[Federal Register Volume 73, Number 42 (Monday, March 3, 2008)]
[Rules and Regulations]
[Pages 11318-11323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-3963]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AC04


Common Crop Insurance Regulations; Mustard Crop Insurance 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the 
Common Crop Insurance Regulations; Mustard Crop Insurance Provisions to 
convert the mustard pilot crop insurance program to a permanent 
insurance program for the 2009 and succeeding crop years.

DATES: Effective Date: April 2, 2008.

FOR FURTHER INFORMATION CONTACT: Gary Johnson, Risk Management 
Specialist, USDA Risk Management Agency-PASD, Beacon Facility-Mail Stop 
0812, P.O. Box 419205, Kansas City, MO 64141-6205, telephone (816) 926-
7730.

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
rule is non-significant for the purposes of Executive Order 12866 and, 
therefore, it has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    Pursuant to the provisions of the Paperwork Reduction Act of 1995 
(44 U.S.C. chapter 35), the collections of information in this rule 
have been approved by OMB under control number 0563-0053 through June 
30, 2008.

E-Government Act Compliance

    FCIC is committed to complying with the E-Government Act of 2002, 
to promote the use of the Internet and other information technologies 
to provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

Unfunded Mandates Reform Act of 1995

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

Executive Order 13132

    It has been determined under section 1(a) of Executive Order 13132, 
Federalism, that this rule does not have sufficient implications to 
warrant consultation with the States. The provisions contained in this 
rule will not have a substantial direct effect on States, or on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.

Regulatory Flexibility Act

    FCIC certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities. Program 
requirements for the Federal crop insurance program are the same for 
all producers regardless of the size of their farming operation. For 
instance, all producers are required to submit an application and 
acreage report to establish their insurance guarantees and compute 
premium amounts, and all producers are required to submit a notice of 
loss and production information to determine the amount of an indemnity 
payment in the event of an insured cause of crop loss. Whether a 
producer has 10 acres or 1000 acres, there is no difference in the kind 
of information collected. To ensure crop insurance is available to 
small entities, the Federal Crop Insurance Act authorizes FCIC to waive 
collection of administrative fees from limited resource farmers. FCIC 
believes this waiver helps to ensure that small entities are given the 
same opportunities as large entities to manage their risks through the 
use of crop insurance. A Regulatory Flexibility Analysis has not been 
prepared since this regulation does not have an impact on small 
entities, and, therefore, this regulation is exempt from the provisions 
of the Regulatory Flexibility Act (5 U.S.C. 605).

Federal Assistance Program

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

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which require intergovernmental consultation with State and 
local officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.

Executive Order 12988

    This proposed rule has been reviewed in accordance with Executive 
Order 12988 on civil justice reform. The provisions of this rule will 
not have a retroactive effect. The provisions of this rule will preempt 
State and local laws to the extent such State and local laws are 
inconsistent herewith. With respect to any direct action taken by FCIC 
or to require the insurance provider to take specific action under the 
terms of the crop insurance policy, the administrative appeal 
provisions published at 7 CFR part 11 must be exhausted before any 
action against FCIC for judicial review may be brought.

Environmental Evaluation

    This action is not expected to have a significant economic impact 
on the quality of the human environment, health, or safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.
    Background:
    On Thursday, November 16, 2006, FCIC published a notice of proposed 
rulemaking in the Federal Register at 71 FR 6016-6021 to add 7 CFR 
457.168 Mustard crop insurance provisions.

[[Page 11319]]

