[Federal Register Volume 62, Number 101 (Tuesday, May 27, 1997)]
[Rules and Regulations]
[Pages 28609-28618]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13801]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 401 and 457


General Crop Insurance Regulations, Onion Endorsement; and Common 
Crop Insurance Regulations, Onion Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes 
specific crop provisions for the insurance of onions. 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 Onion 
Endorsement under the Common Crop Insurance Policy for ease of use and 
consistency of terms, and to restrict the effect of the current Onion 
Endorsement to the 1997 and prior crop years.

EFFECTIVE DATE: May 27, 1997.

FOR FURTHER INFORMATION CONTACT: Bill Klein, Insurance Management 
Specialist, Research and Development, Product Development Division, 
Federal Crop Insurance Corporation, United States Department of 
Agriculture, 9435 Holmes Road, Kansas City, MO 64131, 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

    Following publication of the proposed rule, the public was afforded 
60 days to submit written comments on information collection 
requirements previously approved by OMB under OMB control number 0563-
0003 through September 30, 1998. No public comments were received.

[[Page 28610]]

Unfunded Mandates Reform Act of 1995

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

Executive Order No. 12612

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

Regulatory Flexibility Act

    This regulation will not have a significant impact on a substantial 
number of small entities. New provisions included in this rule will not 
impact small entities to a greater extent than large entities. Under 
the current regulations, a producer is required to complete an 
application and acreage report. If the crop is damaged or destroyed, 
the insured is required to give notice of loss and provide the 
necessary information to complete a claim for indemnity.
    The producer 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 
certification 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 in accordance with Executive 
Order 12988 on civil justice reforms. 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

    On Thursday, February 13, 1997, FCIC published a proposed rule, in 
the Federal Register at 62 FR 6739-6746 to add to the Common Crop 
Insurance Regulations (7 CFR part 457) a new section, 7 CFR 457.135, 
Onion 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 onions found at 7 CFR 
401.126 (Onion Endorsement). This rule also amends Sec. 401.126 to 
limit its effect to the 1997 and prior crop years.
    Following publication of the proposed rule, the public was afforded 
30 days to submit written comments, data and opinions. A total of 28 
comments were received from reinsured companies, an insurance service 
organization, and FCIC Regional Service Offices (RSO). The comments 
received, and FCIC's responses, are as follows:
    Comment: An insurance service organization recommended that FCIC 
consider defining in section 1 the term ``onion'' or ``bulb onion'' to 
clarify that green (bunch) and seed onions are not insurable types.
    Response: Insurable types of onions are clearly identified in 
section 7 (Insured Crop). The provision states in part ``* * * the crop 
insured will be all the onions (excluding green (bunch) or seed onions, 
chives, garlic, leeks, and scallions) in the county * * *''. Therefore, 
no change will be made in the definitions.
    Comment: A reinsured company recommended deleting the definition 
for ``FSA'' in section 1 of the provisions because they do not see a 
need for this definition.
    Response: FCIC disagrees with the recommendation. The term ``FSA'' 
is used numerous times in section 14, Late planting and Prevented 
Planting. Therefore, the definition has not been deleted.
    Comment: A reinsured company recommended adding in section 1 the 
words ``and quality'' after the word ``quantity'' in the definition of 
``irrigated practice.''
    Response: FCIC agrees that water quality is an important issue. 
However, since no standards or procedures have been developed to 
measure water quality for insurance purposes, FCIC has elected not to 
include quality in the definition. Therefore, no change has been made.
    Comment: A reinsured company recommended that either the master 
yield concept be incorporated or that onions be insured solely for 
production loss with a quality option endorsement to cover quality 
concerns.
    Response: FCIC disagrees with the recommendations. The ``master 
yield'' is used by FCIC to establish an actual production history yield 
for crops that require several years between plantings in the same 
field to avoid buildup of insects, disease, or both. It is useful 
principally when optional units are authorized by section or section 
equivalent. For onions, however, location of land within a county is 
not a factor in determining eligibility for optional units. Therefore, 
each year's production is considered in establishing the APH yield 
regardless of the field in which the onions are planted. This differs 
materially from the conditions that necessitate the use of a master 
yield. Use of a master yield in the circumstances surrounding onion 
insurance would only complicate the onion insurance program needlessly.
    FCIC considered a ``straight production'' policy but circumstances 
do not support the concept. In general, onions that do not meet U.S. 
No. 1 standards for storage onions or the applicable marketing order 
for non-

[[Page 28611]]

