 8 or more days after 
harvest, production to count will be determined in accordance with 
section 6(b).
    (b) Grade less than U.S. No. 2 due to factors other than those 
specified in section 6(a) will be multiplied by a factor (not to 
exceed 1.0) that is determined as follows:
    (1) Production damaged by freeze or a cause that results in soft 
rot or wet breakdown will be removed from representative samples of 
the production;
    (2) The percentage of remaining potatoes that grade U.S. No. 2 
or better will be determined by dividing the weight of potatoes that 
grade U.S. No. 2 or better in the remainder of section 6(b)(1) by 
the total weight of the remainder of section 6(b)(1); and
    (3) The percentage determined in section 6(b)(2) above will be 
divided by the applicable percentage factor contained in the Special 
Provisions.
    7. All grade determinations for the purposes of this endorsement 
will be made using the United States Standards for Grades of 
Potatoes for Processing or Chipping.
    8. All determinations must be based upon a grade inspection.
    9. The Actuarial Table may provide ``U.S. No. 1'' in place of 
``U.S. No. 2'' as used in this endorsement.

    9. Section 457.145 is added to read as follows:


Sec. 457.145  Potato crop insurance--certified seed endorsement.

    The Potato Crop Insurance Certified Seed Endorsement provisions for 
the 1998 and succeeding 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:

POTATO CROP INSURANCE

CERTIFIED SEED ENDORSEMENT

    1. In return for payment of the additional premium designated in 
the Actuarial Table, this endorsement is attached to and made part 
of your Northern Potato Crop Provisions subject to the terms and 
conditions described herein.
    2. You must elect this endorsement on or before the sales 
closing date for the initial crop year you wish to insure your 
potatoes under this endorsement. This endorsement

[[Page 19701]]

will continue in effect until canceled. It may be canceled by either 
you or us for any succeeding crop year by giving written notice to 
the other party on or before the cancellation date.
    3. All potatoes grown on insurable acreage and that are entered 
into the potato seed certification program administered by the state 
in which the seed is grown must be insured unless limited by section 
4 below.
    4. The certified seed acreage you insure in the current crop 
year cannot be greater than 125 percent of the average number of 
acres grown for seed in the three previous years unless we agree 
otherwise in writing. If you enter more than this number of acres 
into the certification program, your certified seed production 
guarantee for the current crop year will be reduced as follows:
    (a) Multiply the average number of acres grown for certified 
seed the 3 previous years by 1.25 and divide this result by the 
number of acres grown for certified seed in the current crop year; 
and
    (b) Multiply the result of section 4(a) (not to exceed 1.0) by 
the production guarantee for certified seed for the current crop 
year.
    5. You must provide acceptable records of your certified seed 
potato acreage and production for the previous three years. These 
records must clearly indicate the number of acres entered into the 
potato seed certification program administered by the state in which 
the seed is grown.
    6. All potatoes insured for certified seed production must be 
produced and managed in accordance with standards, practices, and 
procedures required for certification by the state's certifying 
agency and applicable regulations.
    7. If, due to insurable causes occurring within the insurance 
period, potato production does not qualify as certified seed on any 
insured certified seed potato acreage within a unit, we will pay you 
the dollar amount per hundredweight shown in the Special Provisions, 
multiplied by your production guarantee for such acreage, and 
multiplied by your share. Any production that does not qualify as 
certified seed because of varietal mixing or your failure to follow 
the standard practices and procedures required for certification 
will be considered as lost due to uninsured causes.
    8. You must notify us of any loss under this endorsement not 
later than 14 days after you receive notice from the state 
certification agency that any acreage has failed certification.

    10. Section 457.146 is added to read as follows:


Sec. 457.146  Northern potato crop insurance--storage coverage 
endorsement.

