[Federal Register Volume 65, Number 131 (Friday, July 7, 2000)]
[Notices]
[Pages 41937-41940]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17150]


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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), since 1996 the Federal Crop Insurance Corporation 
(FCIC) Board of Directors (Board) has approved for reinsurance and 
subsidy the insurance of corn, grain sorghum, soybeans, cotton, rice, 
and wheat in select states and counties under the Crop Revenue Coverage 
(CRC) plan of insurance submitted by American Agrisurance (AmAg). This 
notice is intended to inform eligible producers and the private 
insurance industry of revisions to the Crop Revenue Coverage (CRC) 
Insurance Policy Basic Provisions, the Crop Revenue Coverage Insurance 
Policy Wheat Crop Provisions, and the Crop Revenue Coverage Mandatory 
Actuarial Document Endorsement Commodity Exchange Endorsement--Wheat, 
for the 2001 and succeeding crop years.

FOR FURTHER INFORMATION CONTACT: Tim Hoffmann, Director, Product 
Development Division, Federal Crop Insurance Corporation, United States 
Department of Agriculture, 6501 Beacon Dr., Kansas City, Missouri 
64133, 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 section 508(h) of the Act, the Board approved a 
program of insurance known as CRC, submitted by American Agrisurance, 
an exclusive marketing agent and wholly owned subsidiary of Acceptance 
Insurance Companies, Inc. All terms and conditions of the policy and 
all premium rates are determined by AmAg. FCIC does not have the 
authority to modify or waive any terms or conditions. FCIC only has the 
authority to approve or disapprove the terms and conditions submitted 
by AmAg.
    The CRC program has been approved for reinsurance and premium 
subsidy, including subsidy for administrative and operating expenses in 
an amount authorized under section 508(e) of the Act. CRC is designed 
to protect producers against both price and yield losses.
    On Tuesday, November 30, 1999, FCIC published a Notice of 
availability in the Federal Register at 64 FR 66839-66866 to revise the 
Basic Provisions, Crop Provisions, and Commodity Exchange Endorsements 
to be effective beginning with the 2000 CRC spring crop programs.
    AmAg has requested the CRC program for winter wheat for the 2001 
crop year be changed to remove the CRC base price and harvest price for 
Winter Durum Wheat in Arizona and California, incorporate changes to 
allow for continuous rating of crop insurance policies, change the 
cancellation and termination dates for some counties and make minor 
edits for clarification. The CRC program for durum wheat is being 
removed from Arizona and California because of an inability to 
determine prices from the current market. Other changes made include 
those changes in the administrative fees and producer subsidies as well 
as the substitution of yields in the producers's actual production 
history mandated by the Agricultural Risk Protection Act of 2000.
    Accordingly, FCIC herewith gives notice of the above stated changes 
for the 2001 and succeeding crop years.
    The CRC policies, endorsements, underwriting rules, questions and 
answers, premium calculation worksheet, and actuarial documents for the 
2001 crop year will be released electronically to all reinsured 
companies through FCIC's Website.

    Notice: Accordingly, the publication on November 30, 1999, 
Notice of availability at 64 FR 66839-66866 is adopted with 
revisions to the Crop Revenue Coverage (CRC) Insurance Policy Basic 
Provisions, Crop Revenue Coverage Insurance Policy Wheat Crop 
Provisions, and Crop Revenue Coverage Mandatory Actuarial Document 
Endorsement Commodity Exchange Endorsement--Wheat, effective 
beginning with the 2001 crop year as follows:

Crop Revenue Coverage (CRC) Insurance Policy Basic Provisions

    1. In section 1, the definitions of ``actuarial documents,'' 
``additional coverage,'' ``administrative fee,'' and ``approved yield'' 
are revised to read as follows:
    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, practices, insurable acreage, 
and other related information regarding crop insurance in the county.
    Additional coverage. A level of coverage equal to or greater than 
50 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 additional coverage 
for each crop year as specified in section 8.
    Approved yield. The actual production history (APH) yield 
determined in accordance with 7 CFR part 400, subpart G, including any 
adjustments elected under section 35. 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.
    2. In section 1, the definition of ``base premium rate'' has been 
added to read as follows:
    Base premium rate. A premium rate used to calculate the risk 
associated with yield.
    3. In section 1, the definition of ``CRC rate'' has been replaced 
with ``CRC base rate'' and is revised to read as follows:

