[Federal Register Volume 74, Number 96 (Wednesday, May 20, 2009)]
[Proposed Rules]
[Pages 23660-23664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-11693]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 74, No. 96 / Wednesday, May 20, 2009 / 
Proposed Rules  

[[Page 23660]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AC22


Common Crop Insurance Regulations; Florida Avocado Crop Insurance 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule with request for comments.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to add 
regulations that provide insurance for Florida avocados. The provisions 
will be used in conjunction with the Common Crop Insurance Policy Basic 
Provisions (Basic Provisions), which contain standard terms and 
conditions common to most crop programs. The intended effect of this 
action is to convert the Florida Avocado pilot crop insurance program 
to a permanent insurance program for the 2011 and succeeding crop 
years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business July 20, 2009, and will be considered 
when the rule is to be made final.

ADDRESSES: Interested persons are invited to submit comments, titled 
``Florida Avocado Crop Insurance Provisions,'' by any of the following 
methods:
     By Mail to: Director, Product Administration and Standards 
Division, Risk Management Agency, United States Department of 
Agriculture, Beacon Facility, Stop 0812, Room 421, P.O. Box 419205, 
Kansas City, MO 64141-6205.
     By Express Mail to: Director, Product Administration and 
Standards Division, Risk Management Agency, United States Department of 
Agriculture, Beacon Facility, Stop 0812, 9240 Troost Avenue, Kansas 
City, MO 64131-3055.
     E-mail: [email protected].
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.

    A copy of each response will be available for public inspection 
from 7 a.m. to 4:30 p.m., CST, Monday through Friday except holidays at 
the above address.

FOR FURTHER INFORMATION CONTACT: Claire White, Economist, Product 
Management, Product Administration and Standards Division, Risk 
Management Agency, at the Kansas City, MO, address listed above, 
telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
rule is not 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 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 March 
31, 2012.

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), Public 
Law 104-4, 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 
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 small entities are given the same 
opportunities 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.

[[Page 23661]]

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 and 7 CFR part 400, subpart J, 
for the informal administrative review process of good farming 
practices, as applicable, 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 impact on the 
quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

Background

    FCIC offered a pilot crop insurance program for Florida avocados 
beginning with the 1999 crop year. The pilot program is only available 
in Miami-Dade County, which, according to the 2002 Census of 
Agriculture, accounts for 98.6 percent of Florida's avocado acreage. 
The Florida Avocado pilot crop insurance program is an actual 
production history (APH) crop that protects against a loss in yield; 
and is available in coverage levels from 50 to 75 percent of the 
producer's average yield and up to 100 percent of the reference price. 
The pilot program permits optional units by type, i.e. by early and 
late varieties. Insured causes of loss for Florida avocados include 
adverse weather conditions; earthquake; fire, wildlife, insects and 
plant diseases unless the damage is due to insufficient or improper 
application of control measures; volcanic eruption; and failure of 
irrigation water supply if due to an insured cause. Indemnities are 
payable when the total yield from the harvested and appraised 
production is less than the production guarantee.
    In the 2007 crop year, 97 producers with approximately 2,239 acres 
were insured under the Florida Avocado pilot crop insurance program. 
FCIC contracted with an independent firm to conduct an evaluation of 
the Florida Avocado pilot crop insurance program. The evaluation found 
the Florida Avocado pilot crop insurance program to be a valuable risk 
management tool for avocado producers. The evaluation identified the 
following: (1) An APH program is appropriate for this crop and meets 
avocado producers' risk management needs; (2) there is no evidence of 
waste, fraud, abuse, or program vulnerabilities; and (3) optional units 
based on early versus late varieties are a positive feature of the 
program and assist producers in managing their risk exposure. The 
evaluation recommended converting the Florida Avocado pilot crop 
insurance program to a permanent program. FCIC's Board of Directors 
approved the conversion of the pilot program to that of a permanent 
crop insurance program.
    FCIC has revised certain provisions to be consistent with other 
Crop Provisions. FCIC also proposes to revise the following:

    a. Section 1--FCIC proposes to remove the definition of ``APH'' 
because it is defined in the Basic Provisions.

