[Federal Register Volume 74, Number 128 (Tuesday, July 7, 2009)]
[Rules and Regulations]
[Pages 32049-32059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-15498]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AC09


Common Crop Insurance Regulations; Grape Crop Insurance 
Provisions and Table Grape Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes 
amendments to the Common Crop Insurance Regulations, Grape Crop 
Insurance Provisions and Table Grape Crop Insurance Provisions. The 
intended effect of this action is to provide policy changes and clarify 
existing policy provisions to better meet the needs of insured 
producers, and to reduce vulnerability to fraud, waste, or abuse.

DATES: Effective Date: This rule is effective August 6, 2009.

FOR FURTHER INFORMATION CONTACT: Elizabeth Lopez, Risk Management 
Specialist, Product Management, Product Administration and Standards 
Division, Risk Management Agency, United States Department of 
Agriculture, Beacon Facility, Stop 0812,

[[Page 32050]]

Room 421, 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 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) 
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 1,000 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 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 February 29, 2008, FCIC published a notice of proposed 
rulemaking in the Federal Register at 73 FR 11054-11060 to revise 7 CFR 
457.138 Grape crop insurance provisions and 7 CFR 457.149 Table grape 
crop insurance provisions. Following publication of the proposed rule, 
the public was afforded 60 days to submit written comments and 
opinions.
    A total of 29 comments were received from 8 commenters. The 
commenters were reinsured companies, trade associations and an 
insurance service organization. The comments received and FCIC's 
responses are as follows:

Grape Crop Provisions

    Some of the comments received pertained to both the Grape Crop 
Provisions and Table Grape Crop Provisions. In those cases, the 
responses will be provided under the Grape Crop Provisions with a note 
indicating when the Table Grape Crop Provisions are also impacted.
    Comment: A few commenters expressed concern regarding insurable 
grape and table grape varieties in Arizona and California and the 
possible impact of changing the term ``varietal group'' to ``type'' 
throughout the policy. In California, there is a type for ``Other 
Varieties''. This type is for all varieties not listed individually in 
the Special Provisions. The provisions allow the insured the option to 
insure one or more varieties under this type. The varieties insured 
under this type qualify for a separate basic unit. All varieties under 
this type must have the same coverage level and price election 
percentage, but would qualify for one single administrative fee as 
type, ``Other Varieties'', are not recognized as a separate crop in 
regards to administrative fees. The commenters further stated that in 
light of the increasing number of varieties being insured under this 
type, a separate administrative fee should be charged for ``Other 
Varieties''. In addition, changing ``variety'' to ``type'' could impact 
varieties currently being insured under this type. Any change in 
terminology needs to take into consideration the impacts involved in 
insuring different varieties under type 095 in California.
    Response: Provisions that allow insurance to be selected by variety 
have been retained for Arizona and California. Producers will still be 
able to select insurance coverage levels by variety except for those 
varieties that fall under type 095 (other varieties). All varieties 
listed under type 095 must have the same price election and coverage 
level percentage. For example,

[[Page 32051]]