 storage onions are not marketable. Furthermore, only a small 
percentage of onions normally fail to meet marketing requirements due 
to factors such as doubles, seeders, off color, or hand or machine 
damage. Thus, FCIC determined that adjustment for deficient quality 
best meets the risk management needs of onion producers.
    Comment: A reinsured company and an insurance service organization 
recommended that optional units be made available by legal description 
(sections, etc), as is the case with similar crops.
    Response: The rule authorizes optional units by irrigated and non-
irrigated practice and by type. The only types allowed to be separated 
into optional units are those identified in the Special Provisions and 
include white, yellow, and red storage onions and two or more types of 
non-storage onions based on regional differences. Additional unit 
division by section or legal description would require further record 
keeping that may not be readily available based on past practices, 
increase producer premium, and further complicate the insurance program 
for onions. Therefore, the recommendation is not adopted in the final 
rule.
    Comment: A reinsured company recommended that the percent of 
coverage for each stage be uniform nationwide and that it be included 
in section 3 of the crop provisions rather than being placed in the 
Special Provisions.
    Response: The percentage of coverage for each stage is uniform 
nationwide. The term ``production guarantee'' is defined in section 1 
and includes the percentages for each stage. The definition will remain 
in section 1. However, for clarity purposes the percentages have been 
added to the stages defined in section 3.
    Comment: An insurance service organization commented that the 
language in section 3 describes the first stage as being ``* * * until 
the emergence of the third leaf * * *'', while the second stage is 
described as ``* * * extends from emergence of the fourth leaf * * *'' 
Commenters believe that the language leaves a gap between stage 1 and 
stage 2 and that the language in the first stage should be modified to 
read ``* * * through emergence of the third leaf.''
    Response: FCIC agrees with the comment, and has amended provisions 
in section 3 accordingly.
    Comment: An FCIC RSO suggested that the proposed three stages may 
be difficult to distinguish and would require extra effort to 
administer. The commenter recommended that two stages be used: (1) 
Prior to topping and lifting or digging, and (2) From topping and 
lifting or digging to the end of the insurance period.
    Response: The three stages as defined in the proposed rule reflect 
the inputs through each stage of crop development. Transplants, for 
example, are immediately placed in the second stage based on producer 
inputs. The leaf count method of appraisal for onions is similar to 
appraisal methods for many other crops. Thus onion loss adjustment 
should not require significantly greater time to administer or be 
unduly difficult. Therefore, no change has been made.
    Comment: An insurance service organization commented that it is 
confusing to have no first stage for transplanted onions, only a second 
and final stage. The industry suggested that it might be less confusing 
to have separate stage definitions for direct-seeded and for 
transplanted onions.
    Response: Crops are divided into stages primarily to reflect 
insured's expenses in producing the crop and appropriate insurer 
liability. Transplanted onions are immediately placed in the second 
stage due to the additional cost incurred in purchasing the 
transplants, and the cost of transplanting. It would actually be more 
confusing to have two different stages, one for seed onions and one for 
transplanted onions. Therefore, no change has been made.
    Comment: An insurance service organization commented that a 
contract change date 60 days before the sales closing date, as shown in 
section 4, may not provide sufficient time for producers to make 
informed risk management decisions. They contend that the companies 
will not have adequate time to make operational changes, to develop 
training materials, or to train agents. Even a contract change date 
three months ahead of the sales closing creates problems in getting 
necessary information to insureds on a timely basis.
    Response: While FCIC is sensitive to the industry's concerns for 
timely information, FCIC believes that a contract change date 60 days 
prior to the sales closing date allows the companies adequate time to 
perform all required tasks in a timely manner. Furthermore, major 
changes in the crop provisions are published in the Federal Register 
prior to the contract change date. This provides companies additional 
lead time to begin implementing changes. The June 30 and November 30 
contract change dates contained in section 4 are consistent with other 
crops. For these reasons, no change has been made.
    Comment: One commenter from a reinsured company questioned if 70 
days, as listed in section 7, provides sufficient time to harvest wheat 
interplanted with onions to function as a windbreak in the Pacific 
Northwest where this is a common practice.
    Response: Wheat planted for this purpose is only a windbreak and is 
not intended for harvest. Harvesting wheat grown with an insured onion 
crop will violate the onion contract.
    Comment: One commenter from a reinsured company suggested that FCIC 
consider changing the provisions in section 8 which address crop 
rotation requirements. They maintained that onion growers in the 
Vidalia region plant onions following onions year after year, 
apparently with no adverse effect on yields. Current language requires 
producers to request written agreements every year unless the Special 
Provisions provide different rotation requirements. The commenter noted 
that they did not know what information will be provided in the Special 
Provisions. However, for the Vidalia region FCIC must allow different 
rotation requirements without requiring additional paperwork.
    Response: In most areas of the country, rotating onion acreage to 
control disease and insects is a good farming practice. Consequently, 
standard rotation requirements were placed in the crop provisions. The 
Special Provisions contain the requirements that are specific for the 
county and are received by the insured with the other policy documents. 
If a different rotation practice is appropriate for any area, FCIC will 
allow that rotation practice in the Special Provisions. Therefore, no 
change has been made.
    Comment: An insurance service organization commented that the State 
of Washington was listed in section 9 with a July 31 end of insurance 
period, but was not listed in item 10 of the summary of changes. The 
industry questioned whether Washington was inadvertently omitted from 
the summary.
    Response: FCIC inadvertently omitted the state of Washington from 
item 10 of the summary. The reference in section 9 is correct.
    Comment: An insurance service organization commented that, under 
section 9, the end of the insurance period for Colorado would be 
October 15. The summary of changes states that this is a date change 
for Colorado, but the Automated Date Table already shows October 15 for 
the 1997 crop year.

[[Page 28612]]

