[Federal Register Volume 73, Number 42 (Monday, March 3, 2008)]
[Rules and Regulations]
[Pages 11314-11318]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-3964]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AC00


Common Crop Insurance Regulations; Cultivated Wild Rice 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 
Cultivated Wild Rice Crop Insurance Provisions to convert the 
cultivated wild rice pilot crop insurance program to a permanent 
insurance program for the 2009 and succeeding crop years.

DATES: Effective Date: May 2, 2008.

FOR FURTHER INFORMATION CONTACT: Erin Albright, Risk Management 
Specialist, Product Management, Product Administration & Standards 
Division, Risk Management Agency, United States Department of 
Agriculture, Beacon Facility--Mail Stop 0812, Room 421, PO 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 purpose of Executive Order 12866 and, 
therefore, it has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    Pursuant to 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 the 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 
economical 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

[[Page 11315]]

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 final rule has been reviewed in accordance with Executive 
Order No. 12988 on civil justice reform. The provisions of this rule 
will not have a retroactive effect. The provisions of this rule 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, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

Background

    On Wednesday, June 6, 2007, FCIC published a notice of proposed 
rule making in the Federal Register at 72 FR 31196-31199 to add to the 
Common Crop Insurance Regulations (7 CFR part 457) a new section, 7 CFR 
457.170, Cultivated Wild Rice Crop Insurance Provisions. FCIC is 
converting the cultivated wild rice pilot crop insurance program to a 
permanent crop insurance program beginning with the 2009 crop year. 
These provisions will replace and supersede the current unpublished 
provisions that insure cultivated wild rice under pilot program status.
    Following publication of the proposed rule, the public was afforded 
60 days to submit written comments, data, and opinions. A total of 24 
comments were received from 3 commenters. The commenters were an 
insurance service organization and two insurance providers. The 
comments received and FCIC's responses are as follows:
    Comment: Two commenters stated the definition of ``cultivated wild 
rice'' refers to ``* * * man-made irrigated fields known as paddies'' 
while section 6(a)(3) specifies the insured crop is ``grown in man-made 
flood irrigated fields.'' The commenters asked if cultivated wild rice 
is ever grown in a field that is irrigated by some other method, or 
should both of the references be made to read consistently.
    Response: Natural stands of wild rice can be found in various 
locations. Because wild rice plants shatter, seeds will drop and the 
natural stands may continue to grow. To be eligible for crop insurance, 
wild rice must be grown in man-made fields in accordance with good 
farming practices for wild rice production. The term ``flood'' is used 
to describe how the cultivated wild rice is irrigated; paddies must be 
built so that they can not only flood the area, but also to control the 
water level and to provide drainage when the crop is to be harvested. 
FCIC has revised the definition of ``cultivated wild rice'' to specify 
it must be grown ``in man-made flood irrigated fields.'' This will 
provide consistency with the provision in section 6(a)(3).
    Comment: Two commenters stated the definition of ``finished 
weight'' is defined in three parts as green weight (delivered, stored, 
or appraised) multiplied by the applicable recovery method (determined 
or standard). The commenters asked if the definition of ``finished 
weight'' matches the definition of ``processor,'' which is defined as 
``A business that converts green weight to finished weight using 
appropriate equipment and methods * * *.'' while the ``finished 
weight'' definition sounds like it is simply the result of a 
mathematical calculation. The commenters also suggested the word 
``The'' be added to the beginning of subpart (c) of the definition of 
``finished weight'' to match subparts (a) and (b).
    Response: The definition of ``processor'' was added to the Crop 
Provisions because it is referenced in other definitions. FCIC agrees 
the definition of ``processor'' is confusing by referencing the term 
``finished weight.'' The definition of ``processor'' has been revised 
to specify it is a business enterprise that converts green weight to a 
product ready for commercial sale. Also, the beginning of subpart (c) 
of the definition of ``finished weight'' has been revised accordingly.
    Comment: Two commenters suggested the definition of ``planted 
acreage'' could be easier to read if the phrase ``including shattering 
for the second and succeeding years'' was put in parentheses instead of 
setting it off with commas.
    Response: FCIC has made the change accordingly.
    Comment: Two commenters suggested the definition of ``recovery 
percentage'' be revised to include the definitions of ``standard 
recovery percentage'' and ``determined recovery percentage'' as 
subparagraphs.
    Response: FCIC has made the change accordingly.
    Comment: Two commenters suggested commas should be added in section 
4 before and after the phrase ``* * * the contract change date is 
November 30 preceding the cancellation date for counties with a 
February 28 cancellation date * * *'' or consider separating the two 
contract change dates into 4(a) and (b).
    Response: FCIC has revised section 4 to separate the contract 
change dates into separate subsections as suggested.
    Comment: Two commenters stated section 6(b) uses ``shatters'' as a 
verb, while in section 1, ``shatter'' is defined as a noun. The 
commenters suggested one or the other should be revised to be 
consistent. They also indicated the term ``shattering'' is used in the 
definition of ``planted acreage.''
    Response: FCIC has revised the definition of ``shatter'' to be 
defined as a verb.
    Comment: Two commenters thought section 7 should be separated into 
three subsections for easier identification, and rearranged to list the 
states first in all three cases: ``* * * the calendar date for the end 
of the insurance period is:
    ``(a) For Minnesota, September 30 * * *;
    ``(b) For California, October 15 * * *; and
    ``(c) For all other states, the date provided in the Special 
Provisions.''
    Response: FCIC has made the change accordingly.
    Comment: Two commenters recommended the insured cause of loss in 
section 8 should be clarified as ``Fire due to natural causes.''
    Response: In addition to the Cultivated Wild Rice Crop Provisions, 
the Common Crop Insurance Policy, Basic Provisions are applicable for 
wild rice. Section 12 of the Basic Provisions states all specified 
causes of loss must be due to a naturally occurring event.

