[Federal Register Volume 62, Number 94 (Thursday, May 15, 1997)]
[Proposed Rules]
[Pages 26750-26755]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12707]


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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. 94 / Thursday, May 15, 1997 / 
Proposed Rules  

[[Page 26750]]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 416 and 457


Pea Crop Insurance Regulations; and Common Crop Insurance 
Regulations, Dry Pea 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 dry peas. 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, separate dry peas and green 
peas into separate crop insurance provisions, include the current pea 
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 pea crop insurance regulations to the 1997 and prior crop 
years.

DATES: Written comments on this proposed rule will be accepted until 
close of business June 16, 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: Arden Routh, Insurance Management 
Specialist, Product Development Division, Federal Crop Insurance 
Corporation, at 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 these 
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 do 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; Dry Pea 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 dry peas that are eligible for Federal crop insurance.
    The information requested is necessary for the reinsured companies 
and FCIC to provide insurance and reinsurance, determine eligibility, 
determine the correct parties to the agreement or contract, determine 
and collect premiums or other monetary amounts, and pay benefits.
    All information is reported annually. The reporting burden for this 
collection of information is estimated to average 16.9 minutes per 
response for each of the 3.6 responses from approximately 1,755,015 
respondents. The total annual burden on the public for this information 
collection is 2,676,932 hours.
    FCIC is requesting comments on the following: (a) whether the 
proposed collection of information is necessary for the proper 
performance of the functions of the agency, including whether the 
information shall have practical utility; (b) the accuracy of the 
agency's estimate of the burden of the proposed collection of 
information; (c) ways to enhance the quality, utility, and clarity of 
the information to be collected; and (d) ways to minimize the burden of 
the collection of information on respondents, including through the use 
of automated collection techniques or other forms of information 
gathering technology.
    Comments regarding paperwork reduction should be submitted to the 
Desk Officer for Agriculture, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, D.C. 20503.
    OMB is required to make a decision concerning the collections of 
information contained in these proposed regulations between 30 and 60 
days after submission to OMB. Therefore, a comment to OMB is best 
assured of having full effect if OMB receives it within 30 days of 
publication. This does not affect the deadline for the public to 
comment on the proposed regulation.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. This rule contains no Federal 
mandates (under the regulatory provisions of title II of the UMRA) for 
State, local, and tribal governments or the private sector. Thus, this 
rule is not subject to the requirements of sections 202 and 205 of the 
UMRA.

Executive Order No. 12612

    It has been determined under section 6(a) of Executive Order No. 
12612, Federalism, that this rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment. The 
provisions contained in this rule will not have a substantial direct 
effect on States or their political subdivisions, or on the 
distribution of power and responsibilities among 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 on large entities. Under 
the current regulations, a producer is required to complete an 
application and acreage

[[Page 26751]]

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. 12998

    This rule has been reviewed in accordance with Executive Order No. 
12998. The provisions of this rule will not have retroactive effect 
prior to the effective date. The provisions of this rule will preempt 
State and local laws to the extent such State and local laws are 
inconsistent herewith. The administrative appeal provisions published 
at 7 CFR part 11 must be exhausted before any action for judicial 
review may be brought.

Environmental Evaluation

    This action is not expected to have a significant impact on the 
quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

National Performance Review

    This regulatory action is being taken as part of the National 
Performance Review Initiative to eliminate unnecessary or duplicative 
regulations and improve those that remain in force.

