[Federal Register Volume 62, Number 120 (Monday, June 23, 1997)]
[Proposed Rules]
[Pages 33763-33768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-16273]


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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. 120 / Monday, June 23, 1997 / 
Proposed Rules  

[[Page 33763]]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 401 and 457


General Crop Insurance Regulations, Canning and Processing Tomato 
Endorsement; and Common Crop Insurance Regulations, Processing Tomato 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes 
specific crop provisions for the insurance of processing tomatoes. The 
provisions will be used in conjunction with the Common Crop Insurance 
Policy Basic Provisions, which contain standard terms and conditions 
common to most crops. The intended effect of this action is to provide 
policy changes to better meet the needs of the insured, include the 
current Canning and Processing Tomato Endorsement and the late planting 
agreement option with the Common Crop Insurance Policy for ease of use 
and consistency of terms, and to restrict the effect of the current 
Canning and Processing Tomato Endorsement to the 1997 and prior crop 
years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business July 23, 1997, and will be considered 
when the rule is to be made final.

ADDRESSES: Interested persons are invited to submit written comments to 
the Director, Product Development Division, Federal Crop Insurance 
Corporation, United States Department of Agriculture, 9435 Holmes Road, 
Kansas City, MO 64131.

FOR FURTHER INFORMATION CONTACT: Richard Brayton, Insurance Management 
Specialist, Research and Development, Product Development Division, 
Federal Crop Insurance Corporation, at the Kansas City, MO, address 
listed above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

    The Office of Management and Budget (OMB) has determined this rule 
to be exempt for the purposes of Executive Order 12866, and, therefore, 
this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    The information collection requirements contained in these 
regulations are being reviewed by OMB pursuant to the Paperwork 
Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB control number 
0563-0053. The processing tomatoes are described in the background.
    The title of this information collection is ``Multiple Peril Crop 
Insurance.''
    The burden associated with the processing tomatoes is estimated at 
19 minutes per response from approximately 1,112 respondents each year 
for a total number of 364 hours.
    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. Under 
the current regulations, a producer is required to complete an 
application and acreage report. If the crop is damaged or destroyed, 
the insured is required to give notice of loss and provide the 
necessary information to complete a claim for indemnity. The insured 
must also annually certify to the previous years production if adequate 
records are available to support the certification. The producer must 
maintain the production records to support the certified information 
for at least three years. This regulation does not alter those 
requirements. The amount of work required of the insurance companies 
delivering and servicing these policies will not increase significantly 
from the amount of work currently required.
    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, DC 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 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 larger entities. This 
rule does not have any greater or lesser impact on the producer. 
Therefore, this action is determined to be exempt from the

[[Page 33764]]

provisions of the Regulatory Flexibility Act ( 5 U.S.C. 605), and no 
Regulatory Flexibility Analysis was prepared.

Federal Assistance Program

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

Executive Order No. 12372

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

Executive Order No. 12988

    This proposed rule has been reviewed under Executive Order 12988. 
The provision of this rule will not have a retroactive effect prior to 
the effective date. The provisions of this rule will preempt state and 
local laws to the extent such state and local laws are inconsistent 
herewith. The administrative appeal provisions published at 7 CFR part 
11 must be exhausted before any action for judicial review may be 
brought.

