[Federal Register Volume 62, Number 84 (Thursday, May 1, 1997)]
[Proposed Rules]
[Pages 23675-23680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11250]


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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. 84 / Thursday, May 1, 1997 / Proposed 
Rules  

[[Page 23675]]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 401 and 457


General Crop Insurance Regulations, Canning and Processing Bean 
Endorsement; and Common Crop Insurance Regulations, Processing Bean 
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 processing beans. 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 canning and processing bean crop insurance endorsement with the 
Common Crop Insurance Policy for ease of use and consistency of terms, 
and to restrict the effect of the current canning and processing bean 
crop insurance endorsement to the 1997 and prior crop years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business June 2, 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, 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 amendments set forth in this proposed rule contain 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; Processing Bean 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 processing beans 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. For the crop insurance 
program as a whole, the reporting burden for this collection of 
information is estimated to average 16.9 minutes per response for each 
of the 3.6 responses from approximately 1,755,015 respondents. The 
total annual burden on the public for this information collection is 
2,676,932 hours.
    FCIC is requesting comments on the following: (a) whether the 
proposed collection of information is necessary for the proper 
performance of the functions of the agency, including whether the 
information shall have practical utility; (b) the accuracy of the 
agency's estimate of the burden of the proposed collection of 
information; (c) ways to enhance the quality, utility, and clarity of 
the information to be collected; and (d) ways to minimize the burden of 
the collection of information on respondents, including through the use 
of automated collection techniques or other forms of information 
gathering technology.
    Comments regarding paperwork reduction should be submitted to the 
Desk Officer for Agriculture, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, D.C. 20503.
    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 
implication 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

[[Page 23676]]

claim for indemnity. The insured must also annually certify to the 
number of acres and the previous 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 duplicative 
regulations and improve those that remain in force.

Background

    FCIC proposes to add to the Common Crop Insurance Regulations (7 
CFR part 457), a new section, 7 CFR 457.155, Processing Bean 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 processing beans found at 7 CFR 
401.118 (Canning and Processing Bean Endorsement). FCIC also proposes 
to amend 7 CFR 401.118 to limit its effect to the 1997 and prior crop 
years.
    This rule makes minor editorial and format changes to improve the 
Canning and Processing Bean Endorsement's compatibility with the Common 
Crop Insurance Policy. In addition, FCIC is proposing substantive 
changes in the provisions for insuring processing beans as follows:
    1. Remove the words ``Canning and'' from the title of the policy. 
``Canning and processing'' is redundant because ``processing'' includes 
those beans that are processed for canning.
    2. Section 1--Add definitions for the terms ``base contract 
price,'' ``bypassed acreage,'' ``days,'' ``FSA,'' ``final planting 
date,'' ``good farming practices,'' ``interplanted,'' ``irrigated 
practice,'' ``planted acreage,'' ``practical to replant,'' 
``processor,'' ``processor contract,'' ``production guarantee (per 
acre),'' ``replanting,'' ``timely planted,'' ``ton,'' and ``written 
agreement'' for clarification.
    3. Section 2--Describe the requirements for dividing basic units 
into optional units. Also, subsection 2(f)(4)(ii) clarifies unit 
division for non-irrigated corners of center-pivot irrigation systems.
    4. Section 3--Specify that the producer may select only one price 
election for all the processing beans in the county insured under the 
policy unless the Special Provisions provide different price elections 
by type, in which case the producer may select one price election for 
each processing bean type designated. The price election chosen for 
each type must have the same percentage relationship to the maximum 
price available.
    5. Section 4--Change the contract change date from December 31 to 
November 30, to allow adequate time for producers to become aware of 
contract changes and make informed choices before the sales closing 
date, which was moved back 30 days to comply with the Federal Crop 
Insurance Reform Act of 1994.
    6. Section 5--Change the cancellation and termination dates from 
April 15 to March 15, to coincide with the statutory change in the 
sales closing date.
    7. Section 6--Require the insured to provide a copy of the 
processor contract to the insurance provider on or before the acreage 
reporting date to establish liability and insurability before a loss is 
likely to occur.
    8. Section 7(a)--Specify that the crop insured will be processing 
beans that are grown under a processor contract executed before the 
acreage reporting date.
    9. Section 7(a)(4)--Permit consideration for requests for a written 
agreement to insure processing beans that are interplanted with another 
crop or planted into an established grass or legume. This provision 
makes insurance available, on a case-by-case basis (written agreement), 
for processing beans grown with a production practice that is not 
normally followed in an area.
    10. Section 7(b)--Specify that a producer will be considered to 
have a share in the insured crop, if under the processor contract, the 
producer retains possession of the acreage on which the processing 
beans are grown, is at risk of loss, and the processor contract 
provides for delivery of the processing beans under specified 
conditions and at a stipulated base contract price.
    11. Section 7(c)--Specify that a commercial bean producer who is 
also a processor may establish an insurable interest if certain 
requirements are met. This provision is added to other processor 
policies.
    12. Section 8(a)--Require that any acreage damaged prior to the 
final planting date must be replanted unless the insurance provider 
agrees that replanting is not practical.
    13. Section 8(b)--Require that rotation requirements shown on the 
Special Provisions be met for acreage to be insured.
    14. Section 9--Add a provision for the insurance to end when the 
processing beans should have been harvested or when the amount of 
processing beans delivered to the processor fulfills the producer's 
processing contract. Also, specify that October 30 is the calendar date 
for the end of insurance period for Arkansas.
    15. Section 10(a)(1)--Clarify that loss of production due to 
adverse weather conditions is an insurable cause of loss when (1) 
excessive moisture prevents harvesting equipment from entering the 
field or prevents timely operation of harvesting equipment, and (2) 
abnormally hot or cold temperatures cause the insured acreage to be 
bypassed.
    16. Section 10(a)(3)--Clarify that insect damage as an insurable 
cause of loss does not include damage due to insufficient or improper 
application of pest control measures.
    17. Section 10(a)(4)--Clarify that plant disease as an insurable 
cause of loss does not include damage due to

