[Federal Register Volume 62, Number 132 (Thursday, July 10, 1997)]
[Proposed Rules]
[Pages 37000-37004]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18060]


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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. 132 / Thursday, July 10, 1997 / 
Proposed Rules  

[[Page 37000]]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 450 and 457


Prune Crop Insurance Regulations; and Common Crop Insurance 
Regulations, Prune Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes 
specific crop provisions for the insurance of prunes. 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 Prune Crop 
Insurance Regulations with the Common Crop Insurance Policy for ease of 
use and consistency of terms, and to restrict the effect of the current 
Prune Crop Insurance Regulations to the 1997 and prior crop years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business August 11, 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: Linda Williams, Insurance Management 
Specialist, Research and Development, Product Development Division, 
Federal Crop Insurance Corporation, at the Kansas City, MO, address 
listed above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

    The Office of Management and Budget (OMB) has determined this rule 
to be exempt for the purposes of Executive Order No. 12866, and, 
therefore, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    The 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.
    Section 7 of the proposed 1998 Prune Crop Provisions adds 
interplanting as an insurable farming practice as long as it is 
interplanted with another perennial crop and does not adversely affect 
the insured crop. This practice was not insurable under the previous 
Prune Crop Insurance Policy. Consequently, interplanting information 
will need to be collected using the FCI-12-P Pre-Acceptance Perennial 
Crop Inspection Report form for approximately two percent of the 
insureds who interplant their prune crop. Standard interplanting 
language has been added to most perennial crops to make insurance 
available for more perennial crop producers and reduce the acreage that 
will need to be placed into the noninsured crop disaster assistance 
program (NAP).
    The title of this information collection is ``Multiple Peril Crop 
Insurance.''
    The information to be collected includes a crop insurance 
application and an acreage report. Information collected from the 
application and acreage report is electronically submitted to FCIC by 
the reinsured companies. Potential respondents to this information 
collection are producers of prunes that are eligible for Federal crop 
insurance.
    The information requested is necessary for the reinsured companies 
and FCIC to provide insurance and reinsurance, determine eligibility, 
determine the correct parties to the agreement or contract, determine 
and collect premiums or other monetary amounts, and pay benefits.
    The title of this information collection is ``Multiple Peril Crop 
Insurance.''
    The burden associated with the written agreement is estimated at 19 
minutes per response from approximately 4,864 respondents each year for 
a total number of 1,571 hours.
    FCIC is requesting comments on the following: (a) whether the 
proposed collection of information is necessary for the proper 
performance of the functions of the agency, including whether the 
information shall have practical utility; (b) the accuracy of the 
agency's estimate of the burden of the proposed collection of 
information; (c) ways to enhance the quality, utility, and clarity of 
the information to be collected; and (d) ways to minimize the burden of 
the collection of information on respondents, including through the use 
of automated collection techniques or other forms of information 
gathering technology.
    Comments regarding paperwork reduction should be submitted to the 
Desk Officer for Agriculture, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, D.C. 20503.
    OMB is required to make a decision concerning the collections of 
information contained in these proposed regulations between 30 and 60 
days after submission to OMB. Therefore, a comment to OMB is best 
assured of having full effect if OMB receives it within 30 days of 
publication. This does not affect the deadline for the public to 
comment on the proposed regulation.

Unfunded Mandates Reform Act of 1995

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

Executive Order No. 12612

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

[[Page 37001]]

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. 
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 12988

