[Federal Register Volume 63, Number 63 (Thursday, April 2, 1998)]
[Notices]
[Pages 16225-16242]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8590]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation


Crop Revenue Coverage

ACTION: Notice of availability.

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SUMMARY: In accordance with section 508(h) of the Federal Crop 
Insurance Act (Act), the Federal Crop Insurance Corporation (FCIC) 
Board of Directors (Board) approves for reinsurance and subsidy the 
insurance of corn, grain sorghum, soybeans and cotton in select states 
and counties under the Crop Revenue Coverage (CRC) plan of insurance 
for the 1998 crop year. This notice is intended to inform eligible 
producers and the private insurance industry of the expanded 
availability of the CRC plan of insurance for corn, grain sorghum, 
soybeans, and cotton and its terms and conditions.

FOR FURTHER INFORMATION CONTACT: Tim Hoffmann, Director, Product 
Development Division, Federal Crop Insurance Corporation, United States 
Department of Agriculture, 9435 Holmes Road, Kansas City, Missouri, 
64131, telephone (816) 926-7387.

SUPPLEMENTARY INFORMATION: Section 508(h) of the Act allows for the 
submission of a policy to FCIC's Board and authorizes the Board to 
review and, if the Board finds that the interests of

[[Page 16226]]

producers are adequately protected and that any premiums charged to the 
producers are actuarially appropriate, approve the policy for 
reinsurance and subsidy in accordance with section 508(e) of the Act.
    In accordance with the Act, the Board approved a program of 
insurance known as CRC, originally submitted by American Agrisurance, a 
managing general agency for Redland Insurance Company.
    The CRC program has been approved for reinsurance and premium 
subsidy, including subsidy for administrative and operating expenses. 
CRC is designed to protect producers against both price and yield 
losses. CRC provides a harvest revenue guarantee that pays losses from 
the established yield coverage at a higher price if the harvest time 
price is higher than the spring price.
    In the 1996 crop year, the CRC program was available for corn and 
soybeans in all counties in Iowa and Nebraska. In the 1997 crop year, 
the CRC program was expanded for corn into Colorado, Illinois, Indiana, 
Kansas, Michigan, Minnesota, Missouri, Ohio, Oklahoma, South Dakota, 
and Texas, and soybeans into Illinois, Indiana, Kansas, Michigan, 
Minnesota, Missouri, Ohio, Oklahoma, South Dakota, and Texas. New CRC 
programs were also made available for grain sorghum in Colorado, 
Nebraska, Oklahoma, and crop reporting districts 20, 30, 50, and 70 in 
Kansas, 40 in Missouri, 50 and 80 in South Dakota, and 40, 51, 52, 81, 
82, 90, 96, and 97 in Texas; for cotton in Arizona, Georgia, Oklahoma, 
and crop reporting districts 11, 12, 21, and 22 in Texas; and for wheat 
into Kansas, Michigan, Minnesota, Nebraska, South Dakota, Texas, 
Washington, and twenty-three counties each in Montana and North Dakota.
    In the 1998 crop year, the CRC program was expanded for corn into 
Alabama, Arizona, Arkansas, California, Georgia, Idaho, Kentucky, 
Louisiana, Mississippi, Montana, New Mexico, North Carolina, North 
Dakota, Oregon, South Carolina, Tennessee, Utah, Virginia, Washington, 
Wisconsin, and Wyoming; for soybeans into Alabama, Arkansas, Georgia, 
Kentucky, Louisiana, Mississippi, North Carolina, North Dakota, South 
Carolina, Tennessee, Virginia, and Wisconsin; for grain sorghum into 
Alabama, Arkansas, California, Georgia, Illinois, Indiana, Iowa, 
Kentucky, Louisiana, Michigan, Minnesota, Mississippi, New Mexico, 
North Carolina, North Dakota, Ohio, South Carolina, Tennessee, 
Virginia, Wisconsin, and the remaining counties in Kansas, Missouri, 
South Dakota, and Texas; for cotton into Alabama, Arkansas, California, 
Kansas, Louisiana, Mississippi, Missouri, New Mexico, North Carolina, 
South Carolina, Tennessee, Virginia, and the remaining counties in 
Texas; and for wheat into Alabama, Arizona, Arkansas, California, 
Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, 
Mississippi, Missouri, New Mexico, North Carolina, Ohio, Oklahoma, 
Oregon, South Carolina, Tennessee, Utah, Virginia, Wisconsin, Wyoming, 
and remaining counties in Montana and North Dakota. Prior to the 1998 
crop year, the CRC policy only provided coverage for basic and optional 
units as selected by the insured. Beginning with the 1998 crop year, 
producers can select basic, optional or enterprise units for corn and 
soybeans and a 95 or 100 price percentage for corn, grain sorghum, 
soybeans and cotton. The CRC program also provides insurance for any 
producer that has been identified on the nonstandard classification 
system (NCS).
    FCIC herewith gives notice of the above stated changes for the 1998 
crop year for corn, grain sorghum, soybeans and cotton for use by 
private insurance companies.
    The CRC underwriting rules, rate factors and forms for corn, grain 
sorghum, soybeans, and cotton will be released electronically to all 
reinsured companies through FCIC's Reporting Organization Server. FCIC 
will also make available the terms and conditions of the CRC 
reinsurance agreement. Requests for this information should be sent to 
Heyward Baker, Director, Reinsurance Services Division, Federal Crop 
Insurance Corporation, 14th & Independence Ave, SW, Room 6727, 
Washington, D.C. 20250.
    Following is a complete list of insurable CRC crops by state for 
the 1998 crop year:

Alabama
    Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Arizona
    Corn, Cotton, Wheat
Arkansas
    Corn, Cotton, Grain Sorghum, Soybeans, Wheat
California
    Corn, Cotton, Grain Sorghum, Wheat
Colorado
    Corn, Grain Sorghum, Wheat
Georgia
    Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Idaho
    Corn, Wheat
Illinois
    Corn, Grain Sorghum, Soybeans, Wheat
Indiana
    Corn, Grain Sorghum, Soybeans, Wheat
Iowa
    Corn, Grain Sorghum, Soybeans, Wheat
Kansas
    Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Kentucky
    Corn, Grain Sorghum, Soybeans, Wheat
Louisiana
    Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Michigan
    Corn, Grain Sorghum, Soybeans, Wheat
Minnesota
    Corn, Grain Sorghum, Soybeans, Wheat
Mississippi
    Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Missouri
    Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Montana
    Corn, Wheat
Nebraska
    Corn, Grain Sorghum, Soybeans, Wheat
New Mexico
    Corn, Cotton, Grain Sorghum, Wheat
North Carolina
    Corn, Cotton, Grain Sorghum, Soybeans, Wheat
North Dakota
    Corn, Grain Sorghum, Soybeans, Wheat
Ohio
    Corn, Grain Sorghum, Soybeans, Wheat
Oklahoma
    Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Oregon
    Corn, Wheat
South Carolina
    Corn, Cotton, Grain Sorghum, Soybeans, Wheat
South Dakota
    Corn, Grain Sorghum, Soybeans, Wheat
Tennessee
    Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Texas
    Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Utah
    Corn, Wheat
Virginia
    Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Washington
    Corn, Wheat
Wisconsin

[[Page 16227]]

    Corn, Grain Sorghum, Soybeans, Wheat
Wyoming
    Corn, Wheat

    Notice: The Basic Provisions and Crop Provisions for the CRC 
corn, grain sorghum, soybeans, and cotton programs of insurance are 
as follows.

Crop Revenue Coverage Insurance Policy

(This is a continuous policy. Refer to section 3.)
    This policy is reinsured by the Federal Crop Insurance Corporation 
(FCIC) under the authority of section 508(h) of the Federal Crop 
Insurance Act, as amended (7 U.S.C. 1508(h)). The provisions of the 
policy may not be waived or varied in any way by the crop insurance 
agent or any other agent or employee of the company. In the event the 
company cannot pay a loss, the claim will be settled in accordance with 
the provisions of the policy and paid by FCIC. No state guarantee fund 
will be liable to pay the loss. Throughout the policy, ``you'' and 
``your'' refer to the named insured shown on the accepted application 
and ``we,'' ``us,'' and ``our'' refer to the company. Unless the 
context indicates otherwise, use of the plural form of a word includes 
the singular and use of the singular form of the word includes the 
plural.
    Agreement to Insure: In return for the payment of the premium, and 
subject to all of the provisions of this policy, the company agrees 
with the insured to provide the insurance as stated in the policy. If a 
conflict exists among the policy provisions, the order of priority is 
as follows: (1) The Basic Provisions; (2) the Special Provisions; and 
(3) the Crop Provisions, with (1) controlling (2), etc.

Basic Provisions

Terms and Conditions

1. Definitions
    Abandon. Failure to continue to care for the crop, providing care 
so insignificant as to provide no benefit to the crop, or failure to 
harvest in a timely manner, unless an insured cause of loss prevents 
you from properly caring for or harvesting the crop or causes damage to 
it to the extent that most producers of the crop on acreage with 
similar characteristics in the area would not normally further care for 
or harvest it.
    Acreage report. A report required by section 7 of these Basic 
Provisions that contains, in addition to other required information, 
your report of your share of all acreage of an insured crop in the 
county, whether insurable or not insurable.
    Acreage reporting date. The date contained in the Special 
Provisions or as provided in section 7 by which you are required to 
submit your acreage report.
    Act. The Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
    Actuarial documents. The material for the crop year which is 
available for public inspection in your agent's office, and which show 
the revenue guarantees, coverage levels, premium rates, practices, 
insurable acreage, and other related information regarding crop 
insurance in the county.
    Agricultural commodity. All insurable crops and other fruit, 
vegetable or nut crops produced for human or animal consumption.
    Another use, notice of. The written notice required when you wish 
to put acreage to another use (see section 15).
    Application. The form required to be completed by you and accepted 
by us before insurance coverage will commence. This form must be 
completed and filed in your agent's office not later than the sales 
closing date of the initial insurance year for each crop for which 
insurance coverage is requested. If cancellation or termination of 
insurance coverage occurs for any reason, including but not limited to 
indebtedness, suspension, debarment, disqualification, cancellation by 
you or us, or violation of the controlled substance provisions of the 
Food Security Act of 1985, a new application must be filed for the 
crop. Insurance coverage will not be provided if you are ineligible 
under the contract or under any Federal statute or regulation.
    Approved yield. The yield determined in accordance with 7 CFR part 
400, subpart (G). This yield is established for basic or optional 
units. The approved yield for each basic unit comprising an enterprise 
unit is retained for premium and final guarantee purposes.
    Assignment of indemnity. A transfer of policy rights, made on our 
form, and effective when approved by us. It is the arrangement whereby 
you assign your right to an indemnity payment to any party of your 
choice for the crop year.
    Base price. The initial price determined in accordance with the 
Commodity Exchange Endorsement and used to calculate your premium and 
Minimum Guarantee.
    CRC low price factor. A premium factor, as set forth in the 
actuarial documents, used to calculate the risk associated with a 
decrease in the Harvest Price relative to the Base Price.
    CRC high price factor. A premium factor, as set forth in the 
actuarial documents, used to calculate the risk associated with an 
increase in the Harvest Price relative to the Base Price.
    CRC rate. A premium rate, as set forth in the actuarial documents, 
used to calculate the risk associated with producing a level of 
production.
    Cancellation date. The calendar date specified in the Crop 
Provisions on which coverage for the crop will automatically renew 
unless canceled in writing by either you or us, or terminated in 
accordance with the policy terms.
    Claim for indemnity. A claim made on our form by you for damage or 
loss to an insured crop and submitted to us not later than 60 days 
after the end of the insurance period (see section 15).
    Consent. Approval in writing by us allowing you to take a specific 
action.
    Contract. (see ``policy'').
    Contract change date. The calendar date by which we make any policy 
changes available for inspection in the agent's office (see section 5).
    County. Any county, parish, or other political subdivision of a 
state shown on your accepted application, including acreage in a field 
that extends into an adjoining county if the county boundary is not 
readily discernible.
    Coverage. The insurance provided by this policy against insured 
loss of revenue, by unit as shown on your summary of coverage.
    Coverage begins, date. The calendar date insurance begins on the 
insured crop, as contained in the Crop Provisions, or the date planting 
begins on the unit (see section 12 of these Basic Provisions for 
specific provisions relating to prevented planting).
    Crop Provisions. The part of the policy that contains the specific 
provisions of insurance for each insured crop.
    Crop year. The period within which the insured crop is normally 
grown and designated by the calendar year in which the insured crop is 
normally harvested.
    Damage. Injury, deterioration, or loss of revenue of the insured 
crop due to insured or uninsured causes.
    Damage, notice of. A written notice required to be filed in your 
agent's office whenever you initially discover the insured crop has 
been damaged to the extent that a loss is probable (see section 15).
    Days. Calendar days.
    Deductible. The amount determined by subtracting the coverage level 
percentage you choose from 100 percent. For example, if you elected a 
65 percent coverage level, your deductible would be 35 percent 
(100%-65% = 35%).
    Delinquent account. Any account you have with us in which premiums, 
and