if a producer selects to insure three varieties under type 095, and 
selected 80 percent of the maximum price election and 75 percent of the 
coverage level for the first variety under type 095, the remaining two 
varieties under type 095 must have the same price election and coverage 
level percentage as the first. RMA reviewed the California 2007 crop 
year to determine the number of policies that included multiple 
varieties under type 095 and found approximately 53 grape policies with 
multiple varieties under type 095. This is only 1 percent of the total 
grape policies (4,439). Because such a small percentage of policies are 
impacted and there is only an average of 15 acres of each variety under 
type 095 in each policy, RMA determined it is not cost effective to 
make all the computer system changes necessary to charge a separate 
administrative fee for each grape variety that falls under type 095. In 
addition, a definition of ``variety'' has been included in both the 
Crop Provisions to clarify the term.
    Comment: A few commenters stated that in states other than Arizona 
and California, it is common for different varieties/types of grapes to 
be grouped into different varietal groups, which are now being 
eliminated and being referred to as different types. Since there are 
many different new varieties/types that are always being developed, the 
commenter would like to recommend that the Special Provisions be clear 
and specific in defining the different types so that it is easy to 
determine the proper category for these new varieties.
    Response: The Special Provisions will be clear and specific in 
defining the types. The Special Provisions will clearly indicate that 
for California and Arizona a ``type'' will consist of a variety, with 
the exception of type 095 (other varieties). For all other states, a 
``type'' will consist of one or more varieties identified as a type on 
the Special Provisions, (i.e., type 083 may include the Merlot variety 
and all other varieties not specifically named on the Special 
Provisions).
    Comment: A few commenters questioned whether the replacement of 
``varietal group'' with ``type'' was one of terminology or whether 
there other differences as well. There are no references to what a 
``type'' will consist of within a given state or region. The new term 
``type'' is used to identify the varieties grouped together in the 
actuarial documents for all states except Arizona and California for 
rating and optional unit purposes. The commenters ask if it is similar 
to the current varietal group in these states/regions. The terminology 
for Arizona and California throughout the Crop Provisions is 
``variety'' or ``grape variety'', however, section 1(g) if the Proposed 
Rule Background on page 11055 states that ``* * * (each variety in 
California constitutes a type) * * *'' and the 2008 actuarial documents 
for California use the term ``type''. The commenters ask if it would be 
possible to use the term ``type'' for all states rather than having to 
distinguish between ``variety'' (Arizona and California) and ``type'' 
(all other states) throughout. This also would help avoid confusion 
with the use ``variety'' instead of ``type'' along with ``practice'' in 
the actuarial documents. If Arizona and California continue to use 
``variety'' instead of ``type'', presumably the terminology in the 
actuarial documents for Arizona and California will be changed from 
``types'' to ``varieties'', while terminology in other states will be 
changed from ``varietal group'' to ``type''.
    Response: The actuarial document will still use the term ``type''. 
Type is defined in the Crop Provisions as, ``A category of grapes (one 
or more varieties) identified as a type in the Special Provisions''. In 
California and Arizona each variety is a separate type except for type 
095 as explained above. In these two states the term ``variety'' must 
still be used to allow producers to select the varieties they wish to 
insure within type 095. For all other states covered under the Grape 
Crop Provisions, the term ``type'' is simply a replacement for the term 
``varietal group''. The Table Grape Crop Provisions will now also 
include the term ``type''.
    Comment: A few commenters asked that FCIC consider including a 
definition of ``variety'' to clarify the difference between ``types'' 
and ``varieties''. Otherwise, the reference to ``each variety'' in 
section 2(a)(1) [for Arizona and California] could lead to confusion as 
to whether or not it is the same as ``type'' as defined.
    Response: FCIC has included in both Grape Crop Provisions and Table 
Grape Crop Provisions a definition of ``variety.''
    Comment: A few comments were received regarding unit division. In 
the states of Arizona and California, basic units are divided into 
additional basic units by each variety insured. The commenters state 
that since section 7 states the insured crop will be any insurable 
variety that the producer elects to insure in these states, section 
2(a)(1) may not be necessary. If each variety is insured as a separate 
crop, it is already a separate basic unit even before establishing any 
basic units for different share arrangements. However, it may be 
helpful to include some reference in section 2 to the different basic 
unit qualifications in Arizona and California. The following is 
suggested language, ``Basic units are established for each variety that 
you choose to insure, and also defined in section 1 of the Basic 
Provisions.''
    Response: Unit structure and insurability are two different things 
and should be treated separately. Therefore, while section 2(a)(1) may 
not be strictly necessary, it is provided to clarify that while each 
variety is treated as a separate crop to allow producers to elect which 
variety they want to insure, all insured varieties are still covered 
under one grape policy with separate basic units provided. No change 
has been made.
    Comment: A few commenters stated there is no mention of acreage 
insured under organic farming practices in provisions dealing with unit 
division. Clarification is needed to determine whether optional units 
are allowed for organic practices.
    Response: In Arizona and California, optional units may be 
established if each optional unit is located on non-contiguous land. In 
addition, optional units may be provided for acreage grown and insured 
under an organic farming practice. In all other states, optional units 
may be established in accordance with section 34 of the Basic 
Provisions, which includes optional units for organic acreage, and as 
provided for in the Grape Crop Provisions. Both the Grape Crop 
Provisions and the Table Grape Crop Provisions have been clarified 
accordingly.
    Comment: A few comments were received regarding the phrase in 
section 2(b)(2) ``* * * when separate types are specified in the 
Special Provisions''. The commenters ask if ``separate type'' is 
different from a ``type'' and does it need to be defined in section 1.
    Response: ``Separate type'' does not to be defined. In this case, 
``separate'' is given its common meaning, which means that optional 
units can be established by each different (or individual) type listed 
in the Special Provisions.
    Comment: A few comments were received regarding clarification of 
sections 3(a) and (b). In Arizona and California, addition of the 
phrase ``* * * you elect to insure'' in 3(a) would clarify that each 
variety is considered a separate crop, and it may not be necessary to 
mention ``in the county'', though it is for 3(b), which is further 
clarified as having the same level and price percentage for all grapes 
in the county, regardless of variety.