    FCIC also proposes to remove the definition of ``buckhorning'' and 
replace it with the definition of ``buckhorn.'' The proposed definition 
will be consistent with the definition of ``buckhorn'' in the Florida 
Fruit Tree Pilot Crop Provisions, which provides insurance for avocado 
trees.
    FCIC also proposes to add a definition of ``type'' because the term 
is used throughout the Crop Provisions and generally is considered as 
either late or early varieties of avocados.
    b. Section 3--FCIC proposes to revise paragraph (a) to clarify if 
the Catastrophic Risk Protection (CAT) level of coverage is elected, 
then the CAT level of coverage will apply to all insured types of 
avocados in the county.
    FCIC also proposes to revise paragraph (d). The current provision 
states if the producer fails to notify the approved insurance provider 
(AIP) of any circumstance set out in section 3(c), the producer's 
production guarantee will be reduced at any time the AIP becomes aware 
of the circumstance. The proposed provision states if the producer 
fails to notify the AIP of any circumstance set out in section 3(c), 
the producer's production guarantee will be reduced in accordance with 
the Special Provisions at any time the AIP becomes aware of the 
circumstance. Including the phrase ``in accordance with the Special 
Provisions'' allows the producer to be informed via the Special 
Provisions of the method by which the production guarantee will be 
reduced.
    c. Section 6--FCIC proposes to revise paragraph (b). Currently, 
avocados are only insurable if produced on trees that have reached at 
least the fifth growing season after setout, unless there is a written 
agreement based on the acreage producing at least 50 bushels of 
avocados per acre in a previous year. FCIC proposes to revise the 
provision to insure avocados produced on trees that have reached at 
least the fourth growing season after setout and produced the minimum 
amount specified in the Special Provisions in at least one of the 
previous three crop years. Shortening the period following setout 
allows producers with good yields the ability to insure their crop 
sooner. Further, providing the minimum amount of production the tree 
must produce in order to be eligible for insurance on the Special 
Provisions allows the flexibility to specify different minimum 
production requirements for early and late varieties. Requiring the 
minimum production to be met in one of the previous three crop years 
allows only groves that are productive to be eligible for insurance.
    d. Section 8--FCIC proposes to revise paragraph (a)(1) to make the 
provisions easier to read.
    FCIC also proposes to redesignate paragraph (a)(2) as paragraph 
(a)(3) and add a new paragraph (a)(2). Paragraph (a)(1) states when 
coverage attaches for the year of application, but there is no 
provision specifying when coverage attaches for the crop years 
following the year of application. Paragraph (a)(2) is added to clarify 
this.
    FCIC also proposes to revise newly redesignated paragraph (a)(3). 
The current provisions have fixed dates for the end of the insurance 
period for early and late avocados. FCIC proposes to allow the ability 
to provide different dates in the Special Provisions if agronomically 
appropriate.
    e. Section 11--FCIC proposes to add a settlement of claim example.
    FCIC intends to convert the Florida Avocado pilot crop insurance 
program to a permanent crop insurance program beginning with the 2011 
crop year. To effectuate this, FCIC proposes to amend the Common Crop 
Insurance regulations (7 CFR part 457) by adding a new section Sec.  
457.173, Florida Avocado Crop Insurance Provisions. These provisions 
will replace and supersede the current unpublished provisions that 
provide insurance coverage for Florida avocados under a pilot program 
status.

List of Subjects in 7 CFR Part 457

    Crop insurance, Florida Avocado, Reporting and recordkeeping 
requirements.

Proposed Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation proposes to amend 7 CFR

[[Page 23662]]

part 457, Common Crop Insurance Regulations, for the 2011 and 
succeeding crop years as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS

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

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

    2. Section 457.173 is added to read as follows:


Sec.  457.173  Florida Avocado crop insurance provisions.

    The Florida Avocado Crop Insurance Provisions for the 2011 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:
    Florida Avocado Crop Insurance Provisions.