[[Page 16228]]

interest on those premiums, is not paid by the termination date 
specified in the Crop Provisions, or any other amounts due us, such as 
indemnities found not to have been earned, which are not paid within 30 
days of our mailing or other delivery of notification to you of the 
amount due.
    Earliest planting date. The earliest date established for planting 
the insured crop (see the Special Provisions and section 14).
    End of insurance period, date of. The date upon which your crop 
insurance coverage ceases for the crop year (see the Crop Provisions 
and section 12).
    Field. All acreage of tillable land within a natural or artificial 
boundary (e.g., roads, waterways, fences, etc).
    Final guarantee. The number of dollars guaranteed per acre 
determined to be the higher of the minimum guarantee or the harvest 
guarantee, where:
    (1) Minimum guarantee--The approved yield per acre multiplied by 
the base price multiplied by the coverage level percentage you elect.
    (2) Harvest guarantee--The approved yield per acre multiplied by 
the harvest price, multiplied by the coverage level percentage you 
elect.
    If you elect enterprise unit coverage, the final guarantee for each 
basic unit comprising the enterprise unit will be calculated 
separately.
    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 final guarantee.
    FSA. The Farm Service Agency, an agency of the USDA, or a successor 
agency.
    FSA farm serial number. The number assigned to the farm by the 
local FSA office.
    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 final 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 price. The final price determined in accordance with the 
Commodity Exchange Endorsement and used to calculate your calculated 
revenue and the harvest guarantee.
    Insured. The named person as shown on the application accepted by 
us. This term does not extend to any other person having a share or 
interest in the crop (for example, a partnership, landlord, or any 
other person) unless specifically indicated on the accepted 
application.
    Insured crop. The crop for which coverage is available under these 
Basic Provisions and the applicable Crop Provisions as shown on the 
application accepted by us.
    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 
final guarantee on the irrigated acreage planted to the insured crop.
    Late planted. Acreage initially planted to the insured crop after 
the final planting date.
    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, unless otherwise specified in the Crop Provisions 
or Special Provisions.
    Loss, notice of. The notice required to be given by you not later 
than 72 hours after certain occurrences or 15 days after the end of the 
insurance period, whichever is earlier (see section 15).
    MPCI. Multiple peril crop insurance program, a program of insurance 
offered under the Federal Crop Insurance Act, as amended (7 U.S.C. 1501 
et seq.) (Act) and implemented in 7 CFR part 400.
    Negligence. The failure to use such care as a reasonably prudent 
and careful person would use under similar circumstances.
    Non-contiguous. 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.
    Palmer Drought Severity Index. A meteorological index calculated by 
the National Weather Service to indicate prolonged and abnormal 
moisture deficiency or excess.
    Person. An individual, partnership, association, corporation, 
estate, trust, or other legal entity, and wherever applicable, a State 
or a political subdivision or agency of a State. ``Person'' does not 
include the United States Government or any agency thereof.
    Planted acreage. Land in which seed, plants, or trees have been 
placed 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.
    Policy. The agreement between you and us consisting of the accepted 
application, these Basic Provisions, the Crop Provisions, the Special 
Provisions, other applicable endorsements or options, the actuarial 
documents for the insured crop, and the applicable regulations 
published in 7 CFR chapter IV.
    Practical to replant. Our determination, after loss or damage to 
the insured crop, based on all 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 after 
the end of the late planting period, or the final planting date if no 
late planting period is applicable, unless replanting is generally 
occurring in the area. Unavailability of seed or plants will not be 
considered a valid reason for failure to replant.
    Premium billing date. The earliest date upon which you will be 
billed for insurance coverage based on your acreage report. The premium 
billing date is contained in the Special Provisions.
    Prevented planting. Failure 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 by the end of the late 
planting period. You must have been prevented from planting the insured 
crop due to an insured cause of loss that also prevented most producers 
from planting on acreage with similar characteristics in the 
surrounding area.
    Production report. A written record showing your annual production 
and used by us to determine your yield for insurance purposes (see 
section 4). The report contains yield information for previous years, 
including planted acreage and harvested production. This report must be 
supported by written verifiable records from a warehouseman or buyer of 
the insured crop, by measurement of farm-stored production, or by other 
records of production approved by us on an individual case basis.
    Replanting. Performing the cultural practices necessary to prepare 
the land to replace the seed or plants of the damaged or destroyed 
insured crop and then replacing the seed or plants of the same crop in 
the insured acreage with the expectation of producing at least the 
yield used to determine the final guarantee.

[[Page 16229]]

    Representative sample. Portions of the insured crop that must 
remain in the field for examination and review by our loss adjuster 
when making a crop appraisal, as specified in the Crop Provisions. In 
certain instances we may allow you to harvest the crop and require only 
that samples of the crop residue be left in the field.
    Sales closing date. A date contained in the Special Provisions by 
which an application must be filed. The last date by which you may 
change your crop insurance coverage for a crop year.
    Section (for the purposes of unit structure). A unit of measure 
under a rectangular survey system describing a tract of land usually 
one mile square and usually containing approximately 640 acres.
    Share. Your percentage of interest in the insured crop as an owner, 
operator, or tenant at the time insurance attaches. However, only for 
the purpose of determining the amount of indemnity, your share will not 
exceed your share at the earlier of the time of loss, or the beginning 
of harvest.
    Special Provisions. The part of the policy that contains specific 
provisions of insurance for each insured crop that may vary by 
geographic area.
    State. The state shown on your accepted application.
    Substantial benefit interest. An interest held by any person of at 
least 10 percent in the applicant or insured.
    Summary of coverage. Our statement to you, based upon your acreage 
report, specifying the insured crop and the revenue guarantee provided 
by unit.
    Tenant. A person who rents land from another person for a share of 
the crop or a share of the proceeds of the crop (see the definition of 
``share'' above).
    Termination date. The calendar date contained in the Crop 
Provisions upon which your insurance ceases to be in effect because of 
nonpayment of any amount due us under the policy, including premium.
    Timely planted. Planted on or before the final planting date 
designated in the Special Provisions for the insured crop in the 
county.
    Unit.
    (a) Basic unit--A unit established in accordance with section 2(a).
    (b) Optional unit--A unit established from basic units in 
accordance with section 2(b).
    (c) Enterprise unit--A unit established from basic units in 
accordance with section 2(c).
    USDA. United States Department of Agriculture.
    Void. When the policy is considered not to have existed for a crop 
year as a result of concealment, fraud, or misrepresentation (see 
section 27).
2. Unit Structure
    (a) Basic unit--All insurable acreage of the insured crop in the 
county on the date coverage begins for the crop year:
    (1) In which you have 100 percent crop share; or
    (2) Which is owned by one person and operated by another person on 
a share basis. (Example: If, in addition to the land you own, you rent 
land from five landlords, three on a crop share basis and two on a cash 
basis, you would be entitled to four units; one for each crop share 
lease and one that combines the two cash leases and the land you own.) 
Land which would otherwise be one unit may, in certain instances, be 
divided according to guidelines contained in section 2(b) and the 
applicable Crop Provisions.
    (b) Optional unit--Unless limited by the Crop Provisions or Special 
Provisions, a basic unit as determined in section 2(a) may be divided 
into optional units if, for each optional unit:
    (1) You meet the following:
    (A) You have records that are acceptable to us, of planted acreage 
and the production from each optional unit for at least the last crop 
year used to determine your final guarantee;
    (B) You 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;
    (C) All optional units you select for the crop year are identified 
on the acreage report for that crop year (Units will be determined when 
the acreage is reported but may be adjusted or combined to reflect the 
actual unit structure when adjusting a loss. No further unit division 
may be made after the acreage reporting date for any reason); and
    (D) You have records of marketed or 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 
optional unit is kept separate until loss adjustment is completed by 
us.
    (2) Each optional unit must meet one or more of the following, 
unless otherwise specified in the Crop Provisions:
    (A) Optional units may be established if each optional unit is 
located in a separate section. In the absence of sections, we may 
consider parcels of land legally identified by other methods of measure 
such as Spanish grants, as the equivalents of sections for unit 
purposes. In areas which have not been surveyed using sections, section 
equivalents or in areas where boundaries are not readily discernible, 
each optional unit must be located in a separate FSA farm serial 
number; and
    (B) 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 and 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 the final guarantee is based, except the 
corners of a field in which a center-pivot irrigation system is used 
may be considered as irrigated acreage 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. In this case, production from 
both practices will be used to determine your approved yield.
    (3) If you do not comply fully with the provisions in this section, 
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 by us 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 for the units combined.
    (c) Enterprise unit--A unit that consists of all insurable acreage 
of the insured crop in the county in which you have a share on the date 
coverage begins for the crop year. If you select and qualify for an 
enterprise unit, you will qualify for a premium discount based on the 
insured crop and number of acres in the enterprise unit. The following 
requirements must be met to qualify for an enterprise unit:
    (1) The enterprise unit must contain 50 or more acres;
    (2) The enterprise unit must be comprised of two or more basic 
units of the same insured crop as defined in section 2(a);
    (3) The basic units which comprise the enterprise unit must each 
have insurable acreage of the same crop in the crop year insured;
    (4) You must comply with all reporting requirements for each basic 
unit comprising the enterprise unit;
    (5) Basic units may not be combined into an enterprise unit on any 
basis other than as described under this section; and

[[Page 16230]]

