[Federal Register Volume 64, Number 19 (Friday, January 29, 1999)]
[Notices]
[Pages 4609-4632]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2109]


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 Notices
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains documents other than rules 
 or proposed rules that are applicable to the public. Notices of hearings 
 and investigations, committee meetings, agency decisions and rulings, 
 delegations of authority, filing of petitions and applications and agency 
 statements of organization and functions are examples of documents 
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  Federal Register / Vol. 64, No. 19 / Friday, January 29, 1999 / 
Notices  

[[Page 4609]]


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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, cotton, and rice in select 
states and counties under the Crop Revenue Coverage (CRC) plan of 
insurance for the 1999 crop year. This notice is intended to inform 
eligible producers and the private insurance industry of the CRC 
coverage changes for corn, grain sorghum, soybeans, cotton and rice and 
provide 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 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 provided coverage for 
basic and optional units only, as selected by the insured, and the 
expected market price was based on 95 percent of the average daily 
settlement price. Beginning with the 1998 crop year, insureds could 
select basic, optional or enterprise units for corn and soybeans and 95 
or 100 percent of the average daily settlement price for corn, grain 
sorghum, soybeans and cotton. The CRC program was also changed to 
provide insurance at an appropriate premium for any producer that had 
been identified on the nonstandard classification system (NCS).
    Beginning with the 1999 crop year for CRC wheat, producers can 
select basic, optional or enterprise units, 95 or 100 percent of the 
average daily settlement price, coverage for all acreage classified as 
high risk, and a separate price for durum wheat. A methodology also has 
been developed for determining the spring wheat Base Price in counties 
that had both fall and spring wheat programs, but only a fall 
cancellation date.
    Beginning with the 1999 crop year, new CRC programs are available 
for rice in Arkansas, California, Florida, Louisiana, Mississippi, 
Missouri, Oklahoma, Tennessee, and Texas; for corn, grain sorghum, and 
soybeans in Maryland; and for corn, grain sorghum, soybeans, and cotton 
in Florida. Enterprise units are now available for all CRC crops; and, 
written agreements are allowed for rating purposes only. Beginning with 
the 1999 spring crops, insureds can select increased coverage levels of 
80 and 85 percent for crops and in counties where Risk Management 
Agency (RMA) offers coverage levels up to 85 percent, and high-risk 
classification rating has been added for corn, grain sorghum, soybeans, 
cotton, and rice.
    FCIC herewith gives notice of the above stated changes for the 1999 
crop year for CRC corn, grain sorghum, soybeans, cotton, spring wheat, 
and rice for use by private insurance companies.

[[Page 4610]]

    The CRC underwriting rules, rate factors and forms for 1999 spring 
crops 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, 1400 Independence Avenue, SW, Stop 0804, Room 6727-S, 
Washington, DC, 20250-0804.
    Following is a complete list of insurable CRC crops by state for 
the 1999 crop year:

Alabama: Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Arizona: Corn, Cotton, Wheat
Arkansas: Corn, Cotton, Grain Sorghum, Rice, Soybeans, Wheat
California: Corn, Cotton, Grain Sorghum, Rice, Wheat
Colorado: Corn, Grain Sorghum, Wheat
Georgia: Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Florida: Corn, Cotton, Grain Sorghum, Rice, Soybeans
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, Rice, Soybeans, Wheat
Maryland: Corn, Grain Sorghum, Soybeans
Michigan: Corn, Grain Sorghum, Soybeans, Wheat
Minnesota: Corn, Grain Sorghum, Soybeans, Wheat
Mississippi: Corn, Cotton, Grain Sorghum, Rice, Soybeans, Wheat
Missouri: Corn, Cotton, Grain Sorghum, Rice, 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, Rice, 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, Rice, Soybeans, Wheat
Texas: Corn, Cotton, Grain Sorghum, Texas, Soybeans, Wheat
Utah: Corn, Wheat
Virginia: Corn, Cotton, Grain Sorghum, Soybeans, Wheat
Washington: Corn, Wheat
Wisconsin: Corn, Grain Sorghum, Soybeans, Wheat
Wyoming: Corn, Wheat

    Notice: The Basic Provisions, Crop Provisions, and Commodity 
Exchange Endorsements for the 1999 CRC spring crop programs of 
insurance are as follows:

Crop Revenue Coverage (CRC) 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 FCIC or us. In the event we 
cannot pay your loss, your claim will be settled in accordance with the 
provisions of this 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 insurance company providing insurance. 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, we agree with you 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 Special Provisions; (2) the Commodity Exchange Endorsement; (3) the 
Crop Provisions; and (4) these Basic 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.
    Additional coverage. Plans of crop insurance providing a level of 
coverage equal to or greater than 65 percent of the approved yield 
indemnified at 100 percent of the Base Price, or a comparable coverage.
    Administrative fee. An amount you must pay for limited and 
additional coverage for each crop year as specified in section 8.
    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 or optional unit comprising an 
enterprise unit is retained for premium and final guarantee purposes 
under an enterprise unit.
    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

[[Page 4611]]

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 Harvest Price is released (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, regardless of whether or not it is actually 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 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 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 Crop Provisions and 
section 12.)
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
government corporation within USDA.
    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 Basic Units or Optional 
units comprising the enterprise unit will retain separate Final 
Guarantees.
    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 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.
    Limited coverage. Plans of insurance offering coverage that is 
equal to or greater than 50 percent of the approved yield indemnified 
at 100 percent of the Base Price, or a comparable coverage, but less 
than 65 percent of the approved yield indemnified at 100 percent of the 
Base Price, or a comparable coverage.
    Limited resource farmer. A producer or operator of a farm:
    (a) With an annual gross income of $20,000 or less derived from all 
sources, including income from a spouse or other members of the 
household, for each of the prior two years; or
    (b) With less than 25 acres aggregated for all crops, where a 
majority of the

[[Page 4612]]

producer's gross income is derived from such farm or farms, but the 
producer's gross income from farming operations does not exceed 
$20,000.
    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 chapter IV.
    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.
    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. You may also be eligible 
for a prevented planting payment if you failed to plant the insured 
crop with the proper equipment within the late planting period. You 
must have been prevented from planting the insured crop due to an 
insured cause of loss that is general in the surrounding area and that 
prevents other producers from planting acreage with similar 
characteristics.
    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.
    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 or 
optional 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).
    Written Agreement. A document that alters designated terms of a 
policy as authorized under these Basic Provisions. See section 34.
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 rented for cash, a fixed commodity payment, or a consideration 
other than a share in the insured crop, or proceeds from the sale of 
the insured crop, on such land will be considered as owned by the 
lessee (see definition of ``Share'' above).