[[Page 23677]]

insufficient or improper application of disease control measures.
    18. Section 10(b)--Clarify that the insurance provider does not 
cover loss of production due to: (1) bypassed acreage if the acreage is 
bypassed due to the breakdown or non-operation of equipment or 
facilities; (2) bypassed acreage if acreage to be bypassed is selected 
based on the availability of a crop insurance payment; (3) beans not 
being timely harvested, unless the delay in harvesting is directly due 
to an insured cause of loss; (4) failure to follow the requirements 
contained in the processor contract; and (5) damage that occurs to 
unharvested production after the producer delivers the production 
required by the processor contract.
    19. Section 11--Require that the producer give notice of loss 
within 3 days of the date harvest should have begun on any acreage that 
will not be harvested, and document why the acreage was bypassed. 
Failure to provide such information may result in the insurance 
provider's determination that the acreage was bypassed due to an 
uninsured cause of loss. If the crop will not be harvested, the 
producer must leave representative samples of the unharvested crop for 
the insurance provider's inspection. The samples must be at least 10 
feet wide and extend the entire length of each field in the unit and 
must not be destroyed until the earlier of the insurance provider's 
inspection or 15 days after notice of loss is given.
    20. Section 12(a)--Clarify actions to be taken when acceptable 
records of production are not provided regarding optional and basic 
units.
    21. Section 12(c)--Clarify that the total production to count will 
include bypassed acreage unless adequate evidence is provided to show 
the acreage was bypassed for insurable reasons.
    22. Section 12(d)--Clarify determination of production to count for 
acreage that is not timely harvested due to an uninsured cause of loss.
    23. Section 14--Add provisions for providing insurance coverage by 
written agreement. FCIC has a long-standing policy of permitting 
certain modification of the insurance contract by written agreement for 
some policies. This amendment allows FCIC to tailor the policy to a 
specific insured in certain instances. The new section will cover 
application for, and duration of, written agreements.
    Good cause is shown to allow 30 days for comments after this rule 
is published in the Federal Register. This rule improves processing 
bean crop insurance coverage and brings it under the Common Crop 
Insurance Policy Basic Provisions for consistency among policies. 
Although the contract change date is December 31, 1997, the final rule 
must be published by July 7, 1997. Publication is required by this date 
to achieve revision and timely distribution of the actuarial documents 
thereby allowing the reinsured companies and insureds sufficient time 
to implement the new provisions. Therefore, public interest requires 
the agency to act immediately to make these provisions available for 
the 1998 crop year.