    (6) If you do not comply fully with these provisions, and if at any 
time we discover that you have failed to comply with these provisions, 
we will assign you the basic unit structure and adjust the premium 
accordingly.
    (d) Selection of unit structure--Basic, optional, or enterprise 
units will be determined when the acreage is reported but may be 
adjusted, combined, or separated to reflect the actual unit structure 
when adjusting a loss. If you select an enterprise unit structure, you 
must elect that option in writing by the sales closing date. If you do 
not qualify for an enterprise unit when the acreage is reported, you 
will be assigned a basic unit structure.
    (e) All applicable unit structures must be stated on the acreage 
report for each crop year. If you elect enterprise units, both the 
enterprise unit and all basic units that comprise the enterprise unit 
must also be elected on the acreage report.
3. Life of Policy, Cancellation, and Termination
    (a) This is a continuous policy and will remain in effect for each 
crop year following the acceptance of the original application until 
canceled by you in accordance with the terms of the policy or 
terminated by operation of the terms of the policy, or by us.
    (b) Your application for insurance must contain all the information 
required by us to insure the crop. Applications that do not contain all 
social security numbers and employer identification numbers, as 
applicable, (except as stated herein) coverage level, price percentage, 
crop, type, variety, or class, plan of insurance, and any other 
material information required to insure the crop, are not acceptable. 
If a person with a substantial beneficial interest in the insured crop 
refuses to provide a social security number or employer identification 
number and that person is:
    (1) Not on the nonstandard classification system list, the amount 
of coverage available under the policy will be reduced proportionately 
by that person's share of the crop; or
    (2) On the nonstandard classification system list, the insurance 
will not be available to that person and any entity in which the person 
has a substantial beneficial interest.
    (c) After acceptance of the application, you may not cancel this 
policy for the initial crop year. Thereafter, the policy will continue 
in force for each succeeding crop year unless canceled or terminated as 
provided below.
    (d) Either you or we may cancel this policy after the initial crop 
year by providing written notice to the other on or before the 
cancellation date shown in the Crop Provisions.
    (e) If any amount due, including premium, is not paid on or before 
the termination date for the crop on which an amount is due:
    (1) For a policy with the unpaid premium, the policy will terminate 
effective on the termination date immediately subsequent to the billing 
date for the crop year;
    (2) For a policy with other amounts due, the policy will terminate 
effective on the termination date immediately after the account becomes 
delinquent;
    (3) Ineligibility will be effective as of the date that the policy 
was terminated for the crop for which you failed to pay an amount owed 
and for all other insured crops with coincidental termination dates;
    (4) All other policies that are issued by us under the authority of 
the Act will also terminate as of the next termination date contained 
in the applicable policy;
    (5) If you are ineligible, you may not obtain any crop insurance 
under the Act until payment is made, you execute an agreement to repay 
the debt and make the payments in accordance with the agreement, or you 
file a petition to have your debts discharged in bankruptcy;
    (6) If you execute an agreement to repay the debt and fail to 
timely make any scheduled payment, you will be ineligible for crop 
insurance effective on the date the payment was due until the debt is 
paid in full or you file a petition to discharge the debt in bankruptcy 
and subsequently obtain discharge of the amounts due. Dismissal of the 
bankruptcy petition before discharge will void all policies in effect 
retroactive to the date you were originally determined ineligible to 
participate;
    (7) Once the policy is terminated, the policy cannot be reinstated 
for the current crop year unless the termination was in error;
    (8) After you again become eligible for crop insurance, if you want 
to obtain coverage for your crops, you must reapply on or before the 
sales closing date for the crop (Since applications for crop insurance 
cannot be accepted after the sales closing date, if you make any 
payment after the sales closing date, you cannot apply for insurance 
until the next crop year); and
    (9) If we deduct the amount due us from an indemnity, the date of 
payment for the purpose of this section will be the date you sign the 
properly executed claim for indemnity.
    (10) For example, if crop A, with a termination date of October 31, 
1997, and crop B, with a termination date of March 15, 1998, are 
insured and you do not pay the premium for crop A by the termination 
date, you are ineligible for crop insurance as of October 31, 1997, and 
crop A's policy is terminated on that date. Crop B's policy is 
terminated as of March 15, 1998. If you enter an agreement to repay the 
debt on April 25, 1998, you can apply for insurance for crop A by the 
October 31, 1998, sales closing date and crop B by the March 15, 1999, 
sales closing date. If you fail to make a scheduled payment on November 
1, 1998, you will be ineligible for crop insurance effective on 
November 1, 1998, and you will not be eligible unless the debt is paid 
in full or you file a petition to have the debt discharged in 
bankruptcy and subsequently receive discharge.
    (f) If you die, disappear, or are judicially declared incompetent, 
or if you are an entity other than an individual and such entity is 
dissolved, the policy will terminate as of the date of death, judicial 
declaration, or dissolution. If such event occurs after coverage begins 
for any crop year, the policy will continue in force through the crop 
year and terminate at the end of the insurance period and any indemnity 
will be paid to the person or persons determined to be beneficially 
entitled to the indemnity. The premium will be deducted from the 
indemnity or collected from the estate. Death of a partner in a 
partnership will dissolve the partnership unless the partnership 
agreement provides otherwise. If two or more persons having a joint 
interest are insured jointly, death of one of the persons will dissolve 
the joint entity.
    (g) We may terminate your policy if no premium is earned for 3 
consecutive years.
    (h) The cancellation and termination dates are contained in the 
Crop Provisions.
    (i) You are not eligible to participate in the Crop Revenue 
Coverage program if you have elected the MPCI Catastrophic Risk 
Protection Endorsement except if you execute a High Risk Land Exclusion 
Option for a Crop Revenue Coverage Policy, you may elect to insure the 
``high risk land'' under an MPCI Catastrophic Risk Protection 
Endorsement. If both policies are in force, the acreage of the crop 
covered under the Crop Revenue Coverage policy and the acreage covered 
under an MPCI Catastrophic Risk Protection Endorsement will be 
considered as separate crops for insurance purposes, including the 
payment of administrative fees.

[[Page 16231]]

4. Coverage Level, Price Percentage, and Approved Yield for Determining 
Final Guarantee and Indemnity
    (a) For each crop year, the final guarantee, coverage level, and 
price percentage at which an indemnity will be determined for each unit 
will be those used to calculate your summary of coverage. The 
information necessary to determine those factors will be contained in 
the Special Provisions or in the actuarial documents.
    (b) You may select only one coverage level from among those offered 
by us for each insured crop. You may change the coverage level for the 
following crop year by giving written notice not later than the sales 
closing date for the affected insured crop. If you do not change the 
coverage level for the succeeding crop year, you will be assigned the 
same coverage level that was in effect the previous crop year.
    (c) You may select only one price percentage for each insured crop. 
You may change the price percentage for the following crop year by 
giving written notice to us not later than the sales closing date for 
the insured crop. The price percentage you select applies to both the 
base price and harvest price. Since the price percentage may change 
each year, if you do not select a new price percentage on or before the 
sales closing date, we will assign a price percentage which bears the 
same relationship to the price percentage schedule that was in effect 
for the preceding year. (For example: If you selected a price 
percentage of 100 for the previous crop year, and you do not select a 
new price percentage for the current crop year, we will assign a price 
percentage of 100 for the current crop year.)
    (d) This policy is an alternative to the MPCI program and satisfies 
the requirements of section 508(b)(7) of the Act.
    (e) You must report production to us for the previous crop year by 
the earlier of the acreage reporting date or 45 days after the 
cancellation date unless otherwise stated in the Special Provisions.
    (1) If you do not provide the required production report, we will 
assign a yield for the previous crop year. The yield assigned by us 
will not be more than 75 percent of the yield used by us to determine 
your coverage for the previous crop year. The production report or 
assigned yield will be used to compute your approved yield for the 
purpose of determining your final guarantee for the current crop year.
    (2) If you have filed a claim for any crop year, the documents 
signed by you which state the amount of production used to complete the 
claim for indemnity will be the production report for that year unless 
otherwise specified by FCIC.
    (3) Production and acreage for the prior crop year must be reported 
for each proposed optional unit by the production reporting date. If 
you do not provide the information stated above, the optional units 
will be combined into the basic unit.
    (f) We may revise your final guarantee for any unit, and revise any 
indemnity paid based on that final guarantee, if we find that your 
production report under paragraph (e) of this section:
    (1) Is not supported by written verifiable records in accordance 
with the definition of production report; or
    (2) Fails to accurately report actual production, acreage, or other 
material information.
5. Contract Changes
    (a) We may change the terms of your coverage under this policy from 
year to year.
    (b) Any changes in policy provisions, premium rates, and program 
dates will be provided by us to your crop insurance agent not later 
than the contract change date contained in the Crop Provisions. You may 
view the documents or request copies from your crop insurance agent.
    (c) You will be notified, in writing, of changes to the Basic 
Provisions, Crop Provisions, and Special Provisions not later than 30 
days prior to the cancellation date for the insured crop. Acceptance of 
changes will be conclusively presumed in the absence of notice from you 
to change or cancel your insurance coverage.
6. Liberalization
    If we adopt any revision that broadens the coverage under this 
policy subsequent to the contract change date without additional 
premium, the broadened coverage will apply.
7. Report of Acreage
    (a) An annual acreage report must be submitted to us on our form 
for each insured crop in the county on or before the acreage reporting 
date contained in the Special Provisions, except as follows:
    (1) If you insure multiple crops that have final planting dates on 
or after August 15 but before December 31, you must submit an acreage 
report for all such crops on or before the latest applicable acreage 
reporting date for such crops; and
    (2) If you insure multiple crops that have final planting dates on 
or after December 31 but before August 15, you must submit an acreage 
report for all such crops on or before the latest applicable acreage 
reporting date for such crops.
    (3) Notwithstanding the provisions in sections 7(a)(1) and (2):
    (i) If the Special Provisions designate separate planting periods 
for a crop, you must submit an acreage report for each planting period 
on or before the acreage reporting date contained in the Special 
Provisions for the planting period; and
    (ii) If planting of the insured crop 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:
    (A) The acreage reporting date contained in the Special Provisions;
    (B) The date determined in accordance with sections 7(a)(1) or (2); 
or
    (C) Five (5) days after the end of the late planting period for the 
insured crop, if applicable.
    (b) If you do not have a share in an insured crop in the county for 
the crop year, you must submit an acreage report on or before the 
acreage reporting date, so indicating.
    (c) Your acreage report must include the following information, if 
applicable:
    (1) All acreage of the crop in the county (insurable and not 
insurable) in which you have a share;
    (2) Your share at the time coverage begins;
    (3) The practice;
    (4) The type; and
    (5) The date the insured crop was planted.
    (d) Because incorrect reporting on the acreage report may have the 
effect of changing your premium and any indemnity that may be due, you 
may not revise this report after the acreage reporting date without our 
consent.
    (e) We may elect to determine all premiums and indemnities based on 
the information you submit on the acreage report or upon the factual 
circumstances we determine to have existed.
    (f) If you do not submit an acreage report by the acreage reporting 
date, or if you fail to report all units, we may elect to determine by 
unit the insurable crop acreage, share, type and practice, or to deny 
liability on such units. If we deny liability for the unreported units, 
your share of any production from the unreported units will be 
allocated, for loss purposes only, as production to count to the 
reported units in proportion to the liability on each reported unit.
    (g) If the information reported by you on the acreage report for 
share, acreage, practice, type or other material