[[Page 11316]]

Adding the suggested language could be redundant and could cause 
confusion by suggesting that the other listed causes of loss do not 
have to be due to natural causes. Therefore, no change has been made.
    Comment: Two commenters indicated FCIC should consider if section 
8(a)(8) should include the phrase that is in the Rice Crop Provisions: 
``* * * drought, or the intrusion of saline water'' [in which case, 
section 9(b) of the Rice Crop Provisions also should be adapted for use 
for Cultivated Wild Rice].
    Response: The crop insurance program for cultivated wild rice is 
available in certain Minnesota and California counties. The chance for 
intrusion of saline water in Minnesota is almost non-existent. However, 
there is a minute possibility for the chance of saline water intrusion 
in three California counties located in the intermountain region. In 
addition, two California counties where crop insurance is available are 
located in areas where the crop could be damaged if levees were to 
fail. For that reason, FCIC agrees with the commenters and has revised 
section 8(a)(8) to be consistent with the Rice Crop Provisions and 
specify the application of saline water is not an insured cause of 
loss.
    Comment: Two commenters stated if the intention in section 11(b)(2) 
is to delete the word ``section'' preceding the phrase ``11(b)(1)'' in 
this subsection, the same should be done in subsections (b)(3)-(7) as 
well to be consistent.
    Response: FCIC did not intend to omit the word ``section'' as 
questioned by the commenters. FCIC has added the term ``section'' 
preceding 11(b)(1) in section 11(b)(2) accordingly.
    Comment: Two commenters suggested the example contained in section 
11 be revised to delete the ``/'' and replace it with ``per'' so it is 
not mistaken for a division symbol.
    Response: FCIC has made the change accordingly.
    Comment: Two commenters asked FCIC to consider rearranging section 
11(c) from ``The total production (finished weight) to count * * *'' to 
read as ``The total production to count (finished weight) * * *''
    Response: FCIC has made the change accordingly.
    In addition to the changes described above, FCIC has revised the 
definition of ``recovery percentage'' in section 1 by deleting the 
sentence ``This is also known as percent recovery.''