[[Page 41938]]

    CRC base rate. The premium rate used to calculate the risk 
associated with revenue.
    4. In section 1, the definition of ``Limited coverage'' is removed.
    5. Section 3(b) is revised to read as follows:
    (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, 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.
    6. Section 3(e)(10) is revised to read as follows:
    (10) For example, if crop A, with a termination date of October 31, 
2000, and crop B, with a termination date of March 15, 2001, 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, 2000, and 
crop A's policy is terminated on that date. Crop B's policy is 
terminated as of March 15, 2001. If you enter an agreement to repay the 
debt on April 25, 2001, you can apply for insurance for crop A by the 
October 31, 2001, sales closing date and crop B by the March 15, 2002, 
sales closing date. If you fail to make a scheduled payment on November 
1, 2001, you will be ineligible for crop insurance effective on 
November 1, 2001, 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.
    7. Section 4(a), is revised to read as follows:
    (a) For each crop year, the Final Guarantee and coverage level 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.
    8. Section 8(c) is revised to read as follows:
    (c) Your annual premium amount is determined by:
    (1) Multiplying the Approved Yield times the Coverage Level, times 
the Base Premium Rate, and times the Base Price as defined in the 
Commodity Exchange Endorsement;
    (2) Multiplying the Approved Yield times the Coverage Level, times 
the CRC Base Rate, and times the CRC Low Price Factor specified in the 
actuarial documents;
    (3) Multiplying the Approved Yield times the Coverage Level, times 
the Base Premium Rate, and times the CRC 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 CRC Option Factor; Yield Adjustment Surcharge; 
and/or CRC Enterprise Option Factor;
    (6) Multiplying the result of section 8(c)(5) 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).
    9. Section 8(d) is removed and the remaining section is 
redesignated, accordingly.
    10. Section 8(e) redesignated as 8(d) is revised as follows:
    (d) In addition to the premium charged:
    (1) You, unless otherwise authorized in 7 CFR part 400, must pay an 
administrative fee each crop year of $30 per crop per county.
    (2) The administrative fee must be paid no later than the time that 
premium is due.
    (3) 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.
    (4) The administrative fee will be waived if you request it and you 
qualify as a limited resources farmer.
    (5) Failure to pay the administrative fees when due may make you 
ineligible for certain other USDA benefits.
    11. Section 34(c) is revised to read as follows:
    (c) A written agreement may only be used to insure a CRC crop in a 
county without a CRC program if the county without a CRC program is 
adjacent to a county with a CRC program;
    12. Section 35 is added as follows:

Section 35. Substitution of Yields

    You may elect to exclude actual yields used to calculate the APH 
yield that are less than 60 percent of the applicable transitional 
yield (T-yield), as defined in 7 CFR 400.52. Each excluded actual yield 
will be replaced with a yield equal to 60 percent of the applicable T-
yield for the county. The replacement yields will be used in the same 
manner as actual yields for the purpose of calculating the APH yield. 
Premium rates for approved yields that are adjusted under this section 
will be based on your yield prior to replacing the actual yields or 
such other basis as determined appropriate by us.