[[Page 16232]]

information is inconsistent with the information that is determined to 
actually exist for a unit and results in:
    (1) A lower liability than the actual liability determined, the 
final guarantee on the unit will be reduced to an amount that is 
consistent with the reported information. In the event that insurable 
acreage is under-reported for any unit, all production or value from 
insurable acreage in that unit will be considered production or value 
to count in determining the indemnity; and
    (2) A higher liability than the actual liability determined, the 
information contained in the acreage report will be revised to be 
consistent with the correct information. If we discover that you have 
incorrectly reported any information on the acreage report for any crop 
year, you may be required to provide documentation in subsequent crop 
years that substantiates your report of acreage for those crop years, 
including, but not limited to, an acreage measurement service at your 
own expense.
    (h) Errors in reporting units may be corrected by us at the time of 
adjusting a loss to reduce our liability and to conform to applicable 
unit division guidelines.
8. Annual Premium
    (a) The annual premium is earned and payable at the time coverage 
begins. You will be billed for premium due not earlier than the premium 
billing date specified in the Special Provisions. The premium due, plus 
any accrued interest, will be considered delinquent if it is not paid 
on or before the termination date specified in the Crop Provisions.
    (b) Any amount you owe us related to any crop insured with us under 
the authority of the Act will be deducted from any prevented planting 
payment or indemnity due you for any crop insured with us under the 
authority of the Act.
    (c) The annual premium amount is determined by:
    (1) Multiplying the approved yield times the coverage level, times 
the base rate specified in the actuarial documents, times the base 
price as defined in the Commodity Exchange Endorsement;
    (2) Multiplying the approved yield times the coverage level, times 
the CRC rate specified in the actuarial documents, times the CRC low 
price factor specified in the actuarial documents;
    (3) Multiplying the approved yield times the coverage level, times 
the base rate specified in the actuarial documents, times the CRC high 
price factor specified in the actuarial documents;
    (4) Totaling section 8(c)(1), (2), and (3);
    (5) Multiplying the result of section 8(c)(4) times the acres 
insured, times your share at the time coverage begins, and as 
applicable, times any rate map adjustment factor; rate class option 
factor and; option factor specified in the actuarial documents;
    (6) Multiplying the approved yield times the coverage level, times 
the base rate specified in the actuarial documents, times the MPCI 
market price election, times the insured acres, times your share at the 
time coverage begins, and as applicable, times any rate map adjustment 
factor; rate class option factor and; option factor specified in the 
actuarial documents, and times the applicable producer subsidy 
percentage to calculate the appropriate amount of subsidy. The producer 
subsidy percentage is based upon the coverage level and is contained in 
the actuarial documents; and
    (7) Subtracting the result of section 8(c)(6) from the result of 
section 8(a)(5) to determine the annual producer paid premium.
    (d) The annual premium amount for any applicable nonstandard 
classification system designations is determined by:
    (1) Multiplying the approved yield (with yield adjustments 
specified in the actuarial documents) times the coverage level, times 
the NCS rate specified in the actuarial documents, times the rate 
differential specified in the actuarial documents, and times the base 
price as defined in the Commodity Exchange Endorsement;
    (2) Multiplying the result of section 8(d)(1) times the acres 
insured, times your share at the time coverage begins, times any 
applicable rate class option factor specified in the actuarial 
documents, times any applicable option factor specified in the 
actuarial documents, and times the NCS premium factor calculated using 
the NCS premium factor formula specified in the actuarial documents;
    (3) Multiplying the approved yield (with yield adjustments 
specified in the actuarial documents) times the coverage level, times 
the NCS rate specified in the actuarial documents, times the rate 
differential specified in the actuarial documents, times the MPCI 
market price election, times the acres insured, times your share at the 
time coverage begins, and as applicable, times any rate class option 
factor and/or option factor specified in the actuarial documents, and 
times the applicable producer subsidy percentage to calculate the 
appropriate amount of subsidy (The producer subsidy percentage is based 
upon the coverage level and is contained in the actuarial documents); 
and
    (4) Subtracting the result of section 8(d)(3) from the result of 
section 8(d)(2) to determine the annual producer paid premium.
9. Insured Crop
    (a) The insured crop will be that shown on your accepted 
application and as specified in the Crop Provisions or Special 
Provisions and must be grown on insurable acreage.
    (b) A crop which will NOT be insured will include, but will not be 
limited to, any crop:
    (1) If the farming practices carried out are not in accordance with 
the farming practices for which the premium rates or final guarantee 
have been established;
    (2) Of a type, class or variety established as not adapted to the 
area or excluded by the policy provisions;
    (3) That is a volunteer crop;
    (4) That is a second crop following the same crop (insured or not 
insured) harvested in the same crop year unless specifically permitted 
by the Crop Provisions or the Special Provisions;
    (5) That is planted for the development or production of hybrid 
seed or for experimental purposes, unless permitted by the Crop 
Provisions or unless we agree, in writing, to insure such crop; or
    (6) That is used solely for wildlife protection or management. If 
the lease states that specific acreage must remain unharvested, only 
that acreage is uninsurable. If the lease specifies that a percentage 
of the crop must be left unharvested, your share will be reduced by 
such percentage.
10. Insurable Acreage
    (a) Acreage planted to the insured crop in which you have a share 
is insurable except acreage:
    (1) That has not been planted and harvested within one of the 3 
previous crop years, unless:
    (i) Such acreage was not planted:
    (A) To comply with any other USDA program;
    (B) Because of crop rotation, (e.g., corn, soybean, alfalfa; and 
the alfalfa remained for 4 years before the acreage was planted to corn 
again);
    (C) Due to an insurable cause of loss that prevented planting; or
    (D) Because a perennial crop was grown on the acreage.
    (ii) Such acreage was planted but was not harvested due to an 
insurable cause of loss; or
    (iii)The Crop Provisions specifically allow insurance for such 
acreage.
    (2) That has been strip-mined, unless an agricultural commodity 
other than a

[[Page 16233]]

cover, hay, or forage crop (except corn silage), has been harvested 
from the acreage for at least five crop years after the strip-mined 
land was reclaimed;
    (3) On which the insured crop is damaged and it is practical to 
replant the insured crop, but the insured crop is not replanted;
    (4) That is interplanted, unless allowed by the Crop Provisions;
    (5) That is otherwise restricted by the Crop Provisions or Special 
Provisions; or
    (6) That is planted in any manner other than as specified in the 
policy provisions for the crop.
    (b) If insurance is provided for an irrigated practice, you must 
report as irrigated only that acreage for which you have adequate 
facilities and adequate water, or the reasonable expectation of 
receiving adequate water at the time coverage begins, to carry out a 
good irrigation practice. If you knew or had reason to know that your 
water may be reduced before coverage begins, no reasonable expectation 
exists.
    (c) Notwithstanding the provisions in section 9(b)(1), if acreage 
is irrigated and we do not provide a premium rate for an irrigated 
practice, you may either report and insure the irrigated acreage as 
``non-irrigated,'' or report the irrigated acreage as not insured.
    (d) We may restrict the amount of acreage that we will insure to 
the amount allowed under any acreage limitation program established by 
the United States Department of Agriculture if we notify you of that 
restriction prior to the sales closing date.
11. Share Insured
    (a) Insurance will attach only to the share of the person 
completing the application and will not extend to any other person 
having a share in the crop unless the application clearly states that:
    (1) The insurance is requested for an entity such as a partnership 
or a joint venture; or
    (2) You as landlord will insure your tenant's share, or you as 
tenant will insure your landlord's share. In this event, you must 
provide evidence of the other party's approval (lease, power of 
attorney, etc.). Such evidence will be retained by us. You also must 
clearly set forth the percentage shares of each person on the acreage 
report.
    (b) We may consider any acreage or interest reported by or for your 
spouse, child or any member of your household to be included in your 
share.
    (c) Acreage rented for a percentage of the crop, or a lease 
containing provisions for BOTH a minimum payment (such as a specified 
amount of cash, bushels, pounds, etc.,) AND a crop share will be 
considered a crop share lease.
    (d) Acreage rented for cash, or a lease containing provisions for 
EITHER a minimum payment OR a crop share (such as a 50/50 share or 
$100.00 per acre, whichever is greater) will be considered a cash 
lease.
12. Insurance Period
    (a) Except for prevented planting coverage (see section 18), 
coverage begins on each unit or part of a unit at the later of:
    (1) The date we accept your application (For the purposes of this 
paragraph, the date of acceptance is the date that you submit a 
properly executed application in accordance with section 3);
    (2) The date the insured crop is planted; or
    (3) The calendar date contained in the Crop Provisions for the 
beginning of the insurance period.
    (b) Coverage ends at the earliest of:
    (1) Total destruction of the insured crop on the unit;
    (2) Harvest of the unit;
    (3) Final adjustment of a loss on a unit;
    (4) The calendar date contained in the Crop Provisions for the end 
of the insurance period;
    (5) Abandonment of the crop on the unit; or
    (6) As otherwise specified in the Crop Provisions.
13. Causes of Loss
    The insurance provided is against only unavoidable loss of revenue 
directly caused by specific causes of loss contained in the Crop 
Provisions. All other causes of loss, including but not limited to the 
following, are NOT covered:
    (a) Negligence, mismanagement, or wrongdoing by you, any member of 
your family or household, your tenants, or employees;
    (b) Failure to follow recognized good farming practices for the 
insured crop;
    (c) Water contained by any governmental, public, or private dam or 
reservoir project;
    (d) Failure or breakdown of irrigation equipment or facilities; or
    (e) Failure to carry out a good irrigation practice for the insured 
crop, if applicable.
14. Replanting Payment
    (a) If allowed by the Crop Provisions, a replanting payment may be 
made on an insured crop replanted after we have given consent and the 
acreage replanted is at least the lesser of 20 acres or 20 percent of 
the insured planted acreage for the unit (as determined on the final 
planting date or within the late planting period if a late planting 
period is applicable.)
    (b) No replanting payment will be made on acreage:
    (1) On which our appraisal establishes that production will exceed 
the level set by the Crop Provisions;
    (2) Initially planted prior to the earliest planting date 
established by the Special Provisions; or
    (3) On which one replanting payment has already been allowed for 
the crop year.
    (c) The replanting payment per acre will be your actual cost for 
replanting, but will not exceed the amount determined in accordance 
with the Crop Provisions.
    (d) No replanting payment will be paid if we determine it is not 
practical to replant.
15. Duties in the Event of Damage or Loss
    Your Duties--
    (a) In case of damage to any insured crop you must:
    (1) Protect the crop from further damage by providing sufficient 
care;
    (2) Give us notice within 72 hours of your initial discovery of 
damage (but not later than 15 days after the end of the insurance 
period), by unit, for each insured crop (we may accept a notice of loss 
provided later than 72 hours after your initial discovery if we still 
have the ability to accurately adjust the loss);
    (3) Leave representative samples intact for each field of the 
damaged unit as may be required by the Crop Provisions; and
    (4) Cooperate with us in the investigation or settlement of the 
claim, and, as often as we reasonably require:
    (i) Show us the damaged crop;
    (ii) Allow us to remove samples of the insured crop; and
    (iii) Provide us with records and documents we request and permit 
us to make copies.
    (b) You must obtain consent from us before, and notify us after 
you:
    (1) Destroy any of the insured crop that is not harvested;
    (2) Put the insured crop to an alternative use;
    (3) Put the acreage to another use; or
    (4) Abandon any portion of the insured crop. We will not give 
consent for any of the actions in sections 15(b) (1) through (4) if it 
is practical to replant the crop or until we have made an appraisal of 
the potential production of the crop.
    (c) In addition to complying with all other notice requirements, 
you must