[[Page 32052]]

    Response: The phrase ``you elect to insure'' should be added in 
section 3(a). The language regarding ``in the county'' should be 
consistent in both 3(a) and (b) and therefore, will be added to section 
3. These same changes have also been made in the Table Grape Crop 
Provisions to maintain consistency between the policies.
    Comment: A few commenters expressed concern with the removal of the 
language currently in section 3(c) that would allow insureds in all 
states (not just Arizona and California) to select different price 
election percentages by type, though this was not identified as a 
change in the Proposed Rule.
    Response: The proposed provision in section 3(b) allows insureds in 
all states to choose a different price election percentage for each 
type. This proposal was described in the Proposed Rule on page 11055. 
In addition, FCIC has also removed section 3(c) (in the current 
policy), which required the same percentage relationship to the maximum 
price offered for each varietal group, so that different price election 
percentage could be selected by type.
    Comment: A few commenters questioned the removal of section 3(c), 
stating it would result in a significant change, allowing grape 
insureds in all states (not just Arizona and California) to choose 
different price election percentages by type. They further stated this 
would be problematic in the other states since different types are not 
treated as separate crops, but are potentially separate optional units 
that could end up being combined if the optional unit requirements are 
not met. Also, new types could be added on the acreage report (because 
all grapes in the county must be insured), when it is after the sales 
closing date deadline to select a price percentage. If this is the 
intent, the language needs clarification. The commenters also stated 
they do not agree with the intended effect of the revised provision. 
They suggested that the policyholder continue to be allowed to choose a 
single price election percentage and coverage level on a county basis 
and all insurable types in the county would be insured on this basis.
    Response: It should not be a problem if there are different 
coverage levels and price election percentages for separate types 
provided the application contains the selected coverage levels and 
price election percentages. Further, clarification has been added to 
section 3(b) of the Grape Crop Provisions and Table Grape Crop 
Provisions regarding percentage relationship to the maximum price 
election. Additionally, FCIC has added a new section 3(c) to both Grape 
Crop Provisions and Table Grape Crop Provisions (and redesignated the 
following sections) to account for cases where a new type is added 
after the application is received. This provision states that if the 
producer acquires a share in any grape acreage after the application is 
submitted, provided such acreage is insurable under the terms of the 
policy and the producer did not include the grape type on the 
application, the insurance provider will assign a coverage level and 
price election percentage. The assigned coverage level will be the 
lowest coverage level selected for any other grape type along with the 
corresponding price election percentage.
    Comment: A few of the commenters expressed concerns regarding the 
possible use of a contract price. This is already allowed by the 
Special Provisions in California, but would be new in the Crop 
Provisions, which would allow for the possibility for this to be 
extended to other states as well. Care must be taken to make sure that 
all necessary information is included in the Crop Provisions, while not 
over-complicating it.
    Response: Provisions regarding the use of a contract price when 
allowed by Special Provisions will include information on how to 
determine the contract price if more than one contract exists, and a 
maximum price which the contract price cannot exceed.
    Comment: A few comments were submitted regarding the use of a price 
election based on a contract price if allowed by the Special 
Provisions. The commenters asked that FCIC consider the ramifications 
of contract prices coexisting with non-contract prices. In addition, 
the commenters asked that FCIC consider including a definition under 
section 1 so that other references to ``price election'' would include 
the possibility of a contract price basis. ``Price election'' should be 
defined, and some type of limit should be placed on the price election 
for grapes under contract. The commenter asked what would the price 
election be (for a grape type in the county in states other than 
Arizona and California) if there is a contract price on some grapes 
types but not others or if there are multiple contract prices within a 
unit. It is quite possible that one variety is insured under contract 
while another is not. In such cases, there is a need to specify what 
price election is used. Clarification is needed to specify that the 
price election will be based on the contact price but the actual price 
election will be limited to the terms stated in the Special Provisions. 
Additionally, determination of an indemnity in section 12 needs to be 
clearly illustrated in such situations.
    Response: It is not necessary to redefine ``price election'' in 
section 1 because the provision in redesignated section 3(d) indicates 
a contract price election may be used instead of the published price 
election. It is not necessary to add an example in section 12 because 
the provisions already address situations in which multiple price 
elections are applicable. The provisions regarding use of a contract 
price, when allowed by Special Provisions, will include information 
regarding calculation of a weighted average price if more than one 
price election exists, and a maximum price which the contract price 
cannot exceed. All of the necessary information will be included in the 
Special Provisions statement.
    Comment: A few commenters noted the reference to adjusting the 
approved yield in redesignated section 3(d) is not relevant without 
adding the reason for which production will be reduced. The preamble of 
the Proposed Rule states that this was added as some contracts require 
the use of cultural practices to produce fewer tons of grapes. The 
commenters recommend revising the last sentence of 3(d) to clarify that 
the reduction to the approved yield will be based on redesignated 3(f): 
``* * * In the event any contract requires the use of a cultural 
practice that will reduce the amount of production from any insured 
acreage, your approved yield will be adjusted in accordance with 
section 3(f).''
    Response: FCIC has added the reason the yield will be reduced. 
Redesignated section 3(d) will also reference redesignated section 3(g) 
because these sections state yields will be reduced to reflect changes 
in practices or other circumstances.
    Comment: A few commenters stated that proposed section 3(f) 
(redesignated 3(g)), repeats what was stated in proposed sections 
3(e)(1) and (4) (redesignated 3(f)(1) and (4)), and that it may ease in 
reading if those sections were referenced instead of duplicating.
    Response: The provisions are duplicative and FCIC has revised the 
provisions in the Grapes Crop Provisions and Table Grape Crop 
Provisions accordingly.
    Comment: A few commenters suggested a revision to the last sentence 
in section 3(f) (redesignated section 3(g)), to include: ``* * * If you 
fail to notify us of any circumstance that may reduce your yields from 
previous levels, we will reduce your guarantee or assess uninsured 
cause of loss against your