Environmental Evaluation

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

National Performance Review

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

Background

    FCIC proposes to add to the Common Crop Insurance Regulations (7 
CFR part 457), a new section, 7 CFR 457.160, Processing Tomato 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 canning and processing tomatoes 
found at 7 CFR 401.114 (Canning and Processing Tomato Endorsement). 
FCIC also proposes to amend 401.114 to limit its effect to the 1997 and 
prior crop years.
    This rule makes minor editorial and format changes to improve the 
Canning and Processing Tomato Endorsement's compatibility with the 
Common Crop Insurance Policy. In addition, FCIC is proposing 
substantive changes in the provisions for insuring processing tomatoes 
as follows:
    1. Remove the word ``canning'' from the title of the policy.
    2. Section 1--Add definitions for the terms ``acre,'' ``bypassed 
acreage,'' ``days,'' ``FSA,'' ``final planting date,'' ``good farming 
practices,'' ``interplanted,'' ``irrigated practice,'' ``planted 
acreage,'' ``practical to replant,'' ``processor,'' ``processor 
contract,'' ``production guarantee (per acre),'' ``replanting,'' 
``timely planted,'' ``ton,'' and ``written agreement'' for 
clarification.
    3. Section 2(a)--For California only, eliminate unit division for 
acreage that is owned by one entity and operated by another entity on a 
share basis. This change, in conjunction with other optional unit 
structure changes proposed herein, (see item 4 below) will provide an 
insurance product that is more flexible for insureds and is easier to 
administer. Current provisions that require unit division by share 
arrangement are difficult to administer in California because 
shareholder arrangements vary a great deal from year to year.
    4. Section 2(f)(4)(iii)--In California only, allow optional units 
to be established if acreage planted to tomatoes is separated by a 
field that is not planted to tomatoes or by a permanent boundary such 
as a permanent waterway, fence, public road or woodland. Such optional 
units must consist of the minimum number of acres specified in the 
Special Provisions. Optional units will only be allowed where the 
processor contract is acreage based as opposed to production based. 
This change provides a unit structure that is less complex to 
administer, and is compatible with the land location and landowner 
changes that occur on an annual basis in California.
    5. Section 3(a)--Specify that an insured may select only one price 
election for all the processing tomatoes planted in the county that are 
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 tomato type specified in the Special 
Provisions. The price election the producer chooses for each type must 
have the same percentage relationship to the maximum price available. 
This will help to protect against adverse selection and simplifies 
administration of the program.
    6. Section 3(b)--Specify the liability under this policy will not 
exceed the number of tons under a processor contract in effect on or 
before the earlier of August 20 or the date of damage to the insured 
crop in all counties with an acreage reporting date of 7/15, or on or 
before the acreage reporting date or the date of damage in all other 
counties. (Exclude damage that occurs in stage one or damage that 
results in a replant payment.)
    7. Section 3 (c) and (d)--Specify: (c) The price elections used to 
determine the amount of indemnity are progressive by stages and 
increase, at specified intervals, to the price used for final stage 
losses; and (d) Any acreage of tomatoes damaged to the extent that the 
majority of producers in the area would not normally further care for 
the tomatoes, will be deemed to have been destroyed even though you may 
continue to care for it. The price election used to determine the 
amount of indemnity will be that applicable to the stage in which the 
tomatoes were destroyed.
    8. Sections 4--Change the contract change date from November 30 to 
August 31 preceding the cancellation date for California, and from 
December 31 to November 30 preceding the cancellation date for all 
other states. This will maintain an adequate time period between the 
contract change date and the revised cancellation date.
    9. Section 5--Change the cancellation and termination dates from 
February 15 to January 15 in California, and from April 15 to March 15 
for all other states. This change is necessary to standardize the 
cancellation and termination dates with the sales closing dates. Sales 
closing dates were changed to comply with requirements of the Federal 
Crop Insurance Reform Act of 1994.
    10. Section 6--Require the producer to provide a copy of the 
processor contract to the insurance provider on or before August 20 in 
all counties with an acreage reporting date of 7/15, or on or before 
the acreage reporting date in all other counties. In some instances 
contracts are not completed prior to August 20 in counties with a 7/15 
acreage reporting date.
    11. Section 8(a)(3)--Specify that the crop insured will be tomatoes 
that are grown under and in accordance with the requirements of a 
processor contract executed on or before August 20 for all counties 
with an acreage reporting date of 7/15, or on or before the acreage 
reporting date in all other counties, and are not excluded from the 
processor contract for or during the crop year.
    12. Section 8(b)--Specify that if the processor contract under 
which the insured retains control of the acreage on which the tomatoes 
are grown and that provides for delivery of the tomatoes under certain 
conditions and at a stipulated price, the insured will be