List of Subjects in 7 CFR Part 457

    Crop insurance, Cultivated wild rice, Reporting and recordkeeping 
requirements.

Final Rule

0
Accordingly, as set forth in the preamble, the Federal Crop Insurance 
Corporation finalizes 7 CFR part 457, Common Crop Insurance 
Regulations, 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 457.170 is added to read as follows:


Sec.  457.170   Cultivated Wild Rice crop insurance provisions.

    The Cultivated Wild Rice 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: Cultivated Wild Rice Crop 
Provisions.
1. Definitions
    Approved laboratory. A testing facility approved by us to determine 
the recovery percentage from samples of cultivated wild rice.
    Cultivated Wild Rice. A member of the grass family Zizania 
Palustris L., adapted for growing in man-made flood irrigated fields 
known as paddies.
    Finished weight.
    (a) The green weight delivered to a processor multiplied by the 
determined recovery percentage;
    (b) The green weight stored for seed multiplied by either the 
determined recovery percentage or the standard recovery percentage in 
accordance with section 11(d); or
    (c) The appraised green weight multiplied by either the determined 
recovery percentage or the standard recovery percentage in accordance 
with section 11(d).
    Flood irrigation. Intentionally covering the planted acreage with 
water and maintaining it at a proper depth throughout the growing 
season.
    Green weight. The total weight in pounds of the green cultivated 
wild rice production that was appraised, delivered to a processor, or 
stored for seed.
    Harvest. Combining or threshing the cultivated wild rice for grain 
or seed.
    Initially planted. The first occurrence of planting the insured 
crop on insurable acreage for the crop year.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, land on which an adequate amount of seed is initially 
spread onto the soil surface by any appropriate method (including 
shattering for the second and succeeding years) and subsequently is 
mechanically incorporated into the soil at the proper depth, will be 
considered planted, unless otherwise provided by the Special Provisions 
or actuarial documents.
    Processor. A business that converts green weight to a product ready 
for commercial sale using appropriate equipment and methods such as 
separating immature kernels, fermenting or curing, parching, de-
hulling, and scarifying.
    Recovery percentage. The ratio of finished weight to green weight 
of the cultivated wild rice. As specified in section 11(d), the 
recovery percentage is either:
    (a) The determined recovery percentage for a sample as determined 
by an approved laboratory; or
    (b) The standard recovery percentage provided in the Special 
Provisions.
    Shatter. The act of mature seeds naturally falling to the ground 
from a cultivated wild rice plant.
2. Unit Division
    Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.
3. Insurance Guarantee, Coverage Levels, and Prices for Determining 
Indemnities
    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) You may select only one percentage of the maximum price 
election for all the cultivated wild rice insured under this policy in 
the county.
    (b) The insurance guarantee per acre is expressed as pounds of 
finished weight.
4. Contract Changes
    In accordance with section 4 of the Basic Provisions, the contract 
change date is:
    (a) November 30 preceding the cancellation date for counties with a 
February 28 cancellation date; and
    (b) June 30 preceding the cancellation date for counties with a 
September 30 cancellation date.
5. Cancellation and Termination Dates
    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

[[Page 11317]]