Background

    1. FCIC proposes to add to the Common Crop Insurance Regulations (7 
CFR part 457), a new section, 7 CFR 457.140, Dry Pea 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 dry peas found at 7 CFR part 416 (Pea 
Crop Insurance Regulations). FCIC also proposes to amend 7 CFR part 416 
to limit its effect for Dry Peas to the 1997 and prior crop years. FCIC 
proposes to separately publish crop provisions in Part 457 to cover 
Green Peas.
    This rule makes minor editorial and format changes to improve the 
Pea Crop Insurance Regulations compatibility with the Common Crop 
Insurance Policy. In addition, FCIC is proposing substantive changes in 
the provisions for insuring dry peas as follows:
    1. Section 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. Add definitions for the terms ``adequate stand,'' 
``base price,'' ``contract price,'' ``contract seed peas,'' ``days,'' 
``dry peas,'' ``FSA,'' ``final planting date,'' ``good farming 
practices,'' ``interplanted,'' ``irrigated practice,'' ``local market 
price,'' ``nurse crop (companion crop),'' ``planted acreage,'' 
``practical to replant,'' ``price election,'' ``production guarantee 
(per acre),'' ``replanting,'' ``salvage value,'' ``seed company,'' 
``seed company contract,'' ``timely planted,'' and ``written 
agreement'' for clarification purposes. The definition of ``dry peas'' 
includes fall-planted Austrian Winter Peas if we agree in writing. The 
definition also stipulates that peas grown for seed will be considered 
contract seed peas only if the insured acreage is enrolled in a state 
seed certification program and at least 50 percent of the expected 
production from the insured acreage is contracted at a fixed price. 
Contract seed peas not meeting these requirements will be insurable at 
the price election established for smooth green and yellow varieties of 
commercial dry edible peas.
    2. Section 2--Allow separate dry pea types to qualify for optional 
units rather than only basic units as previously allowed. This change 
makes basic unit division provisions for dry peas consistent with 
provisions for other crops. Clarify unit division for non-irrigated 
corners of acreage irrigated by center-pivot systems.
    3. Section 3--Specify that the insured may select only one price 
election (percentage of the contract price for contract seed peas) for 
all the dry peas in the county insured under the policy, unless the 
Special Provisions provide different price elections by type, in which 
case the insured may select one price election for each dry pea type 
designated in the Special Provisions. This change is proposed to be 
consistent with other crop provisions that allow insurance by type. The 
price elections selected are not required to have the same percentage 
relationship to the maximum price offered for each type. Also specify 
that the price election for spring-planted contract seed peas produced 
under a seed company contract will be based on the contract price.
    4. Section 4--Change the contract change date from December 31 to 
November 30 for all counties to provide adequate time to permit insured 
producers to become familiar with any changes and make informed 
decisions before the sales closing date. The sales closing date was 
moved up 30 days by the Federal Crop Insurance Reform Act of 1994.
    5. Section 5--Change the cancellation and termination dates from 
April 15 to March 15 to standardize the cancellation and termination 
dates with the sales closing dates.
    6. Section 6--Add a requirement that insureds who produce spring-
planted contract seed peas under a seed company contract to submit a 
copy of the seed company contract on or before the report of acreage. 
This change is made to establish liability under the contract.
    7. Section 7(a)(3)--Permit consideration for requests to insure dry 
peas interplanted with another crop or planted into an established 
grass or legume. This makes insurance available by written agreement 
for production practices that are not normally followed in an area.
    8. Section 7(c)--Permit insurance of Austrian Winter Peas if the 
insurance provider agrees in writing that there is an adequate stand in 
the spring to produce the yield used to determine the production 
guarantee and the insured requested insurance on or before the sales 
closing date.
    9. Section 8(b)--Clarify that any acreage damaged prior to the 
final planting date must be replanted unless

[[Page 26752]]

we agree that it is not practical to replant.
    10. Section 9(a)--Provide that coverage on Austrian Winter Peas 
will begin on acreage that has an adequate stand on the earlier of 
March 16 or on the date the acreage is accepted for insurance; however, 
such coverage will not attach before March 1.
    11. Section 9(b)--Change the end of insurance period date from 
September 15 to September 30 to ensure that coverage is provided 
through the normal harvest period.
    12. Section 10(c)--Clarify that insect and disease damage due to 
insufficient or improper application of pest or disease control 
measures are not an insurable cause of loss.
    13. Section 12(b)--Modify the calculations used to determine dry 
pea claim amounts to allow the aggregation of production guarantees and 
production to count when more than one dry pea type is in one unit. 
This modification is necessary to accommodate the insurance of multiple 
types of dry peas within a single unit.
    14. Section 12--No adjustment for quality deficiencies will be 
allowed for Austrian Winter Peas since the type is commonly sold only 
after removing any deficiencies.
    15. Section 12(e)--Allow quality adjustment for smooth green and 
yellow varieties (including peas grown for seed that do not qualify to 
be insured as seed peas) that grade lower than U.S. No. 2 instead of 
the current U.S. No. 3. This change is consistent with the crop quality 
anticipated by the dry pea industry, and specifically by the American 
Dry Pea and Lentil Association (ADPLA). The ADPLA assesses the Fair 
Average Quality (FAQ) of each crop years' production. The historical 
FAQ for smooth green and yellow varieties is between U.S. No. 1 and 2. 
FCIC will increase premium rates as appropriate if this change is 
adopted in the final rule.
    16. Currently, coverage is provided for late planted acreage under 
The Late Planting Agreement Option. This option will not be applicable 
to the proposed provisions. FCIC will later propose late and prevented 
planting provisions that will be added to the Basic Provisions 
(Sec. 457.8). These provisions will provide late and prevented planting 
coverage for pea producers.
    17. Section 13--Provide for insurance coverage by written 
agreement. FCIC has a long standing policy of permitting certain 
modifications of the insurance contract by written agreement for some 
policies. This amendment allows FCIC to tailor the policy to a specific 
insured in certain instances. The new section will cover the procedures 
for, and duration of, written agreements.
    Good cause is shown to allow 30 days for comments after this rule 
is published in the Federal Register. This rule improves dry pea 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 interests requires the agency to act 
immediately to make these provisions available for the 1998 crop year.