List of Subjects in 7 CFR Parts 401 and 457

    Crop insurance, Canning and processing beans, Reporting and 
recordkeeping requirements.

Proposed Rule

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

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

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

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

    2. The introductory text of Section 401.118 is revised to read as 
follows:


Sec. 401.118  Canning and processing bean endorsement.

    The provisions of the Canning and processing bean endorsement for 
the 1988 through 1997 crop years are as follows:
* * * * *

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

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

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

    4. Section 457.155 is added to read as follows:


Sec. 457.155  Processing bean crop insurance provisions.

    The Processing Bean 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:

Processing Bean Crop Insurance Provisions

    If a conflict exists among the Basic Provisions (Sec. 457.8), 
these crop provisions, and the Special Provisions; the Special 
Provisions will control these crop provisions and the Basic 
Provisions; and these crop provisions will control the Basic 
Provisions.

1. Definitions

    Base contract price. The price stipulated in the contract 
executed between you and the processor for the grade factor or sieve 
size that is designated in the Special Provisions without regard to 
discounts or incentives that may apply.
    Bypassed acreage. Land on which production is ready for harvest 
but is not harvested. Bypassed acreage upon which an indemnity is 
payable will be considered to have a zero yield for Actual 
Production History (APH) purposes.
    Days. Calendar days.
    FSA. The Farm Service Agency, an agency of the United States 
Department of Agriculture, or a successor agency.
    Final planting date. The date contained in the Special 
Provisions for the insured crop by which the crop must initially be 
planted in order to be insured for the full production guarantee.
    Good farming practices. The cultural practices generally in use 
in the county for the crop to make normal progress toward maturity 
and produce at least the yield used to determine the production 
guarantee and are those required by the bean processor contract with 
the processing company and recognized by the Cooperative State 
Research, Education, and Extension Service, as compatible with 
agronomic and weather conditions in the county.
    Harvest. The mechanical picking of bean pods from the vines.
    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.
    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. Processing beans must 
initially be placed in rows far enough apart to permit mechanical 
cultivation. Acreage planted in any other manner will not be 
insurable unless otherwise provided by the Special Provisions or by 
written agreement.
    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,

[[Page 23678]]

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 unless 
production from the replanted acreage can be delivered under the 
terms of the processor contract.
    Processor. Any business enterprise regularly engaged in 
processing beans for human consumption, that possesses all licenses 
and permits for processing beans required by the state in which it 
operates, and that possesses facilities, or has contractual access 
to such facilities, with enough equipment to accept and process 
contracted beans within a reasonable amount of time after harvest.
    Processor contract. A written agreement between the producer and 
a processor, containing at a minimum:
    (a) The producer's commitment to plant and grow processing 
beans, and to deliver the bean production to the processor;
    (b) The processor's commitment to purchase all the production 
stated in the contract; and
    (c) A base contract price.
    Production guarantee (per acre). The number of tons determined 
by multiplying the approved APH yield per acre by the coverage level 
percentage you elect.
    Replanting. Performing the cultural practices necessary to 
prepare the land to replace the processing bean seed and then 
replacing the bean 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.
    Ton. Two thousand (2000) pounds avoirdupois.
    Written agreement. A written document that alters designated 
terms of this policy in accordance with section 14.

2. Unit Division

    (a) In addition to the criteria stated in the definition of unit 
in section 1 (Definitions) of the Basic Provisions (Sec. 457.8), and 
if provided for in the Special Provisions, snap type beans will form 
a basic unit and lima type beans will form a basic unit.
    (b) Unless limited by the Special Provisions, these 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. Basic units may not be divided into optional 
units on any basis other than as described in this section.
    (c) Optional units will be available only if the processor 
contract stipulates the number of acres that are under contract and 
not a specific amount of production. This provision may not be 
changed by written agreement.
    (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 the 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 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) 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 and non-
irrigated acreage if both are located in the same section, section 
equivalent, or FSA Farm Serial Number. To qualify as separate 
irrigated and non-irrigated optional units, the non-irrigated 
acreage may not continue into the irrigated acreage in the same rows 
or planting pattern. The irrigated acreage may not extend beyond the 
point at which the irrigation system can deliver the quantity of 
water needed to produce the yield on which the guarantee is based, 
except the corners of a field in which a center-pivot irrigation 
system is used will be considered as irrigated acreage if separate 
acceptable records of production from the corners are not provided. 
If the corners of a field in which a center-pivot irrigation system 
is used do not qualify as a separate non-irrigated optional unit, 
they will be a part of the unit containing the irrigated acreage. 
Non-irrigated acreage that is not a part of a field in which a 
center-pivot irrigation system is used may qualify as a separate 
optional unit provided that all 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 processing beans 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 processing bean 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 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 November 30 
preceding the cancellation date.