    Response: The date table published for the 1997 crop year is 
incorrect. The regulations at Sec. 401.126 specify the end of insurance 
date for Colorado is September 30. Therefore, the summary of changes is 
correct.
    Comment: An FCIC RSO recommended two changes in section 9: (1) That 
the term ``fall planted'' be changed to ``fall direct seeded'' or 
``winter transplanted'', and (2) the end of the insurance period be 
changed from June 15 to June 1 for the State of Georgia. The commenter 
stated that the date change recommendation resulted from consultation 
with extension personnel, and the commenter stated that the additional 
14 days increases the risk of heat damage to Georgia onions not 
harvested by June 1.
    Response: FCIC has determined that the terms are production 
practices that should properly be defined in the Special Provisions. 
The recommended change to the end of insurance period for Georgia is 
adopted.
    Comment: An FCIC RSO commented that the time allowed after lifting 
or digging of non-storage onions until the end of the insurance period 
was too short. A maximum of 14 days was recommended versus the 
presently allowed 2 days after lifting or digging.
    Response: Based on additional research, FCIC agrees with the 
recommendation and has made the change accordingly.
    Comment: An insurance service organization recommended that the 
words ``for the type'' be added to section 11 after the words ``by your 
price election'' to clarify the price used in determining the maximum 
amount of the replanting payment per acre.
    Response: FCIC agrees with the recommendation and has amended the 
language accordingly.
    Comment: A reinsured company recommended that the maximum amount of 
replant payment in section 11 be changed from ``* * * the lesser of 7 
percent of the final stage production guarantee or 18 hundredweight * * 
*'' to ``* * * the lesser of 10 percent of the final stage production 
guarantee or 20 hundredweight.'' The commenter reasoned that since most 
guarantees exceed 200 hundredweight, these recommendations will provide 
a more equitable replant payment.
    Response: A replanting payment equal to the lesser of 7 percent or 
18 hundredweight was based on extensive research of the actual cost of 
replanting. These costs do not differ materially if the crop yields 200 
or 500 hundredweight. Therefore, no change has been made.
    Comment: An insurance service organization stated that they did not 
understand the intent of the language in section 13(c)(1)(vi)(C) and 
how it related to items 13(c)(1)(vi)(A) and 13(c)(1)(vi)(B). They noted 
that they previously took exception with allowing the insured to wait 
for a later, probably lower appraisal. They did not believe that the 
language in section 13(c)(1)(vi)(C) resolved the issue.
    Response: After further review, FCIC agrees that the language in 
section 13(c)(1)(vi)(C) does not relate well to sections 
13(c)(1)(vi)(A) and 13(c)(1)(vi)(B) and does not further clarify 
section 13(c)(1)(vi)(A) as was intended. Therefore, FCIC has been 
deleted 13(c)(1)(vi)(C).
    Comment: A reinsured company and an insurance service organization 
expressed concern that the language in section 13(d) seemed to address 
only unharvested production and questioned the meaning of the clause 
``* * * no production will be counted if the appraised percent of 
damage exceeds the percentage shown in the Special Provisions.''
    Response: FCIC agrees that the language was unclear and has 
modified the language to read ``If the percent of damaged onion 
production, harvested or unharvested, is determined to exceed the 
percentage shown by type in the Special Provisions * * *'' to clearly 
specify both harvested and unharvested onion production that is 
damaged. Thus, for example, if the percentage shown on the Special 
Provisions is 50 percent for non-storage type onions, and the percent 
of actual damage exceeds 50 percent, then the production to count would 
be zero for that acreage. Onions with a high percent of damage 
generally have no value.
    Comment: An FCIC RSO recommended that the percentage factors 
referenced in section 13(d) be uniform nationwide and be placed in the 
Crop Provisions rather than in the Special Provisions. This person 
recommended a graduated system in which an appraised percent of damage 
between 0 and 30 percent resulted in no damage, but the amount of 
production would be reduced by five percent for each 1 percent of 
damage between 31 percent and 50 percent. Damage in excess of 50 
percent would result in no production to count.
    Response: Allowable damage differs by region and type. Listing the 
percentage in the Special Provisions permits recognition of these 
differences. Therefore, no change has been made.
    Comment: An insurance service organization communicated an 
anticipation that the substitute crop provision in section 14 under the 
prevented planting coverage will be eliminated for the 1998 crop year.
    Response: FCIC is currently working on a regulation that will 
propose numerous revisions to the prevented planting coverage. The 
substitute crop provision is among those revisions. Until that rule is 
finalized, the current prevented planting coverage will continue.
    Comment: An insurance service organization commented that some 
recently revised crop provisions have deleted the reference to base 
acres for non-program crops. Although the comment did not specifically 
recommend removal of these provisions from the onion crop provisions, 
this was clearly the intent.
    Response: FCIC agrees with the comment and is currently working on 
a regulation that proposes to delete reference to base acres.
    Comment: A reinsured company recommended reducing the prevented 
planting percentages in section 14 from 40 percent to 35 percent for 
unplanted acreage, and from 20 percent to 17.5 percent for acreage 
planted to a substitute crop. The commenter reasoned that the 
recommended percentages would be more consistent with other policies 
(such as cotton, rice, and sugar beets) that insure high-value crops.
    Response: After additional study, FCIC agrees with the comment and 
has amended section 14 to read 35 percent for unplanted acreage and 
17.5 percent for acreage planted to a substitute crop.
    Comment: An insurance service organization commented that the 
language in section 14 refers to double-cropping in ``* * * each of the 
last 4 years in which the insured crop was grown on the acreage.'' 
Earlier crop provisions required a history of double-cropping in each 
of the last 4 years, which was interpreted to mean the last 4 
consecutive calendar years, not APH crop years. The commenter observed 
that this is a significant change and questioned if it had been 
discussed in recent meetings where prevented planting was a topic.
    Response: Initial crop policies converted to the Common Crop 
Insurance Policy contained language appropriately interpreted to mean 
the last 4 consecutive calendar years. More recent crop provisions 
contain language that specifies each of the last 4 years in which the 
insured crop was grown on the acreage. This issue has been discussed in 
a number of recent prevented planting meetings at which industry 
representatives were present. The restriction that limited eligibility 
to

[[Page 28613]]