[[Page 4613]]

    (b) Optional unit--Unless limited by the Crop Provisions or Special 
Provisions, a basic unit as defined in section 2(a) may be divided into 
optional units if, for each optional unit:
    (1) You meet the following:
    (i) 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;
    (ii) You must plant the crop in a manner that results in a clear 
and discernable break in the planting pattern at the boundaries of each 
optional unit;
    (iii) 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
    (iv) 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:
    (i) 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
    (ii) 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 acreage that comprises the enterprise unit must also 
qualify;
    (i) For two or more basic units of the same insured crop as defined 
in section 2(a) that are located in two or more separate sections, 
section equivalents or FSA farm serial numbers; or
    (ii) For two or more optional units of the same insured crop 
established by separate sections, section equivalents, or FSA farm 
serial numbers as defined in section 2(b)(2)(i).
    (3) These basic units or optional units that 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 the 
enterprise unit. (You must maintain required production records on a 
basic or optional unit basis if you wish to change your unit structure 
for any subsequent crop year.);
    (5) The qualifying basic units or optional units may not be 
combined into an enterprise unit on any basis other than as described 
herein; and
    (6) If you do not comply with the reporting provisions for the 
enterprise unit, your yield for the enterprise unit will be determined 
in accordance with section 4(e).
    (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 earliest sales closing date 
for the insured crops. If you do not qualify for an enterprise unit 
when the acreage is reported, we will assign the basic unit structure.
    All applicable unit structures must be stated on the acreage report 
for each crop year.
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, the amount of coverage available under the policy will be 
reduced proportionately by that person's share of the crop.
    (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 administrative fees or premium, is 
not paid, or an acceptable arrangement for payment is not made on or 
before the termination date for the crop on which the amount is due, 
you will be determined to be ineligible to participate in any crop 
insurance program authorized under the Act in accordance with 7 CFR 
part 400, subpart U.
    (1) For a policy with unpaid administrative fees or premium, the 
policy will terminate effective on the termination date immediately 
subsequent to the billing date for the crop year;

[[Page 4614]]

    (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, 
1998, and crop B, with a termination date of March 15, 1999, 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, 1998, and 
crop A's policy is terminated on that date. Crop B's policy is 
terminated as of March 15, 1999. If you enter an agreement to repay the 
debt on April 25, 1999, you can apply for insurance for crop A by the 
October 31, 1999, sales closing date and crop B by the March 15, 2000, 
sales closing date. If you fail to make a scheduled payment on November 
1, 1999, you will be ineligible for crop insurance effective on 
November 1, 1999, 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, provided the Catastrophic Risk Protection Endorsement is 
obtained from us. 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.
    (j) When obtaining limited or additional coverage, you must provide 
information regarding crop insurance coverage on any crop previously 
obtained from an approved insurance provider, including the date such 
insurance was obtained and the amount of the administrative fee.
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. By written notice to us, you may change 
the coverage level for the following crop year 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 average daily settlement price 
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 Multiple Peril Crop 
Insurance 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

[[Page 4615]]

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.
    (g) Any person may sign any document relative to crop insurance 
coverage on behalf of any other person covered by such a policy, 
provided that the person has a properly executed power of attorney or 
such other legally sufficient document authorizing such a person to 
sign.
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 with us 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 with us 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, subject to the provisions 
contained in section 7(g).
    (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. 
However, such production will not be allocated to prevented planting 
acreage or otherwise affect any prevented planting payment.
    (g) If the information reported by you on the acreage report for 
share, acreage, practice, type or other material 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 and Administrative Fees
    (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 MPCI Base Rate specified in the applicable MPCI actuarial 
documents, and times

[[Page 4616]]

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, and times the Low 
Price Factor specified in the actuarial documents ;
    (3) Multiplying the Approved Yield times the coverage level, times 
the MPCI Base Rate specified in the applicable MPCI actuarial 
documents, and times the High Price Factor specified in the actuarial 
documents;
    (4) Adding sections 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 Area Adjustment Factor; Rate Class 
Option Factor; Option Factor; and Yield Adjustment Surcharge specified 
in the actuarial documents;
    (6) Multiplying the Approved Yield times the coverage level, times 
the MPCI Base Rate specified in the applicable 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 Map Area Adjustment Factor; Rate Class Option Factor; Option 
Factor; and Yield Adjustment Surcharge 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 section 8(c)(6) from section 8(c)(5) to determine 
the annual producer paid premium.
    (d) The annual premium amount for any applicable High Risk 
Classification is determined by:
    (1) Multiplying the Approved Yield (with yield adjustments 
specified in the actuarial documents) times the coverage level, times 
the High Risk Classification 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; and Option Factor specified in the 
actuarial documents, and times the High Risk Classification Premium 
Factor calculated using the High Risk Classification Premium 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 High Risk Classification 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 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 section 8(d)(3) from section 8(d)(2) to determine 
the annual producer paid premium.
    (e) In addition to the premium charged:
    (1) If you elect limited coverage, you must pay an administrative 
fee each crop year of $50 per crop per county, not to exceed $200 per 
county, or $600 for all counties in which you elected to obtain limited 
coverage.
    (2) If you elect additional coverage, you must pay an 
administrative fee of $20 per crop for each crop year in which crop 
insurance coverage remains in effect.
    (3) The administrative fee must be paid no later than the time that 
premium is due.
    (4) Payment of an administrative fee will not be required if you 
file a bona fide zero acreage report on or before the acreage reporting 
date for the crop. If you falsely file a zero acreage report, you may 
be subject to criminal and administrative sanctions.
    (5) The administrative fee for limited coverage will be waived if 
you request it and you qualify as a limited resource farmer.
    (6) The administrative fee for additional coverage is not subject 
to any limits and may not be waived.
    (7) Failure to pay the administrative fees when due may make you 
ineligible for certain other USDA benefits.
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
    (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 tree, vine, or bush 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 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

[[Page 4617]]

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 USDA 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; 1
    (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;
    (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; and
    (5) Give us notice of your expected revenue loss not later than 45 
days after the date the Harvest Price is released.
    (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 submit a claim for indemnity declaring the amount of your loss 
not later than 60 days after the date the Harvest Price is released. 
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

[[Page 4618]]

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 FCIC.
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.
    (c) Appraised production will be used to calculate your claim if 
you will not be harvesting the acreage. To determine your indemnity 
based on appraised production, you must agree to notify us if you 
harvest the crop and advise us of the production. If the acreage will 
be harvested, harvested production will be used to determine any 
indemnity due, unless otherwise specified in the policy.
    (d) The amount of an indemnity that may be determined under the 
applicable provisions of your crop policy may be reduced by an amount, 
determined in accordance with the Crop Provisions or Special 
Provisions, to reflect out-of-pocket expenses that were not incurred by 
you as a result of not planting, caring for, or harvesting the crop. 
Indemnities paid for acreage prevented from being planting will be 
based on a reduced Final Guarantee as provided for in the crop policy 
and will not be further reduced to reflect expenses not incurred.
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; and
    (3) 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 this 
section 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).
    (d) Any acreage on which an insured cause of loss is a material 
factor in preventing 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 considered as acreage 
planted after the final planting date and the Final Guarantee will be 
calculated in accordance with section 17(b)(1).
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;
    (2) You include any acreage of the insured crop that was prevented 
from being planted on your acreage report; and
    (3) You did not plant the insured crop during or after the late 
planting period. If such acreage was planted to the insured crop during 
or after the late planting period, it is covered under the late 
planting provisions.
    (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 be 
considered to be an insurable cause of loss for the purposes of 
prevented planting only if on the final planting date (or within the 
late planting period if you elect to try to plant the crop):
    (1) For non-irrigated acreage, the area that is prevented from 
being planted has