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

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 Sec. 457.133, Prune 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 prunes found at 7 CFR part 450 (Prune 
Crop Insurance Regulations). FCIC also proposed to amend 7 CFR part 450 
to limit its effect to the 1997 and prior crop years. FCIC will later 
publish a regulation to remove and reserve part 450.
    This rule makes minor editorial and format changes to improve the 
Prune Crop Insurance Regulations' compatibility with the Common Crop 
Insurance Policy. In addition, FCIC is proposing substantive changes in 
the provisions for insuring prunes as follows:
    1. Section 1--Add the definition for the terms ``days,'' ``direct 
marketing,'' ``FSA,'' ``good farming practices,'' ``interplanted,'' 
``irrigated practice,'' ``non-contiguous land,'' ``production 
guarantee,'' ``ton,'' ``written agreement,'' and change the definition 
of ``prunes'' for clarification.
    2. Section 2(e)--Change provisions to allow optional units on non-
contiguous land and for land located in separate sections. Previous 
regulations provided basic units for land located on contiguous land. 
This change will standardize these provisions with the provisions 
contained in other perennial crop policies.
    3. Section 3(a)--Specify that the insured may select only one price 
election for all the prunes in the county insured under the policy, 
unless the Special Provisions provide different price elections by 
varietal group, in which case the insured may select one price election 
for each prune varietal group designated in the Special Provisions.
    4. Section 3(b)--Specify that the insured must report damage, 
removal of trees, change in practices or any other circumstance that 
may reduce yields. The insured must also report, for the first year of 
insurance for acreage interplanted with another perennial crop and 
anytime the planting pattern of such acreage is changed, the age and 
varietal group, if applicable, of any interplanted crop, its planting 
pattern, and any other information that the insurer requests in order 
to establish the yield upon which the production guarantee is based. If 
the insured fails to notify the insurer of any circumstance that may 
reduce yields from previous levels, the insurer will reduce the 
production guarantee at any time the insurer becomes aware of the 
circumstance. Current regulations provide that production guarantees 
will be reduced when the number of bearing trees has been reduced by 
more than 10 percent from the preceding year. This change will 
standardize these provisions with provisions contained in other 
perennial crop policies.
    5. Section 6(c)--Clarify that the insured crop must be grown on 
prune tree varieties that were commercially available when the trees 
were set out and on rootstock that is adapted to the area.
    6. Section 7--Add provisions to make interplanted prunes insurable 
if planted with another perennial crop unless the insurance provider 
inspects the acreage and determines it does not qualify to be accepted 
for insurance coverage. This provision was added to provide insurance 
coverage to the maximum extent to all prune producers, and to reduce 
the number of acres that would require coverage under the Non-insured 
Assistance Program (NAP).
    7. Section 8--Add provisions to clarify the procedure when an 
insurable share is acquired or relinquished on or before the acreage 
reporting date.
    8. Section 9(a)--Remove direct Mediterranean Fruit Fly damage as an 
insured cause of loss. Effective control measures are now available; 
therefore, damage due to Mediterranean Fruit Fly is no longer needed as 
a separate cause of loss.
    9. Section 9(b)(1)--Add disease and insect infestation to the 
excluded causes of loss unless adverse weather prevents the proper 
application of control measures, causes control measures to be 
ineffective when properly applied, or no effective control mechanism is 
available for such disease or insect infestation. These exclusions need 
to be added for clarification so that insurance coverage is not 
provided for causes of loss that could be prevented.
    10. Section 9(b)(2)--Clarify that insurance is not provided against 
damage or loss of production due to the inability to market the prunes 
for any reason other than actual physical damage to the prunes from an 
insurable cause.
    11. Section 10(a)--Require that the insured give notice of loss 
within 3 days of the date harvest should have started if the crop is 
not to be harvested. Previous regulations required written notice if 
during the period before harvest, any prunes would not be harvested or 
further cared for. This change will standardize the notice of loss 
requirements utilized in other perennial crops.
    12. Section 10(b)--Require notice of loss be provided at least 15 
days prior to harvest if production will be sold by direct marketing or 
sold as fresh fruit. This change will assure that a timely notice of 
loss is provided so that a pre-harvest inspection can be made to 
determine the total amount of production to count when the prunes

[[Page 37002]]