4 calendar years is unduly restrictive because it does not recognize 
normal practices on a typical farm that employs a double-cropping 
practice.
    Comment: An FCIC RSO recommended deleting language in section 14 
that refers to participation in USDA programs that limit the number of 
acres planted for the crop year to base acres, and to nonparticipation 
in USDA programs, because these provisions do not apply to onions.
    Response: FCIC agrees with the comment and is currently working on 
a regulation that proposes to delete these references. However, this 
language will not be deleted from Crop Provisions until that regulation 
has become a final rule. This provides consistency among policies. 
Therefore, no change has been made.
    Comment: An insurance service organization suggested combining the 
provisions contained in section 15(e) with the provisions in section 
15(a).
    Response: The requirement that a written agreement be requested on 
or before the sales closing date is intended to be the rule. The 
exception provided in section 15(e) is only available in specific 
limited circumstances. Therefore, no change will be made.
    Comment: A reinsured company and an insurance service organization 
recommended removal of the requirement in section 15 that a written 
agreement be renewed each year. The terms should be stated in the 
agreement to fit the particular situation for the policy, and, if no 
substantive changes occur from one year to the next, the written 
agreement should be continuous. Limiting written agreements to one year 
only increases administrative cost, complexity, and the opportunities 
for misunderstanding and error.
    Response: Written agreements are intended to supplement policy 
terms or permit insurance in unusual situations that require 
modification of the otherwise standard insurance provisions. If such 
practices continue year to year, they should be incorporated into the 
policy or Special Provisions. It is not intended that written 
agreements be so numerous that they would significantly increase 
administrative costs and cause producer misunderstanding. It is 
important to minimize written agreement exceptions to assure that the 
insured is well aware of the specific terms of the policy. Therefore, 
no change will be made.
    In addition to the changes described above, and minor reformatting 
and word changes for clarity, FCIC has made the following changes:
    1. Changed the term ``third stage'' to ``final stage'' throughout 
the text for clarification.
    2. Section 1--Amend the terms ``onion production'' and production 
guarantee (per acre) and added the term ``damaged onion production'' in 
order to standardize the guidelines to be used in determining damaged 
onions.
    3. Section 3(b)--Modified the language to read ``the stages are for 
any acreage in the unit * * *'' that qualify for a specific stage. 
Previously the language describing stages 2 and 3 read ``* * * 25 
percent of the acreage in the unit * * * .'' Stages are now on an acre 
basis rather than a unit basis.
    4. Section 13--Deleted section 13(c)(1)(vi)(C) based on proposed 
rule comments that the provision did not relate well to sections 
13(c)(1)(vi)(A) and 13(c)(1)(vi)(B) and that it did not further clarify 
section 13(c)(1)(vi)(A) as was intended.
    Good cause is shown to make this rule effective upon publication in 
the Federal Register. This rule improves the onion insurance coverage 
and brings it under the Common Crop Insurance Policy Basic Provisions 
for consistency among the policies. The earliest contract change date 
that can be met for the 1998 crop years is June 30, 1997. It is 
therefore, imperative that these provisions be made final before that 
date so that the reinsured companies and insureds may have sufficient 
time to implement these changes. Therefore, public interest requires 
the agency to make the rules effective upon publication.

List of Subjects in 7 CFR Parts 401 and 457

    Crop insurance, Onion crop insurance regulations, Onions.

Final Rule

    Accordingly, for the reasons set forth in the preamble, the Federal 
Crop Insurance Corporation hereby amends 7 CFR parts 401 and 457 
effective for the 1998 and succeeding crop years to read 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(1), 1506(p).

    2. In Sec. 401.126 the introductory paragraph is revised to read as 
follows:


Sec. 401.126  Onion endorsement.

    The provisions of the Onion Endorsement for the 1988 through the 
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(l), 1506(p).

    4. Section 457.135 is added to read as follows:


Sec. 457.135  Onion Crop Insurance Provisions.

    The Onion Crop Insurance Provisions for the 1998 and succeeding 
crop years are as follows:

    FCIC policies:

United States Department of Agriculture

Federal Crop Insurance Corporation

    Reinsured policies:

(Appropriate title for insurance provider)
    Both FCIC and reinsured policies:

Onion 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.
    Crop year. The period of time in which the onions are normally 
grown and designated by the calendar year in which the onions are 
normally harvested.
    Damaged onion production. Storage type onions that do not grade 
U.S. No. 1 or do not satisfy any other standards that may be 
contained in the Special Provisions; or non-storage type onions 
which do not satisfy standards contained in any applicable marketing 
order or other standards that may be contained in the Special 
Provisions.
    Days. Calendar days.
    Direct Marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, 
farmer's market, and permitting the general public to enter the 
field for the purpose of harvesting all or a portion of the crop.
    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

[[Page 28614]]