Crop Revenue Coverage Insurance Policy Wheat Crop Provisions

    13. Section 3 is revised to read as follows:

3. Coverage Level

    In addition to the requirements of section 4 of the Basic 
Provisions all the insurable acreage of wheat in the county insured as 
grain under this policy will have the same coverage level.
    14. Section 5 is revised to read as follows:

5. Cancellation and Termination Dates

    In accordance with section 3(h) of the Basic Provisions, the 
cancellation and termination dates are:

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                       State and county                            Cancellation date         Termination date
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All Colorado counties except Alamosa, Archuleta, Conejos,      September 30............  September 30.
 Costilla, Custer, Delta, Dolores, Eagle, Garfield, Grand, La
 Plata, Mesa, Moffat, Montezuma, Montrose, Ouray, Pitkin, Rio
 Blanco, Rio Grande, Routt, Saguache, and San Miguel; all
 Iowa counties except Plymouth, Cherokee, Buena Vista,
 Pocahontas, Humbolt, Wright, Franklin, Butler, Black Hawk,
 Buchanan, Delaware, Dubuque and all Iowa counties north
 thereof; all Wisconsin counties except Buffalo, Trempealeau,
 Jackson, Wood, Portage, Waupaca, Outagamie, Brown, Kewaunee
 and all Wisconsin counties north thereof; and all other
 states except Alaska, Arizona, California, Connecticut,
 Idaho, Maine, Massachusetts, Minnesota, Montana, Nevada, New
 Hampshire, New York, North Dakota, Oregon, Rhode Island,
 South Dakota, Utah, Vermont, Washington, and Wyoming.

[[Page 41939]]

 
Archuleta, Custer, Delta, Dolores, Eagle, Garfield, Grand, La  September 30............  November 30.
 Plata, Mesa, Moffat, Montezuma, Montrose, Ouray, Pitkin, Rio
 Blanco, Routt and San Miguel counties, Colorado;
 Connecticut; Idaho; Plymouth, Cherokee, Buena Vista,
 Pocahontas, Humboldt, Wright, Franklin, Butler, Black Hawk,
 Buchanan, Delaware and Dubuque counties, Iowa, and all Iowa
 counties north thereof; Massachusetts; all Montana counties
 except Daniels and Sheridan; New York; Oregon; Rhode Island;
 all South Dakota counties except Corson, Walworth, Edmonds,
 Faulk, Spink, Beadle, Kingsbury, Miner, McCook, Turner,
 Yankton and all South Dakota counties north and east
 thereof; Washington; Buffalo, Trempealeau, Jackson, Wood,
 Portage, Waupaca, Outagamie, Brown and Kewaunee counties,
 Wisconsin, and all Wisconsin counties north thereof; and all
 Wyoming counties except Big Horn, Fremont, Hot Springs,
 Park, and Washakie.
Arizona; California; Nevada; and Utah........................  October 31..............  November 30.
Alaska; Alamosa, Conejos, Costilla, Rio Grande and Saguache    March 15................  March 15.
 counties, Colorado; Maine; Minnesota; Daniels and Sheridan
 counties, Montana; New Hampshire; North Dakota; Corson,
 Walworth, Edmunds, Faulk, Spink, Beadle, Kingsbury, Miner,
 McCook, Turner, and Yankton counties, South Dakota, and all
 South Dakota counties north and east thereof; Vermont; and
 Big Horn, Fremont, Hot Springs, Park, and Washakie counties,
 Wyoming.
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    15. Section 11(e)(2)(i) is revised to read as follows:
    (i) Deficiencies in quality, in accordance with the Official United 
States Standards for Grain, result in wheat not meeting the grade 
requirements for U.S. No. 4 (grades U.S. No. 5 or worse) because of 
test weight, total damaged kernels (heat-damaged kernels will not be 
considered to be damaged), shrunken or broken kernels, defects (foreign 
material and heat damage will not be considered to be defects), a 
musty, sour, or commercially objectional foreign odor (except smut 
odor) or grading garlicky, light smutty, smutty or ergoty;
    16. The Crop Revenue Coverage Mandatory Actuarial Document 
Endorsement Commodity Exchange Endorsement--Wheat, is revised to read 
as follows:

Crop Revenue Coverage Mandatory Actuarial Document Endorsement 
Commodity Exchange Endorsement--Wheat