will be harvested for direct marketing or fresh fruit.
    13. Section 10(c)--Change the notice of loss requirements when the 
insured intends to claim an indemnity. Require that notice of loss be 
provided at least 15 days prior to the beginning of harvest or 
immediately if damage is discovered during harvest. Previous prune 
regulations required notice of loss not later than 10 days after 
harvest or the end of the insurance period. This change will 
incorporate and standardize the notice of loss requirements utilized 
for other perennial crops.
    14. Section 10(d)--Specifies that the insured cannot destroy the 
damaged crop until we have given written consent to do so. However, the 
insured may sell or dispose of the damaged crop if there is a market 
for it. Previous regulations required written consent before the 
insured destroyed any of the prunes which were not to be harvested. 
This change conforms with the requirements contained in other crop 
policies.
    15. Section 11(c)(1)(i)(B)--Specify that production to count will 
not be less than the production guarantee per acre for any acreage that 
is marketed directly to consumers or sold as fresh fruit if the 
producer fails to meet the notification requirements contained in 
section 10.
    16. Section 11(c)(1)(iv)--Require the insured to continue to 
provide sufficient care for the insured crop when the insured does not 
agree with the appraisal on that acreage. Production to count for such 
acreage will be determined using the harvested production if the crop 
is harvested, or our reappraisal if the crop is not harvested.
    17. Section 11(d)--Clarify that the total harvested production to 
count will include prune production harvested for fresh fruit. Such 
fresh fruit production will be converted to a dried prune weight basis 
by dividing the total amount of fresh fruit production by 3.1.
    18. Section 12--Add provisions for providing 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.
    19. Remove the date for submitting an acreage report. In accordance 
with the Common Crop Insurance Policy, Basic Provisions, the acreage 
reporting date instead will be contained in the Special Provisions. 
This change conforms the prune crop provisions to other crop 
provisions.

List of Subjects in 7 CFR Parts 450 and 457

    Crop insurance, Prunes.

Proposed Rule

    Accordingly, for the reasons set forth in the preamble, the Federal 
Crop Insurance Corporation hereby proposes to amend 7 CFR parts 450 and 
457 as follows:

PART 450--PRUNE CROP INSURANCE REGULATIONS

    1. The authority citation for 7 CFR part 450 is revised to read as 
follows:

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

    2. The part heading is revised to read as set forth above.
    3. Subpart Heading ``Subpart--Regulations for the 1986 through the 
1997 Crop Years'' is removed.
    4. Section 450.7 is amended by revising the introductory text of 
paragraph (d) to read as follows:


Sec. 450.7  The application and policy.

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

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

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

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

    5. Section 457.133 is added to read as follows:


Sec. 457.133  Prune crop insurance provisions.

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

    FCIC policies:

Department of Agriculture

Federal Crop Insurance Corporation

    Reinsured policies:

(Appropriate title for insurance provider)

    Both FCIC and reinsured policies:

Prune 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

    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 picking 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.
    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 recognized by the Cooperative State Research, 
Education, and Extension Service as compatible with agronomic and 
weather conditions in the county.
    Harvest. Picking of mature prunes from the trees or ground 
either by hand or machine.
    Interplanted. Acreage on which two or more crops are planted in 
any form of alternating or mixed pattern.
    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.
    Market price for standard prunes. The price per ton shown on the 
processor's settlement sheet for each size count of standard prunes.
    Natural condition prunes. The condition of prunes in which they 
are normally delivered from a dehydrator or dry yard.
    Non-contiguous land. Any two or more tracts of land whose 
boundaries do not touch at any point, except that land separated 
only by a public or private right-of-way, waterway, or an irrigation 
canal will be considered as contiguous.
    Production guarantee (per acre). The number of tons determined 
by multiplying the approved APH yield per acre by the coverage level 
percentage you elect.
    Prunes. Any type or variety of plums that are grown in the area 
for the production of prunes and that meets the requirements defined 
in the applicable Federal Marketing Agreement Dried Prune Order.
    Standard prunes. Any natural condition prunes:
    (a) That grade ``C'' or better in accordance with the United 
States Standards for grades of prunes; or
    (b) That meet or exceed the grading standards in effect for the 
crop year, if a Federal Marketing Agreement Dried Prune Order has 
been established for the area in which the insured crop is grown.
    Substandard prunes. Any natural condition prunes failing to meet 
the applicable grading specifications for standard prunes.

[[Page 37003]]

    Ton. Two thousand (2000) pounds avoirdupois.
    Written agreement. A written document that alters designated 
terms of this policy in accordance with section 12.