[[Page 4619]]

insufficient soil moisture for germination of seed and progress toward 
crop maturity due to a prolonged period of dry weather. Prolonged 
precipitation deficiencies must be verifiable using information 
collected by sources whose business it is to record and study the 
weather, including, but not limited to, local weather reporting 
stations of the National Weather Service; 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 double cropped acreage in accordance 
with section 18(f)(4) or (5). The eligible acres for each insured crop 
will be determined in accordance with the following table:

----------------------------------------------------------------------------------------------------------------
                                                                                Eligible acres if, in any of the
                                    Eligible acres if, in any of the 4 most      4 most recent crop years, you
                                    recent crop years, you have planted any     have not planted any crop in the
          Type of crop               crop in the county for which prevented        county for which prevented
                                    planting insurance was available or have    planting insurance was available
                                    received a prevented planting insurance     or have not received a prevented
                                                   guarantee                      planting insurance guarantee
----------------------------------------------------------------------------------------------------------------
(i) The crop is not required to   (A) The maximum number of acres certified    (B) The number of acres specified
 be contracted with a processor    for APH purposes or reported for insurance   on your intended acreage report
 to be insured.                    for the crop in any one of the 4 most        which is submitted to us by the
                                   recent crop years (not including reported    sales closing date for all crops
                                   prevented planting acreage that was          you insure for the crop year and
                                   planted to a substitute crop other than an   that is accepted by us. The
                                   approved cover crop). The number of acres    total number of acres listed may
                                   determined above for a crop may be           not exceed the number of acres
                                   increased by multiplying it by the ratio     of cropland in your farming
                                   of the total cropland acres that you are     operation at the time you submit
                                   farming this year (if greater) to the        the intended acreage report. The
                                   total cropland acres that you farmed in      number of acres determined above
                                   the previous year, provided that you         for a crop may only be increased
                                   submit proof to us that for the current      by multiplying it by the ratio
                                   crop year you have purchased or leased       of the total cropland acres that
                                   additional land or that acreage will be      you are farming this year (if
                                   released from any USDA program which         greater) to the number of acres
                                   prohibits harvest of a crop. Such acreage    listed on your intended acreage
                                   must have been purchased, leased, or         report, if you meet the
                                   released from the USDA program, in time to   conditions stated in section
                                   plant it for the current crop year using     18(e)(1)(i)(A).
                                   good farming practices. No cause of loss
                                   that will or could prevent planting may be
                                   evident at the time the acreage is
                                   purchased, leased, or released from the
                                   USDA program.
(ii) The crop must be contracted  (A) The number of acres of the crop          (B) The number of acres of the
 with a processor to be insured.   specified in the processor contract, if      crop as determined in section
                                   the contract specifies a number of acres     18(e)(1)(ii)(A).
                                   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) That does not constitute at least 20 acres or 20 percent of the 
insurable crop acreage in the unit, whichever is less. Any prevented 
planting acreage within a field that contains planted acreage will be 
considered to be acreage of the same crop, type, and practice that is 
planted in the field unless the acreage that was prevented from being 
planted constitutes at least 20 acres or 20 percent of the total 
insurable acreage in the field and you produced both crops, crop types, 
or followed both practices in the same field in the same crop year 
within any of the 4 most recent crop years;
    (2) Used for conservation purposes or intended to be left unplanted 
under any program administered by the USDA;
    (3) For which the actuarial documents do not designate a premium 
rate unless a written agreement designates such premium rate;
    (4) 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;
    (5) 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. (If one of the crops being double-cropped is not insurable, 
other verifiable records of it being planted may be used);
    (6) 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

[[Page 4620]]

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;
    (7) For which planting history or conservation plans indicate that 
the acreage would have remained fallow for crop rotation purposes;
    (8) That exceeds the number of acres eligible for a prevented 
planting payment;
    (9) That exceeds the number of eligible acres physically available 
for planting;
    (10) 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);
    (11) Based on an irrigated practice Final Guarantee unless adequate 
irrigation facilities were in place to carry out an irrigated practice 
on the acreage prior to the insured cause of loss that prevented you 
from planting. Acreage with an irrigated practice Final Guarantee will 
be limited to the number of acres allowed for that practice under 
sections 18(e) and (f); or
    (12) Based on a crop type that you did not plant, or did not 
receive a prevented planting insurance guarantee for, in at least one 
of the four most recent crop years. Types for which separate insurance 
guarantees are available must be included in your APH database in at 
least one of the four most recent crop 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). We will limit prevented planting payments based on a 
specific crop type to the number of acres allowed for that crop type as 
specified in sections 18(e) and (f).
    (g) If you purchased a limited or additional coverage policy for a 
crop, and you executed a High Risk Land Exclusion Option that 
separately insures acreage which has been designated as ``high risk'' 
land by FCIC under a Catastrophic Risk Protection Endorsement for that 
crop, the maximum number of acres eligible for a prevented planting 
payment will be limited for each policy as specified in sections 18(e) 
and (f).
    (h) If you are prevented from planting a crop for which you do not 
have an adequate base of eligible prevented planting acreage, as 
determined in accordance with section 18(e)(1), your prevented planting 
production guarantee, premium, and prevented planting payment will be 
based on the crops insured for the current crop year, for which you 
have remaining eligible prevented planting acreage. The crops used for 
this purpose will be those that result in a prevented planting payment 
most similar to the prevented planting payment that would have been 
made for the crop that was prevented from being planted.
    (1) For example, assume you were prevented from planting 200 acres 
of corn and have 100 acres eligible for a corn prevented planting 
guarantee that would result in a payment of $40 per acre. You also had 
50 acres of potato eligibility that would result in a $100 per acre 
payment, 90 acres of grain sorghum eligibility that would result in a 
$30 per acre payment, and 100 acres of soybean eligibility that would 
result in a $25 per acre payment. Your prevented planting coverage for 
the 200 acres would be based on 100 acres of corn ($40 per acre), 90 
acres of grain sorghum ($30 per acre), and 10 acres of soybeans ($25 
per acre).
    (2) Prevented planting coverage will be allowed as specified in 
this section (18(h)) only if the crop that was prevented from being 
planted meets all policy provisions, except for having an adequate base 
of eligible prevented planting acreage. Payment may be made based on 
crops other than those that were prevented from being planted even 
though other policy provisions, including but not limited to, processor 
contract and rotation requirements, have not been met for the crop on 
which payment is being based.
    (i) 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(i)(1) by the number of 
eligible prevented planting acres in the unit; and
    (3) Multiplying the result of section 18(i)(2) by your share.
    (j) 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 or optional 
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(j)(1) by the number of 
eligible prevented planting acres in each basic unit or optional unit 
within the enterprise unit;
    (3) Multiplying the result of section 18(j)(2) by your share; and
    (4) Total the results from section 18(j)(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.