List of Subjects in 7 CFR Parts 416 and 457

    Crop Insurance, Dry pea, Pea crop insurance regulations.

Proposed Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation hereby proposes to amend 7 CFR parts 416 and 457 
as follows:

PART 416--PEA CROP INSURANCE REGULATIONS FOR THE 1986 THROUGH THE 
1997 CROP YEARS

    1. The authority citation for 7 CFR part 416 is revised to read as 
follows:

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

    2. The part heading is revised to read as set forth above.
    3. The part heading ``Subpart--Regulations for the 1986 through the 
1997 Crop Years'' is removed.
    4. Section 416.7 is amended by revising the introductory text of 
paragraph (d) to read as follows:


Sec. 416.7  The application and policy.

* * * * *
    (d) The application for the 1986 and subsequent crop years is found 
at subpart D of part 400-General Administrative Regulations (7 CFR 
400.37, 400.38). The provisions of the Pea Insurance Policy for the 
1986 through 1997 crop years are as follows:
* * * * *

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

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

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

    5. Section 457.140 is added to read as follows:


Sec. 457.140  Dry pea crop insurance provisions.

    The Dry Pea 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:

Dry Pea Crop Provisions

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

1. Definitions

    Adequate stand. A population of live plants per unit of acreage 
which will produce at least the yield used to establish your 
production guarantee.
    Base price. The price per pound (excluding any discounts or 
incentives that may apply) that is stated in the contract seed pea 
processor contract and that will be paid to the producer for at 
least 50 percent of the total production under contract with the 
seed company.
    Combining. A harvesting process that uses a machine to separate 
the peas from the pods and other vegetable matter and place the peas 
into a temporary storage receptacle.
    Contract price. A fixed price per pound, (excluding any 
discounts or incentives that may apply), that is stated in the seed 
company contract.
    Contract seed peas--Dry peas produced for the purpose of 
producing seed to be planted at a future date and that are grown:
    (1) On acreage enrolled in the seed certification program 
administered by the state in which the peas are produced; and
    (2) Under a contract with a seed company. The contract must 
stipulate a fixed price for at least fifty percent of the 
anticipated production from the acreage planted to the contract seed 
peas, and must be executed before you report your acreage.
    Days. Calendar days.
    Dry peas--Peas of the following types:
    (1) All spring-planted smooth green and yellow varieties of 
commercial dry edible peas, and peas that are grown for the purpose 
of producing seed to be planted at a future date that do not meet 
the requirements contained in the definition of contract seed peas;
    (2) All fall-planted varieties of Austrian Winter Peas (if we 
agree in writing (see section 7(c));
    (3) All spring-planted varieties of lentils; and
    (4) All spring-planted varieties of contract seed peas.
    FSA. The Farm Service Agency, an agency of the United States 
Department of Agriculture, or a successor agency.