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. Removal of the onions from the field after topping and 
lifting or digging.
    Hundredweight. 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.
    Late planted. Acreage planted to the insured crop during the 
late planting period.
    Late planting period--The period that begins the day after the 
final planting date for the insured crop and ends 25 days after the 
final planting date.
    Lifting or digging. A pre-harvest process in which the onion 
roots are severed from the soil and the onion bulbs laid on the 
surface of the soil for drying in the field.
    Non-storage onions. Generally of a Bermuda, Granex, or Grano 
variety, or hybrids developed from these varieties, that are 
harvested as a bulb and dried only a short time, and consequently 
have a higher moisture content. They are thinner skinned, contain a 
higher sugar content, and are generally milder in flavor than 
storage onions. Due to a higher moisture and sugar content, they are 
subject to deterioration both on the surface and internally if not 
used shortly after harvest.
    Onion production. Onions of recoverable size and condition, with 
excess dirt and foliage material removed and that are not considered 
damaged onion production.
    Planted acreage. Land in which onion seed has been placed by a 
machine appropriate for the insured crop and planting method, or in 
which onion plants or sets have been transplanted by machine or by 
hand, at the correct depth, into a seedbed that has been properly 
prepared for the planting method and production practice. Onions 
must initially be planted in rows to be considered planted.
    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.
    Prevented planting. Inability to plant the insured crop with 
proper equipment by the final planting date designated in the 
Special Provisions for the insured crop in the county or the end of 
the late planting period. You must have been unable to plant the 
insured crop due to an insured cause of loss that has prevented the 
majority of producers in the surrounding area from planting the same 
crop.
    Production guarantee (per acre):
    (a) First stage production guarantee--Thirty-five percent (35%) 
of the final stage production guarantee.
    (b) Second stage production guarantee--Sixty percent (60%) of 
the final stage production guarantee.
    (c) Final stage production guarantee--The quantity of onions (in 
hundredweight) determined by multiplying the approved yield per acre 
by the coverage level percentage you elect.
    Replanting. Performing the cultural practices necessary to 
replace the onion seed or onion transplants, and then replacing the 
onion seed or onion transplants in the insured acreage with the 
expectation of growing a crop that will produce at least the yield 
used to determine the production guarantee.
    Storage onions. Onions other than a Bermuda, Granex, or Grano 
variety, or hybrids developed from these varieties that are 
harvested as a bulb and dried to a lower moisture content, are 
firmer, have more outer layers of paper-like skin, and are darker in 
color than non-storage onions. They are generally more pungent, have 
a lower sugar content, and can normally be stored for several months 
under proper conditions prior to use without deterioration.
    Timely planted. Planted on or before the final planting date 
designated in the Special Provisions for the insured crop in the 
county.
    Topping. A pre-harvest process to initiate curing, in which 
onion foliage is removed or bent over.
    Type. A category of onions as identified in the Special 
Provisions.
    Written agreement. A written document that alters designated 
terms of this policy in accordance with section 15.
    2. Unit Division.
    (a) Unless limited by the Special Provisions, a unit as defined 
in section 1 (Definitions) of the Basic Provisions (Sec. 457.8), 
(basic unit) may be divided into optional units if, for each 
optional unit you meet all the conditions of this section.
    (b) Basic units may not be divided into optional units on any 
basis other than as described in this section.
    (c) If you do not comply fully with these provisions, we will 
combine all optional units that are not in compliance with these 
provisions into the basic unit from which they were formed. We will 
combine the optional units at any time we discover that you have 
failed to comply with these provisions. If failure to comply with 
these provisions is determined to be inadvertent, and the optional 
units are combined into a basic unit, that portion of the additional 
premium paid for the optional units that have been combined will be 
refunded to you.
    (d) All optional units you selected for the crop year must be 
identified on the acreage report for that crop year.
    (e) The following requirements must be met for each optional 
unit:
    (1) You must have records, which can be independently verified, 
of planted acreage and production for each optional unit for at 
least the last crop year used to determine your production 
guarantee;
    (2) You must plant the crop in a manner that results in a clear 
and discernable break in the planting pattern at the boundaries of 
each optional unit;
    (3) 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) Optional units meet one or more of the following, as 
applicable, unless otherwise provided by written agreement:
    (i) Optional Units Based on Irrigated Acreage or Non-Irrigated 
Acreage: 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 
your 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 the 
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 all 
requirements of this section are met; or
    (ii) Optional Units Based on Onion Type: To qualify for a 
separate optional unit by type, that type of onion must be 
designated in the Special Provisions.
    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 onions 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 onion 
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) Your production guarantee progresses, in stages, to the 
final stage production guarantee. Stages will be determined on an 
acre basis and at least 75% of the plants on such acreage must be at 
the same stage to qualify for the applicable stage guarantee. The 
stages are as follows:
    (1) First stage extends from planting through the emergence of 
the third leaf for

[[Page 28615]]

direct seeded onions, and has a guarantee of 35 percent of the final 
stage production guarantee.
    (2) Second stage extends from emergence of the fourth leaf for 
direct seeded onions, or from transplanting of onion plants or sets, 
until the acreage has been subjected to topping and lifting or 
digging, and has a guarantee of 60 percent of the final stage 
production guarantee.
    (3) Final stage extends from the completion of topping and 
lifting or digging on the acreage until the end of the insurance 
period, and is the quantity of onions (in hundredweight) determined 
by multiplying the approved yield per acre by the coverage level 
percentage elected.
    (c) Any acreage of onions damaged in the first or second stage, 
to the extent that producers in the area would not normally further 
care for the onions, will be deemed to have been destroyed even 
though you may continue to care for the onions. The production 
guarantee for such acreage will not exceed the production guarantee 
for the stage in which the damage occurred.
    4. Contract Changes.
    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is June 30 
preceding the cancellation date for counties with an August 31 
cancellation date, and November 30 preceding the cancellation date 
for all other counties.
    5. Cancellation and Termination Dates.
    In accordance with section 2 (Life of the Policy, Cancellation, 
and Termination) of the Basic Provisions (Sec. 457.8), the 
cancellation and termination dates are:

------------------------------------------------------------------------
                                                      Cancellation and  
                 State and county                     termination date  
------------------------------------------------------------------------
All Georgia Counties; Umatilla County, Oregon;     Aug. 31.             
 Kinney, Uvalde, Medina, Bexar, Wilson, Karnes,                         
 Bee, and San Patricio, Counties, Texas, and all                        
 Texas Counties lying south thereof; Walla Walla                        
 County, Washington.                                                    
All other states and counties....................  Feb. 1.              
------------------------------------------------------------------------