[[Page 32053]]

claim at any time we become aware of the circumstance.'' Growers have a 
responsibility to report to the insurance provider damage, removal of 
vines, etc. If they report it timely, the insurance provider can adjust 
the guarantee and premium. There should be a penalty if they do not 
report this information timely and it is discovered by the adjuster at 
claim time. Currently there is no penalty, so there is little incentive 
to report the information timely.
    Response: Assessing an uninsured cause of loss against the claim 
was not in the proposed rule, the public was not provided an 
opportunity to comment on the recommended change, and therefore, the 
recommendation cannot be incorporated in the final rule. No change has 
been made.
    Comment: A few commenters questioned the proposed language used in 
section 3(g) (redesignated section 3(h)). The commenters were not sure 
if any other Crop Provisions use the phrase ``the ratio of your price 
election to the maximum price election we offer'' rather than the 
phrasing that has been dropped from the current Grape Crop Provisions 
section 3(c) that states ``the same percentage relationship to the 
maximum price offered by us''. The commenters also questioned the 
reference to ``the maximum price election we offer'' since ``we'' 
refers to the insurance provider while the price elections are 
determined and offered by RMA [though it can be understood that the 
insurance provider is offering the coverage, including the price 
election, to the insured]. In addition, the commenters requested 
clarification on what is meant by ``* * * if a cause of loss * * * is 
evident prior to the time that you request the increase.'' A cause of 
loss that occurred the previous crop year would be ``prior to the time 
that you request the increase.'' The commenter asked FCIC consider 
rewriting the provision similar to the following: ``Your request to 
increase the coverage level or price election percentage will not be 
accepted if a cause of loss that could or would reduce the yield of the 
insured crop is evident when your request is made.''
    Response: FCIC has changed language in redesignated 3(h). The 
phrase ``the ratio of your price election to the maximum price election 
we offer'' has been deleted. The provision will now include the 
recommended language. This same change has been made in the Table Grape 
Crop Provisions.
    Comment: A few commenters questioned the language under section 6. 
They commented that the phrase, ``In all other states, by each grape 
type you insure,'' sounds as though insureds in the other states can 
choose to insure some but not all types as in California, which is not 
the case. The commenters recommended ending section (b) after the word 
``type'' or to consider whether this requires a distinction between 
states. Perhaps section 6 could read simply: ``* * * you must report 
your acreage by grape type or variety, as applicable.''
    Response: Section 6(b) needs to be clarified so FCIC changed the 
provisions to state reporting is required ``by each grape type''. The 
Table Grape Crop Provisions have also been revised so the provisions 
will be consistent.
    Comment: A few comments were received regarding Settlement of Claim 
and the quality adjustment for mature marketable grapes. Due to the 
increasing amount of wine grape acreage in production, wineries have 
increased the sugar percent thresholds in their contracts. This has 
allowed buyers to be very selective in the grapes they will purchase. 
The effect of this on grape crop insurance is in determining market 
prices and the values for the quality adjustment procedure in 12(e). 
For example, if the market price of the wine grapes in the area is 
based primarily on sugar content that the producer's wine grape 
production does not normally meet, the commenters asks how is the 
market price and value to be determined. In many cases, there is no 
means of determining if the damage caused a drop in the sugar 
percentage. If the sugar content were higher, the value of the grape 
would be greater and the producer may not even feel compelled to file a 
claim. In years where production is low, the buyers do not place such 
emphasis on the sugar content and this is a non-issue. This fluctuation 
in market demand causes many issues in determining values and adjusting 
for quality for wine grapes, though it may also be an issue for juice 
grapes.
    The commenters recommend that a standard minimum sugar percentage 
be included in the determination of the market price and value. Doing 
so sets a limit to the amount of quality adjustment that can be made 
when market prices and values are based on sugar content, and if market 
prices are not based on sugar content, the quality adjustment is not 
affected. Crop insurance should pay for damaged production but caution 
is needed when determining values based on marketability and market 
demand. Failure to add a limit can result in quality adjustments that 
are not related to the insured cause of damage. The Grape Crop 
Provisions must include language to control the potential for abuse. 
The commenters suggested revising the section to include the following: 
``Grapes produced for the production of wine or juice will only be 
eligible for quality adjustment due to an insured cause of loss that 
results in the grapes having a sugar level below 17 percent. Grapes 
with an insurable damage that fail to meet or exceed 17 percent sugar 
will be adjusted for quality based on the market value for a sugar 
content of not less than 17 percent for undamaged grapes.''
    Response: Quality adjustment is applicable only if the reduction in 
value is due to an insurable cause of loss, such as adverse weather. If 
low brix levels or other damage are due to an insurable cause of loss, 
the grapes may be eligible for quality adjustment provided that they 
qualify under section 12(e) of the Grape Provisions. According to AMS 
standards, brix level is an indication of maturity in some table and 
juice grapes, however, there are no such published standards for wine 
grapes. Therefore, FCIC does not have information necessary to 
establish standard brix levels for the various wine grape varieties and 
growing areas. No change has been made.
    Comment: A few commenters stated that language in the preamble 
regarding quality adjustment (page 11056) did not match language in the 
proposed Crop Provisions section 12(e)(2)(i). The preamble stated, ``* 
* * FCIC is proposing that the value per ton of the damaged grapes will 
be divided by the value per ton for undamaged grapes. The value of 
undamaged grapes will not exceed the maximum price election for such 
grapes. This will ensure that the undamaged grapes are not over-
valued.'' The Crop Provisions state, ``Dividing the value per ton of 
the damaged grapes by the value per ton for undamaged grapes (the value 
of undamaged grapes will be the lesser of the average market price or 
the maximum price election for such grapes) * * *''
    Response: The language in the preamble was not consistent with the 
policy provision. The preamble was incorrect and it should have 
referred to the lesser of the average market price or the maximum price 
election for such grapes. This ensures the grapes are not overinsured.
    Comment: A commenter stated that while in favor of the proposed 
changes, the following provisions should also be added: (1) Grape crop 
insurance should be available in all Texas counties covered by an 
American Viticulture Area; (2) crop insurance by variety should also be 
provided in Texas.
    Response: Grape insurance is currently available in several Texas