    The Northern Potato Crop Insurance Storage Coverage Endorsement 
provisions for the 1998 and succeeding 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:

NORTHERN POTATO CROP INSURANCE

STORAGE COVERAGE ENDORSEMENT

    1. In return for payment of the required additional premium 
specified on the Actuarial Table, this endorsement is attached to 
and made part of your Northern Potato Crop Provisions subject to the 
terms and conditions described herein.
    2. You must elect this endorsement on or before the sales 
closing date for the initial crop year in which you wish to insure 
your potatoes under this endorsement. This endorsement will continue 
in effect until canceled. It may be canceled by either you or us for 
any succeeding crop year by giving written notice to the other party 
on or before the cancellation date.
    3. Potato production grown under a contract that requires the 
production to be delivered to a buyer within three days of harvest 
will not be insured under this endorsement. All other potato 
production insured under the Northern Potato Crop Provisions must be 
insured under this endorsement unless the Special Provisions allow 
you to exclude certain potato varieties, types, or groups from 
insurance under this endorsement, and you elect to exercise this 
option. Such exclusions, if allowed, must be shown annually on your 
acreage report and will be applicable to all acreage of the excluded 
varieties, types, or groups for the crop year.
    4. When production from separate insurance units, basic or 
optional, is commingled in storage, the production to count for each 
unit will be allocated prorata based on the production placed in 
storage from each unit. For example, if 500 hundredweight from one 
unit are commingled with 1,500 hundredweight from another unit and 
the production to count from the stored production is 1,000 
hundredweight, 250 hundredweight of production to count will be 
allocated to the unit originally contributing 500 hundredweight to 
the stored production. This provision does not eliminate or change 
any other requirement contained in this policy to provide or 
maintain separate records of acreage or production by unit.
    5. Production will be adjusted in accordance with this 
endorsement only if:
    (a) The potatoes are damaged by an insured cause other than 
freeze that later results in soft rot or wet breakdown as defined in 
the United States Standards for Grades of Potatoes, or other tuber 
rot condition, to the extent that five percent (by weight) or more 
of the insured production is affected;
    (b) You notify us within 72 hours of your initial discovery of 
any damage that has or that may later result in soft rot or wet 
breakdown;
    (c) Damage is the result of an insured cause other than freeze 
that occurs prior to the end of the insurance period;
    (d) The percentage of potatoes having soft rot, wet breakdown, 
or other tuber rot condition is determined no later than 60 days 
after harvest; and
    (e) A grade inspection is performed.
    6. Production to count for production that qualifies under the 
terms of this endorsement will be determined as follows:
    (a) For potatoes sold within 60 days of harvest, by dividing the 
price received per hundredweight by the highest price election 
designated in the Special Provisions for the insured potato type, 
and multiplying the result (not to exceed 1.0) by the number of 
hundredweight of sold production. If production is sold for a price 
lower than the value appropriate and representative of the local 
market, we will determine the value of the production based on the 
price that we determine you could have received in the local market;
    (b) For potatoes discarded within 60 days of harvest that could:
    (1) Not have been sold, the production to count will be zero; or
    (2) Have been sold, the production will be reduced as follows 
(all percents of damage will be rounded to the nearest 0.1 percent):
    (i) 0.1 percentage point for each 0.1 percent of damage through 
5.0 percent;
    (ii) 0.5 percentage point for each 0.1 percent of damage from 
5.1 percent through 6.0 percent;
    (iii) 1.0 percentage point for each 0.1 percent of damage from 
6.1 through 8.0 percent;
    (iv) 2.0 percentage point for each 0.1 percent of damage from 
8.1 through 9.0 percent; and
    (v) 2.5 percentage point for each 0.1 percent of damage from 9.1 
through 11.0 percent.
    (c) For potatoes stored more than 60 days after harvest, 
adjustment will be made in accordance with subsection 6(b)(2) of 
this endorsement.

    Signed in Washington, DC, on April 17, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-10449 Filed 4-22-97; 8:45 am]
BILLING CODE 3410-FA-P