[[Page 26753]]

    Final planting date. The date contained in the Special 
Provisions for the insured crop by which the crop must initially be 
planted in order to be insured for the full production guarantee.
    Good farming practices. The cultural practices generally in use 
in the county for the crop to make normal progress toward maturity 
and produce at least the yield used to determine the production 
guarantee, and are those recognized by the Cooperative State 
Research, Education, and Extension Service as compatible with 
agronomic and weather conditions in the county.
    Harvest. Combining of dry peas.
    Interplanted. Acreage on which two or more crops are planted in 
a manner that does not permit separate agronomic maintenance or 
harvest of the insured crop.
    Irrigated practice. A method of producing a crop by which water 
is artificially applied during the growing season by appropriate 
systems and at the proper times, with the intention of providing the 
quantity of water needed to produce at least the yield used to 
establish the irrigated production guarantee on the irrigated 
acreage planted to the insured crop.
    Local market price. The cash price per pound for the U.S. No. 2 
grade of dry peas or lentils offered by buyers in the area in which 
you normally market the insured crop. Such price will be the 
prevailing dollar amount these buyers are willing to pay for dry 
peas or lentils containing the maximum limits of quality 
deficiencies allowable for the U.S. No. 2 grade. Factors not 
associated with grading under the United States Standards for Whole 
Dry Peas, Split Peas and Lentils will not be considered.
    Nurse crop (companion crop). A crop planted into the same 
acreage as another crop, that is intended to be harvested 
separately, and which is planted to improve growing conditions for 
the crop with which it is grown.
    Planted acreage. Land in which seed has been placed by a machine 
appropriate for the insured crop and planting method, at the correct 
depth, into a seedbed that has been properly prepared for the 
planting method and production practice. Dry peas must initially be 
planted in rows to be considered planted. 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, time to crop maturity, and marketing window, that replanting 
the insured crop will allow the crop to attain maturity prior to the 
calendar date for the end of the insurance period. It will not be 
considered practical to replant after the end of the late planting 
period unless replanting is generally occurring in the area.
    Price Election. In addition to the provisions of the definition 
of price election in section 1 of the Basic Provisions (Sec. 457.8) 
the price election for spring-planted contract seed peas produced 
under a seed company contract will be the result of multiplying the 
contract price by a percentage (not to exceed 100 percent) that you 
elect.
    Production guarantee (per acre). The number of pounds determined 
by multiplying the approved APH yield per acre by the coverage level 
percentage you elect.
    Replanting. Performing the cultural practices necessary to 
prepare the land to replace the pea seed and then replacing the pea 
seed in the insured acreage with the expectation of growing a 
successful crop.
    Salvage value. The highest price per pound that will be paid for 
the damaged dry peas as determined by us.
    Seed company. Any business enterprise regularly engaged in the 
processing of contract seed peas, that possesses all licenses and 
permits for marketing contract seed peas required by the state in 
which it operates, and that possesses or has contracted for 
facilities, with enough drying, screening, and bagging or packaging 
equipment to accept and process the contract seed peas within a 
reasonable amount of time after harvest.
    Seed company contract--A written agreement between the producer 
and the seed company, containing at a minimum:
    (a) The producer's promise to plant and grow one or more 
specific varieties of contract seed peas, and deliver the production 
from those varieties to the seed company;
    (b) The seed company's promise to purchase all the production 
stated in the contract;
    (c) A date by which the crop must be harvested to be accepted by 
the processor; and
    (d) A fixed price or a method to determine such price based on 
published independent information, that will be paid to the producer 
for the production stated in the contract.
    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 14.

2. Unit Division

    (a) Unless limited by the Special Provisions, a unit as defined 
in section 1 (Definitions) of the Basic Provisions (Sec. 457.8), 
(basic unit) may be divided into optional units if, for each 
optional unit you meet all the conditions of this section.
    (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 units that are not in compliance with these 
provisions into the basic unit from which they were formed. We will 
combine the optional units at any time we discover that you have 
failed to comply with these provisions. If failure to comply with 
these provisions is determined to be inadvertent, and the optional 
units are combined into a basic unit, that portion of the additional 
premium paid for the optional units that have been combined will be 
refunded to you.
    (d) All optional units you selected for the crop year must be 
identified on the acreage report for that crop year.
    (e) The following requirements must be met for each optional 
unit:
    (1) You must have 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 unless otherwise specified by a written agreement, as 
applicable:
    (i) Optional Units by Dry Pea Type: A separate optional unit may 
be established for each dry pea type designated in section 1 
(Definitions).
    (ii) 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.
    (iii) 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

[[Page 26754]]

system is used may qualify as a separate optional unit provided that 
all requirements of this section are met.