[[Page 16234]]

submit a claim for indemnity declaring the amount of your loss not 
later than 60 days after the end of the insurance period. This claim 
must include all the information we require to settle the claim.
    (d) Upon our request, you must:
    (1) Provide a complete harvesting and marketing record of each 
insured crop by unit including separate records showing the same 
information for production from any acreage not insured; and
    (2) Submit to examination under oath.
    (e) You must establish the total production or value received for 
the insured crop on the unit, that any loss of production or value 
occurred during the insurance period, and that the loss of production 
or value was directly caused by one or more of the insured causes 
specified in the Crop Provisions.
    (f) All notices required in this section that must be received by 
us within 72 hours may be made by telephone or in person to your crop 
insurance agent but must be confirmed in writing within 15 days.
    Our Duties--
    (a) If you have complied with all the policy provisions, we will 
pay your loss within 30 days after:
    (1) We reach agreement with you;
    (2) Completion of arbitration or appeal proceedings; or
    (3) The entry of a final judgment by a court of competent 
jurisdiction.
    (b) In the event we are unable to pay your loss within 30 days, we 
will give you notice of our intentions within the 30-day period.
    (c) We may defer the adjustment of a loss until the amount of loss 
can be accurately determined. We will not pay for additional damage 
resulting from your failure to provide sufficient care for the crop 
during the deferral period.
    (d) We recognize and apply the loss adjustment procedures 
established or approved by the Federal Crop Insurance Corporation.
16. Production Included in Determining Indemnities
    (a) The total production to be counted for a unit will include all 
production determined in accordance with the policy.
    (b) The amount of production of any unharvested insured crop may be 
determined on the basis of our field appraisals conducted after the end 
of the insurance period.
17. Late Planting
    Unless limited by the Crop Provisions, insurance will be provided 
for acreage planted to the insured crop after the final planting date 
in accordance with the following:
    (a) The final guarantee for each acre planted to the insured crop 
during the late planting period will be reduced by 1 percent per day 
for each day planted after the final planting date.
    (b) Acreage planted after the late planting period (or after the 
final planting date for crops that do not have a late planting period) 
may be insured as follows:
    (1) The final guarantee for each acre planted as specified in this 
subsection will be determined by multiplying the final guarantee that 
is provided for acreage of the insured crop that is timely planted by 
the prevented planting coverage level percentage you elected, or that 
is contained in the Crop Provisions if you did not elect a prevented 
planting coverage level percentage;
    (2) Planting on such acreage must have been prevented by the final 
planting date (or during the late planting period, if applicable) by an 
insurable cause occurring within the insurance period for prevented 
planting coverage;
    (3) The final guarantee for any acreage on which an insured cause 
of loss prevents completion of planting, as specified in the definition 
of ``planted acreage'' (e.g., seed is broadcast on the soil surface but 
cannot be incorporated), will be determined as indicated in this 
section; and
    (4) All production from acreage as specified in this section will 
be included as production to count for the unit.
    (c) The premium amount for insurable acreage specified in section 
17(a) or (b) 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 such acreage exceeds the liability, coverage for those 
acres will not be provided (no premium will be due and no indemnity 
will be paid).
18. Prevented Planting
    (a) Unless limited by the policy provisions, a prevented planting 
payment may be made to you for eligible acreage if:
    (1) You were prevented from planting the insured crop by an insured 
cause that occurs:
    (i) On or after 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 or after the sales closing 
date for the previous crop year for the insured crop in the county, 
provided insurance has been in force continuously since that date. 
Cancellation for the purpose of transferring the policy to a different 
insurance provider for the subsequent crop year will not be considered 
a break in continuity for the purpose of the preceding sentence; and
    (2) You include any acreage of the insured crop that was prevented 
from being planted on your acreage report.
    (b) The actuarial documents may contain additional levels of 
prevented planting coverage that you may purchase for the insured crop:
    (1) Such purchase must be made on or before the sales closing date.
    (2) If you do not purchase one of those additional levels by the 
sales closing date, you will receive the prevented planting coverage 
specified in the Crop Provisions.
    (3) If you have an MPCI Catastrophic Risk Protection Endorsement 
for any acreage of ``high risk land,'' the additional levels of 
prevented planting coverage will not be available for that acreage; and
    (4) You may not increase your elected or assigned preventing 
planting coverage level for any crop year if a cause of loss that will 
or could prevent planting is evident prior to the time you wish to 
change your prevented planting coverage level.
    (c) The premium amount for acreage that is prevented from being 
planted 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 acreage that is prevented from being planted 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).
    (d) Drought or failure of the irrigation water supply will not be 
considered to be an insurable cause of loss for the purposes of 
prevented planting unless, on the final planting date:
    (1) For non-irrigated acreage, the area that is prevented from 
being planted is classified by the Palmer Drought Severity Index as 
being in a severe or extreme drought; or
    (2) For irrigated acreage, there is not a reasonable probability of 
having adequate water to carry out an irrigated practice.
    (e) The maximum number of acres that may be eligible for a 
prevented planting payment for any crop will be determined as follows:
    (1) The total number of acres eligible for prevented planting 
coverage for all crops cannot exceed the number of acres of cropland in 
your farming operation for the crop year, unless you are eligible for 
prevented planting coverage on

[[Page 16235]]

double cropped acreage in accordance with section 18(f)(3) or (4). The 
eligible acres for each insured crop will be determined in accordance 
with the following table.

------------------------------------------------------------------------
                                                         Eligible acres 
                                                          if, in any of 
                                 Eligible acres if, in     the 4 most   
                                   any of the 4 most       recent crop  
         Type of crop           recent crop years, you   years, you have
                                have produced any crop  not produced any
                                  for which insurance    crop for which 
                                     was available        insurance was 
                                                            available   
------------------------------------------------------------------------
(i) The crop is not required    (A) The maximum number  (B) The number  
 to be contracted with a         of acres certified      of acres       
 processor to be insured.        for actual production   specified on   
                                 history (APH)           your intended  
                                 purposes or reported    acreage report 
                                 for insurance for the   which is       
                                 crop in any one of      submitted to us
                                 the 4 most recent       by the sales   
                                 crop years (not         closing date   
                                 including reported      for all crops  
                                 prevented planting      you insure for 
                                 acreage that was        the crop year  
                                 planted to a            and that is    
                                 substitute crop other   accepted by us.
                                 than an approved        The total      
                                 cover crop). The        number of acres
                                 number of acres         listed may not 
                                 determined above for    exceed the     
                                 a crop may be           number of acres
                                 increased by            of cropland in 
                                 multiplying it by the   your farming   
                                 ratio of the total      operation at   
                                 cropland acres that     the time you   
                                 you are farming this    submit the     
                                 year (if greater) to    intended       
                                 the total cropland      acreage report.
                                 acres that you farmed   The number of  
                                 in the previous year,   acres          
                                 provided that you       determined     
                                 submit proof to us      above for a    
                                 that for the current    crop may only  
                                 crop year you have      be increased by
                                 purchased or leased     multiplying it 
                                 additional land or      by the ratio of
                                 that acreage will be    the total      
                                 released from any       cropland acres 
                                 USDA program which      that you are   
                                 prohibits harvest of    farming this   
                                 a crop. Such acreage    year (if       
                                 must have been          greater) to the
                                 purchased, leased, or   number of acres
                                 released from the       listed on your 
                                 USDA program, in time   intended       
                                 to plant it for the     acreage report,
                                 current crop year       if you meet the
                                 using good farming      conditions     
                                 practices. No cause     stated in      
                                 of loss that will or    section        
                                 could prevent           18(e)(1)(i)(A).
                                 planting may be                        
                                 evident at the time                    
                                 the acreage is                         
                                 purchased, leased, or                  
                                 released from the                      
                                 USDA program.                          
(ii) The crop must be           (A) The number of       (B) The number  
 contracted with a processor     acres of the crop       of acres of the
 to be insured.                  specified in the        crop as        
                                 processor contract,     determined in  
                                 if the contract         section        
                                 specifies a number of   18(e)(1)(ii)(A)
                                 acres contracted for    .              
                                 the crop year; or the                  
                                 result of dividing                     
                                 the quantity of                        
                                 production stated in                   
                                 the processor                          
                                 contract by your                       
                                 approved yield, if                     
                                 the processor                          
                                 contract specifies a                   
                                 quantity of                            
                                 production that will                   
                                 be accepted. (For the                  
                                 purposes of                            
                                 establishing the                       
                                 number of prevented                    
                                 planting acres, any                    
                                 reductions applied to                  
                                 the transitional                       
                                 yield for failure to                   
                                 certify acreage and                    
                                 production for four                    
                                 prior years will not                   
                                 be used.).                             
------------------------------------------------------------------------

    (2) Any eligible acreage determined in accordance with the table 
contained in section 18(e)(1) will be reduced by subtracting the number 
of acres of the crop (insured and uninsured) that are timely and late 
planted, including acreage specified in section 17(b).
    (f) Regardless of the number of eligible acres determined in 
section 18(e), prevented planting coverage will not be provided for any 
acreage:
    (1) If at least one contiguous block of prevented planting acreage 
does not constitute at least 20 acres or 20 percent of the insurable 
crop acreage in the unit, whichever is less. We will assume that any 
prevented planting acreage within a field that contains planted acreage 
would have been planted to the same crop that is planted in the field, 
unless the prevented planting acreage constitutes at least 20 acres or 
20 percent of the insurable acreage in the field and you can prove that 
you have previously produced both crops in the same field in the same 
crop year;
    (2) Used for conservation purposes or intended to be left unplanted 
under any program administered by the USDA;
    (3) On which the insured crop is prevented from being planted, if 
you or any other person receives a prevented planting payment for any 
crop for the same acreage in the same crop year (excluding share 
arrangements), unless you have coverage greater than the catastrophic 
risk protection plan of insurance and have records of acreage and 
production that are used to determine your approved yield that show the 
acreage was double-cropped in each of the last 4 years in which the 
insured crop was grown on the acreage;
    (4) On which the insured crop is prevented from being planted, if 
any crop from which any benefit is derived under any program 
administered by the USDA is planted and fails, or if any crop is 
harvested, hayed or grazed on the same acreage in the same crop year 
(other than a cover crop which may be hayed or grazed after the final 
planting date for the insured crop), unless you have coverage greater 
than that applicable to the catastrophic risk protection plan of 
insurance and have records of acreage and production that are used to 
determine your approved yield that show the acreage was double-cropped 
in each of the last 4 years in which the insured crop was grown on the 
acreage;
    (5) Of a crop that is prevented from being planted if a cash lease 
payment is also received for use of the same acreage in the same crop 
year (not applicable if acreage is leased for haying or grazing only). 
If you state that you will not be cash renting the acreage and claim a 
prevented planting payment on the acreage, you could be subject to 
civil and criminal sanctions if you cash rent the acreage and do not 
return the prevented planting payment for it;
    (6) For which planting history or conservation plans indicate that 
the acreage would have remained fallow for crop rotation purposes;
    (7) That exceeds the number of acres eligible for a prevented 
planting payment;
    (8) That exceeds the number of eligible acres physically available 
for planting;
    (9) For which you cannot provide proof that you had the inputs 
available to plant and produce a crop with the expectation of at least 
producing the yield used to determine the final guarantee (Evidence 
that you have previously planted the crop on the unit will be 
considered adequate proof unless your planting practices or rotational 
requirements show that the acreage would have remained fallow or been 
planted to another crop);
    (10) Based on an irrigated practice final guarantee unless adequate 
irrigation facilities were in place to carry out an irrigated practice 
on the