[[Page 4621]]

    (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 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 section 24(d)) 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.
    (e) Amounts owed to us by you may be collected in part through 
administrative offset from payments you receive from United States 
government agencies in accordance with 31 U.S.C. chapter 37.
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

[[Page 4622]]

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 and administrative 
fees. 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.
33. Multiple Benefits
    (a) If you are eligible to receive an indemnity under a limited or 
additional coverage plan of insurance and are also eligible to receive 
benefits for the same loss under any other USDA program, you may 
receive benefits under both programs, unless specifically limited by 
the crop insurance contract or by law.
    (b) The total amount received from all such sources may not exceed 
the amount of your actual loss. The total amount of the actual loss is 
the difference between the fair market value of the insured commodity 
before and after the loss, based on your production records and the 
highest price election or amount of insurance available for the crop.
    (c) FSA will determine and pay the additional amount due you for 
any applicable USDA program, after first considering the amount of any 
crop insurance indemnity.
    (d) Farm ownership and operating loans may be obtained from USDA in 
addition to crop insurance indemnities.
34. Written Agreements
    Only rates or rates of premium for this policy may be altered by 
written agreement in accordance with the following:
    (a) You must apply in writing for each written agreement no later 
than the sales closing date, except as provided in section 34(e);
    (b) The application for a written agreement must contain the rate 
or rate of premium applicable to this policy that will be in effect if 
the written agreement rate is not approved;
    (c) If approved, the written agreement will specify the rate or 
rate of premium that will be in effect;
    (d) Each written agreement will only be valid for one crop year (If 
the written agreement is not specifically renewed the following year, 
the rates for subsequent crop years will be the rate specified in the 
actuarial document), or if no rate is specified the acreage will not be 
insurable; and
    (e) An application for a written agreement submitted after the 
sales closing date may be approved if you demonstrate your physical 
inability to apply prior to the sales closing date, or it is submitted 
in accordance with any regulation which may be promulgated under 7 CFR 
400, and after physical inspection of the acreage by us, if required, 
it is determined that no loss has occurred and the crop is insurable in 
accordance with the policy and written agreement provisions.

Crop Revenue Coverage

Coarse Grains Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Special Provisions; (2) the Commodity 
Exchange Endorsement; (3) these Crop Provisions; and (4) 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 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.
    Silage. A product that results from severing the plant from the 
land and chopping it for the purpose of livestock feed.
2. Coverage Level and Price Percentage
    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.

[[Page 4623]]

3. Contract Changes
    In accordance with Section 5 of the Basic Provisions, the contract 
change date is November 30 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
               State and county                    termination dates
------------------------------------------------------------------------
(a) For corn and grain sorghum:
    Val Verde, Edwards, Kerr, Kendall, Bexar,  January 15.
     Wilson, Karnes, Goliad, Victoria, and
     Jackson Counties, Texas, and all Texas
     counties lying south thereof.
    El Paso, Hudspeth, Culberson, Reeves,      February 15.
     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; California;    February 28.
     Florida; Georgia; Louisiana;
     Mississippi; Nevada; North Carolina; and
     South Carolina.
    All other Texas counties and all other     March 15
     states.
(b) For soybeans:
    Jackson, Victoria, Goliad, Bee, Live Oak,  February 15.
     McMullen, LaSalle, and Dimmit Counties,
     Texas and all Texas counties lying south
     thereof.
    Alabama; Arizona; Arkansas; California;    February 28.
     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 other     March 15.
     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 a combine-type hybrid grain sorghum (grown from hybrid 
seed); and
    (2) 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 a majority of producers in the area 
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:
    (1) Val Verde, Edwards, Kerr, Kendall,     September 30.
     Bexar, Wilson, Karnes, Goliad, Victoria,
     and Jackson Counties, Texas, and all
     Texas counties lying south thereof.
    (2) Clark, Cowlitz, Grays Harbor, Island,  October 31.
     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:
    (1) Val Verde, Edwards, Kerr, Kendall,     September 30.
     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:
    All states...............................  December 10.
 


[[Page 4624]]

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, 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
    (a) 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, 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 the earlier of our inspection 
or 15 days after harvest of the balance of the unit is completed.
    (b) In addition to the requirements of section 15 of the Basic 
Provisions, you must notify us before harvest begins if you intend to 
harvest corn acreage for silage.
11. Settlement of Claim
    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which 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 or optional unit within the enterprise 
unit;
    (2) For each basic unit or optional 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) Planted for grain but harvested as silage, if you fail to give 
us notice before harvest begins;
    (D) Damaged solely by uninsured causes; or
    (E) 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 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);

[[Page 4625]]

    (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

Mandatory Actuarial Document Endorsement

Commodity Exchange Endorsement--Coarse Grains
(This is a Continuous Endorsement)
    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Special Provisions; (2) this Commodity 
Exchange Endorsement; (3) the Crop Provisions; and (4) the Basic 
Provisions, with (1) controlling (2), etc.
How this endorsement affects your coverage:
    (I) This endorsement is attached to and made a part of your Crop 
Revenue Coverage (CRC) Coarse Grains crop policy provisions and 
actuarial documents, subject to the terms and conditions described 
herein.
    (II) This endorsement specifies how, where, and when commodity 
prices for your CRC Coarse Grains policy are determined.
    (III) This endorsement defines the Average Daily Settlement Price, 
as used in the Base Price and Harvest Price, as--The average calculated 
by summing all the daily settlement prices for the contract specified 
in the applicable Base Price and/or Harvest Price definition 
(established on full active trading days), during the month specified 
in the applicable Base Price and/or Harvest Price definition, and 
dividing that sum by the total number of days included in the sum. The 
average must include at least fifteen (15) days and each day included 
in the average must be a full active trading day for the contract 
specified in the applicable Base Price and/or Harvest Price definition. 
A full active trading day is any day on which there are fifty (50) or 
more open interest contracts of the contract specified in the Base 
Price and/or Harvest Price definition. If there are less than fifteen 
(15) full active trading days for the contract specified in the 
applicable Base Price and/or Harvest Price definition, then additional 
daily settlement prices, established on full active trading days, for 
the contract immediately prior to the contract specified in the 
applicable Base Price and/or Harvest Price definition, during the month 
specified in the applicable Base Price and/or Harvest Price definition, 
will be used until there are fifteen (15) prices from fifteen (15) full 
active trading days included in the average.
    (IV) This endorsement defines the Base Price and Harvest Price as 
shown in Section 1 of the Crop Revenue Coverage Basic Provisions by 
Cancellation Date as follows:

Corn (for Grain)--Chicago Board of Trade (CBOT)--Counties With a March 
15 Cancellation Date

    Base Price (CBOT)--The February harvest year average daily 
settlement price for the harvest year's CBOT December corn futures 
contract (rounded to the nearest whole cent) multiplied times the 
selected Price Percentage and rounded to the nearest whole cent. The 
available Price Percentages and subsequent Base Price will be released 
as an Actuarial Document Addendum (Special Provisions) by March 10 of 
the harvest year, and will be available in your agent's office.
    Harvest Price (CBOT)--The November harvest year average daily 
settlement price for the harvest year's CBOT December corn futures 
contract (rounded to the nearest whole cent) multiplied times the 
selected Price Percentage and rounded to the nearest whole cent. The 
Harvest Price cannot be less than the Base Price minus one dollar and 
fifty cents ($1.50), or greater than the Base Price plus one dollar and 
fifty cents ($1.50). The Price Percentage used to calculate the Harvest 
Price is equal to the selected Price Percentage used to calculate the 
Base Price. The Harvest Price will be released as an Actuarial Document 
Addendum (Special Provisions) by December 10 of the harvest year, and 
will be available in your agent's office.