    6. Annual Premium.
    In lieu of the provisions of section 7(c) (Annual Premium) of 
the Basic Provisions (Sec. 457.8), the annual premium amount is 
computed by multiplying the final stage production guarantee by the 
price election, 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 storage 
and non-storage onions (excluding green (bunch) or seed onions, 
chives, garlic, leeks, and scallions) in the county for which a 
premium rate is provided by the Actuarial Table:
    (a) In which you have a share;
    (b) That are planted for harvest as either storage onions or 
non-storage onions;
    (c) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Interplanted with another crop, unless the onions are 
interplanted with a windbreak crop and the windbreak crop is 
destroyed within 70 days after completion of seeding or 
transplanting; 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 
of the insured crop that:
    (a) Was planted the previous year to storage or non-storage 
onions, green (bunch) onions, seed onions, chives, garlic, leeks, 
shallots, or scallions unless different rotation requirements are 
specified in the Special Provisions or we agree in writing to insure 
such acreage; 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 the crop and is not replanted, unless we agree that it is 
not practical to replant.
    9. Insurance Period.
    (a) In addition to the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the acreage must be 
planted on or before the final planting date designated in the 
Special Provisions except as allowed in section 14(c).
    (b) The insurance period ends at the earliest of:
    (1) The calendar date for the end of the insurance period as 
follows:
    (i) June 1 for Vidalia, and any other non-storage onions planted 
in the State of Georgia;
    (ii) July 15 for 1015 Super Sweets, and any other non-storage 
onions in the State of Texas;
    (iii) July 31 for Walla Walla Sweets, and any other non-storage 
onions in the states of Oregon and Washington;
    (iv) August 31 for all non-storage onions in any other state; 
and
    (v) October 15 for all storage onions; or
    (2) The following event for each unit or portion of a unit:
    (i) Removal of the onions from the field; or
    (ii) Fourteen days after lifting or digging.
    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, unless control measures have not been taken;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if caused by an 
insured peril 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 damage that occurs or becomes evident after the end of the 
insurance period, including, but not limited to, loss of production 
that occurs after onions have been placed in storage.
    11. Replanting Payment.
    (a) In accordance with section 13 (Replanting Payment) of the 
Basic Provisions (Sec. 457.8), a replanting payment is allowed if 
the crop is damaged by an insurable cause of loss to the extent that 
the remaining stand will not produce at least 90 percent of the 
final stage production guarantee for the acreage and we determine 
that it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will 
be the lesser of 7 percent of the final stage production guarantee 
or 18 hundredweight multiplied by your price election for the type 
and by your insured share.
    (c) When onions are replanted using a practice that is 
uninsurable as an original planting, the liability for the unit will 
be reduced by the amount of the replanting payment. The premium 
amount will not be reduced.
    12. Duties in the Event of Damage or Loss.
    (a) In accordance with the requirements of section 14 (Duties in 
the Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), 
any representative samples of the unharvested crop that may be 
required 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) You must notify us at least 15 days before any production 
from any unit will be sold by direct marketing. We will conduct an 
appraisal that will be used to determine your production to count 
for production that is sold by direct marketing. If damage occurs 
after this appraisal, we will conduct an additional appraisal. These 
appraisals, and any acceptable records provided by you, will be used 
to determine your production to count. Failure to give timely notice 
that production will be sold by direct marketing will result in an 
appraised amount of production to count that is not less than the 
production guarantee per acre if such failure results in our 
inability to make the required appraisal.

[[Page 28616]]