[[Page 16236]]

acreage prior to the insured cause of loss that prevented you from 
planting; or
    (11) Of a crop type that you did not plant in at least one of the 
four most recent years. Types for which separate final guarantees are 
available must be included in your APH database in at least one of the 
most recent four years, or crops that do not require yield 
certification (crops for which the insurance guarantee is not based on 
APH) must be reported on your acreage report in at least one of the 
four most recent crop years except as allowed in section 
18(e)(1)(i)(B).
    (g) The prevented planting payment for any eligible acreage within 
a basic or optional unit will be determined by:
    (1) Multiplying the final guarantee for timely planted acreage of 
the insured crop by the prevented planting coverage level percentage 
you elected, or that is contained in the Crop Provisions if you did not 
elect a prevented planting coverage level percentage;
    (2) Multiplying the result of section 18(g)(1) by the number of 
eligible prevented planting acres in the unit; and
    (3) Multiplying the result of section 18(g)(2) by your share.
    (h) The prevented planting payment for any eligible acreage within 
an enterprise unit will be determined by:
    (1) Multiplying the final guarantee for each basic unit within the 
enterprise unit, for timely planted acreage of the insured crop by the 
prevented planting coverage level percentage you elected, or that is 
contained in the Crop Provisions if you did not elect a prevented 
planting coverage level percentage.
    (2) Multiplying the result of section 18(h)(1) by the number of 
eligible prevented planting acres in each basic unit within the 
enterprise unit; and
    (3) Multiplying the result of section 18(h)(2) by your share.
    (4) Total the results from section 18(h)(3).
19. Crops as Payment
    You must not abandon any crop to us. We will not accept any crop as 
compensation for payments due us.
20. Arbitration
    (a) If you and we fail to agree on any factual determination, the 
disagreement will be resolved in accordance with the rules of the 
American Arbitration Association. Failure to agree with any factual 
determination made by FCIC must be resolved through the FCIC appeal 
provisions published at 7 CFR part 11.
    (b) No award determined by arbitration or appeal can exceed the 
amount of liability established or which should have been established 
under the policy.
21. Access to Insured Crop and Records, and Record Retention
    (a) We reserve the right to examine the insured crop as often as we 
reasonably require.
    (b) For three years after the end of the crop year, you must 
retain, and provide upon our request, complete records of the 
harvesting, storage, shipment, sale, or other disposition of all the 
insured crop produced on each unit. This requirement also applies to 
the records used to establish the basis for the production report for 
each unit. You must also provide, upon our request, separate records 
showing the same information for production from any acreage not 
insured. We may extend the record retention period beyond three years 
by notifying you of such extension in writing. Your failure to keep and 
maintain such records will, at our option, result in:
    (1) Cancellation of the policy;
    (2) Assignment of production to the units by us;
    (3) Combination of the optional units; or
    (4) A determination that no indemnity is due.
    (c) Any person designated by us will, at any time during the record 
retention period, have access:
    (1) To any records relating to this insurance at any location where 
such records may be found or maintained; and
    (2) To the farm.
    (d) By applying for insurance under the authority of the Act or by 
continuing insurance for which you previously applied, you authorize 
us, or any person acting for us, to obtain records relating to the 
insured crop from any person who may have custody of those records 
including, but not limited to, FSA offices, banks, warehouses, gins, 
cooperatives, marketing associations, and accountants. You must assist 
us in obtaining all records which we request from third parties.
22. Other Insurance
    (a) Other Like Insurance--You must not obtain any other crop 
insurance issued under the authority of the Act on your share of the 
insured crop. If we determine that more than one policy on your share 
is intentional, you may be subject to the sanctions authorized under 
this policy, the Act, or any other applicable statute. If we determine 
that the violation was not intentional, the policy with the earliest 
date of application will be in force and all other policies will be 
void. Nothing in this paragraph prevents you from obtaining other 
insurance not issued under the Act.
    (b) Other Insurance Against Fire--If you have other insurance, 
whether valid or not, against damage to the insured crop by fire during 
the insurance period, we will be liable for loss due to fire only for 
the smaller of:
    (1) The amount of indemnity determined pursuant to this policy 
without regard to such other insurance; or
    (2) The amount by which the loss from fire is determined to exceed 
the indemnity paid or payable under such other insurance.
    (c) For the purpose of subsection (b) of this section, the amount 
of loss from fire will be the reduction in revenue of the insured crop 
on the unit involved determined pursuant to this policy.
23. Conformity to Food Security Act
    Although your violation of a number of federal statutes, including 
the Act, may cause cancellation, termination, or voidance of your 
insurance contract, you should be specifically aware that your policy 
will be canceled if you are determined to be ineligible to receive 
benefits under the Act due to violation of the controlled substance 
provision (title XVII of the Food Security Act of 1985 (Pub. L. 99-
198)) and the regulations promulgated under the Act by USDA. Your 
insurance policy will be canceled if you are determined, by the 
appropriate Agency, to be in violation of these provisions. We will 
recover any and all monies paid to you or received by you during your 
period of ineligibility, and your premium will be refunded, less a 
reasonable amount for expenses and handling not to exceed 20 percent of 
the premium paid or to be paid by you.
24. Amounts Due Us
    (a) Interest will accrue at the rate of 1.25 percent simple 
interest per calendar month, or any portion thereof, on any unpaid 
amount due us. For the purpose of premium amounts due us, the interest 
will start to accrue on the first day of the month following the 
premium billing date specified in the Special Provisions.
    (b) For the purpose of any other amounts due us, such as repayment 
of indemnities found not to have been earned, interest will start to 
accrue on the date that notice is issued to you for the collection of 
the unearned amount. Amounts found due under this paragraph will not be 
charged interest if payment is made within 30 days of issuance of the 
notice by us. The

[[Page 16237]]

amount will be considered delinquent if not paid within 30 days of the 
date the notice is issued by us.
    (c) All amounts paid will be applied first to expenses of 
collection (see subsection (d) of this section) if any, second to the 
reduction of accrued interest, and then to the reduction of the 
principal balance.
    (d) If we determine that it is necessary to contract with a 
collection agency or to employ an attorney to assist in collection, you 
agree to pay all of the expenses of collection.
25. Legal Action Against Us
    (a) You may not bring legal action against us unless you have 
complied with all of the policy provisions.
    (b) If you do take legal action against us, you must do so within 
12 months of the date of denial of the claim. Suit must be brought in 
accordance with the provisions of 7 U.S.C. 1508(j).
    (c) Your right to recover damages (compensatory, punitive, or 
other), attorney's fees, or other charges is limited or excluded by 
this contract or by Federal Regulations.
26. Payment and Interest Limitations
    (a) Under no circumstances will we be liable for the payment of 
damages (compensatory, punitive, or other), attorney's fees, or other 
charges in connection with any claim for indemnity, whether we approve 
or disapprove such claim.
    (b) We will pay simple interest computed on the net indemnity 
ultimately found to be due by us or by a final judgment of a court of 
competent jurisdiction, from and including the 61st day after the date 
you sign, date, and submit to us the properly completed claim on our 
form. Interest will be paid only if the reason for our failure to 
timely pay is NOT due to your failure to provide information or other 
material necessary for the computation or payment of the indemnity. The 
interest rate will be that established by the Secretary of the Treasury 
under section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611) 
and published in the Federal Register semiannually on or about January 
1 and July 1 of each year, and may vary with each publication.
27. Concealment, Misrepresentation or Fraud
    (a) If you have falsely or fraudulently concealed the fact that you 
are ineligible to receive benefits under the Act or if you or anyone 
assisting you has intentionally concealed or misrepresented any 
material fact relating to this policy:
    (1) This policy will be voided; and
    (2) You may be subject to remedial sanctions in accordance with 7 
CFR part 400, subpart R.
    (b) Even though the policy is void, you may still be required to 
pay 20 percent of the premium due under the policy to offset costs 
incurred by us in the service of this policy. If previously paid, the 
balance of the premium will be returned.
    (c) Voidance of this policy will result in you having to reimburse 
all indemnities paid for the crop year in which the voidance was 
effective.
    (d) Voidance will be effective on the first day of the insurance 
period for the crop year in which the act occurred and will not affect 
the policy for subsequent crop years unless a violation of this section 
also occurred in such crop years.
28. Transfer of Coverage and Right to Indemnity
    If you transfer any part of your share during the crop year, you 
may transfer your coverage rights, if the transferee is eligible for 
crop insurance. We will not be liable for any more than the liability 
determined in accordance with your policy that existed before the 
transfer occurred. The transfer of coverage rights must be on our form 
and will not be effective until approved by us in writing. Both you and 
the transferee are jointly and severally liable for the payment of the 
premium. The transferee has all rights and responsibilities under this 
policy consistent with the transferee's interest.
29. Assignment of Indemnity
    You may assign to another party your right to an indemnity for the 
crop year. The assignment must be on our form and will not be effective 
until approved in writing by us. The assignee will have the right to 
submit all loss notices and forms as required by the policy. If you 
have suffered a loss from an insurable cause and fail to file a claim 
for indemnity within 60 days after the end of the insurance period, the 
assignee may submit the claim for indemnity not later than 15 days 
after the 60-day period has expired. We will honor the terms of the 
assignment only if we can accurately determine the amount of the claim. 
However, no action will lie against us for failure to do so.
30. Subrogation (Recovery of Loss From a Third Party)
    Since you may be able to recover all or a part of your loss from 
someone other than us, you must do all you can to preserve this right. 
If we pay you for your loss, your right to recovery will, at our 
option, belong to us. If we recover more than we paid you plus our 
expenses, the excess will be paid to you.
31. Descriptive Headings
    The descriptive headings of the various policy provisions are 
formulated for convenience only and are not intended to affect the 
construction or meaning of any of the policy provisions.
32. Notices
    (a) All notices required to be given by you must be in writing and 
received by your crop insurance agent within the designated time unless 
otherwise provided by the notice requirement. Notices required to be 
given immediately may be by telephone or in person and confirmed in 
writing. Time of the notice will be determined by the time of our 
receipt of the written notice. If the date by which you are required to 
submit a report or notice falls on Saturday, Sunday, or a Federal 
holiday, or, if your agent's office is, for any reason, not open for 
business on the date you are required to submit such notice or report, 
such notice or report must be submitted on the next business day.
    (b) All notices and communications required to be sent by us to you 
will be mailed to the address contained in your records located with 
your crop insurance agent. Notice sent to such address will be 
conclusively presumed to have been received by you. You should advise 
us immediately of any change of address.