    1. Definitions

    Bushel. A unit of measure equal to 55 pounds of avocados, unless 
otherwise specified in the Special Provisions.
    Buckhorn. To prune any limb at a diameter of at least four inches.
    Crop year. A period beginning with the date insurance attaches to 
the avocado crop and extending through the normal harvest time. The 
crop year is designated by the calendar year after insurance attaches.
    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, 
farmer's market, and permitting the general public to enter the fields 
for the purpose of picking all or a portion of the crop.
    Harvest. Picking of the avocados from the trees or ground by hand 
or machine.
    Pound. A unit of weight equal to sixteen ounces avoirdupois.
    Set out. Transplanting a tree into the grove.
    Type. Avocados that are either early varieties or late varieties.
2. Unit Division
    Provisions in section 34 of the Basic Provisions that allow 
optional units by section, section equivalent, or FSA farm serial 
number and by irrigated and non-irrigated practices are not applicable. 
Optional units may be established by type when provided for in the 
Special Provisions.
3. Insurance Guarantees, 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 coverage level for all the avocados in 
the county insured under this policy unless the Special Provisions 
provide that you may select one coverage level for each avocado type 
designated in the Special Provisions. However, if you elect the 
catastrophic risk protection (CAT) level of coverage, the CAT level of 
coverage will be applicable to all insured types of avocados in the 
county.
    (b) You may select only one price election for all the avocados in 
the county insured under this policy unless the Special Provisions 
provide different price elections by type, in which case you may select 
one price election for each avocado type designated in the Special 
Provisions. The price elections you choose for each type must have the 
same percentage relationship to the maximum price offered by us for 
each type. For example, if you choose 100 percent of the maximum price 
election for one type, you must choose 100 percent of the maximum price 
election for all other types.
    (c) You must report, by the production reporting date designated in 
section 3 of the Basic Provisions, by type if applicable:
    (1) Any damage, removal of trees, trees that have been buckhorned, 
change in grove practices, or any other circumstance that may reduce 
the expected yield per acre to less than the yield upon which the 
production guarantee per acre is based, and the number of affected 
acres;
    (2) The number of trees on insurable and uninsurable acreage;
    (3) The age of the trees;
    (4) Any acreage that is excluded under section 6 of these Crop 
Provisions; and
    (5) For acreage interplanted with another crop:
    (i) The age of the interplanted crop, and type if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your production guarantee per acre.
    (d) We will reduce the yield used to establish your production 
guarantee as necessary, based on the effect of interplanting a 
perennial crop; removal of trees; trees that have been buckhorned; 
damage; or a change in practices on the yield potential of the insured 
crop. If you fail to notify us of any circumstance as set out in 
paragraph (c) of this section, we will reduce your production guarantee 
in accordance with the Special Provisions at any time we become aware 
of the circumstance.
4. Contract Changes
    In accordance with section 4 of the Basic Provisions, the contract 
change date is August 31 preceding the cancellation date.
5. Cancellation and Termination Dates
    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are the first November 30th after 
insurance attaches.
6. Insured Crop
    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the commercially-grown avocado types in the county 
listed in the Special Provisions for which a premium rate is provided 
by the actuarial table:
    (1) In which you have a share;
    (2) That are grown for harvest as avocados; and
    (3) That are grown on trees that, if inspected, are considered 
acceptable to us.
    (b) In addition to the avocados not insurable in section 8 of the 
Basic Provisions, we do not insure any avocados produced on trees that 
have not reached the fourth growing season after setout and have not 
produced the minimum production per acre as specified in the Special 
Provisions in at least one of the previous three crop years.
7. Insurable Acreage
    In lieu of the provisions in section 9 of the Basic Provisions that 
prohibits insurance attaching to a crop planted with another crop, 
avocados interplanted with another perennial crop are insurable unless 
we inspect the acreage and determine it does not meet the requirements 
of insurability contained in these Crop Provisions.
8. Insurance Period
    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) For the year of application, if you apply for coverage:
    (i) On or before November 21st, coverage begins for the crop year 
on December 1 of the calendar year (You must provide any information we 
require so we may determine the condition of the grove to be insured.); 
or
    (ii) After November 21 but prior to December 1, insurance will 
attach on the 10th day after your properly completed application, 
acreage and production reports are received in our local office, unless 
we inspect the

[[Page 23663]]