[[Page 32054]]

counties, and coverage in counties without the grape insurance program 
can be requested by written agreement. If the commenter has specific 
counties where they would like grape insurance, the commenter may make 
a request to RMA's Oklahoma City Regional Office. If there are 
sufficient acres and producers in a requested county, and other 
expansion criteria are met, the Regional Office can recommend 
implementation of a program for the requested county. Since providing 
`insurance by variety'' in Texas was not proposed and the public was 
not provided opportunity to comment on the recommended change, the 
recommendation cannot be incorporated in the final rule. Insurance by 
type is available in Texas as it is in all states other than California 
and Arizona. No other change has been made.
    Comment: A commenter stated that several vitis vinifera varieties 
(Riesling, Chardonnay, and Cabernet Franc for example) have a long 
history in New York and warrant having separate premium rates for these 
varieties. At current time, these varieties need a written agreement 
annually, which is cumbersome for the growers as well as the insurer.
    Response: The vinifera varieties in New York are insured by written 
agreement to take into consideration the location, block by block, 
susceptibility to frost, and each producers yield history by variety. 
Due to the climatic conditions in the region, premium rates are 
individually set by use of the written agreement.
    Comment: A commenter inquired about new plantings in New York being 
insurable at an earlier age than is currently available since they are 
such a long term investment. Recent ``disaster'' payments have had 
provisions to pay partial payments on 3 and 4 year old plantings based 
on a percentage of the county average yield for the particular variety. 
It would seem that some sort of plan like this could help relieve some 
of the financial burden of having several thousand dollars per acre 
invested in a new planting, with no eligibility for insurance for the 
first 6 years.
    Response: When establishing a new vineyard, a significant risk is 
production loss due to freeze. New vines run a higher risk of 
production loss due to freeze than older established vines. Insuring 
production on younger vines would require additional rating analysis to 
determine if it would be cost prohibitive to provide such coverage. In 
addition, further procedures would be involved to determine appropriate 
production guarantees for such young vines. FCIC can consider the 
recommended changes in the future and is willing to work with any 
interested parties to determine if insurance can be provided for 
production from younger vines. However, no insurance is currently 
available for damage to vines.