3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities

    In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) 
of the Basic Provisions (Sec. 457.8), you may select only one price 
election (percentage of the contract price for spring-planted 
contract seed peas) for all the dry peas 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 
(percentage of the contract price for spring-planted contract seed 
peas) for each dry pea type so designated in the Special Provisions. 
The price elections you choose for each type are not required to 
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 may choose 80 percent of 
the maximum price election for another type. However, if you elect 
the Catastrophic Risk Protection level of insurance for any dry pea 
type, that level of coverage will be applicable to all insured 
acreage in the county. When you elect a price election for one or 
more dry pea type that is applicable to the limited level of 
coverage and a price election applicable to the additional level of 
coverage for the remaining dry pea types, the administrative fees 
applicable to both the limited and additional levels of coverage 
will apply.

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), if you are insuring spring-
planted contract seed peas grown under contract with a seed company 
you must submit a copy of the seed company contract to us on or 
before the acreage reporting date.

7. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the dry pea 
types in the county (except Austrian Winter Peas unless you request 
insurance for such peas in accordance with section 7(c)) for which a 
premium rate is provided by the actuarial table:
    (1) In which you have a share;
    (2) That are planted for harvest as dry peas and which, if grown 
under a seed company contract, are not excluded from such contract 
for or during the crop year; and
    (3) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop;
    (ii) Planted into an established grass or legume; or
    (iii) Planted as a nurse crop.
    (b) An instrument in the form of a ``lease'' under which you 
retain control of the acreage on which the insured crop is grown and 
that provides for delivery of the crop under substantially the same 
terms as a seed company contract may be treated as a contract under 
which you have an insurable interest in the crop.
    (c) Austrian Winter Peas will be insured only if you request 
insurance in writing for such dry peas and we agree to provide 
coverage by written agreement. Your request to insure Austrian 
Winter Peas must be submitted to us not later than the sales closing 
date. We will not agree to insure Austrian Winter Peas unless an 
adequate stand exists in the spring to produce at least the 
production guarantee.
    (d) Any acreage of dry peas which is destroyed and replanted to 
different insurable type of dry peas will be considered insured 
acreage.

8. Insurable Acreage

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

9. Insurance Period

    In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (a) Coverage for Austrian Winter Peas will begin on acreage that 
has an adequate stand on the earlier of March 16 or on the date we 
agree to accept the acreage for insurance; however, insurance will 
not begin before March 1; and
    (b) The calendar date for the end of the insurance period is 
September 30 of the calendar year in which the crop normally is 
harvested.

10. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or 
improper application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if caused by an 
insured peril that occurs during the insurance period.

11. Duties in the Event of Damage or Loss

    In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the 
representative samples of the unharvested crop must be at least 10 
feet wide and extend the entire length of each field in the unit. 
The samples must not be harvested or destroyed until the earlier of 
our inspection or 15 days after harvest of the balance of the unit 
is completed.

12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event 
you are unable to provide separate acceptable production records:
    (1) For any optional 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 unit.
    (b) In the event of loss or damage to your pea crop covered by 
this policy, we will settle your claim by:
    (1) Multiplying the insured acreage of each dry pea type, 
excluding contract seed peas, by its respective production 
guarantee;
    (2) Multiplying each result in section 12(b)(1) by the 
respective price election for each insured type;
    (3) Totaling the results in section 12(b)(2);
    (4) Multiplying the insured acreage of each contract seed pea 
type by its respective production guarantee;
    (5 ) Multiplying each result in section 12(b)(4) by the 
applicable base price;
    (6) Multiplying each result in section 12(b)(5) by your selected 
price election percentage;
    (7) Totaling the results in section 12(b)(6);
    (8) Totaling the results in section 12(b)(3) and section 
12(b)(7);
    (9) Multiplying the total production to be counted of each dry 
pea type, excluding contract seed peas, if applicable, (see section 
12(d)) by the respective price election;
    (10) Totaling the value of all contract seed pea production (see 
section 12(c));
    (11) Totaling the results in section 12(b)(9) and section 
12(b)(10);
    (12) Subtracting the result in section 12(b)(11) from the result 
in section 12(b)(8); and
    (13) Multiplying the result by your share.
    (c) The value of contract seed pea production to count for each 
type in the unit will be determined as follows:
    (1) For production meeting the minimum quality requirements 
contained in the seed pea processor contract and for production that 
does not meet such requirements due to uninsured causes:
    (i) Multiplying the actual value or base price per pound, 
whichever is greater, by the price election percentage you selected; 
and
    (ii) Multiplying the result by the number of pounds of such 
production.
    (2) For mature production not meeting the minimum quality 
requirements contained in the seed pea processor contract due to 
insurable causes, and immature production that is appraised:
    (i) Multiplying the actual value by the price election 
percentage you selected; and