------------------------------------------------------------------------
            State               Cancellation date     Termination  date
------------------------------------------------------------------------
Mendocino, Glenn, Butte, and  February 28.........  February 28.
 Sierra Counties,
 California; and all
 California Counties south
 thereof.
Minnesota; All Other          September 30........  November 30.
 California Counties; and
 All Other States.
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6. Insured Crop
    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the cultivated wild rice in the county grown on 
insurable acreage for which premium rates are provided by the actuarial 
documents:
    (1) In which you have a share;
    (2) That is planted for harvest as grain; and
    (3) That is grown in man-made flood irrigated fields.
    (b) Section 8(b)(3) of the Basic Provisions is not applicable to 
the cultivated wild rice seed that naturally shatters and is 
subsequently mechanically incorporated into the soil.
7. Insurance Period
    In accordance with section 11 of the Basic Provisions, the calendar 
date for the end of the insurance period is:
    (a) For Minnesota, September 30 of the calendar year the crop is 
normally harvested;
    (b) For California, October 15 of the calendar year the crop is 
normally harvested; and
    (c) For all other states, the date provided in the Special 
Provisions.
8. Causes of Loss
    (a) In accordance with section 12 of the Basic Provisions, 
insurance is provided only against the following causes of loss that 
occur during the insurance period:
    (1) Adverse weather conditions;
    (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 a cause of 
loss specified in sections 8(a)(1) through (7) that occurs during the 
insurance period, drought, or the intrusion of saline water.
    (b) In addition to the causes not insured against in section 12 of 
the Basic Provisions, we will not insure against any loss of production 
due to:
    (1) The crop not being timely harvested unless such delay in 
harvesting is solely and directly due to adverse weather conditions 
which preclude harvesting equipment from entering and moving about the 
field; or
    (2) The application of saline water, except as specified in section 
8(a) of these crop provisions.
9. Replanting Payments
    The provisions of section 13 of the Basic Provisions are not 
applicable.
10. Duties in the Event of Damage or Loss
    Representative samples are required in accordance with section 14 
of the Basic Provisions.
11. Settlement of Claim
    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production that are acceptable to us 
for any:
    (1) Optional unit, we will combine all optional units for which 
such production records were not provided; or
    (2) Basic unit, we will allocate any commingled production to such 
units in proportion to our liability on the harvested acreage for each 
unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying the result in section 11(b)(1) by the respective 
price election;
    (3) Totaling the results of section 11(b)(2);
    (4) Multiplying the total production to be counted, (see section 
11(c) through (d)) by the respective price election;
    (5) Totaling the results of section 11(b)(4);
    (6) Subtracting the result of section 11(b)(5) from the result of 
section 11(b)(3); and
    (7) Multiplying the result of section 11(b)(6) by your share.
    For example:
    You have a 100 percent share in 100 acres of cultivated wild rice 
in the unit, with a guarantee of 400 pounds per acre and a price 
election of $1.00 per pound. You are only able to harvest 20,000 
pounds. Your indemnity would be calculated as follows:
    (1) 100 acres x 400 pounds = 40,000 pound guarantee;
    (2) 40,000 pounds x $1.00 per pound price election = $40,000 value 
of guarantee;
    (3) 20,000 pounds x $1.00 per pound price election = $20,000 value 
of production to count;
    (4) $40,000 - $20,000 = $20,000 loss; and
    (5) $20,000 x 100 percent share = $20,000 indemnity payment.
    (c) The total production to count (finished weight) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide records of production that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested green weight 
production must be adjusted in accordance with section 11(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 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.

[[Page 11318]]

    (d) Mature green weight will be multiplied by the recovery 
percentage subject to the following:
    (1) We may obtain samples of the production to determine the 
recovery percentage.
    (2) The determined recovery percentage will be used to calculate 
your loss only if:
    (i) All determined recovery percentages are established using 
samples of green weight production obtained by us or by the processor 
for sold or processed production; and
    (ii) The samples are analyzed by an approved laboratory.
    (3) If the conditions of section 11(d)(2) are not met, the standard 
recovery percentage will be used.
12. Late Planting
    The provisions of section 16 of the Basic Provisions are not 
applicable.
13. Prevented Planting
    The provisions of section 17 of the Basic Provisions are not 
applicable.

    Signed in Washington, DC on February 21, 2008.
Eldon Gould,
Manager, Federal Crop Insurance Corporation.
 [FR Doc. E8-3964 Filed 2-29-08; 8:45 am]
BILLING CODE 3410-08-P