[[Page 33765]]

considered to have a share in the insured crop if the insured retains 
the risk of loss.
    13. Section 8(c)--Specify the requirements under which the tomato 
producer who is also a processor may establish an insurable interest in 
the insured crop.
    14. Section 9(a)--Require that any acreage damaged prior to the 
final planting date to the extent that the majority of growers in the 
area would normally not further care for the crop must be replanted 
unless the insurer agrees that replanting is not practical.
    15. Section 9(b)--Specify that rotation requirements shown in the 
Special Provisions must be met for acreage to be insured.
    16. Section 10--Add provisions stating that the insurance period 
will end when the amount of tomatoes delivered equals the amount of 
production under contract.
    17. Section 11(a)(1)--Clarify that adverse weather conditions 
include: (1) Excessive moisture that prevents harvesting equipment from 
entering the field or prevents timely operation of harvesting 
equipment; and (2) abnormally hot or cold temperatures that cause 
acreage to be bypassed.
    18. Section 11(a)(3) and (4)--Clarify that insect and disease 
damage as a cause of loss does not include damage due to insufficient 
or improper application of insect and disease control measures.
    19. Section 11(b)--Clarify that the insurance provider will not 
cover loss of production: (1) On bypassed acreage if the acreage is 
bypassed due to the breakdown or non-operation of equipment or 
facilities; (2) on bypassed acreage if acreage to be bypassed is 
selected based on the availability of a crop insurance payment; (3) due 
to processing tomatoes not being timely harvested, unless the delay in 
harvesting is directly due to an insured cause of loss; (4) due to 
failure to follow the requirements contained in the processor contract; 
(5) due to damage that occurs to unharvested production after the 
producer delivers the production required by the processor contract; 
and (6) due to failure to market the tomatoes unless such failure is 
due to actual physical damage due to a specified cause of loss.
    20. Section 12--Add provisions to provide a replanting payment. The 
current tomato policy does not allow a replanting payment. A replanting 
payment will be allowed only if the crop sustained a loss in excess of 
50 percent of the plant stand. This change is consistent with 
replanting payment provisions contained in the Fresh Market Tomato 
(Guaranteed Production Plan) Crop Provisions and Fresh Market Tomato 
(dollar plan) Crop Provisions. The replant provisions were requested by 
tomato growers and insurance providers.
    21. Section 13(a)(2)--Clarify that the producer must give notice on 
or before the date the tomatoes should be harvested if any acreage on a 
unit will not to be harvested.
    22. Section 14(c)(1)(i)(E)--Clarify that the total production to 
count will include appraised production on bypassed acreage, unless 
adequate evidence is provided to show the acreage was bypassed for 
insurable reasons.
    23. Section 14(d)--Specifies that once harvest has begun on any 
acreage covered by a processor contract that specifies the number of 
tons to be delivered, the total indemnities payable will be limited to 
an amount based on the number of tons of production necessary to 
fulfill the quantity of production remaining to be delivered under the 
processor contract consistent with the number of acres planted.
    24. Section 15--Provide 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 processing 
tomato crop insurance coverage and brings it under the Common Crop 
Insurance Policy Basic Provisions for consistency among policies. The 
earliest contract change date required for new policies is August 31. 
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 the new provisions. Therefore, public 
interest requires the agency to act immediately to make these 
provisions available for the 1998 crop year.

List of Subjects in CFR Parts 401 and 457

     Canning and processing tomato endorsement, Crop insurance, 
Processing tomato.

Proposed Rule

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

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

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

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

    2. The introductory text of Sec. 401.114 is revised to read as 
follows:


Sec. 401.114  Canning and processing tomato endorsement.

    The provisions of the Canning and Processing Tomato Crop Insurance 
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. 7 CFR part 457 is amended by adding a new Sec. 457.160 to read 
as follows:


Sec. 457.160  Processing tomato crop insurance provisions.