    13. Settlement of Claim.
    (a) We will determine your loss on a unit basis. In the event 
you are unable to provide 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 of section 13(b)(1) by the 
respective price election;
    (3) Totaling the results in section 13(b)(2);
    (4) Multiplying the total production to be counted (see section 
13(c)) by the respective price elections you chose;
    (5) Totaling the results of section 13(b)(4);
    (6) Subtracting the result in section 13(b)(5) from the result 
in 13(b)(3); and
    (7) Multiplying the result in section 13(b)(6) by your share.
    (c) The total production (in hundredweight) to count 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 direct marketed to consumers if you fail to meet the 
requirements contained in section 12;
    (C) Put to another use without our consent;
    (D) That is damaged solely by uninsured causes; or
    (E) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested onion production (mature unharvested 
production may be adjusted based on the percent of damaged onion 
production in accordance with section 13(d));
    (iv) The appraised production that exceeds the difference 
between the first or second stage (as applicable) and the final 
stage production guarantee for acreage that does not qualify for the 
final stage guarantee, if such acreage is not subject to section 
13(c)(1) (i) and (ii); 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 if you put the acreage to another use or 
abandon the crop.
    (vi) 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 
onion 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 onion 
production, or our reappraisal if additional damage occurs and the 
crop is not harvested.
    (2) All harvested onion production from the insurable acreage.
    (d) If the damage to onion production (harvested or unharvested) 
exceeds the percentage shown by type in the Special Provisions, no 
production will be counted for that unit or portion of a unit unless 
the damaged onion production from that acreage is subsequently sold.
    (e) The extent of any damaged onion production must be 
determined not later than the time onions are placed in storage if 
the production is stored prior to sale, or the date the onions are 
delivered to a packer, processor, or other handler if production is 
not stored.
    14. Late Planting and Prevented Planting.
    (a) In lieu of provisions contained in the Basic Provisions 
(Sec. 457.8) regarding acreage initially planted after the final 
planting date and the applicability of a Late Planting Agreement 
Option, insurance will be provided for acreage planted to the 
insured crop during the late planting period (see section 14(c)) and 
you were prevented from planting (see section 14(d)). These 
coverages provide reduced production guarantees. The premium amount 
for late planted acreage and eligible prevented planting acreage 
will be the same as that for timely planted acreage. If the amount 
of premium you are required to pay (gross premium less our subsidy) 
for late planted acreage or prevented planting acreage exceeds the 
liability on such acreage, coverage for those acres will not be 
provided, no premium will be due, and no indemnity will be paid for 
such acreage.
    (b) If you were prevented from planting, you must provide 
written notice to us not later than the acreage reporting date.
    (c) Late Planting
    (1) For onion acreage planted during the late planting period, 
the production guarantee for each acre will be reduced for each day 
planted after the final planting date by:
    (i) One percent (1%) per day for the 1st through the 10th day; 
and
    (ii) Two percent (2%) per day for the 11th through the 25th day.
    (2) In addition to the requirements of section 6 (Report of 
Acreage) of the Basic Provisions (Sec. 457.8), you must report the 
dates the acreage is planted within the late planting period.
    (3) If planting of onions continues after the final planting 
date, or you are prevented from planting during the late planting 
period, the acreage reporting date will be the later of:
    (i) The acreage reporting date contained in the Special 
Provisions for the insured crop; or
    (ii) Five days after the end of the late planting period.
    (d) Prevented Planting (Including Planting After the Late 
Planting Period)
    (1) If you were prevented from timely planting onions, you may 
elect:
    (i) To plant onions during the late planting period. The 
production guarantee for such acreage will be determined in 
accordance with section 14(c)(1);
    (ii) Not to plant this acreage to any crop except a cover crop 
not for harvest. You may also elect to plant the insured crop after 
the late planting period. In either case, the production guarantee 
for such acreage will be 35 percent of the final stage production 
guarantee for timely planted acres. For example, if your production 
guarantee for timely planted acreage is 300 hundredweight per acre, 
your prevented planting production guarantee would be 105 
hundredweight per acre (300 hundredweight multiplied by 0.35). If 
you elect to plant the insured crop after the late planting period, 
production to count for such acreage will be determined in 
accordance with section 13; or
    (iii) Not to plant the intended crop but plant a substitute crop 
for harvest, in which case:
    (A) No prevented planting production guarantee will be provided 
for such acreage if the substitute crop is planted on or before the 
10th day following the final planting date for the insured crop; or
    (B) A production guarantee equal to 17.5 percent of the final 
stage production guarantee for timely planted acres will be provided 
for such acreage, if the substitute crop is planted after the 10th 
day following the final planting date for the insured crop. If you 
elected the Catastrophic Risk Protection Endorsement or excluded 
this coverage, and plant a substitute crop, no prevented planting 
coverage will be provided. For example, if your production guarantee 
for timely planted acreage is 300 hundredweight per acre, your 
prevented planting production guarantee would be 52.5 hundredweight 
per acre (300 hundredweight multiplied by 0.17.5). You may elect to 
exclude prevented planting coverage when a substitute crop is 
planted for harvest and receive a reduction in the applicable 
premium rate. If you wish to exclude this coverage, you must so 
indicate, on or before the sales closing date, on your application 
or on a form approved by us. Your election to exclude this coverage 
will remain in effect from year to year unless you notify us in 
writing on our form by the applicable sales closing date for the 
crop year for which you wish to include this coverage. All acreage 
of the crop insured under this policy will be subject to this 
exclusion.
    (2) Production guarantees for timely, late, and prevented 
planting acreage within a unit will be combined to determine the 
production guarantee for the unit. For example, assume you insure 
one unit in which you have a 100 percent share. The unit consists of 
150 acres, of which 50 acres were planted timely, 50 acres were 
planted 7 days after the final planting date (late planted), and 50 
acres were not planted but are eligible for a prevented planting 
production guarantee. The production guarantee for the unit will be 
computed as follows:
    (i) For the timely planted acreage, multiply the per acre 
production guarantee for timely planted acreage by the 50 acres 
planted timely;
    (ii) For the late planted acreage, multiply the per acre 
production guarantee for timely

[[Page 28617]]