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 premium 
paid for the purpose of electing optional units will be refunded to 
you for the units combined.
    (d) All optional units established for a crop year must be 
identified on the acreage report for that crop year.
    (e) The following requirements must be met for each optional 
unit:
    (1) You must have provided records by the production reporting 
date, that can be independently verified, of acreage and production 
for each optional unit for at least the last crop year used to 
determine your production guarantee;
    (2) For each crop year, you must have records of marketed 
production or measurement of stored production from each optional 
unit maintained in such a manner that permits us to verify the 
production from each optional unit, or the production from each unit 
must be kept separate until loss adjustment is completed by us;
    (3) Each optional unit must also meet one or more of the 
following criteria as applicable unless otherwise allowed by a 
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 exists but boundaries are not readily discernable, each 
optional unit must be located in a separate farm identified by a 
single FSA Farm Serial Number; or
    (ii) Optional Units on Acreage Located on Non-Contiguous Land: 
In lieu of establishing optional units by section, section 
equivalent or FSA Farm Serial Number, optional units may be 
established if each optional unit is located on non-contiguous land.

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 prunes in 
the county insured under this policy unless the Special Provisions 
provide different price elections by varietal group, in which case 
you may select one price election for each prune varietal group 
designated in the Special Provisions. The price elections you choose 
for each varietal group must have the same percentage relationship 
to the maximum price offered by us for each varietal group. For 
example, if you choose 100 percent of the maximum price election for 
one varietal group, you must also choose 100 percent of the maximum 
price election for all other varietal groups.
    (b) You must report, by the production reporting date designated 
in section 3 (Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities) of the Basic Provisions (Sec. 457.8), by 
varietal group if applicable:
    (1) Any damage, removal of trees, change in practices, or any 
other circumstance that may reduce the expected yields below the 
yield upon which the insurance guarantee is based, and the number of 
affected acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted 
with another perennial crop, and anytime the planting pattern of 
such acreage is changed:
    (i) The age of the interplanted crop, and varietal group if 
applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to 
establish your approved yield.
    We will reduce the yield used to establish your production 
guarantee as necessary, based on our estimate of the effect of the 
following: interplanted perennial crop; removal of trees; damage; 
change in practices and any other circumstance that may affect the 
yield potential of the insured crop. If you fail to notify us of any 
circumstance that may reduce your yields from previous levels, we 
will reduce your production guarantee at any time we become aware of 
the circumstance.

4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is October 31 
preceding the cancellation date.

5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation 
and termination dates are January 31.

6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the prunes in 
the county for which a premium rate is provided by the actuarial 
table:
    (a) In which you have a share;
    (b) That are grown for the production of natural condition 
prunes;
    (c) That are grown on tree varieties that:
    (1) Were commercially available when the trees were set out;
    (2) Are adapted to the area;
    (3) Are grown on rootstock that is adapted to the area; and
    (4) Are irrigated (except where otherwise provided in the 
Special Provisions);
    (d) That are grown in an orchard that, if inspected, is 
considered acceptable by us; and
    (e) That are grown on trees that have reached at least the 
seventh growing season after being set out.

7. Insurable Acreage

    As an exception to the provisions in section 9 (Insurable 
Acreage) of the Basic Provisions (Sec. 457.8), that prohibit 
insurance attaching to a crop planted with another crop, prunes 
interplanted with another perennial crop are insurable unless we 
inspect the acreage and determine that it does not meet the 
insurability requirements contained in your policy.

8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins for each crop year on March 1.
    (2) The calendar date for the end of the insurance period for 
each crop year is:
    (i) October 1 for California; or
    (ii) October 15 for Oregon.
    (b) In addition to the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage 
after coverage begins but on or before the acreage reporting date 
for the crop year, and after an inspection we consider the acreage 
acceptable, insurance will be considered to have attached to such 
acreage on the calendar date for the beginning of the insurance 
period.
    (2) If you relinquish your insurable share on any insurable 
acreage of prunes on or before the acreage reporting date for the 
crop year and if the acreage was insured by you the previous crop 
year, insurance will not be considered to have attached to, and no 
premium or indemnity will be due for such acreage for that crop year 
unless:
    (i) A transfer of coverage and right to an indemnity, or a 
similar form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

9. 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 during the 
insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and undergrowth have not been controlled 
or pruning debris has not been removed from the orchard;
    (3) Wildlife, unless control measures have not been taken;

[[Page 37004]]

    (4) Earthquake;
    (5) Volcanic eruption; or
    (6) 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 excluded in section 12 
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not 
insure against damage or loss of production due to:
    (1) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or 
causes properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available; or
    (2) Inability to market the prunes for any reason other than 
actual physical damage from an insurable cause specified in this 
section. For example, we will not pay you an indemnity if you are 
unable to market due to quarantine, boycott, or refusal of any 
person to accept production.