    The public was afforded 60 days to submit written comments and 
opinions. The e-mail address listed on the proposed rule and the 
Federal eRulemaking Portal address were not operational during that 
time period, therefore, FCIC published a notice in the Federal Register 
at 71 FR 14828 on March 24, 2006, extending the comment period for an 
additional 30 days, until April 24, 2006.
    A total of 21 comments were received from 3 commenters. The 
commenters were an insurance services organization, one insurance 
provider, and one producer. The comments received and FCIC's responses 
are as follows:
    Comment: Two commenters have concerns whether a processor contract 
can be accepted by the insurance provider if the processor is located 
in Canada. The commenters asked whether it is the insurance provider's 
responsibility to perform the monetary conversion of the contract price 
from Canadian dollars to U.S. dollars.
    Response: A contract can be accepted if the processor is located in 
Canada. It would be preferable if the contract expressed the base 
contract price in U.S. dollars. However, if the base contract price is 
expressed in Canadian dollars the insurance provider must convert it to 
United States dollars based upon the monetary exchange rate on the date 
the contract was signed by the mustard producer.
    Comment: One commenter suggested adding the definition for 
``windrow'' since windrow is used in the definition for swathed.
    Response: FCIC has added a definition for ``windrow.''
    Comment: Two commenters expressed concerns with section 3(c) where 
it states ``that for processor contracts that stipulate the amount of 
production to be delivered, the number of acres is determined by 
dividing the amount of production to be delivered by the approved 
yield.'' The commenters questioned what happens if the producer's 
approved yield is so low that when you divide the amount of production 
to be delivered by the approved yield more acres are needed to be 
planted than were actually planted to produce the amount of production 
stated in the contract.
    Response: FCIC has removed language in section 3(c) and added a new 
section 3(d) and revised section 8(c) to explain how to determine the 
total production guarantee and insurable acreage. As added in section 
3(d), the total production guarantee will be based on the lesser of the 
contracted acreage multiplied by the production guarantee per acre, the 
planted acreage multiplied by the production guarantee per acre, the 
total production stated in the processor contract, or, for acreage and 
production processor contracts, the contracted acres multiplied by the 
contracted production per acre. As revised in section 8(c), insured 
acreage for acreage and production based processor contracts is based 
on the lesser of the planted acres or the maximum acres stated in the 
processor contact. Insured acreage for production based processor 
contracts will be based on the lesser of the number of acres determined 
by dividing the production stated in the processor contract by the 
approved yield or the planted acres. These revisions will ensure that 
the policy does not provide over-insurance.
    Comment: One commenter suggested in section 3(c) that in the 
parenthetical phrase the term ``stipulates'' be changed to 
``stipulate.''
    Response: FCIC has revised the language in section 3(c) in response 
to other comments and the term ``stipulates'' is no longer used in 
section 3(c).
    Comment: One commenter expressed concern regarding the removal of 
the provision ``to be processed into products for human consumption'' 
in section 7(a)(2).
    Response: FCIC removed the language to allow maximum flexibility in 
providing coverage for mustard used for other uses. In addition, only 
mustard that is produced under a processor contract is insurable. 
Therefore, it is unlikely that the processor will contract for the 
mustard unless the processor has a use for it.
    Comment: Two commenters expressed concerns with the provisions in 
section 8(c) that indicate the maximum insurable acreage will be 
determined by the acreage amount stated in the processor contract(s), 
if applicable, The commenters asked what the maximum insurable acreage 
would be if the processor contract(s) do not state acreage amounts.
    Response: As stated above, FCIC has added language in section 8(c) 
explaining how to determine insurable acreage. For processor contracts 
that specify acreage only and processor contracts that are acreage and 
production based the insurable acreage will be the lesser of the 
planted acres or the acreage specified in the contract. For processor 
contracts that are production only based the insurable acreage will be 
the lesser of the number of acres determined by dividing the production 
stated in the processor contract by the approved yield or the planted 
acreage.
    Comment: One commenter recommended that section 10(b) be clarified 
as ``Fire, due to natural causes'' or ``Fire, if caused by lighting'' 
as is in the proposed revision to the Tobacco Crop Provisions.
    Response: Section 12 of the Basic Provisions states all specified 
causes of loss must be due to a naturally occurring event. Further, if 
the requirement for natural causes was only included with regard to 
fire, it may create the mistaken impression that fire is the only cause 
of action that must be from natural causes. Therefore, no change has 
been made.
    Comment: One commenter stated the provision in section 13(a)(1)(ii) 
that states ``For any processor contract that stipulates the amount of 
production to be delivered, and notwithstanding the provisions of this 
section or any unit division provisions contained in the Basic 
Provisions or these Crop Provisions'' should have been included in 
section 13(a)(2).
    Response: FCIC moved the provision to section 13(a)(2) accordingly.
    Comment: One commenter suggested FCIC add a hyphen between 650-
pound production guarantee in Example 1 in section 13(b).
    Response: FCIC has made the correction accordingly.
    Comment: One commenter suggested FCIC change 13,000 pounds 
production guarantee to 13,000 pound production guarantee in the 
Example 1 in section 13(b).
    Response: FCIC has made the correction accordingly.
    Comment: One commenter suggested FCIC change the wording in the 
first sentence from ``with 650 pound production guarantee'' to ``with a 
650-pound production guarantee'' in Example 2 in section 
13(b).
    Response: FCIC has made the correction accordingly.
    Comment: One commenter suggested FCIC add a hyphen between 6,500 
pound production guarantee in Example 2 in section 13(b).
    Response: FCIC has made the correction accordingly.
    Comment: One commenter suggested FCIC delete the space after the 
``$'' sign in ``$0.15'' in Example 2 in section 13(b).
    Response: FCIC has made the correction accordingly.
    Comment: One commenter stated in section 13(b)(1) that ``mustard 
type'' does not need to be specified since type is defined in section 
1.
    Response: FCIC has revised section 13(b)(1) accordingly.
    Comment: One commenter expressed concern regarding section 13(b)(1) 
stating that when the contract states the total production to be 
delivered with no reference to acres.