planted acreage by 93 percent and multiply the result by the 50 
acres planted late; and
    (iii) For prevented planting acreage, multiply the per acre 
production guarantee for timely planted acreage by:
    (A) Thirty-five percent and multiply the result by the 50 acres 
you were prevented from planting, if the acreage is eligible for 
prevented planting coverage, and if the acreage is left idle for the 
crop year, or if a cover crop is planted not for harvest. Prevented 
planting compensation hereunder will not be denied because the cover 
crop is hayed or grazed; or
    (B) Seventeen and one-half percent and multiply the result by 
the 50 acres you were prevented from planting, if the acreage is 
eligible for prevented planting coverage, and if you elect to plant 
a substitute crop for harvest after the 10th day following the final 
planting date for the insured crop (This paragraph (B) is not 
applicable, and prevented planting coverage is not available under 
these crop provisions, if you elected the Catastrophic Risk 
Protection Endorsement or you elected to exclude prevented planting 
coverage when a substitute crop is planted (see section 
14(d)(1)(iii)).)
    Your premium will be based on the result of multiplying the per 
acre production guarantee for timely planted acreage by the 150 
acres in the unit.
    (3) You must have the inputs available to plant and produce the 
intended crop with the expectation of at least producing the 
production guarantee. Proof that these inputs were available may be 
required.
    (4) In addition to the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the insurance period 
for prevented planting coverage begins:
    (i) On the sales closing date contained in the Special 
Provisions for the insured crop in the county for the crop year the 
application for insurance is accepted; or
    (ii) For any subsequent crop year, on the sales closing date for 
the insured crop in the county for the previous crop year, provided 
continuous coverage has been in effect since that date. For example: 
If you make application and purchase insurance for onions for the 
1998 crop year, prevented planting coverage will begin on the 1998 
sales closing date for onions in the county. If the onion coverage 
remains in effect for the 1999 crop year (is not terminated or 
canceled during or after the 1998 crop year) prevented planting 
coverage for the 1999 crop year began on the 1998 sales closing 
date. Cancellation for the purposes of transferring the policy to a 
different insurance provider when there is no lapse in coverage will 
not be considered terminated or canceled coverage for the purpose of 
the preceding sentence.
    (5) The acreage to which prevented planting coverage applies 
will not exceed the total eligible acreage on all FSA Farm Serial 
Numbers in which you have a share, adjusted for any reconstitution 
that may have occurred on or before the sales closing date. Eligible 
acreage for each FSA Farm Serial Number is determined as follows:
    (i) If you participate in any program administered by the United 
States Department of Agriculture that limits the number of acres 
that may be planted for the crop year, the acreage eligible for 
prevented planting coverage will not exceed the total acreage 
permitted to be planted to the insured crop.
    (ii) If you do not participate in any program administered by 
the United States Department of Agriculture that limits the number 
of acres that may be planted, and unless we agree in writing on or 
before the sales closing date, eligible acreage will not exceed the 
greater of:
    (A) The FSA base acreage for the insured crop, including acres 
that could be flexed from another crop, if applicable;
    (B) The number of acres planted to onions on the FSA Farm Serial 
Number during the previous crop year; or
    (C) One-hundred percent of the simple average of the number of 
acres planted to onions during the crop years that you certified to 
determine your yield.
    (iii) Acreage intended to be planted under an irrigated practice 
will be limited to the number of acres for which you had adequate 
irrigation facilities prior to the insured cause of loss which 
prevented you from planting.
    (iv) A prevented planting production guarantee will not be 
provided for any acreage:
    (A) That does not constitute at least 20 acres or 20 percent of 
the acreage in the unit, whichever is less (Acreage that is less 
than 20 acres or 20 percent of the acreage in the unit will be 
presumed to have been intended to be planted to the insured crop 
planted in the unit, unless you can show that you had the inputs 
available before the final planting date to plant and produce 
another insured crop on the acreage);
    (B) For which the actuarial table does not designate a premium 
rate unless a written agreement designates such premium rate;
    (C) Used for conservation purposes or intended to be left 
unplanted under any program administered by the United States 
Department of Agriculture;
    (D) On which another crop is prevented from being planted, if 
you have already received a prevented planting indemnity, guarantee 
or amount of insurance for the same acreage in the same crop year, 
unless you provide adequate records of acreage and production 
showing that the acreage has a history of double-cropping in each of 
the last 4 years in which the insured crop was grown on the acreage;
    (E) On which the insured crop is prevented from being planted, 
if any other crop is planted and fails, or is planted and harvested, 
hayed or grazed on the same acreage in the same crop year (other 
than a cover crop as specified in section 14 (d)(2)(iii)(A) or a 
substitute crop allowed in section 14 (d)(2)(iii)(B)), unless you 
provide adequate records of acreage and production showing that the 
acreage has a history of double-cropping in each of the last 4 years 
in which the insured crop was grown on the acreage;
    (F) When coverage is provided under the Catastrophic Risk 
Protection Endorsement if you plant another crop for harvest on any 
acreage you were prevented from planting in the same crop year, even 
if you have a history of double-cropping. If you have a Catastrophic 
Risk Protection Endorsement and receive a prevented planting 
indemnity, guarantee, or amount of insurance for a crop and are 
prevented from planting another crop on the same acreage, you may 
only receive the prevented planting indemnity, guarantee, or amount 
of insurance for the crop on which the prevented planting indemnity, 
guarantee, or amount of insurance is received; or
    (G) For which planting history or conservation plans indicate 
that the acreage would have remained fallow for crop rotation 
purposes.
    (v) For the purpose of determining eligible acreage for 
prevented planting coverage, acreage for all units will be combined 
and be reduced by the number of onion acres timely planted and late 
planted. For example, assume you have 100 acres eligible for 
prevented planting coverage in which you have a 100 percent share. 
The acreage is located in a single FSA Farm Serial Number which you 
insure as two separate optional units consisting of 50 acres each. 
If you planted 60 acres of onions on one optional unit and 40 acres 
of onions on the second optional unit, your prevented planting 
eligible acreage would be reduced to zero (i.e., 100 acres eligible 
for prevented planting coverage minus 100 acres planted equals 
zero).
    (6) In accordance with the provisions of section 6 (Report of 
Acreage) of the Basic Provisions (Sec. 457.8), you must report by 
unit any insurable acreage that you were prevented from planting. 
This report must be submitted on or before the acreage reporting 
date. For the purpose of determining acreage eligible for a 
prevented planting production guarantee, the total amount of 
prevented planting and planted acres cannot exceed the maximum 
number of acres eligible for prevented planting coverage. Any 
acreage you report in excess of the number of acres eligible for 
prevented planting coverage, or that exceeds the number of eligible 
acres physically located in a unit, will be deleted from your 
acreage report.
    15. 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 
15(e);
    (b) The application for written agreement must contain all terms 
of the contract between the insurance provider and the insured that 
will be in effect if the written agreement is not approved;
    (c) If approved by us, the written agreement will include all 
variable terms of the contract, including, but not limited to, crop 
type or variety, the guarantee, premium rate, and price election;
    (d) Each written agreement will only be valid for one year. (If 
the written agreement is not specifically renewed the following 
year, insurance coverage for subsequent crop years will be in 
accordance with the printed policy); and
    (e) An application for written agreement submitted after the 
sales closing date may be approved if, after a physical inspection 
of the

[[Page 28618]]

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 19, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-13801 Filed 5-23-97; 8:45 am]
BILLING CODE 3410-08-P