    The Processing Tomato 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:

Processing Tomato 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

    Acre--43,560 square feet of land on which row widths do not 
exceed 6 feet, of if row width exceeds 6 feet, the land on which at 
least 7260 linear feet rows are planted.
    Bypassed acreage--Land on which production is ready for harvest 
but is not harvested.
    Days--Calendar days.
    FSA--The Farm Service Agency, an agency of the United States 
Department of Agriculture, or a successor agency.
    Final planting date--The date contained in the Special 
Provisions for the insured crop by which must initially be planted 
in order to be insured for the full production guarantee.
    First fruit set--The reproductive stage of the plant when 30 
percent of the plants have

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produced a fruit that has reached a minimum of one inch in diameter.
    Good farming practices--The cultural practices generally in use 
in the county for the crop to make normal progress toward maturity 
and produce at least the yield used to determine the production 
guarantee and are those required by the tomato processor contract 
with the processing company, and are those recognized by the 
Cooperative State Research, Education, and Extension Service as 
compatible with agronomic and weather conditions in the county.
    Harvest--The severance of tomatoes from the vines.
    Interplanted--Acreage on which two or more crops are planted in 
a manner that does not permit separate agronomic maintenance or 
harvest of the insured crop.
    Irrigated practice--A method of producing a crop by which water 
is artificially applied during the growing season by appropriate 
systems and at the proper times, with the intention of providing the 
quantity of water needed to produce at least the yield used to 
establish the irrigated production guarantee on the irrigated 
acreage planted to the insured crop.
    Planted acreage--Land in which seed or plants have 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. Tomatoes must 
initially be placed in rows far enough apart to permit cultivation 
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.
    Plant stand--The number of plants per acre that is considered to 
be the normal plants per acre for the applicable tomato variety and 
growing area.
    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, marketing 
window, condition of the field, and time to crop maturity, that 
replanting the insured crop will allow the crop to attain maturity 
prior to the calendar date for the end of the insurance period. It 
will not be considered practical to replant, unless production from 
the replanted acreage can be delivered under the terms of the 
processor contract.
    Processor--Any business enterprise regularly engaged in 
processing tomatoes for human consumption, that possesses all 
licenses and permits for processing tomatoes required by the state 
in which it operates, and that possesses facilities, or has 
contractual access to such facilities, with enough equipment to 
accept and process contracted processing tomatoes within a 
reasonable amount of time after harvest.
    Processor contract--A written agreement between the producer and 
a processor, containing at a minimum:
    (a) The producer's commitment to plant and grow processing 
tomatoes, and to deliver the tomato production to the processor;
    (b) The processor's commitment to purchase all the production 
stated in the contract; and
    (c) A price per ton that will be paid for the production.
    Production guarantee (per acre)--The number of tons determined 
by multiplying the approved APH yield per acre by the coverage level 
percentage you elect.
    Replanting--Performing the cultural practices necessary to 
replace the tomato seed or plants and then replacing the tomato seed 
or plants in the insured acreage with the expectation of growing a 
successful crop.
    Timely planted--Planted on or before the final planting date 
designated in the Special Provisions for the insured crop in the 
county.
    Ton--Two thousand (2,000) pounds avoirdupois.
    USDA--United States Department of Agriculture.
    Written agreement--A written document that alters designated 
terms of this policy in accordance with section 15.