Corn (for Grain)--CBOT--Counties With a Cancellation Date Prior to 
March 15

    Base Price (CBOT)--The December pre-harvest year average daily 
settlement price for the harvest year's CBOT September corn futures 
contract (rounded to the nearest whole cent) multiplied times the 
selected Price Percentage and rounded to the nearest whole cent. The 
available Price Percentages and subsequent Base Price will be released 
as an Actuarial

[[Page 4626]]

Document Addendum (Special Provisions) by January 10 of the harvest 
year, and will be available in your agent's office.
    Harvest Price (CBOT)--The August harvest year average daily 
settlement price for the harvest year's CBOT September corn futures 
contract (rounded to the nearest whole cent) multiplied times the 
selected Price Percentage and rounded to the nearest whole cent. The 
Harvest Price cannot be less than the Base Price minus one dollar and 
fifty cents ($1.50), or greater than the Base Price plus one dollar and 
fifty cents ($1.50). The Price Percentage used to calculate the Harvest 
Price is equal to the selected Price Percentage used to calculate the 
Base Price. The Harvest Price will be released as an Actuarial Document 
Addendum (Special Provisions) by September 10 of the harvest year, and 
will be available in your agent's office.

Grain Sorghum (for Grain)--CBOT--Counties With a March 15 Cancellation 
Date

    Base Price (CBOT)--The Preliminary Grain Sorghum Base Price 
multiplied times the selected Price Percentage and rounded to the 
nearest whole cent. The Preliminary Grain Sorghum Base Price equals the 
February harvest year average daily settlement price for the harvest 
year's CBOT December corn futures contract (rounded to the nearest 
whole cent), multiplied times .95 and rounded to the nearest whole 
cent. The available Price Percentages and subsequent Base Price will be 
released as an Actuarial Document Addendum (Special Provisions) by 
March 10 of the harvest year, and will be available in your agent's 
office.
    Harvest Price (CBOT)--The Preliminary Grain Sorghum Harvest Price 
multiplied times the selected Price Percentage and rounded to the 
nearest whole cent. The Preliminary Grain Sorghum Harvest Price equals 
the November harvest year average daily settlement price for the 
harvest year's CBOT December corn futures contract (rounded to the 
nearest whole cent) multiplied times .95 and rounded to the nearest 
whole cent. The Harvest Price cannot be less than the Base Price minus 
one dollar and fifty cents ($1.50), or greater than the Base Price plus 
one dollar and fifty cents ($1.50). The Price Percentage used to 
calculate the Harvest Price is equal to the selected Price Percentage 
used to calculate the Base Price. The Harvest Price will be released as 
an Actuarial Document Addendum (Special Provisions) by December 10 of 
the harvest year, and will be available in your agent's office.

Grain Sorghum (for Grain)--CBOT--Counties With a Cancellation Date 
Prior to March 15

    Base Price (CBOT)--The Preliminary Grain Sorghum Base Price 
multiplied times the selected Price Percentage and rounded to the 
nearest whole cent. The Preliminary Grain Sorghum Base Price equals the 
December pre-harvest year average daily settlement price for the 
harvest year's CBOT September corn futures contract (rounded to the 
nearest whole cent) multiplied times .95 and rounded to the nearest 
whole cent. The available Price Percentages and subsequent Base Price 
will be released as an Actuarial Document Addendum (Special Provisions) 
by January 10 of the harvest year, and will be available in your 
agent's office.
    Harvest Price (CBOT)--The Preliminary Grain Sorghum Harvest Price 
multiplied times the selected Price Percentage and rounded to the 
nearest whole cent. The Preliminary Grain Sorghum Harvest Price equals 
the August harvest year average daily settlement price for the harvest 
year's CBOT September corn futures contract (rounded to the nearest 
whole cent) multiplied times .95 and rounded to the nearest whole cent. 
The Harvest Price cannot be less than the Base Price minus one dollar 
and fifty cents ($1.50), or greater than the Base Price plus one dollar 
and fifty cents ($1.50). The Price Percentage used to calculate the 
Harvest Price is equal to the selected Price Percentage used to 
calculate the Base Price. The Harvest Price will be released as an 
Actuarial Document Addendum (Special Provisions) by September 10 of the 
harvest year, and will be available in your agent's office.

Soybeans--CBOT--Counties With a March 15 Cancellation Date

    Base Price (CBOT)--The February harvest year average daily 
settlement price for the harvest year's CBOT November soybean futures 
contract (rounded to the nearest whole cent) multiplied times the 
selected Price Percentage and rounded to the nearest whole cent. The 
available Price Percentages and subsequent Base Price will be released 
as an Actuarial Document Addendum (Special Provisions) by March 10 of 
the harvest year, and will be available in your agent's office.
    Harvest Price (CBOT)--The October harvest year average daily 
settlement price for the harvest year's CBOT November soybean futures 
contract (rounded to the nearest whole cent) multiplied times the 
selected Price Percentage and rounded to the nearest whole cent. The 
Harvest Price cannot be less than the Base Price minus three dollars 
($3.00), or greater than the Base Price plus three dollars ($3.00). The 
Price Percentage used to calculate the Harvest Price is equal to the 
selected Price Percentage used to calculate the Base Price. The Harvest 
Price will be released as an Actuarial Document Addendum (Special 
Provisions) by November 10 of the harvest year, and will be available 
in your agent's office.

Soybeans--CBOT--Counties With a Cancellation Date Prior to March 15

    Base Price (CBOT)--The December pre-harvest year average daily 
settlement price for the harvest year's CBOT September soybean futures 
contract (rounded to the nearest whole cent) multiplied times the 
selected Price Percentage and rounded to the nearest whole cent. The 
available Price Percentages and subsequent Base Price will be released 
as an Actuarial Document Addendum (Special Provisions) by January 10 of 
the harvest year, and will be available in your agent's office.
    Harvest Price (CBOT)--The August harvest year average daily 
settlement price for the harvest year's CBOT September soybean futures 
contract (rounded to the nearest whole cent) multiplied times the 
selected Price Percentage and rounded to the nearest whole cent. The 
Harvest Price cannot be less than the Base Price minus three dollars 
($3.00), or greater than the Base Price plus three dollars ($3.00). The 
Price Percentage used to calculate the Harvest Price is equal to the 
selected Price Percentage used to calculate the Base Price. The Harvest 
Price will be released as an Actuarial Document Addendum (Special 
Provisions) by September 10 of the harvest year, and will be available 
in your agent's office.
    All other terms and conditions of the Policy remain unchanged.