Crop Revenue Coverage

Coarse Grains Crop Provisions

    This is a risk management program. This risk management tool may be 
reinsured under the authority provided by section 508(h) of the Federal 
Crop Insurance Act. If a conflict exists among the policy provisions, 
the order of priority is as follows: (1) the Special Provisions; (2) 
these Crop Provisions; and (3) the Basic Provisions with (1) 
controlling (2), etc.
1. Definitions
    Calculated revenue. The production to count multiplied by the 
harvest price.
    Coarse grains. Corn, grain sorghum, and soybeans.
    Grain sorghum. The crop defined as sorghum under the United States 
Grain Standards Act.
    Harvest. Combining, threshing, or picking the insured crop for 
grain.
    Local market price. The cash grain price per bushel for U.S. No. 2 
yellow corn, U.S. No. 2 grain sorghum, or U.S. No. 1 soybeans, offered 
by buyers in the area in which you normally market the insured crop. 
The local market price

[[Page 16238]]

will reflect the maximum limits of quality deficiencies allowable for 
the U.S. No. 2 grade for yellow corn and grain sorghum, or U.S. No. 1 
grade for soybeans. Factors not associated with grading under the 
Official United States Standards for Grain, including but not limited 
to protein and oil, will not be considered.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, coarse grains must initially be planted in rows (corn 
must be planted in rows far enough apart to permit mechanical 
cultivation), unless otherwise provided by the Special Provisions or 
actuarial documents.
    Prevented planting guarantee. That percentage of the final 
guarantee for timely planted acres as set forth in section 12.
    Silage. A product that results from severing the plant from the 
land and chopping it for the purpose of livestock feed.
2. Coverage Level, Price Percentage, and Approved Yield for Determining 
Final Guarantee and Indemnity
    In addition to the requirements of section 4 of the Basic 
Provisions all the insurable acreage of each crop in the county insured 
as grain under this policy will have the same coverage level and price 
percentage elections.
3. Contract Changes
    In accordance with Section 5 of the Basic Provisions, the contract 
change date is December 31 preceding the cancellation date.
4. Cancellation and Termination Dates
    In accordance with section 3(h) of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
                                           Cancellation and termination 
            State and county                           dates            
------------------------------------------------------------------------
(a) For corn and grain sorghum:                                         
    Val Verde, Edwards, Kerr, Kendall,    January 15.                   
     Bexar, Wilson, Karnes, Goliad,                                     
     Victoria, and Jackson Counties,                                    
     Texas, and all Texas counties lying                                
     south thereof.                                                     
    El Paso, Hudspeth, Culberson,         February 15.                  
     Reeves, Loving, Winkler, Ector,                                    
     Upton, Reagan, Sterling, Coke, Tom                                 
     Green, Concho, McCulloch, San Saba,                                
     Mills, Hamilton, Bosque, Johnson,                                  
     Tarrant, Wise, Cooke Counties,                                     
     Texas, and all Texas counties lying                                
     south and east thereof to and                                      
     including Terrell, Crockett,                                       
     Sutton, Kimble, Gillespie, Blanco,                                 
     Comal, Guadalupe, Gonzales, De                                     
     Witt, Lavaca, Colorado, Wharton,                                   
     and Matagorda Counties, Texas.                                     
    Alabama; Arizona; Arkansas;           February 28.                  
     California; Florida; Georgia;                                      
     Louisiana; Mississippi; Nevada;                                    
     North Carolina; and South Carolina.                                
    All other Texas counties and all      March 15.                     
     other states.                                                      
(b) For soybeans:                                                       
    Jackson, Victoria, Goliad, Bee, Live  February 15.                  
     Oak, McMullen, LaSalle, and Dimmit                                 
     Counties, Texas and all Texas                                      
     counties lying south thereof.                                      
    Alabama; Arizona; Arkansas;           February 28.                  
     California; Florida; Georgia;                                      
     Louisiana; Mississippi; Nevada;                                    
     North Carolina; and South Carolina;                                
     and El Paso, Hudspeth, Culberson,                                  
     Reeves, Loving, Winkler, Ector,                                    
     Upton, Reagan, Sterling, Coke, Tom                                 
     Green, Concho, McCulloch, San Saba,                                
     Mills, Hamilton, Bosque, Johnson,                                  
     Tarrant, Wise, Cooke Counties,                                     
     Texas, and all Texas counties lying                                
     south and east thereof to and                                      
     including Maverick, Zavala, Frio,                                  
     Atascosa, Karnes, De Witt, Lavaca,                                 
     Colorado, Wharton, and Matagorda                                   
     Counties, Texas.                                                   
    All other Texas counties and all      March 15.                     
     other states.                                                      
------------------------------------------------------------------------

5. Insured Crop
    (a) In accordance with section 9 of the Basic Provisions, the crop 
insured will be each coarse grain crop you elect to insure for which 
premium rates and prices are provided by the actuarial documents:
    (1) In which you have a share;
    (2) That is adapted to the area based on days to maturity and is 
compatible with agronomic and weather conditions in the area, including 
air seeded soybeans subject to our approval;
    (3) That is not (unless allowed by the Special Provisions):
    (i) Interplanted with another crop; or
    (ii) Planted into an established grass or legume; and
    (4) Planted for harvest as grain.
    (b) For corn only, in addition to the provisions of section 5(a), 
the corn crop insured will be all corn that is yellow dent or white 
corn, including mixed yellow and white, waxy, high--lysine corn, high-
oil corn blends containing mixtures of at least ninety percent high 
yielding yellow dent female plants with high-oil male pollinator 
plants, commercial varieties of high-protein hybrids, and excluding:
    (1) High--amylose, high-oil except as defined in section 5(b), 
flint, flour, Indian, or blue corn, or a variety genetically adapted to 
provide forage for wildlife or any other open pollinated corn.
    (2) A variety of corn adapted for silage use when the corn is 
reported for insurance as grain.
    (c) For grain sorghum only, in addition to the provisions of 
section 5(a), the grain sorghum crop insured will be all of the grain 
sorghum in the county:
    (1) That is planted for harvest as grain;
    (2) That is a combine--type hybrid grain sorghum (grown from hybrid 
seed); and
    (3) That is not a dual--purpose type of grain sorghum (a type used 
for both grain and forage).
    (d) For soybeans only, in addition to the provisions of section 
5(a), the soybean crop insured will be all of the soybeans in the 
county that are planted for harvest as beans.
6. Insurable Acreage
    In addition to the provisions of section 10 of the Basic 
Provisions, any acreage of the insured crop damaged before the final 
planting date, to the extent that most producers in the surrounding 
area with acreage with similar characteristics would not normally 
further care for the crop, must be replanted unless we agree that it is 
not practical to replant.
7. Insurance Period
    In accordance with the provisions under section 12 of the Basic 
Provisions, the calendar date for the end of the insurance period is 
the date immediately following planting as follows:

(a) For corn insured as grain:                                          

[[Page 16239]]

                                                                        
    (1) Val Verde, Edwards, Kerr,         September 30.                 
     Kendall, Bexar, Wilson, Karnes,                                    
     Goliad, Victoria, and Jackson                                      
     Counties, Texas, and all Texas                                     
     counties lying south thereof.                                      
    (2) Clark, Cowlitz, Grays Harbor,     October 31.                   
     Island, Jefferson, King, Kitsap,                                   
     Lewis, Pierce, Skagit, Snohomish,                                  
     Thurston, Wahkiakum, and Whatcom                                   
     Counties, Washington.                                              
    (3) All other counties and states...  December 10.                  
(b) For grain sorghum insured as grain:                                 
    (1) Val Verde, Edwards, Kerr,         September 30.                 
     Kendall, Bexar, Wilson, Karnes,                                    
     Goliad, Victoria, and Jackson                                      
     Counties, Texas, and all Texas                                     
     counties lying south thereof.                                      
    (2) All other Texas counties and all  December 10.                  
     other states.                                                      
(c) For soybeans insured as beans:                                      
    All states..........................  December 10.                  
                                                                        

8. Causes of Loss
    In accordance with the provisions of section 13 of the Basic 
Provisions, insurance is provided only against an unavoidable loss of 
revenue due to the following causes of loss which occur within the 
insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption;
    (h) Failure of the irrigation water supply, if applicable, due to a 
cause of loss contained in section 8(a) through (g) occurring within 
the insurance period; or
    (i) A harvest price that is less than the base price.
9. Replanting Payments
    (a) In accordance with section 14 of the Basic Provisions, 
replanting payments for coarse grains are allowed if the coarse grains 
are damaged by an insurable cause of loss to the extent that the 
remaining stand will not produce at least 90 percent of the minimum 
guarantee for the acreage 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 minimum guarantee or:
    (1) For corn grain, 8 bushels multiplied by the base price, 
multiplied by your insured share;
    (2) For grain sorghum, 7 bushels multiplied by the base price, 
multiplied by your insured share; and
    (3) For soybeans, 3 bushels multiplied by the base price multiplied 
by your insured share.
    (c) When the crop is replanted using a practice that is uninsurable 
as an original planting, the final guarantee for the unit will be 
reduced by the amount of the replanting payment which is attributable 
to your share. The premium amount will not be reduced.
10. Duties in the Event of Damage or Loss
    In accordance with the requirements of section 15 of the Basic 
Provisions, if you initially discover damage to any insured crop within 
15 days of or during harvest, and you do not intend to harvest the 
acreage, you must leave representative samples of the unharvested crop 
for our inspection. The samples must be at least 10 feet wide, extend 
the entire length of each field in the unit, and must not be harvested 
or destroyed until after our inspection.
11. Settlement of Claim
    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production:
    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production were not provided; or
    (2) For any basic unit, 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 on any insured basic or optional unit of coarse 
grains by:
    (1) Multiplying the insured acreage of the crop by the final 
guarantee;
    (2) Subtracting the calculated revenue from the result of section 
11(b)(1); and
    (3) Multiplying the result of 11(b)(2) by your share.
    If the result of section 11(b)(3) is greater than zero, an 
indemnity will be paid. If the result of section 11(b)(3) is less than 
zero, no indemnity will be due.
    (c) In the event of loss or damage covered by this policy, we will 
settle your claim on any insured enterprise unit by:
    (1) Multiplying the insured acreage of the crop by the final 
guarantee for each basic unit within the enterprise unit;
    (2) For each basic unit in 11(c)(1), compute the calculated 
revenue;
    (3) Subtract each result in section 11(c)(2) from the respective 
result of section 11(c)(1);
    (4) Multiplying each result of section 11(c)(3) by your share; and
    (5) Total the results of section 11(c)(4).
    If the result of section 11(c)(5) is greater than zero, an 
indemnity will be paid. If the result of section 11(c)(5) is less than 
zero, no indemnity will be due.
    (d) The total production in bushels to count from all insurable 
acreage for the crop on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than that amount of production that when multiplied by 
the harvest price equals the final guarantee for the acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide records of production that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance 
with section 11(e)); and
    (iv) Potential production on insured acreage you want to put to 
another use or you wish to abandon and 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 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