(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) Wheat 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 Wheat 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 totaling all the daily settlement prices for the contract specified 
in the applicable Base Price or Harvest Price definition (established 
on full active trading days), during the month specified in the 
applicable Base Price or Harvest Price definition, and dividing that 
sum by the total number of days included in the total. 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 or Harvest Price definition. A full active 
trading day is any day on which there are twenty-five (25) or more open 
interest contracts of the contract specified in the Base Price or 
Harvest Price definition. If there are less than fifteen (15) full 
active trading days for the contract specified in the applicable Base 
Price or Harvest Price definition, during the month specified in the 
applicable Base Price 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 or Harvest Price definition, during the month 
specified in the applicable Base Price 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 
wheat type and state as follows:

Winter Wheat--(Insured as winter wheat), Chicago Board of Trade (CBOT)

Illinois, Indiana, Michigan, Ohio, and Wisconsin
    Base Price (CBOT)--The August 15 to September 14 pre-harvest year's 
average daily settlement price for the harvest year's CBOT July soft 
red winter wheat futures contract rounded to the nearest whole cent. 
The Base Price will be released as an actuarial document addendum by 
September 20 of the pre-harvest year.
    Harvest Price (CBOT)--The July 15 to August 14 harvest year's 
average daily settlement price for the harvest year's CBOT September 
soft red winter wheat futures contract rounded to the nearest whole 
cent. The Harvest Price cannot be less than the Base Price minus two 
dollars ($2.00), or greater than the Base Price plus two dollars 
($2.00). The Harvest Price will be released as an actuarial document 
addendum by August 20 of the harvest year.

Winter Wheat--(Insured as winter wheat), (CBOT)

Alabama, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, 
South Carolina, Tennessee, and Virginia
    Base Price (CBOT)--The August 15 to September 14 pre-harvest year's 
average daily settlement price for the harvest year's CBOT July soft 
red winter wheat futures contract rounded to the nearest whole cent. 
The Base Price will be released as an actuarial document addendum by 
September 20 of the pre-harvest year.
    Harvest Price (CBOT)--The June harvest year's average daily 
settlement price for the harvest year's CBOT July soft red winter wheat 
futures contract rounded to the nearest whole cent. The Harvest Price 
cannot be less than the Base Price minus two dollars ($2.00), or 
greater than the Base Price plus two dollars ($2.00). The Harvest Price 
will be released as an actuarial document addendum by July 10 of the 
harvest year.

[[Page 41940]]

Winter Wheat--(Insured as winter wheat), Kansas City Board of Trade 
(KCBOT)

Iowa, Montana, Nebraska, South Dakota, and Wyoming
    Base Price (KCBOT)--The August 15 to September 14 pre-harvest 
year's average daily settlement price for the harvest year's KCBOT July 
hard red winter wheat futures contract rounded to the nearest whole 
cent. The Base Price will be released as an actuarial document addendum 
by September 20 of the pre-harvest year.
    Harvest Price (KCBOT)--The July 15 to August 14 harvest year's 
average daily settlement price for the harvest year's KCBOT September 
hard red winter wheat futures contract rounded to the nearest whole 
cent. The Harvest Price cannot be less than the Base Price minus two 
dollars ($2.00), or greater than the Base Price plus two dollars 
($2.00). The Harvest Price will be released as an actuarial document 
addendum by August 20 of the harvest year.

Winter Wheat--(Insured as winter wheat), (KCBOT)

Arizona, Arkansas, Colorado, Kansas, Missouri, New Mexico, Oklahoma, 
and Texas
    Base Price (KCBOT)--The August 15 to September 14 pre-harvest 
year's average daily settlement price for the harvest year's KCBOT July 
hard red winter wheat futures contract rounded to the nearest whole 
cent. The Base Price will be released as an actuarial document addendum 
by September 20 of the pre-harvest year.
    Harvest Price (KCBOT)--The June harvest year's average daily 
settlement price for the harvest year's KCBOT July hard red winter 
wheat futures contract rounded to the nearest whole cent. The Harvest 
Price cannot be less than the Base Price minus two dollars ($2.00), or 
greater than the Base Price plus two dollars ($2.00). The Harvest Price 
will be released as an actuarial document addendum by July 10 of the 
harvest year.