Crop Revenue Coverage

Cotton Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Special Provisions; (2) the Commodity 
Exchange Endorsement; (3) these Crop Provisions; and (4) 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.
    Final Guarantee. In lieu of the definition contained in the Basic

[[Page 4627]]

Provisions, the number of dollars guaranteed per acre is 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 applicable cotton yield conversion factor for non-irrigated skip-
row planting patterns, multiplied by the Base Price multiplied by the 
coverage level percentage you elect.
    (2) Harvest Guarantee--The Approved Yield per acre, multiplied by 
the applicable cotton yield conversion factor for non-irrigated skip-
row planting patterns, multiplied by the Harvest Price, multiplied by 
the coverage level percentage you elect.
    If you elect enterprise unit coverage, the Basic Units or Optional 
Units comprising the enterprise unit will retain separate Final 
Guarantees.
    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.
    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.
2. Coverage Level and Price Percentage
    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 November 30 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
               State and county                    termination dates
------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,      January 15.
 Wilson, Karnes, Goliad, Vctoria, and Jackson
 Counties, Texas, and all Texas counties
 lying south thereof.
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 states  March 15.
------------------------------------------------------------------------

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 a majority of producers in the area 
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.

[[Page 4628]]

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, 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, and required samples must not 
be harvested, until the earlier of our inspection or 15 days after 
harvest of the balance of the unit is completed and written notice of 
probable loss given to us.
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 on any insured basic or optional unit 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) 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 or optional unit within the enterprise 
unit;
    (2) For each basic unit or optional unit in 10(c)(1), compute the 
Calculated Revenue;
    (3) Subtract each result in section 10(c)(2) from the respective 
result of section 10(c)(1);
    (4) Multiplying each result of section 10(c)(3) by your share; and
    (5) Total the results of section 10(c)(4);
    If the result of section 10(c)(5) is greater than zero, an 
indemnity will be paid. If the result of section 10(c)(5) is less than 
zero, no indemnity will be due.
    (d) 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(e)); 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 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.
    (e) Mature white cotton may be adjusted for quality when production 
has been damaged by insured causes. Unless otherwise provided by the 
Special Provisions, 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 not available on the date the last bale was 
classed, the price quotations will be determined on the date the last 
bale from the unit was delivered to the warehouse, as shown on the 
insured's account summary obtained from the gin. If eligible for 
quality adjustment, the amount of production to be counted will be 
determined by multiplying the number of pounds of production eligible 
for such adjustment by the factor derived from dividing price quotation 
``A'' by price quotation ``B'.
    (f) 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 50 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

Mandatory Actuarial Document Endorsement

Commodity Exchange Endorsement--Cotton
(This is a Continuous Endorsement)
    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) the Special Provisions; (2) this Commodity 
Exchange Endorsement; (3) the Crop Provisions; and (4) the Basic 
Provisions, with (1) controlling (2), etc.
    How this endorsement affects your coverage:

[[Page 4629]]

    (I) This endorsement is attached to and made a part of your Crop 
Revenue Coverage (CRC) Cotton crop policy provisions and Actuarial 
Documents, subject to the terms and conditions described herein.
    (II) This endorsement specifies how, where, and when commodity 
prices for your CRC Cotton policy are determined.
    (III) This endorsement defines the Average Daily Settlement Price, 
as used in the Base Price and Harvest Price, as--The average calculated 
by summing all the daily settlement prices for the contract specified 
in the applicable Base Price and/or Harvest Price definition 
(established on full active trading days), during the month specified 
in the applicable Base Price and/or Harvest Price definition, and 
dividing that sum by the total number of days included in the sum. The 
average must include at least fifteen (15) days and each day included 
in the average must be a full active trading day for the contract 
specified in the applicable Base Price and/or Harvest Price definition. 
A full active trading day is any day on which there are fifty (50) or 
more open interest contracts of the contract specified in the Base 
Price and/or Harvest Price definition. If there are less than fifteen 
(15) full active trading days for the contract specified in the 
applicable Base Price and/or Harvest Price definition, then additional 
daily settlement prices, established on full active trading days, for 
the contract immediately prior to the contract specified in the 
applicable Base Price and/or Harvest Price definition, during the month 
specified in the applicable Base Price and/or Harvest Price definition, 
will be used until there are fifteen (15) prices from fifteen (15) full 
active trading days included in the average.
    (IV) This endorsement defines the Base Price and Harvest Price as 
shown in Section 1 of the Crop Revenue Coverage Basic Provisions by 
Cancellation Date as follows:

Cotton--New York Cotton Exchange (NYCE)--Counties With a February 28 or 
March 15 Cancellation Date

    Base Price (NYCE)--The January 15 to February 14 harvest year 
average daily settlement price for the harvest year's NYCE December 
cotton futures contract (rounded to the nearest whole cent) multiplied 
times the selected Price Percentage and rounded to the nearest whole 
cent. The available Price Percentages and subsequent Base Price will be 
released as an Actuarial Document Addendum (Special Provisions) by 
February 20 of the harvest year, and will be available in your agent's 
office.
    Harvest Price (NYCE)--The November harvest year average daily 
settlement price for the harvest year's NYCE December cotton futures 
contract (rounded to the nearest whole cent) multiplied times the 
selected Price Percentage and rounded to the nearest whole cent. The 
Harvest Price cannot be less than the Base Price minus seventy cents 
($0.70), or greater than the Base Price plus seventy cents ($0.70). The 
Price Percentage used to calculate the Harvest Price is equal to the 
selected Price Percentage used to calculate the Base Price. The Harvest 
Price will be released as an Actuarial Document Addendum (Special 
Provisions) by December 10 of the harvest year, and will be available 
in your agent's office.

Cotton--NYCE Counties with a January 15 Cancellation Date

    Base Price (NYCE)--The December pre-harvest year average daily 
settlement price for the harvest year's NYCE October cotton futures 
contract (rounded to the nearest whole cent) multiplied times the 
selected Price Percentage and rounded to the nearest whole cent. The 
available Price Percentages and subsequent Base Price will be released 
as a Actuarial Document Addendum (Special Provisions) by January 10 of 
the harvest year, and will be available in your agent's office.
    Harvest Price (NYCE)--The September harvest year average daily 
settlement price for the harvest year's (NYCE) October cotton futures 
contract (rounded to the nearest whole cent) multiplied times the 
selected Price Percentage and rounded to the nearest whole cent. The 
Harvest Price cannot be less than the Base Price minus seventy cents 
($0.70), or greater than the Base Price plus seventy cents ($0.70). The 
Price Percentage used to calculate the Harvest Price is equal to the 
selected Price Percentage used to calculate the Base Price. The Harvest 
Price will be released as an Actuarial Document Addendum (Special 
Provisions) by October 10 of the harvest year, and will be available in 
your agent's office.
    All other terms and conditions of the Policy remain unchanged