[[Page 16240]]

use will be used to determine the amount of production to count.); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, 
or our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage.
    (e) Mature coarse grain production may be adjusted for excess 
moisture and quality deficiencies. If moisture adjustment is applicable 
it will be made prior to any adjustment for quality.
    (1) Production will be reduced by 0.12 percent for each 0.1 
percentage point of moisture in excess of:
    (i) Fifteen percent for corn (If moisture exceeds 30 percent, 
production will be reduced 0.2 percent for each 0.1 percentage point 
above 30 percent);
    (ii) Fourteen percent for grain sorghum; and
    (iii) Thirteen percent for soybeans.
    We may obtain samples of the production to determine the moisture 
content.
    (2) Production will be eligible for quality adjustment if:
    (i) Deficiencies in quality, in accordance with the Official United 
States Standards for Grain, result in:
    (A) Corn not meeting the grade requirements for U.S. No. 4 (grades 
U.S. No. 5 or worse) because of test weight or kernel damage (excluding 
heat damage) or having a musty, sour, or commercially objectionable 
foreign odor;
    (B) Grain sorghum not meeting the grade requirements for U.S. No. 4 
(grades U.S. Sample grade) because of test weight or kernel damage 
(excluding heat damage) or having a musty, sour, or commercially 
objectionable foreign odor (except smut odor), or meets the special 
grade requirements for smutty grain sorghum; or
    (C) Soybeans not meeting the grade requirements for U.S. No. 4 
(grades U.S. Sample grade) because of test weight or kernel damage 
(excluding heat damage) or having a musty, sour, or commercially 
objectionable foreign odor (except garlic odor), or which meet the 
special grade requirements for garlicky soybeans; or
    (ii) Substances or conditions are present that are identified by 
the Food and Drug Administration or other public health organizations 
of the United States as being injurious to human or animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these crop 
provisions;
    (ii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us or 
by a disinterested third party approved by us; and
    (iii) The samples are analyzed by a grader licensed under the 
authority of the United States Grain Standards Act or the United States 
Warehouse Act with regard to deficiencies in quality, or by a 
laboratory approved by us with regard to substances or conditions 
injurious to human or animal health (Test weight for quality adjustment 
purposes may be determined by our loss adjuster).
    (4) Coarse grain production that is eligible for quality 
adjustment, as specified in sections 11(e)(2) and 11(e)(3), will be 
reduced by the quality adjustment factor contained in the Special 
Provisions.
    (f) Any production harvested from plants growing in the insured 
crop may be counted as production of the insured crop on a weight 
basis.
12. Prevented Planting
    Your prevented planting coverage will be 60 percent of your final 
guarantee for timely planted acreage. If you have limited or additional 
levels of coverage, as specified in 7 CFR part 400, subpart T, and pay 
an additional premium, you may increase your prevented planting 
coverage to a level specified in the actuarial documents.

Crop Revenue Coverage

Cotton Crop Provisions

    This is a risk management program. This risk management tool will 
be reinsured under the authority provided by section 508 (h) of the 
Federal Crop Insurance Act. If a conflict exists among the policy 
provisions, the order of priority is as follows: (1) the Special 
Provisions; (2) these Crop Provisions; and (3) the Basic Provisions 
with (1) controlling (2), etc.
1. Definitions
    Calculated Revenue. The production to count multiplied by the 
harvest price.
    Cotton. Varieties identified as American Upland Cotton.
    Growth area. A geographic area designated by the Secretary of 
Agriculture for the purpose of reporting cotton prices.
    Harvest. The removal of the seed cotton from the open cotton boll, 
or the severance of the open cotton boll from the stalk by either 
manual or mechanical means.
    Mature cotton. Cotton that can be harvested either manually or 
mechanically.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, cotton must be planted in rows, unless otherwise 
provided by the Special Provisions or actuarial documents. The yield 
conversion factor normally applied to non-irrigated skip-row cotton 
acreage will not be used if the land between the rows of cotton is 
planted to any other spring planted crop.
    Prevented Planting Guarantee. That percentage of the final 
guarantee for timely planted acres as set forth in section 11(b).
    Skip-row. A planting pattern that:
    (1) Consists of alternating rows of cotton and fallow land or land 
planted to another crop the previous fall; and
    (2) Qualifies as a skip-row planting pattern as defined by FSA or a 
successor agency.
2. Coverage Level, Price Percentage, and Approved Yield for Determining 
Final Guarantee and Indemnity
    In addition to the requirements of section 4 of the Basic 
Provisions, all the insurable acreage of each crop in the county 
insured as cotton under this policy will have the same coverage level 
and price percentage elections.
3. Contract Changes
    In accordance with Section 5 of the Basic Provisions, the contract 
change date is December 31 preceding the cancellation date.
4. Cancellation and Termination Dates
    In accordance with section 3(h) of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
                                           Cancellation and termination 
            State and county                           dates            
------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall,        January 15.                   
 Bexar, Wilson, Karnes, Goliad,                                         
 Victoria, and Jackson Counties, Texas,                                 
 and all Texas counties lying south                                     
 thereof.                                                               

[[Page 16241]]

                                                                        
Alabama; Arizona; Arkansas; California;   February 28.                  
 Florida; Georgia; Louisiana;                                           
 Mississippi; Nevada; North Carolina;                                   
 South Carolina; El Paso, Hudspeth,                                     
 Culberson, Reeves, Loving, Winkler,                                    
 Ector, Upton, Reagan, Sterling, Coke,                                  
 Tom Green, Concho, McCulloch, San Saba,                                
 Mills, Hamilton, Bosque, Johnson,                                      
 Tarrant, Wise, and Cooke Counties,                                     
 Texas, and all Texas counties lying                                    
 south and east thereof to and including                                
 Terrell, Crocket, Sutton, Kimble,                                      
 Gillespie, Blanco, Comal, Guadalupe,                                   
 Gonzales, De Witt, Lavaca, Colorado,                                   
 Wharton, and Matagorda Counties, Texas.                                
All other Texas counties and all other    March 15.                     
 states.                                                                
------------------------------------------------------------------------

5. Insured Crop
    In accordance with section 9 of the Basic Provisions, the crop 
insured will be all the cotton lint, in the county for which premium 
rates are provided by the actuarial documents:
    (a) In which you have a share; and
    (b) That is not (unless allowed by the Special Provisions):
    (1) Colored cotton lint;
    (2) Planted into an established grass or legume;
    (3) Interplanted with another spring planted crop;
    (4) Grown on acreage from which a hay crop was harvested in the 
same calendar year unless the acreage is irrigated; or
    (5) Grown on acreage on which a small grain crop reached the 
heading stage in the same calendar year unless the acreage is irrigated 
or adequate measures are taken to terminate the small grain crop prior 
to heading and less than 50 percent of the small grain plants reach the 
heading stage.
6. Insurable Acreage
    In addition to the provisions of section 10 of the Basic 
Provisions:
    (a) The acreage insured will be only the land occupied by the rows 
of cotton when a skip row planting pattern is utilized; and
    (b) Any acreage of the insured crop damaged before the final 
planting date, to the extent that most producers in the area with 
acreage with similar characteristics would not normally further care 
for the crop, must be replanted unless we agree that it is not 
practical to replant.
7. Insurance Period
    (a) In lieu of section 12(b)(2) of the Basic Provisions, insurance 
will end upon the removal of the cotton from the field.
    (b) In accordance with the provisions under section 12 of the Basic 
Provisions, the calendar date for the end of the insurance period is 
the date immediately following planting as follows:
    (1) September 30 in Val Verde, Edwards, Kerr, Kendall, Bexar, 
Wilson, Karnes, Goliad, Victoria, and Jackson Counties, Texas, and all 
Texas counties lying south thereof;
    (2) January 31 in Arizona, California, New Mexico, Oklahoma, and 
all other Texas counties; and
    (3) December 31 in all other states.
8. Causes of Loss
    In accordance with the provisions of section 13 of the Basic 
Provisions, insurance is provided only against an unavoidable loss of 
revenue due to the following causes of loss which occur within the 
insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption;
    (h) Failure of the irrigation water supply, if applicable, due to a 
cause of loss contained in section 8(a) through (g) occurring within 
the insurance period; or
    (i) A harvest price that is less than the base price.
9. Duties in the Event of Damage or Loss
    (a) In addition to your duties under section 15 of the Basic 
Provisions, in the event of damage or loss:
    (1) The cotton stalks must remain intact for our inspection; and
    (2) If you initially discover damage to the insured crop within 15 
days of harvest, or during harvest, and you do not intend to harvest 
the acreage, you must leave representative samples of the unharvested 
crop in the field for our inspection. The samples must be at least 10 
feet wide and extend the entire length of each field in the unit.
    (b) The stalks must not be destroyed or harvested, until after our 
inspection.
10. Settlement of Claim
    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production:
    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production were not provided; or
    (2) For any basic unit, 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 of the crop by the final 
guarantee;
    (2) Subtracting the calculated revenue from the result of section 
10(b)(1); and
    (3) Multiplying the result of 10(b)(2) by your share.
    If the result of section 10(b)(3) is greater than zero, an 
indemnity will be paid. If the result of section 10(b)(3) is less than 
zero, no indemnity will be due.
    (c) The total production (in pounds) to count from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than that amount of production that when multiplied by 
the harvest price equals the final guarantee for the acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes;
    (D) For which you fail to provide records of production that are 
acceptable to us; or
    (E) On which the cotton stalks are destroyed, in violation of 
section 9;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production of 
white cotton may be adjusted for quality deficiencies in accordance 
with section 10(d)); and
    (iv) Potential production on insured acreage you want to put to 
another use or you wish 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 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

[[Page 16242]]

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; and
    (2) All harvested production from the insurable acreage, including 
any mature cotton retrieved from the ground.
    (d) Mature white cotton may be adjusted for quality when production 
has been damaged by insured causes. Such production to count will be 
reduced if the price quotation for cotton of like quality (price 
quotation ``A'') for the applicable growth area is less than 75 percent 
of price quotation ``B.'' Price quotation ``B'' is defined as the price 
quotation for the applicable growth area for cotton of the color and 
leaf grade, staple length, and micronaire reading designated in the 
Special Provisions for this purpose. Price quotations ``A'' and ``B'' 
will be the price quotations contained in the Daily Spot Cotton 
Quotations published by the USDA Agricultural Marketing Service on the 
date the last bale from the unit is classed. If the date the last bale 
classed is not available, the price quotations will be determined on 
the date the last bale from the unit is delivered to the warehouse, as 
shown on the producer's account summary obtained from the gin. If 
eligible for adjustment, the amount of production to be counted will be 
determined by multiplying the number of pounds of such production by 
the factor derived from dividing price quotation ``A'' by 75 percent of 
price quotation ``B.''
    (e) Colored cotton lint will not be eligible for quality 
adjustment.
11. Prevented Planting
    (a) In addition to the provisions contained in section 18 of the 
Basic Provisions, your prevented planting final guarantee will be based 
on your approved yield without adjustment for skip-row planting 
patterns.
    (b) Your prevented planting coverage will be 45 percent of your 
final guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

    Signed in Washington, D.C. on March 26, 1998.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 98-8590 Filed 4-1-98; 8:45 am]
BILLING CODE 3410-08-P