[[Page 11320]]

    Response: FCIC has added language in section 8(c) explaining how 
insurable acreage is determined. In addition, FCIC has added the cross 
reference to section 8(c) in section 13(b)(1) and changed the reference 
to ``insurable acreage'' to be consistent with section 8(c).
    Comment: One commenter suggests that the ``and'' at the end of 
section 13(c)(1)(iv)(B) should be moved to the end of section 13(c)(2).
    Response: FCIC has revised the provision accordingly.
    Comment: Two commenters expressed concern regarding section 
13(c)(3). The commenters concern was with contracts that state the 
total production to be delivered with no reference to acres. The 
commenters asked if the insurance provider determines the insured has 
planted more acres than what is necessary to fulfill the contract does 
that production on that over planted acreage count at the time of loss, 
or are all the acres considered insured.
    Response: FCIC has added language in section 8(c) explaining how 
insurable acreage is determined. The insurance provider should make 
this determination before issuing the Schedule of Insurance to ensure 
that the premium and liability are correctly stated.
    Comment: One commenter expressed concern with the provisions in 
section 13(d)(2) that state ``mustard production will be eligible for 
quality adjustment if.'' The commenter asked if contracts are going to 
be honored from a processor in Canada and whether there is any concern 
on getting samples to determine the quality adjustment.
    Response: The quality adjustment can be done by a Canadian grader 
as long as U.S. grading standards are used, or the sample can be pulled 
and brought to a U.S. grading facility. No change has been made.
    Comment: One commenter suggested in section 13(d)(4) moving the 
phrase ``if the quality adjustment factors are not contained in the 
Special Provisions'' to the beginning of the parenthetical phrase.
    Response: FCIC has changed section 13(d)(4) accordingly.
    Comment: One commenter recommended eliminating the option to 
increase prevented planting coverage levels in section 15 Prevented 
Planting.
    Response: Since the recommended change was not proposed, no changes 
were required as a result of comforming amendments, and the public was 
not provided an opportunity to comment on the recommended change, the 
recommendation cannot be incorporated in the final rule. No change has 
been made.
    Comment: One commenter asked why mustard must be grown under 
contract.
    Response: There is a very limited market for mustard. Therefore, 
this requirement ensures there is a market for the mustard crop and 
that the market is not distorted by an over-production of mustard.

List of Subjects in 7 CFR Part 457

    Crop insurance, Mustard, Reporting and recordkeeping requirements.

Final Rule

0
Accordingly, as set forth in the preamble, the Federal Crop Insurance 
Corporation amends 7 CFR part 457 for the 2009 and succeeding crop 
years as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS

0
1. The authority citation for 7 CFR part 457 continues to read as 
follows:

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


0
2. Section 457.168 is added to read as follows:


Sec.  457.168  Mustard crop insurance provisions.

    The Mustard Crop Insurance Provisions for the 2009 and succeeding 
crop years are as follows:

FCIC policies:
    United States Department of Agriculture
    Federal Crop Insurance Corporation
Reinsured policies:
    (Appropriate title for insurance provider)
Both FCIC and reinsured policies:
    Mustard Crop Insurance Provisions.
1. Definitions
    Base contract price. The price per pound (U.S. dollars) stipulated 
in the processor contract (without regard to discounts or incentives) 
that will be used to determine your price election.
    Harvest. Combining or threshing for seed. A crop that is swathed 
prior to combining is not considered harvested.
    Mustard. A crop of the family Cruciferae, genus.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, mustard seed must be planted in rows. Acreage planted 
in any other manner will not be insurable unless otherwise provided by 
the Special Provisions, actuarial documents, or by written agreement.
    Processor. Any business enterprise regularly engaged in buying and 
processing mustard, that possesses all licenses and permits for 
processing mustard required by the State in which it operates, and that 
possesses facilities, or has contractual access to such facilities, 
with enough equipment to accept and process contracted mustard within a 
reasonable amount of time after harvest.
    Processor contract. A written agreement between the producer and a 
processor, containing at a minimum:
    (a) The producer's commitment to plant and grow mustard of the 
types specified in the Special Provisions and to deliver the production 
to the processor;
    (b) The processor's commitment to purchase all the production 
stated in the processor contract; and
    (c) A base contract price (U.S. dollars).
    Salvage price. The cash price per pound (U.S. dollars) for mustard 
qualifying for quality adjustment in accordance with section 13 of 
these Crop Provisions.
    Swathed. Severance of the stem and seed pods from the ground and 
placing into windrows without removal of the seed from the pod.
    Type. A category of mustard identified as a type in the Special 
Provisions.
    Windrow. Mustard that is swathed and placed in a row.
2. Unit Division
    In addition to the requirements of section 34 of the Basic 
Provisions, optional units may also be established by type, if types 
are designated on the Special Provisions.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities
    (a) In addition to the requirements of section 3 of the Basic 
Provisions, you may select only one base contract price percentage for 
all the mustard in the county insured under this policy unless the 
Special Provisions allow different base contract prices by type.
    (b) If base contract prices are allowed by type, you can select one 
base contract price for each type designated in the Special Provisions. 
The base contract prices you choose must have the same percentage 
relationship to the base contract price (maximum price) offered for 
each type. For example, if you choose 100 percent of the maximum price 
for a specific type, you must also choose 100 percent of the maximum 
price for all other types.
    (c) If there are multiple base contract prices within the same 
unit, each will be considered a separate price election that will be 
multiplied by the number of insurable acres under applicable

[[Page 11321]]

processor contract. These amounts will be totaled to determine the 
premium, liability, and indemnity for the unit.
    (d) To determine the total production guarantee, apply the lesser 
of the:
    (1) Contracted acres multiplied by the production guarantee (per 
acre);
    (2) Planted acres multiplied by the production guarantee (per 
acre);
    (3) Total production stated in the contract; or
    (4) For acreage and production contracts only, the contracted acres 
multiplied by the contracted production (per acre).
4. Contract Changes
    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.
5. Cancellation and Termination Dates
    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are March 15.
6. Report of Acreage
    In addition to the provisions in section 6 of the Basic Provisions, 
you must provide a copy of all processor contracts to us on or before 
the acreage reporting date.
7. Insured Crop
    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all mustard in the county for which a premium rate is 
provided by the actuarial table:
    (1) In which you have a share;
    (2) That is planted for harvest as seed;
    (3) That is grown under, and in accordance with, the requirements 
of a processor contract executed on or before the acreage reporting 
date and is not excluded from the processor contract at any time during 
the crop year; and
    (4) That is not, unless allowed by the Special Provisions or by 
written agreement:
    (i) Interplanted with another crop; or
    (ii) Planted into an established grass or legume; or
    (iii) Planted following the harvest of any other crop in the same 
crop year.
    (b) You will be considered to have a share in the insured crop if, 
under the processor contract, you retain control of the acres on which 
the mustard is grown, your income from the insured crop is dependent on 
the amount of production delivered, and the processor contract provides 
for delivery of the mustard under specified conditions and at a 
stipulated base contract price.
    (c) A commercial mustard producer who is also a processor may 
establish an insurable interest if the following requirements are met:
    (1) The producer must comply with these Crop Provisions;
    (2) Prior to the sales closing date, the Board of Directors or 
officers of the processor must execute and adopt a resolution that 
contains the same terms as an acceptable processor contract. Such 
resolution will be considered a processor contract under this policy; 
and
    (3) Our inspection reveals that the processing facilities comply 
with the definition of a processor contained in these Crop Provisions.
8. Insurable Acreage
    In addition to the provisions of section 9 of the Basic Provisions:
    (a) Any acreage of the insured crop that is 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.
    (b) We will not insure any acreage that does not meet the rotation 
requirements, if applicable, contained in the Special Provisions.
    (c) Insurable acreage will be:
    (1) For acreage only based processor contracts and acreage and 
production based processor contracts which specify a maximum number of 
acres, the lesser of:
    (i) The planted acres; or
    (ii) The maximum number of acres specified in the contract;
    (2) For production only based processor contracts, the lesser of:
    (i) The number of acres determined by dividing the production 
stated in the processor contract by the approved yield; or
    (ii) The planted acres.
9. Insurance Period
    In accordance with the provisions of section 11 of the Basic 
Provisions, the end of the insurance period is October 31 of the 
calendar year in which the crop is normally harvested unless otherwise 
stated in the Special Provisions.
10. Causes of Loss
    In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss which occur during 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; and
    (h) Failure of the irrigation water supply, if applicable, caused 
by a cause of loss specified in section 10(a) through (g) that occurs 
during the insurance period.
11. Replanting Payment
    (a) In accordance with section 13 of the Basic Provisions, a 
replanting payment is allowed if the insured crop is damaged by an 
insurable cause of loss to the extent that the remaining stand will not 
produce at least 90 percent of the production guarantee for the 
acreage, and it is practical to replant or we require you to replant in 
accordance with section 8(a).
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of 20 percent of the production guarantee (per acre) or 175 
pounds, multiplied by the base contract price applicable to the acreage 
to be replanted, multiplied by your insured share.
    (c) When the mustard is replanted using a practice that is 
uninsurable as an original planting, the liability for the unit will be 
reduced by the amount of the replanting payment that is attributable to 
your share. The premium amount will not be reduced.
12. Duties In The Event of Damage or Loss
    In accordance with the requirements of section 14 of the Basic 
Provisions, the representative samples of the unharvested crop that we 
may require must be at least 10 feet wide and extend the entire length 
of each field in the unit. The samples 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.
13. Settlement of Claim
    (a) We will determine your loss on a unit basis.
    (1) In the event you are unable to provide separate acceptable 
production records:
    (i) For any optional units, we will combine all optional units for 
which acceptable production records were not provided; or
    (ii) For any basic units, we will allocate any commingled 
production to such units in proportion to our liability on the 
harvested acreage for the units.
    (2) For any processor contract that stipulates only the amount of 
production to be delivered, and not withstanding the provisions of this 
section or any unit division provisions contained in the Basic 
Provisions, no