acreage during the 10 day period and determine that it does not meet 
the requirements for insurability contained in your policy (You must 
provide any information we require so we may determine the condition of 
the grove to be insured.).
    (2) For continuous policies, coverage begins for the crop year on 
December 1 of the calendar year. Policy cancellation that results 
solely from transferring an existing policy to a different insurance 
provider for a subsequent crop year will not be considered a break in 
continuous coverage.
    (3) The calendar date for the end of the insurance period, unless 
otherwise specified in the Special Provisions, is:
    (i) The first November 30th after insurance attaches for early 
varieties of avocados.
    (ii) The second March 31st after insurance attaches for late 
varieties of avocados.
    (b) In addition to the provisions of section 11 of the Basic 
Provisions:
    (1) If you acquire an insurable share in any insurable acreage of 
avocados after coverage begins, but on or before the acreage reporting 
date of any crop year, and if after inspection we consider the acreage 
acceptable, then insurance will be considered to have attached to such 
acreage on the calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any acreage of 
avocados on or before the acreage reporting date of any crop year, 
insurance will not be considered to have attached to, no premium will 
be due and no indemnity paid for, such acreage for that crop year 
unless:
    (i) A transfer of coverage and right to an indemnity or a similar 
form approved by us is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.
9. Causes of Loss
    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur within the insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the grove;
    (3) Wildlife, unless control measures have not been taken;
    (4) Earthquake;
    (5) Volcanic eruption;
    (6) Failure of the irrigation water supply caused by an insured 
peril specified in section 9(a)(1) through (5) that occurs during the 
insurance period.
    (7) Insects, but not damage due to insufficient or improper 
application of pest control measures; and
    (8) Plant disease, but not due to insufficient or improper 
application of disease control measures.
    (b) In addition to the causes of loss excluded in section 12 of the 
Basic Provisions, we will not insure against damage or loss of 
production due to:
    (1) Theft; or
    (2) Inability to market the avocados for any reason other than 
actual physical damage from an insurable cause specified in this 
section. For example, we will not pay you an indemnity if you are 
unable to market due to quarantine, boycott, or refusal of any person 
to accept production, etc.
10. Duties in the Event of Damage or Loss
    In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
    (a) You must notify us at least 15 days before any production from 
any unit will be direct marketed.
    (1) We will conduct a preharvest appraisal that will be used to 
determine your production. If damage occurs after the preharvest 
appraisal, and you can provide acceptable records to us that account 
for all production removed from the unit after our appraisal, we will 
conduct an additional appraisal that will be used to determine your 
production.
    (2) Failure to give timely notice that production will be direct 
marketed will result in an appraised production to count of not less 
than the production guarantee per acre if such failure results in an 
inability to make an accurate appraisal.
    (b) If you intend to claim an indemnity on any unit, you must 
notify us 15 days prior to the beginning of harvest or immediately if 
damage is discovered during harvest so that we may inspect the damaged 
production.
    (1) You must not destroy the damaged crop until after we have given 
you written consent to do so.
    (2) If you fail to meet the requirements of this subsection, and 
such failure results in our inability to inspect the damaged 
production, we may consider all such production to be undamaged and 
include it as production to count.
11. Settlement of Claim
    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide production records:
    (1) For any optional unit, we will combine all optional units for 
which acceptable production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each type, if applicable, 
by its respective production guarantee;
    (2) Multiplying each result in section 11(b)(1) by the respective 
price election for each type if applicable;
    (3) Totaling the results in section 11(b)(2);
    (4) Multiplying the total production to be counted by type, if 
applicable (see subsection 11(c)), by the respective price election;
    (5) Totaling the results in section 11(b)(4);
    (6) Subtracting the results in section 11(b)(5) from the results in 
section 11(b)(3); and
    (7) Multiplying the result in section 11(b)(6) by your share.
    For example:
    You have a 100 percent share in 50 acres of early variety A in the 
unit, with a guarantee of 140 bushels per acre and a price election of 
$16.00 per bushel. You are only able to harvest 6,000 bushels due to an 
insured cause of loss. Your indemnity would be calculated as follows:
    (1) 50 acres x 140 bushels = 7,000 bushel guarantee;
    (2) 7,000 bushels x $16.00 price election = $112,000.00 value of 
guarantee;
    (4) 6,000 bushels x $16.00 price election = $96,000.00 value of 
production to count;
    (6) $112,000.00-$96,000.00 = $16,000 loss; and
    (7) $16,000 x 100 percent = $16,000 indemnity.
    (c) The total production to count 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) That is direct marketed if you fail to meet the requirements 
contained in section 10 of these Crop Provisions;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production;
    (iv) Potential production on insured acreage that you intend to 
abandon or

[[Page 23664]]

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 do not agree with our appraisal, we may defer the 
claim only if you agree to continue to care for the crop. We will then 
make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
adequately care for the crop, our appraisal made prior to deferring the 
claim will be used to determine the production to count; and
    (2) All harvested production from the insurable acreage.
12. Late and Prevented Planting
    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

    Signed in Washington, DC, on May 12, 2009.
William J. Murphy,
Acting Manager, Federal Crop Insurance Corporation.
[FR Doc. E9-11693 Filed 5-19-09; 8:45 am]
BILLING CODE 3410-08-P