5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation 
and termination dates are March 15.

6. Report of Acreage

    In addition to the provisions of section 6 (Report of Acreage) 
of the Basic Provisions (Sec. 457.8), you must provide a copy of all 
processor contracts to us on or before the acreage reporting date.

7. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the processing 
beans in the county for which a premium rate is provided by the 
actuarial table:
    (1) In which you have a share;
    (2) That are planted for harvest to be canned or frozen;
    (3) That are grown under and in accordance with the requirements 
of a processor contract executed on or before the acreage reporting 
date and are not excluded from the processor contract at any time 
during the crop year; and
    (4) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop; or
    (ii) Planted into an established grass or legume.
    (b) You will be considered to have a share in the insured crop 
if, under the processor contract, you retain possession of the 
acreage on which the processing beans are grown, you are at risk of 
loss, and the processor contract provides for delivery of the 
processing beans under specified conditions and at a stipulated base 
contract price per unit of delivery.
    (c) A commercial bean producer who is also a processor may 
establish an insurable interest if the following requirements are 
met:
    (1) The processor must meet the requirements as defined in these 
crop provisions;
    (2) The Board of Directors, or officers of the processor, must 
have executed a resolution

[[Page 23679]]

that sets forth essentially the same terms as a processor contract. 
Such resolution will be considered a contract under the terms of the 
processing bean crop insurance policy; and
    (3) Our inspection of the processing facilities determines that 
they satisfy the definition of a processor contained in these crop 
provisions.

8. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8):
    (a) Any acreage of the insured crop that is damaged before the 
final planting date, to the extent that the majority of growers in 
the area would normally not further care for the crop, must be 
replanted unless we agree that it is not practical to replant; and
    (b) We will not insure any acreage that does not meet the 
rotation requirements contained in the Special Provisions.

9. Insurance Period

    In lieu of the provisions contained in section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), regarding the end of 
the insurance period, insurance ceases at the earlier of:
    (a) The date the processing beans:
    (1) Were destroyed;
    (2) Should have been harvested;
    (3) Were abandoned; or
    (4) Were harvested;
    (b) The date you harvested sufficient production to fulfill your 
processor contract;
    (c) Final adjustment of a loss; or
    (d) The date for the end of the insurance period in the calendar 
year in which the processing beans would normally be harvested, 
unless otherwise agreed to in writing, as follows:
    (1) October 30 for all processing beans in the state of 
Arkansas;
    (2) October 15 for all processing beans in the states of 
Delaware, Maryland, and New Jersey;
    (3) September 30 for fresh snap beans in the state of New York;
    (4) September 20 for fresh snap beans in all other states; or
    (5) October 5 for fresh lima beans in all other states.

10. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8):
    (a) Insurance is provided only against the following causes of 
loss that occur during the insurance period:
    (1) Adverse weather conditions, including but not limited to:
    (i) Excessive moisture that prevents the harvesting equipment 
from entering the field or that prevents the timely operation of 
harvesting equipment; and
    (ii) Abnormally hot or cold temperatures, as determined by us, 
that causes insured acreage to be bypassed because of an unexpected 
number of acres over a large producing area are ready for harvest at 
the same time, and the total production is beyond the normal 
capacity of the processor to timely harvest or process;
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease on acreage not planted to the processing beans 
the previous crop year, 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 due to an insured 
cause of loss referred to in section 10(a)(1) through (7), above, 
that occurs during the insurance period; or
    (b) In addition to the causes of loss excluded in section 12 
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we do not 
insure any loss of production:
    (1) On bypassed acreage if the acreage is bypassed due to the 
breakdown or non-operation of equipment or facilities;
    (2) On bypassed acreage if acreage to be bypassed is selected 
based on the availability of a crop insurance payment;
    (3) Due to processing beans not being timely harvested unless 
such delay in harvesting is solely and directly due to an insured 
cause of loss;
    (4) Due to your failure to follow the requirements contained in 
the processor contract; or
    (5) Due to damage that occurs to unharvested production after 
you deliver the production required by the processor contract.