[[Page 11322]]

indemnity will be paid for any loss of production on any unit if the 
insured produced a crop sufficient to fulfill the processor contract(s) 
forming the basis of the insurance guarantee
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insurable acreage of each type, if applicable, 
determined in accordance with section 8(c), by its respective 
production guarantee (per acre);
    (2) Multiplying each result in section 13(b)(1) by the respective 
base contract price for each type, if applicable;
    (3) Totaling the results in section 13(b)(2);
    (4) Multiplying the production to be counted for each type, if 
applicable (see section 13(c), by its respective base contract price 
(If you have multiple processor contracts with varying base contract 
prices within the same unit, we will value your production to count by 
using your highest base contract price first and will continue in 
decreasing order to your lowest base contract price based on the amount 
of production insured at each base contract price);
    (5) Totaling the results in section 13(b)(4);
    (6) Subtracting the total in section 13(b)(5) from the total in 
section 13(b)(3); and
    (7) Multiplying the result in section 13(b)(6) by your share.
    Example  1 (with one base contract price for the unit):
    You have 100 percent share in 20 acres of mustard in a unit with a 
650-pound production guarantee (per acre) and a base contract price of 
$0.15 per pound. Due to insurable causes, you are only able to harvest 
10,000 pounds and there is no appraised production. Your indemnity 
would be calculated as follows:
    (1) 20 acres x 650 pounds = 13,000 pound production guarantee;
    (2) 13,000 pounds x $0.15 base contract price = $1,950 value of 
guarantee;
    (3) $1,950 total value of guarantee;
    (4) 10,000 pounds x $0.15 base contract price = $1,500 value of 
production to count;
    (5) $1,500 total value of production to count;
    (6) $1,950-$1,500 = $450 loss; and
    (7) $450 x 100 percent = $450 indemnity payment.
    Example  2 (with two base contract prices for the same 
unit):
    You have 100 percent share in 20 acres of mustard in a unit with a 
650-pound production guarantee (per acre), 10 acres with a base 
contract price of $0.15 per pound, and 10 acres with a base contract 
price of $0.10 per pound. Due to insurable causes, you are only able to 
harvest 8,500 pounds and there is no appraised production. Your 
indemnity would be calculated as follows:
    (1) 10 acres x 650 pounds = 6,500-pound production guarantee x 
$0.15 base contract price = $975 value guarantee;
    (2) 10 acres x 650 pounds = 6,500-pound production guarantee x 
$0.10 base contract price = $650 value guarantee;
    (3) $975 + $650 = $1,625 total value guarantee;
    (4) 6,500 pounds of production to count x $0.15 base contract price 
(higher base contract price) = $975 value of production to count;
    (5) 2,000 pounds of production to count x $0.10 base contract price 
(lower base contract price) = $200 value of production to count;
    (6) $975 + $200 = $1,175 total value of production to count;
    (7) $1,625 total value guarantee--$1,175 total value of production 
to count = $450 loss; and
    (8) $450 x 100 percent = $450 indemnity payment.
    (c) The total production to count (in pounds) from all insurable 
acreage in the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee (per acre) for acreage:
    (A) That is abandoned;
    (B) That is 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 13(d)); and
    (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;
    (2) All harvested production from the insurable acreage; and
    (3) Any other uninsurable mustard production that is delivered to 
fulfill the processor contract.
    (d) Mature mustard 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) Mustard production will be reduced by 0.12 percent for each 0.1 
percentage point of moisture in excess of 10.0 percent. We may obtain 
samples of the production to determine the moisture content.
    (2) Mustard production will be eligible for quality adjustment only 
if:
    (i) Deficiencies in quality result in the mustard not meeting the 
requirements for acceptance under the processor contract because of 
damaged seeds (excluding heat damage), or a musty, sour, or 
commercially objectionable foreign odor; 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 in mustard 
production only if:
    (i) The deficiencies, substances, or conditions specified in 
section 13(d)(2) resulted from a cause of loss specified in section 10 
that occurs within the insurance period; and
    (ii) The deficiencies, substances, or conditions specified in 
section 13(d)(2) result in a salvage price less than the base contract 
price; and
    (iii) All determinations of these deficiencies, substances, or 
conditions specified in section 13(d)(2) are made using samples of the 
production obtained by us, by the processor identified in the processor 
contract for the insured acreage, or by a disinterested third party 
approved by us; and