2. Unit Division

    (a) For California only, in lieu of the unit definition 
contained in section 1 (Definitions) of the Basic Provisions 
(Sec. 457.8), basic units will consist of all insurable acreage in 
the county in which you have a share.
    (b) Unless limited by the Special Provisions, a basic unit as 
defined in section 2(a) for California only, or in section 1 
(Definitions) of the Basic Provisions (Sec. 457.8) for all states 
except California, may be divided into optional units if, for each 
optional unit, you meet all the conditions of this section. Optional 
units will be available only if the processor contract stipulates 
the number of acres that are under contract and not a specific 
amount of production.
    (c) Basic units may not be divided into optional units on any 
basis other than as described in this section.
    (d) If you do not comply fully with these provisions, we will 
combine all optional units that are not in compliance with these 
provisions into the basic unit from which they were formed. We will 
combine the optional units at any time we discover that you have 
failed to comply with these provisions. If failure to comply with 
these provisions is determined to be inadvertent, and the optional 
units are combined into a basic unit, that portion of the additional 
premium paid for the optional units that have been combined will be 
refunded to you.
    (e) All optional units you selected for the crop year must be 
identified on the acreage report for that crop year.
    (f) The following requirements must be met for each optional 
unit:
    (1) You must have 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) For each crop year, records of marketed production or 
measurement of stored production from each optional unit must be 
maintained in such a manner that permits us to verify the production 
from each optional unit, or the production from each unit must be 
kept separate until loss adjustment is completed by us; and
    (4) Each optional unit must meet one or more of the following 
criteria, as applicable, unless otherwise specified by written 
agreement:
    (i) Optional units by Section, Section Equivalent, or FSA Farm 
Serial Number: Optional units may be established if each optional 
unit is located in a separate legally identified section. In the 
absence of sections, we may consider parcels of land legally 
identified by other methods of measure including, but not limited to 
Spanish grants, railroad surveys, leagues, labors, or Virginia 
Military Lands, as the equivalent of sections for unit purposes. In 
areas that have not been surveyed using the systems identified 
above, or another system approved by us, or in areas where such 
systems exist but boundaries are not readily discernable, each 
optional unit must be located in a separate farm identified by a 
single FSA Farm Serial Number.
    (ii) Optional Units on Acreage Including Both Irrigated and Non-
irrigated Practices: In addition to, or instead of, establishing 
optional units by section, section equivalent, or FSA Farm Serial 
Number, optional units may be based on irrigated acreage and non-
irrigated acreage (in those counties where ``non-irrigated'' 
practice is allowed in the actuarial table) if both are located in 
the same section, section equivalent, or FSA Farm Serial Number. To 
qualify as separate irrigated and non-irrigated optional units, the 
non-irrigated acreage may not continue into the irrigated acreage in 
the same rows or planting pattern. The irrigated acreage may not 
extend beyond the point at which the irrigation system can deliver 
the quantity of water needed to produce the yield on which the 
guarantee is based, except the corners of a field in which a center-
pivot irrigation system is used will be considered as irrigated 
acreage if separate acceptable records of production from the 
corners are not provided. If the corners of a field in which a 
center-pivot irrigation system is used do not qualify as a separate 
non-irrigated optional unit, they will be a part of the unit 
containing the irrigated acreage. Non-irrigated acreage that is not 
a part of a field in which a center-pivot irrigation system is used 
may qualify as a separate optional unit provided that all other 
requirements of this section are met.
    (iii) Optional Units on Separate Acreage Planted to Tomatoes: In 
California only, in addition to or instead of establishing optional 
units by section, section equivalent, or FSA Farm Serial Number, 
optional units may be established if acreage planted to tomatoes is 
separated by a field that is not planted to tomatoes or by a 
permanent boundary, such as, a permanent waterway, fence, public 
road or woodland. Such optional unit must consist of the minimum 
number of acres stated in the Special Provisions. Acreage planted to 
tomatoes that is less than the minimum number of acres required will 
attach to the closest unit within the section, section equivalent or 
FSA Farm Serial Number.

[[Page 33767]]

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):
    (a) You may select only one price election for all the 
processing tomatoes in the county insured under this policy unless 
the Special Provisions provide different price elections by type, in 
which case you may select one price election for each processing 
tomato 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) Liability under this policy will not exceed the number of 
tons under a processor contract in effect on or before the earlier 
of: (1) August 20 or the date of damage to the insured crop in all 
counties with an acreage reporting date of 7/15; or (2) The acreage 
reporting date or the date of damage in all other counties. (Exclude 
damage that occurs in stage one or damage that results in a replant 
payment.)
    (c) The price election used to determine the amount of an 
indemnity are progressive by stages and increase, at specified 
intervals, to the price used for final stage losses. Stages will be 
determined on an acre basis. The stages and production guarantees 
are:
    (1) First stage is from planting until first fruit set. If any 
acreage of the insured crop is destroyed in this stage, the price 
used to determine whether or not an indemnity is owed for such 
acreage will be 50 percent of your price election;
    (2) Second stage is from the first fruit set until harvest. If 
any acreage of the insured crop is destroyed in this stage, the 
price used to determine whether or not an indemnity is owed for such 
acreage will be 80 percent of your price election; and
    (3) Third stage (final stage) is harvested acreage. The price 
election used in this stage to determine whether or not an indemnity 
is due will be 100 hundred percent of your price election.
    (d) Any acreage of tomatoes damaged to the extent that the 
majority of producers in the area would not normally further care 
for the tomatoes, will be deemed to have been destroyed even though 
you may continue to care for it. The price election used to 
determine the amount of an indemnity will be that applicable to the 
stage in which the tomatoes were destroyed.