Table Grape Crop Provisions

    Several comments received were the same as those received for the 
Grape Crop Provisions; since the provisions are substantially similar, 
those comments were addressed in the Grape Crop Provisions and noted 
for Table Grape Provisions as applicable. Therefore, they will not be 
repeated in the comments below.
    Comment: A few comments were received regarding the definition of 
``Lug''. The commenters stated that as written in the Proposed Rule, 
the added phrase ``* * * or as otherwise specified in the Special 
Provisions'' would allow the 21-lb lug to be changed only in ``all 
other California districts'' but not to Coachella County, California, 
or any other states (with a 20-lb lug). If it is intended to allow the 
Special Provisions to revise the number of pounds in a lug in any 
state/county, the definition needs to be rearranged, perhaps something 
like: (a) 20 pounds; (b) 21 pounds; or (c) as otherwise specified.
    Response: FCIC will revise the definition to read: Lug--(a) Twenty 
(20) pounds of table grapes in the Coachella Valley, California 
district, and all other states, (b) Twenty-one (21) pounds in all other 
California districts, or (c) as otherwise specified in the Special 
Provisions.
    Comment: A few commenters questioned section 3(b) stating that this 
subsection is being added to allow for possible expansion of the Table 
Grape program beyond Arizona and California. It matches the equivalent 
subsection of the proposed Grape Crop Provisions but also needs to 
include the additional information that was dropped in the Proposed 
Rule for Grapes so it does not allow insureds to choose different 
levels/price percentages for different types.
    Response: The proposed change was intended to also allow insureds 
in all states to select a coverage level and price election percentage 
by type. FCIC proposed the changes in coverage level and price election 
percentages to allow the producer greater flexibility in managing their 
production and risk. No change has been made.
    Comment; A few commenters noted that while there is general 
consistency in many of the provisions of the Grape Crop Provisions and 
Table Grape Crop Provisions, section 7(f) is written differently from 
the equivalent section 7(e) of the Grape Crop Provisions. Among the 
differences:
     The phrase ``* * * unless otherwise provided in the 
Special Provisions,'' is not being added for Table Grapes. The 
commenter asks whether this possible flexibility is not needed as much 
for Table Grapes, especially since some flexibility is being added to 
the definition of ``lug.''
     The last sentence states that the insurance provider ``* * 
* may agree in writing to insure acreage that has not produced this 
amount'' [dropping the reference in the current crop provisions to 
``inspect'' as well as ``agree''], while the Grape Crop Provisions ends 
with ``* * * inspect and allow insurance on such acreage.'' The 
commenter asks whether there is a valid reason Grapes still would 
require an inspection but Table Grapes would not.
    Response: FCIC has made the changes to be consistent with language 
contained in the Grape Crop Provisions.
    Comment: A few comments were received regarding the proposed 
changes in the calendar date for the end of insurance period. The 
commenters stated that:
     The proposed language no longer includes the date when ``* 
* * the grapes are normally harvested * * *''. This revision broadens 
coverage and potentially increases exposure. The commenter recommends 
retaining the reference to the date when the grapes are normally 
harvested.
     By comparison, note that the actual calendar dates are 
spelled out in the Grape Crop Provisions, instead of just referring to 
the Special Provisions for Table Grapes (which currently are insured 
only in Arizona and California). Consider if those dates could be in 
the Table Grape Crop Provisions as well.
    Response: The phrase when the grapes are normally harvested is not 
specific with respect to the time insurance ends. Therefore, this 
language was removed. However, the date that appears on the Special 
Provisions is clear and defines the end of insurance.
    At this time, FCIC is not considering including the end of 
insurance dates for table grapes to be in the Crop Provisions because 
the dates vary by variety and geographic area and the Special 
Provisions are generally used for information that varies by county. 
Also as new states enter the program; it is beneficial to include this 
date on the Special Provisions so regulations do not have to be revised 
to add new counties or types of grapes.
    Comment: A comment was received regarding section 9(b)(1). The 
commenter indicated the sentence,

[[Page 32055]]

``* * * Acreage acquired after the acreage reporting date will not be 
insured'', is not contained in the Table Grape Crop Provisions, as it 
is in the Grape Crop Provisions and questioned if this implies that 
acreage acquired after the acreage reporting date can be insured based 
upon an acceptable inspection. If so, the commenter recommend adding a 
statement to allow insurance providers the opportunity to inspect and 
insure (or deny) acreage added after the acreage reporting date if they 
wish to do so. This would be similar to what is currently allowed for 
acreage that is not reported in section 6(f) of the Basic Provisions.
    Response: It is intended these provisions be the same for grapes 
and table grapes. Therefore, the provisions indicating insurance will 
not be provided for acreage obtained after the acreage reporting date 
have been added to the Table Grape Crop Provisions.
    Comment: Commenters asked why the phrase, ``* * * and you 
previously gave notice in accordance with section 14 of the Basic 
Provisions * * *'' in section 11(b) is in the Grape Crop Provisions but 
not in the equivalent section of the Table Grape Crop Provisions. 
Consider either removing it from the Grape Crop Provisions or adding it 
for Table Grapes.
    Response: The intent of both provisions is to require a notice in 
addition to a notice given previously. The provisions should be the 
same. Therefore, the phrase indicating, ``notice was previously 
given'', has been added to section 11(c) of the Table Grape Crop 
Provisions.
    Comment: A few comments were received regarding section 
12(c)(1)(iii) referring to ``Unharvested production that meets, or 
would meet if properly handled, the state quality standards or the 
appropriate USDA grade standards (if no state standard is 
applicable).'' ``USDA Grade Standard'' has been added to the 
definitions in section 1, but there is no definition of the ``state 
quality standards'' that take precedence over the USDA standards 
according to this. Recommend one of the following actions:
     Adding a definition of ``state quality standards'' to the 
Crop Provisions or Special Provisions;
     Removing the reference in 12(c)(1)(iii) to avoid the 
possibility of arbitrary determinations; or
     Revising 12(c)(1)(iii) to read something like ``* * * the 
state quality standards, if specified in the Special Provisions or the 
appropriate USDA grade standard (if no state standard is applicable) * 
* *''
    Response: FCIC has revised the provisions to clarify the state 
quality standards as specified in the Special Provisions will be used 
or the appropriate USDA grade standard will be used if no state 
standard is specified.