[[Page 11323]]

    (iv) The samples are analyzed by a grader in accordance with the 
Directive for Inspection of Mustard Seed, provided by the Federal Grain 
Inspection Service or such other directive or standards that may be 
issued by FCIC.
    (4) Mustard production that is eligible for quality adjustment, as 
specified in sections 13(d)(2) and (3), will be reduced by multiplying 
the quality adjustment factors contained in the Special Provisions (if 
quality adjustment factors are not contained in the Special Provisions, 
the quality adjustment factor is determined by dividing the salvage 
price by the base contract price (not to exceed 1.000)) by the number 
of pounds remaining after any reduction due to excessive moisture (the 
moisture-adjusted gross pounds) of the damaged or conditioned 
production.
    (i) The salvage price will be determined at the earlier of the date 
such quality adjusted production is sold or the date of final 
inspection for the unit subject to the following conditions:
    (A) Discounts used to establish the salvage price will be limited 
to those that are usual, customary, and reasonable.
    (B) The salvage price will not include any reductions for:
    (1) Moisture content;
    (2) Damage due to uninsured causes;
    (3) Drying, handling, processing, or any other costs associated 
with normal harvesting, handling, and marketing of the mustard; except, 
if the salvage price can be increased by conditioning, we may reduce 
the salvage price, after the production has been conditioned, by the 
cost of conditioning but not lower than the salvage price before 
conditioning; and
    (i) We may obtain salvage prices from any buyer of our choice. If 
we obtain salvage prices from one or more buyers located outside your 
local market area, we will reduce such price by the additional costs 
required to deliver the mustard to those buyers.
    (ii) Factors not associated with grading under the Directive for 
Inspection of Mustard Seed, provided by the Federal Grain Inspection 
Service or such other directive or standards that may be issued by FCIC 
including, but not limited to, protein and oil will not be considered.
    (e) Any production harvested from plants growing in the insured 
crop may be counted as production of the insured crop on an unadjusted 
weight basis.
14. Late Planting
    In lieu of section 16(a) of the Basic Provisions, the production 
guarantee (per acre) 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, unless otherwise specified 
in the Special Provisions.
15. Prevented Planting
    In addition to the provisions contained in section 17 of the Basic 
Provisions, your prevented planting coverage will be 60 percent of your 
production guarantee (per acre) for timely planted acreage. When a 
portion of the insurable acreage within the unit is prevented from 
being planted, and there is more than one base contract price 
applicable to acreage in the unit, the lowest base contract price will 
be used in calculating any prevented planting payment. 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 the levels specified in the actuarial 
documents.

    Signed in Washington, DC, on February 20, 2008.
Eldon Gould,
Manager, Federal Crop Insurance Corporation.
 [FR Doc. E8-3963 Filed 2-29-08; 8:45 am]
BILLING CODE 3410-08-P