11. Duties In The Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), you 
must give us notice:
    (a) Not later than 48 hours after:
    (1) Total destruction of the processing beans on the unit; or
    (2) Discontinuance of harvest on a unit;
    (b) Within 3 days of the date harvest should have started on any 
acreage that will not be harvested and document why the acreage was 
bypassed. Failure to provide such information will result in our 
determination that the acreage was bypassed due to an uninsured 
cause of loss. If the crop will not be harvested and you wish to 
destroy the crop, you must leave representative samples of the 
unharvested crop for our inspection. The samples must be at least 10 
feet wide and extend the entire length of each field in each unit 
and must not be destroyed until the earlier of our inspection or 15 
days after notice is given to us.
    (c) At least 15 days prior to the beginning of harvest if you 
intend to claim an indemnity on any unit, or immediately if damage 
is discovered during harvest, so that we may inspect any damaged 
production. If you fail to notify us and such failure results in our 
inability to inspect the damaged production, we will consider all 
such production to be undamaged and include it as production to 
count. You do not have to delay harvest if notification is timely 
given.

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 such 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, by type if applicable;
    (2) Multiplying each result in section 12(b)(1) by the 
respective price election, by type if applicable;
    (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 results in section 12(b)(5) from the results 
in section 12(b)(3); and
    (7) Multiplying the result in section 12(b)(6) by your share.
    (c) The total production to count, specified in tons, 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) That is put to another use without our consent;
    (C) That is damaged solely by uninsured causes;
    (D) For which you fail to provide production records that are 
acceptable to us; or
    (E) That is bypassed unless the acreage was bypassed due to a 
cause of loss stated in section 10(a).
    (ii) Production lost due to uninsured causes;
    (iii) Potential production on insured acreage that you intend to 
put to another use or abandon, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for 
that acreage will end when you put the acreage to another use or 
abandon the crop. If agreement on the appraised amount of production 
is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to 
leave intact, and provide sufficient care for, representative 
samples of the crop in locations acceptable to us (The amount of 
production to count for such acreage will be based on the harvested 
production or appraisals from the samples at the time harvest should 
have occurred. If you do not leave the required samples intact, or 
fail to provide sufficient care for the samples, our appraisal made 
prior to giving you consent to put the acreage to another use will 
be used to determine the amount of production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested 
production, or our reappraisal if additional damage occurs and the 
crop is not harvested.
    (2) All harvested processing bean production from the insurable 
acreage. The

[[Page 23680]]

amount of such production will be determined by dividing the dollar 
amount as required by the contract for the quality and quantity of 
the processing beans delivered to the processor by the base contract 
price per ton.
    (d) If any acreage is not timely harvested due to an uninsured 
cause of loss but is later harvested, the production to count will 
be the greater of:
    (1) The harvested amount of production with no adjustment for 
quality; or
    (2) The amount determined by dividing the dollar amount as 
required by the contract for the quality and quantity of the 
processing beans delivered to the processor by the base contract 
price per ton.

13. Late Planting

    Late planting provisions are not applicable to processing beans.

14. Written Agreement

    Designated terms of this policy may be altered by written 
agreement in accordance with the following:
    (a) You must apply in writing for each written agreement no 
later than the sales closing date, except as provided in section 
14(e);
    (b) The application for a written agreement must contain all 
variable terms of the contract between you and us that will be in 
effect if the written agreement is not approved;
    (c) If approved, the written agreement will include all variable 
terms of the contract, including, but not limited to, crop type or 
variety, the guarantee, premium rate, and price election;
    (d) Each written agreement will only be valid for one year (If 
the written agreement is not specifically renewed the following 
year, insurance coverage for subsequent crop years will be in 
accordance with the printed policy.); and
    (e) An application for a written agreement submitted after the 
sales closing date may be approved if, after a physical inspection 
of the acreage, it is determined that no loss has occurred and the 
crop is insurable in accordance with the policy and written 
agreement provisions.

    Signed in Washington, D.C., on April 25, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-11250 Filed 4-30-97; 8:45 am]
BILLING CODE 3410-FA-P