4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 
preceding the cancellation date for California and November 30 
preceding the cancellation date for all other states.

5. Cancellation and Termination Dates

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

6. Report of Acreage

    In addition to the provisions of section 6 (Report of Acreage) 
of the Basic Provisions (Sec. 457.8), you must provide a copy of all 
processor contracts to us on or before August 20 in all counties 
with an acreage reporting date of 7/15, or on or before the acreage 
reporting date in all other counties.

7. Annual Premium

    In lieu of the premium amount determinations contained in 
section 7 (Annual Premium) of the Basic Provisions (Sec. 457.8), the 
annual premium amount is determined by multiplying the production 
guarantee per acre by the price election for unharvested acreage, by 
the premium rate, by the insured acreage, by the applicable share at 
the time of planting, and ultimately by any applicable premium 
adjustment factors contained in the Actuarial Table.

8. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the tomatoes 
in the county for which a premium rate is provided by the actuarial 
table:
    (1) In which you have a share;
    (2) That are planted for harvest as processing tomatoes;
    (3) That are grown under and in accordance with the requirements 
of a processor contract executed on or before August 20 in all 
counties and states with an acreage reporting date of 7/15, or on or 
before the acreage reporting date in all other counties, and are not 
excluded from the processor contract for or during the crop year; 
and
    (4) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Grown where tomatoes have been grown in either of the two 
previous years, except in California;
    (ii) Interplanted with another crop; or
    (iii) Planted into an established grass or legume.
    (b) You will be considered to have a share in the insured crop 
if, under the processor contract, you retain possession of the 
acreage on which the tomatoes are grown, you are at risk of loss for 
failure to deliver, and the processor contract provides for delivery 
of tomatoes under specified conditions and at a stipulated price per 
unit of delivery.
    (c) A tomato producer who is also a processor may establish an 
insurable interest if the following requirements are met:
    (1) The processor must meet the requirements as defined in these 
crop provisions;
    (2) The Board of Directors or officers of the processor must 
have executed a resolution that sets forth essentially the same 
terms as a processor contract. Such resolution will be considered a 
contract under the terms of the processing tomato crop insurance 
policy; and
    (3) Our inspection of the processing facilities determines that 
they satisfy the definition of a processor contained in section 1 of 
these crop provisions.

9. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8):
    (a) Any acreage of the insured crop that is damaged before the 
final planting date, to the extent that the majority of growers in 
the area would normally not further care for the crop, must be 
replanted unless we agree that it is not practical to replant;
    (b) We will not insure any acreage that does not meet the 
rotation requirements contained in section 8 of these crop 
provisions or in the Special Provisions.

10. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of 
the Basic Provisions (Sec. 457.8), regarding the end of the 
insurance period, insurance ceases at the earlier of the date:
    (a) The production delivered to the processor equals the amount 
of production under contract, if the processor contract stipulates a 
specific amount of production to be delivered;
    (b) The number of tons delivered to the processor equals the 
number of insured contracted acres multiplied by the approved yield, 
if the processor contract stipulates a specific number of acres from 
which all production is to be delivered;
    (c) The tomatoes were totally destroyed;
    (d) The tomatoes should have been harvested;
    (e) The tomatoes were abandoned;
    (f) Harvest was completed;
    (g) Final adjustment of a loss was completed; or
    (h) The following calendar date for the end of the insurance 
period:
    (1) October 20 in California; and
    (2) October 10 in all other states.

11. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8):
    (a) Insurance is provided only against the following causes of 
loss that occur during the insurance period:
    (1) Adverse weather conditions, including but not limited to:
    (i) Excessive moisture that prevents the harvesting equipment 
from entering the field or that prevents the timely operation of 
harvesting equipment; and
    (ii) Abnormally hot or cold temperatures that cause insured 
acreage to be bypassed because an unexpected number of acres over a 
large producing area are ready for harvest at the same time, and the 
total production is beyond the normal capacity of the processor to 
timely harvest or process;
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or 
improper application of disease control measures;
    (5) Wildlife, unless appropriate control measures have not been 
taken;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if caused by an 
insured cause of loss that occurs during the insurance period; or
    (9) Physical damage to the production to the extent that the 
processor is unable to utilize it, if caused by an insured cause of 
loss that occurs during the insurance period.

[[Page 33768]]

    (b) In addition to the causes of loss excluded in section 12 
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not 
insure against any loss of production:
    (1) On bypassed acreage, if the acreage is bypassed due to the 
breakdown or non-operation of equipment or facilities;
    (2) On bypassed acreage, if acreage to be bypassed is selected 
based on the availability of a crop insurance payment;
    (3) Due to the processing tomatoes not being timely harvested, 
unless such delay in harvesting is solely and directly due to an 
insured cause of loss;
    (4) Due to your failure to follow the requirements contained in 
the processor contract;
    (5) Due to damage that occurs to unharvested production after 
you deliver the production required by the processor contract; or
    (6) Due to failure to market the tomatoes unless such failure is 
due to actual physical damage from a cause specified in section 
11(a).

12. 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 sustained a loss exceeding 50 percent of the plant stand 
and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will 
be the lesser of 20 percent of the production guarantee or 3 tons, 
multiplied by your price election, multiplied by your share.

13. Duties in the Event of Damage or Loss

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

14. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event 
you are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units 
for which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled 
production to such units in proportion to our liability on the 
harvested acreage for the units.
    (b) In the event of loss or damage covered by this policy, we 
will settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee, by type if applicable;
    (2) Multiplying each result in section 14(b)(1) by the 
respective price election by type, if applicable;
    (3) Totaling the results in section 14(b)(2);
    (4) Multiplying the total production to be counted, by type if 
applicable, (see subsection 14(c)) by the respective price election;
    (5) Totaling the results in section 14(b)(4);
    (6) Subtracting the result in section 14(b)(5) from the result 
in section 14(b)(3); and
    (7) Multiplying the result in section 14(b)(6) by your share.
    (c) The total production to count, specified in tons, from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes;
    (D) For which you fail to provide production records that are 
acceptable to us; or
    (E) That is bypassed unless the acreage was bypassed due to a 
cause of loss stated in section 11(a).
    (ii) Production lost due to uninsured causes;
    (iii) Potential production on insured acreage that you intend to 
put to another use or abandoned, 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 
you fail to provide sufficient care for the samples, our appraisal 
made prior to giving you consent to put the acreage to another use 
will be used to determine the amount of production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested 
production, or our reappraisal if additional damage occurs and the 
crop is not harvested.
    (2) All harvested production (in tons) delivered to the 
processor which meets the quality requirements of the processor 
contract (expressed as usable or payable weight).
    (3) All harvested tomato production delivered to processor which 
does not meet the quality requirements of the processor contract due 
to not being timely delivered.
    (d) Once harvest has begun on any acreage covered by a processor 
contract that specifies the number of tons to be delivered, the 
total indemnity payable will be limited to an amount based on the 
number of tons of production necessary to fulfill the quantity of 
production remaining to be delivered under the processor contract 
consistent with the number of acres planted.

15. 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 
15(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 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, DC, on June 16, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-16273 Filed 6-20-97; 8:45 am]
BILLING CODE 3410-08-P