List of Subjects in 7 CFR Part 457

    Crop insurance, Grapes, Reporting and recordkeeping requirements.

Final Rule

0
Accordingly, as set forth in the preamble, the Federal Crop Insurance 
Corporation amends 7 CFR part 457 effective for the 2010 and succeeding 
crop years for the Grape Crop Insurance Provisions and Table Grape Crop 
Insurance Provisions.

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(1), 1506(o).


0
2. Amend Sec.  457.138 as follows:
0
a. In the introductory text, remove ``2000'' and add ``2010'' in its 
place and remove the phrase ``FCIC Policies'';
0
b. Remove the paragraph immediately preceding section 1;
0
c. Amend section 1 by revising the definitions of ``harvest'' and ``set 
out'', adding definitions of ``type'' and ``variety'', and removing the 
definition of ``varietal group'';
0
d. Revise sections 2 through 8;
0
e. Amend section 9 by revising paragraph (a) and the introductory text 
in paragraph (b);
0
f. Amend section 10 by revising the introductory text in paragraph (a);
0
g. Amend section 11 by revising the introductory text; and
0
h. Amend section 12 by revising paragraphs (b)(2) and (4), and (c)(2) 
and (e)(2)(i).
    The added and revised text reads as follows:


Sec.  457.138  Grape crop insurance provisions.

* * * * *
    1. Definitions.
* * * * *
    Harvest. Removing the mature grapes from the vines either by hand 
or machine.
* * * * *
    Set out. Physically planting the grape plants in the vineyard.
* * * * *
    Type. A category of grapes (one or more varieties) identified as a 
type in the Special Provisions.
    Variety. A kind of grape that is distinguished from any other by 
unique characteristics such as, but not limited to, size, color, skin 
thickness, acidity, flavors and aromas. In Arizona and California each 
variety is identified as a separate type in the Special Provisions 
except for type 095 (other varieties). Type 095 is used to designate 
varieties not listed as a separate type.
    2. Unit Division.
    (a) In Arizona and California only:
    (1) A basic unit as defined in section 1 of the Basic Provisions 
will be divided into additional basic units by each variety that you 
insure; and
    (2) Provisions in the Basic Provisions that provide for optional 
units by section, section equivalent, or FSA farm serial number and by 
irrigated and non-irrigated practices are not applicable. Unless 
otherwise allowed by written agreement, optional units may only be 
established if each optional unit is located on non-contiguous land or 
grown and insured under an organic farming practice.
    (b) In all states except Arizona and California, in addition to, or 
instead of, establishing optional units by section, section equivalent, 
or FSA farm serial number and by irrigated and non-irrigated acreage 
and for acreage grown and insured under an organic farming practice as 
provided in the unit division provisions contained in the Basic 
Provisions, a separate optional unit may be established if each 
optional unit:
    (1) Is located on non-contiguous land; or
    (2) Consists of a separate type when separate types are specified 
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) In Arizona and California, you may select only one coverage 
level and price election for each grape variety you elect to insure in 
the county.
    (b) In all states except Arizona and California, you may select 
only one coverage level and price election for each grape type in the 
county as specified in the Special Provisions. The coverage level you 
choose for each grape type is not required to have the same percentage 
relationship. The price election you choose for each type is not 
required to have the same percentage relationship to the maximum price 
election offered by us for each type. For example, if you choose 75 
percent coverage level and 100 percent of the maximum price election 
for one type, you may choose 65 percent coverage level and 75 percent 
of the maximum price election for another type. If you elect the 
Catastrophic Risk Protection (CAT) level of insurance for any grape 
type, the CAT level of coverage will be