Spring Wheat--(Insured as spring wheat in counties with a 3/15 
cancellation date), Minneapolis Grain Exchange (MGE)

Colorado, Minnesota, Montana, North Dakota, South Dakota, and Wyoming
    Base Price (MGE)--The February harvest year's average daily 
settlement price for the harvest year's MGE September hard red spring 
wheat futures contract rounded to the nearest whole cent. The Base 
Price will be released as an actuarial document addendum by March 10 of 
the harvest year.
    Harvest Price (MGE)--The August harvest year's average daily 
settlement price for the harvest year's MGE September hard red spring 
wheat futures contract rounded to the nearest whole cent. The Harvest 
Price cannot be less than the Base Price minus two dollars ($2.00), or 
greater than the Base Price plus two dollars ($2.00). The Harvest Price 
will be released as an actuarial document addendum by September 10 of 
the harvest year.

Spring Wheat--(Insured as spring wheat in counties with a 9/30 
cancellation date), (KCBOT/MGE)

Colorado, Iowa, Montana, South Dakota, Wisconsin, and Wyoming
    Base Price (KCBOT)--The August 15 to September 14 pre-harvest 
year's average daily settlement price for the harvest year's KCBOT July 
hard red winter wheat futures contract rounded to the nearest whole 
cent. The Base Price will be released as an actuarial document addendum 
by September 20 of the pre-harvest year.
    Harvest Price (MGE)--The August harvest year's average daily 
settlement price for the harvest year's MGE September hard red spring 
wheat futures contract rounded to the nearest whole cent. The Harvest 
Price cannot be less than the Base Price minus two dollars ($2.00), or 
greater than the Base Price plus two dollars ($2.00). The Harvest Price 
will be released as an actuarial document addendum by September 10 of 
the harvest year.

Wheat--Portland Grain Exchange (PGE)

California, Idaho, Oregon, Utah, and Washington
    Base Price (PGE)--The Portland Price equals the August 15 to 
September 14 pre-harvest year's average daily settlement price for the 
harvest year's CBOT September soft red winter wheat futures contract 
(rounded to the nearest whole cent) plus an adjustment equal to the 
current five-year average difference between the August average daily 
settlement price for the nearby CBOT September soft red winter wheat 
futures contract (rounded to the nearest whole cent) and the August 
average daily settlement price for the PGE soft white wheat contract 
(rounded to the nearest whole cent). The Base Price will be released as 
an actuarial document addendum by September 20 of the pre-harvest year.
    Harvest Price (PGE)--The August harvest year's average daily 
settlement price for the PGE soft white wheat contract rounded to the 
nearest whole cent. The Harvest Price cannot be less than the Base 
Price minus two dollars ($2.00), or greater than the Base Price plus 
two dollars ($2.00). The Harvest Price will be released as an actuarial 
document addendum by September 10 of the harvest year.

Durum Wheat--(Insured as durum wheat in counties with a 3/15 
cancellation date), (MGE)

North Dakota counties of Benson, Bottineau, Burke, Cavalier, Divide, 
Mclean, Mountrail, Nelson, Pierce, Ramsey, Renville, Rolette, Towner, 
Ward, Williams
    Base Price (MGE)--The February harvest year's average daily 
settlement price for the harvest year's MGE September durum wheat 
futures contract rounded to the nearest whole cent. The Base Price will 
be released as an actuarial document addendum by March 10 of the 
harvest year.
    Harvest Price (MGE)--The August harvest year's average daily 
settlement price for the harvest year's MGE September durum wheat 
futures contract rounded to the nearest whole cent. The Harvest Price 
cannot be less than the Base Price minus two dollars ($2.00), or 
greater than the Base Price plus two dollars ($2.00). The Harvest Price 
will be released as an actuarial document addendum by September 10 of 
the harvest year.
    All other terms and conditions of the Policy remain unchanged.

    Signed in Washington, D.C. on June 29, 2000.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 00-17150 Filed 7-6-00; 8:45 am]
BILLING CODE 3410-08-U