[[Page 26755]]

    (ii) Multiplying the result by the number of pounds of such 
production.
    (d) The total pea production to count (in pounds) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee 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; or
    (D) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production of 
dry peas, excluding Austrian Winter Peas, may be adjusted for 
quality deficiencies in accordance with section 12 (c) or (e), if 
applicable); and
    (iv) Potential production on insured acreage that you intend to 
put to another use or abandon, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for 
that acreage will end when you put the acreage to another use or 
abandon the crop. If agreement on the appraised amount of production 
is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to 
leave intact, and provide sufficient care for, representative 
samples of the crop in locations acceptable to us (The amount of 
production to count for such acreage will be based on the harvested 
production or appraisals from the samples at the time 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.
    (e) Mature production of smooth green and yellow peas, lentils, 
and contract seed peas that are not deliverable under the contract 
or are sold under the contract for less than the contract price, may 
be adjusted for quality deficiencies. No adjustment for quality 
deficiencies will be allowed for Austrian Winter Peas.
    (1) Production will be eligible for quality adjustment if:
    (i) Deficiencies in quality, in accordance with the United 
States Standards for Whole Dry Peas, Split Peas, and Lentils, result 
in production grading U.S. No. 3 or worse because of defects, color, 
skinned production (lentils only), odor, material weathering, or 
distinctly low quality; or
    (ii) Substances or conditions are present that are identified by 
the Food and Drug Administration or other public health 
organizations of the United States as being injurious to human or 
animal health.
    (2) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these crop 
provisions and which occurs within the insurance period;
    (ii) The deficiencies, substances, or conditions result in a net 
price for the damaged production that is less than the local market 
price;
    (iii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us 
or by a disinterested third party approved by us; and
    (iv) The samples are analyzed by a grader licensed to grade dry 
peas under the authority of the United States Agricultural Marketing 
Act or the United States Warehouse Act with regard to deficiencies 
in quality, or by a laboratory approved by us with regard to 
substances or conditions injurious to human or animal health. Test 
weight for quality adjustment purposes may be determined by our loss 
adjuster.
    (3) Dry Pea production that is eligible for quality adjustment, 
as specified in sections 12(e) (1) and (2), will be reduced as 
follows:
    (i) The value per pound of the qualifying damaged production and 
the local market price will be determined on the earlier of the date 
such damaged production is sold or the date of final inspection for 
the unit. The value per pound for the qualifying damaged production 
will be the value determined in the local area to the extent 
feasible. We may obtain prices from any buyer of our choice. If we 
obtain prices from one or more buyers located outside your local 
market area, we will reduce such prices by the additional costs 
required to deliver the dry peas to those buyers. Discounts used to 
establish the net value of the damaged production will be limited to 
those that are usual, customary, and reasonable. The value will not 
be reduced for:
    (A) Moisture content;
    (B) Damage due to uninsured causes; or
    (C) Drying, handling, processing, or any other costs associated 
with normal harvesting, handling, and marketing of the dry peas; 
except, if the value of the damaged production can be increased by 
conditioning, we may reduce the value of the production after it has 
been conditioned by the cost of conditioning but not lower than the 
value of the production before conditioning;
    (ii) The value per pound of the damaged or conditioned 
production will be divided by the local market price to determine 
the quality adjustment factor;
    (iii) The number of pounds of the damaged or conditioned 
production will then be multiplied by the quality adjustment factor 
to determine the production to count to be included in section 
12(d); and
    (iv) Any production harvested from plants growing in the insured 
crop may be counted as production of the insured crop on a weight 
basis.

13. Written Agreements

    Terms of this policy which are specifically designated for the 
use of written agreements 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 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 May 8, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-12707 Filed 5-14-97; 8:45 am]
BILLING CODE 3410-88-P