Crop Revenue Coverage Insurance Policy

Rice Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Special Provisions; (2) The Commodity 
Exchange Endorsement; (3) these Crop Provisions; and (4) The Basic 
Provisions, with (1) controlling (2), etc.
1. Definitions
    Average Daily Settlement Price. Refer to the definition contained 
in the Commodity Exchange Endorsement--Rice.
    Calculated Revenue. The production to count multiplied by the 
Harvest Price.
    Flood irrigation. An irrigated practice commonly used for rice 
production whereby the planted acreage is intentionally covered with 
water that is maintained at a uniform and shallow depth throughout the 
growing season.
    Harvest. Combining or threshing the rice for grain. A crop that is 
swathed prior to combining is not considered harvested.
    Local market price. The cash price per pound for the U.S. No. 3 
grade of rough rice offered by buyers in the area in which you normally 
market the rice. Factors not associated with grading under the United 
States Standards for Rice including, but not limited to, protein and 
oil content or milling quality will not be considered.
    Planted. The uniform placement of an adequate amount of rice seed 
into a prepared seedbed by one of the following methods:
    (a) Drill seeding--Using a grain drill to incorporate the seed to a 
proper soil depth;
    (b) Broadcast seeding--Distributing seed evenly onto the surface of 
an un-flooded seedbed followed by either timely mechanical 
incorporation of the seed to a proper soil depth in the seedbed or 
flushing the seedbed with water; or
    (c) Broadcast seeding into a controlled flood--Distributing the 
rice seed onto a prepared seedbed that has been intentionally covered 
to a proper depth by water. The water must be free of movement and be 
completely contained on the acreage by properly constructed levees and 
gates.
    Acreage seeded in any other manner will not be insurable unless 
otherwise provided by the Special Provisions.
    Prevented planting guarantee. The Prevented Planting Guarantee for 
such acreage will be that percentage of the Final Guarantee for timely 
planted acres as set forth in section 13.
    Saline water. Water that contains a concentration of salt 
sufficient to cause damage to the insured crop.
    Second crop rice. The regrowth of a stand of rice following harvest 
of the initially insured rice crop that can be harvested in the same 
crop year.
    Swathed. Severance of the stem and grain head from the ground 
without removal of the rice kernels from the plant and placing in a 
windrow.

[[Page 4630]]

    Total milling yield. Rice production consisting of heads, second 
heads, screenings, and brewer's rice as defined by the official United 
States Standards for Rice.
2. Unit Structure
    Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.
3. Coverage Level and Price Percentage
    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.
4. Contract Changes
    In accordance with section 5 in the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.
5. Cancellation and Termination Dates
    In accordance with section 3(b) of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
                                                    Cancellation and
               State and county                     termination date
------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak,      January 15.
 McMullen, La Salle, and Dimmit Counties,
 Texas; and all Texas Counties south thereof.
Florida......................................  February 15.
All other Texas counties and all other states  February 28.
------------------------------------------------------------------------

6. Insured Crop
    In accordance with section 9 of the Basic Provisions, the crop 
insured will be all the rice in the county for which a premium rate is 
provided by the actuarial documents:
    (a) In which you have a share;
    (b) That is planted for harvest as grain;
    (c) That is flood irrigated; and
    (d) That is not wild rice.
7. Insurable Acreage
    In addition to the provisions of section 10 of the Basic 
Provisions:
    (a) We will not insure any acreage planted to rice:
    (1) The preceding crop year unless allowed by the Special 
Provisions; or
    (2) That does not meet the rotation requirements shown in the 
Special Provisions; and
    (b) Any acreage of the insured crop damaged before the final 
planting date, to the extent that producers in the area would normally 
not further care for the crop, must be replanted unless we agree that 
it is not practical to replant.
8. Insurance Period
    In accordance with the provisions of section 12 of the Basic 
Provisions, the calendar date for the end of the insurance period is 
October 31 immediately following planting.
9. Causes of Loss
    (a) In addition to the provisions under section 13 of the Basic 
Provisions, any loss covered by this policy must occur within the 
insurance period. The specific causes of loss for rice are:
    (1) Adverse weather conditions (except drought);
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (9) A Harvest Price that is less than the Base Price.
    (b) In addition to the causes of loss not insured against in 
section 13 of the Basic Provisions, we will not insure against any loss 
of production due to the application of saline water.
10. Replanting Payment
    (a) A replanting payment for rice is allowed as follows:
    (1) You must comply with all requirements regarding replanting 
payments contained under section 14 of the Basic Provisions;
    (2) The rice must be 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
    (3) The replanted rice must be seeded at a rate that is normal for 
initially planted rice (if new seed is planted at a reduced seeding 
rate into a partially damaged stand of rice, the acreage will not be 
eligible for a replanting payment).
    (b) In accordance with the provisions of section 14 of the Basic 
Provisions, the maximum amount of the replanting payment per acre will 
be the lesser of 20 percent of the Minimum Guarantee or 400 pounds, 
multiplied by the Base Price, multiplied by your insured share.
    (c) When rice is replanted using a practice that is uninsurable for 
an original planting, the liability for the unit will be reduced by the 
amount of the replanting payment. The premium amount will not be 
reduced.
11. Duties in the Event of Damage or Loss
    In addition to your duties under section 15 of the Basic 
Provisions, if you initially discover damage to any insured crop within 
15 days of, or during harvest, you must leave representative samples of 
the unharvested crop for our inspection. The samples must be at least 
10 feet wide and the entire length of each field in the unit, and must 
not be harvested or destroyed until the earlier of our inspection or 15 
days after harvest of the balance of the unit is completed.
12. Settlement of Claim
    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional 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 rice by:
    (1) Multiplying the insured acreage of the crop by the Final 
Guarantee;
    (2) Subtracting the Calculated Revenue from the result of section 
12(b)(1); and
    (3) Multiplying the result of 12(b)(2) by your share.
    If the result of section 12(b)(3) is greater than zero, an 
indemnity will be paid. If the result of section 12(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:

[[Page 4631]]

    (1) Multiplying the insured acreage of the crop by the Final 
Guarantee for each basic unit or optional unit within the enterprise 
unit;
    (2) For each basic unit or optional unit in section 12(c)(1), 
compute the Calculated Revenue;
    (3) Subtract each result in section 12(c)(2) from the respective 
result of section 12(c)(1);
    (4) Multiplying each result of section 12(c)(3) by your share; and
    (5) Total the results of section 12(c)(4).
    If the result of section 12(c)(5) is greater than zero, an 
indemnity will be paid. If the result of section 12(c)(5) is less than 
zero, no indemnity will be due.
    (d) The total production to count (in pounds) from all insurable 
acreage on the unit will include: 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 acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance 
with section 12(e));
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not 
reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to 
leave intact, and provide sufficient care for, representative samples 
of the crop in locations acceptable to us (The amount of production to 
count for such acreage will be based on the harvested production or 
appraisals from the samples at the time harvest should have occurred. 
If you do not leave the required samples intact, or 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 production from a second rice crop harvested in the same crop year.
    (e) Mature rough rice 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 12 percent. 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 Rice, result in rice not meeting the grade 
requirements for U.S. No. 3 (grades U.S. No. 4 or worse) because of red 
rice, chalky kernels or damaged kernels;
    (ii) The rice has a total milling yield of less than 68 pounds per 
hundredweight;
    (iii) The whole kernel weight is less than 55 pounds per 
hundredweight of milled rice for medium and short grain varieties;
    (iv) The whole kernel weight is less than 48 pounds per 
hundredweight of milled rice for long grain varieties; or
    (v) Substances or conditions are present that are identified by the 
Food and Drug Administration of 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 specified in 
section 12(e)(2) resulted from a cause of loss against which insurance 
is provided under these crop provisions and which occurs within the 
insurance period;
    (ii) The deficiencies, substances, or conditions specified in 
section 12(e)(2) result in a net price for the damaged production that 
is less than the local market price;
    (iii) All determinations of these deficiencies, substances, or 
conditions specified in section 12(e)(2) are made using samples of the 
production obtained by us or by a disinterested third party approved by 
us; and
    (iv) The samples are analyzed by a grader licensed to grade rice 
under the authority of the United States Agriculture Marketing Act or 
the United States Warehouse Act with regard to deficiencies in quality, 
or by a laboratory approved by us with regard to substances or 
conditions injurious to human or animal health. Notwithstanding the 
preceding sentence, test weight for quality adjustment purposes may be 
determined by our loss adjuster.
    (4) Rice production that is eligible for quality adjustment, as 
specified in sections 12(e)(2) and (3), will be reduced as follows:
    (i) In accordance with quality adjustment factors contained in the 
Special Provisions; or
    (ii) If quality adjustment factors are not contained in the Special 
Provisions, as follows:
    (A) The market price of the qualifying damaged production and the 
local market price will be determined on the earlier of the date such 
quality adjusted production is sold or the date of final inspection for 
the unit. The price for the qualifying damaged production will be the 
market price for the local area to the extent feasible. Discounts used 
to establish the net price of the damaged production will be limited to 
those that are usual, customary, and reasonable. The price will not be 
reduced for:
    (1) Moisture content;
    (2) Damage due to uninsured causes; or
    (3) Drying, handling, processing, or any other costs associated 
with normal harvesting, handling, and marketing of the rice; except, if 
the price of the damaged production can be increased by conditioning, 
we may reduce the price of the production after it has been conditioned 
by the cost of conditioning but not lower that the value of the 
production before conditioning.