10. 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), the 
following will apply:
    (a) You must notify us within 3 days of the date harvest should 
have started if the crop will not be harvested.
    (b) You must notify us at least 15 days before any production 
from any unit will be sold by direct marketing or sold as fresh 
fruit. We will conduct an appraisal that will be used to determine 
your production to count for production that is sold by direct 
marketing or is sold as fresh fruit production. 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 or sold as fresh 
fruit will result in an appraised amount of production to count of 
not less than the production guarantee per acre if such failure 
results in our inability to make the required appraisal.
    (c) If you intend to claim an indemnity on any unit, you must 
notify us at least 15 days prior to the beginning of harvest or 
immediately if damage is discovered during harvest, so that we may 
inspect the damaged production.
    (d) You must not destroy the damaged crop until after we have 
given you written consent to do so. If you fail to meet the 
requirements of this section and such failure results in our 
inability to inspect the damaged production, all such production 
will be considered undamaged and included as production to count.

11. 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 unit, 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 each unit.
    (b) In the event of loss or damage covered by this policy, we 
will settle your claim by:
    (1) Multiplying the insured acreage for each varietal group, if 
applicable, by its respective production guarantee;
    (2) Multiplying the result in 11(b)(1) by the respective price 
election for each varietal group, if applicable;
    (3) Totaling the results in section 11(b)(2);
    (4) Multiplying the total production to be counted of each 
varietal group, if applicable, (see sections 11 (c) through (e)) by 
the respective price election;
    (5) Totaling the results in section 11(b)(4);
    (6) Subtracting the result in section 11(b)(5) from the result 
in section 11(b)(3); and
    (7) Multiplying the result in section 11(b)(6) by your share.
    (c) The total production to count (in tons) from all insurable 
acreage on the unit will include all harvested and appraised 
production of natural condition prunes that grade substandard or 
better and any production that is harvested and intended for use as 
fresh fruit. The total production to count will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is sold by direct marketing or sold as fresh fruit if 
you fail to meet the requirements contained in section 10;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for 
that acreage will end. If you do not agree with our appraisal, we 
may defer the claim only if you agree to continue to care for the 
crop. We will then make another appraisal when you notify us of 
further damage or that harvest is general in the area unless you 
harvested the crop, in which case we will use the harvested 
production. If you do not continue to care for the crop, our 
appraisal made prior to deferring the claim will be used to 
determine the production to count; and
    (2) All harvested production from the insurable acreage.
    (d) Any prune production harvested for fresh fruit will be 
converted to a dried prune weight basis by dividing the total amount 
(in tons) of fresh fruit production by 3.1.
    (e) Any production of substandard prunes resulting from damage 
by insurable causes will be adjusted based on the average size count 
as indicated on the applicable Dried Fruit Association (DFA) 
Inspection Report and Certification Form. Any insurable damage will 
be adjusted by:
    (i) Dividing the value per ton of such substandard prunes by the 
market price per ton for standard prunes (of the same size count); 
and
    (ii) Multiplying the result by the number of tons of such 
prunes.

12. 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 
12(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 
varietal group, the guarantee, premium rate, and price election;
    (d) Each written agreement will only be valid for one year (If 
the written agreement is not specifically renewed the following 
year, insurance coverage for subsequent crop years will be in 
accordance with the printed policy); and
    (e) An application for a written agreement submitted after the 
sales closing date may be approved if, after a physical inspection 
of the acreage, it is determined that no loss has occurred and the 
crop is insurable in accordance with the policy and written 
agreement provisions.

    Signed in Washington, D.C., on July 3, 1997.
Suzette Dittrich,
Deputy Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-18060 Filed 7-9-97; 8:45 am]
BILLING CODE 3410-08-P