(We may obtain prices from any buyer of our choice. If we obtain prices 
from one or more buyers located outside your local market area, we will 
reduce such prices by the additional costs required to deliver the rice 
to those buyers.);
    (B) The value of the damaged or conditioned production will be 
divided by the local market price to determine the quality adjustment 
factor; and
    (C) The number of pounds remaining after any reduction due to 
excessive moisture (the moisture-adjusted gross pounds (if 
appropriate)) of the damaged or conditioned production will then be 
multiplied by the quality adjustment factor to determine the net 
production to count.
    (f) Any production harvested from plants growing in the insured 
crop may be counted as production of the insured crop on a weight 
basis.

[[Page 4632]]

13. Prevented Planting
    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.

Crop Revenue Coverage

Mandatory Actuarial Document Endorsement

Commodity Exchange Endorsement--Rice
(This is a Continuous Endorsement)
    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) the Special Provisions; (2) this Commodity 
Exchange Endorsement; (3) the Crop Provisions; and (4) the Basic 
Provisions, with (1) controlling (2), etc.

How this endorsement affects your coverage:

    (I) This endorsement is attached to and made a part of your Crop 
Revenue Coverage (CRC) Rice crop policy provisions and actuarial 
documents, subject to the terms and conditions described herein.
    (II) This endorsement specifies how, where, and when commodity 
prices for your CRC Rice policy are determined.
    (III) This endorsement defines the Average Daily Settlement Price, 
as used in the Base Price and Harvest Price, as--The average calculated 
by summing all the daily settlement prices for the contract specified 
in the applicable Base Price and/or Harvest Price definition 
(established on full active trading days), during the month specified 
in the applicable Base Price and/or Harvest Price definition, and 
dividing that sum by the total number of days included in the sum. The 
average must include at least fifteen (15) days and each day included 
in the average must be a full active trading day for the contract 
specified in the applicable Base Price and/or Harvest Price definition. 
A full active trading day is any day on which there are fifty (50) or 
more open interest contracts of the contract specified in the Base 
Price and/or Harvest Price definition. If there are less than fifteen 
(15) full active trading days for the contract specified in the 
applicable Base Price and/or Harvest Price definition, then additional 
daily settlement prices, established on full active trading days, for 
the contract immediately prior to the contract specified in the 
applicable Base Price and/or Harvest Price definition, during the month 
specified in the applicable Base Price and/or Harvest Price definition, 
will be used until there are fifteen (15) prices from fifteen (15) full 
active trading days included in the average.
    (IV) This endorsement defines the Base Price and Harvest Price as 
shown in section 1 of the Crop Revenue Coverage Basic Provisions by 
Cancellation Date as follows:

Rice--Chicago Board of Trade (CBOT)--(All Counties With a January 15 
Cancellation Date)

    Base Price (CBOT)--The December pre-harvest year average daily 
settlement price per pound for the harvest year's CBOT September rough 
rice futures contract (rounded to the nearest one-tenth (\1/10\) of a 
cent) multiplied times the selected Price Percentage and rounded to the 
nearest one-tenth (\1/10\) of a cent. The available Price Percentages 
and subsequent Base Price will be released as an Actuarial Document 
Addendum (Special Provisions) by January 10 of the harvest year, and 
will be available in your agent's office.
    Harvest Price (CBOT)--The August harvest year average daily 
settlement price per pound for the harvest year's CBOT September rough 
rice futures contract (rounded to the nearest one-tenth (\1/10\) of a 
cent) multiplied times the selected Price Percentage and rounded to the 
nearest one-tenth (\1/10\) of a cent. The Harvest Price cannot be less 
than the Base Price minus five cents ($0.05), or greater than the Base 
Price plus five cents ($0.05). The Price Percentage used to calculate 
the Harvest Price is equal to the selected Price Percentage used to 
calculate the Base Price. The Harvest Price will be released as an 
Actuarial Document Addendum (Special Provisions) by September 10 of the 
harvest year, and will be available in your agent's office.

Rice--(CBOT)--(All Counties With February 15 or February 28 
Cancellation Dates)

    Base Price (CBOT)--The January harvest year average daily 
settlement price per pound for the harvest year's CBOT November rough 
rice futures contract (rounded to the nearest one-tenth (\1/10\) of a 
cent) multiplied times the selected Price Percentage and rounded to the 
nearest one-tenth (\1/10\) of a cent. The available Price Percentages 
and subsequent Base Price will be released as an Actuarial Document 
Addendum (Special Provisions) by February 10 of the harvest year, and 
will be available in your agent's office.
    Harvest Price (CBOT)--The October harvest year average daily 
settlement price per pound for the harvest year's CBOT November rough 
rice futures contract (rounded to the nearest one-tenth (\1/10\) of a 
cent) multiplied times the selected Price Percentage and rounded to the 
nearest one-tenth (\1/10\) of a cent. The Harvest Price cannot be less 
than the Base Price minus five cents ($0.05), or greater than the Base 
Price plus five cents ($0.05). The Price Percentage used to calculate 
the Harvest Price is equal to the selected Price Percentage used to 
calculate the Base Price. The Harvest Price will be released as an 
Actuarial Document Addendum (Special Provisions) by November 10 of the 
harvest year, and will be available in your agent's office. All other 
terms and conditions of the Policy remain unchanged.

    Signed in Washington, DC on January 22, 1999.
John Zirschky,
Acting Manager, Federal Crop Insurance Corporation.
[FR Doc. 99-2109 Filed 1-28-99; 8:45 am]
BILLING CODE 3410-08-P