[[Page 32056]]

applicable to all insured grape acreage in the county.
    (c) In all states except Arizona and California, if you acquire a 
share in any grape acreage after you submit your application, such 
acreage is insurable under the terms of the policy and you did not 
include the grape type on your application, we will assign the 
following:
    (1) A coverage level equal to the lowest coverage level you 
selected for any other grape type: and
    (2) A price election percentage equal to the type with the lowest 
coverage level you selected, if you elected additional coverage; or 55 
percent of the maximum price election, if you elected CAT.
    (d) In addition to the definition of ``price election'' contained 
in section 1 of the Basic Provisions, a price election based on the 
price contained in your grape contract is allowed if provided by the 
Special Provisions. In the event any contract requires the use of a 
cultural practice that will reduce the amount of production from any 
insured acreage, your approved yield will be adjusted in accordance 
with section 3(f) and (g) to reflect the reduced production potential.
    (e) In Arizona and California only, if the Special Provisions do 
not provide a price election for a specific variety you wish to insure, 
you may apply for a written agreement to establish a price election. 
Your application for the written agreement must include:
    (1) The number of tons sold for at least the two most recent crop 
years; and
    (2) The price received for all production of the grape variety in 
the years for which production records are provided.
    (f) You must report by the production reporting date designated in 
section 3 of the Basic Provisions, by type or variety, if applicable:
    (1) Any damage, removal of bearing vines, change in practices or 
any other circumstance that may reduce the expected yield below the 
yield upon which the insurance guarantee is based, and the number of 
affected acres;
    (2) The number of bearing vines on insurable and uninsurable 
acreage;
    (3) The age of the vines and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and any time the planting pattern of such 
acreage is changed:
    (i) The age of the interplanted crop, and the grape type or 
variety, if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    (g) We will reduce the yield used to establish your production 
guarantee, based on our estimate of the effect on yield potential of 
any of the items listed in section 3(f)(1) through (4). If you fail to 
notify us of any circumstance that may reduce your yields from previous 
levels, we will reduce your production guarantee at any time we become 
aware of the circumstance.
    (h) Your request to increase the coverage level or price election 
percentage will not be accepted if a cause of loss that could or would 
reduce the yield of the insured crop is evident when your request is 
made.
    4. Contract Changes.
    In accordance with section 4 of the Basic Provisions, the contract 
change date is October 31 preceding the cancellation date for Arizona 
and California and August 31 preceding the cancellation date for all 
other states.
    5. Cancellation and Termination Dates.
    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are January 31 in Arizona and 
California, and November 20 for all other states.
    6. Report of Acreage.
    In addition to the requirements of section 6 of the Basic 
Provisions, you must report your acreage:
    (a) In Arizona and California, by each grape variety you insure; or
    (b) In all other states, by each grape type.
    7. Insured Crop.
    In accordance with section 8 of the Basic Provisions, the crop 
insured will be any insurable variety that you elect to insure in 
Arizona and California, or in all other states all insurable types, in 
the county for which a premium rate is provided by the actuarial 
documents:
    (a) In which you have a share;
    (b) That are grown for wine, juice, raisins, or canning (if such 
grapes are put to another use (i.e. table grapes), the production to 
count will be in accordance with section 12(c)(2(ii));
    (c) That are grown in a vineyard that, if inspected, is considered 
acceptable by us;
    (d) That, after being set out or grafted, have reached the number 
of growing seasons designated by the Special Provisions; and
    (e) That have produced an average of at least two tons of grapes 
per acre (or as otherwise provided in the Special Provisions) in at 
least one of the three crop years immediately preceding the insured 
crop year, unless we inspect and allow insurance on acreage that has 
not produced this amount.
    8. Insurable Acreage.
    In lieu of the provisions in section 9 of the Basic Provisions that 
prohibit insurance attaching to a crop planted with another crop, 
grapes interplanted with another perennial crop are insurable unless we 
inspect the acreage and determine that it does not meet the 
requirements contained in your policy.
    9. Insurance Period.
    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) For the year of application, coverage begins on February 1 in 
Arizona and California, and November 21 in all other states. 
Notwithstanding the previous sentence, if your application is received 
by us after January 12 but prior to February 1 in Arizona or 
California, or after November 1 but prior to November 21 in all other 
states, insurance will attach on the 20th day after your properly 
completed application is received in our local office, unless we 
inspect the acreage during the 20-day period and determine that it does 
not meet insurability requirements. You must provide any information 
that we require for the crop or to determine the condition of the 
vineyard.
    (2) For each subsequent crop year that the policy remains 
continuously in force, coverage begins on the day immediately following 
the end of the insurance period for the prior crop year. Policy 
cancellation that results solely from transferring to a different 
insurance provider for a subsequent crop year will not be considered a 
break in continuous coverage.
    (3) If in accordance with the terms of the policy, your grape 
policy is cancelled or terminated for any crop year after insurance 
attached for that crop year, but on or before the cancellation and 
termination dates, whichever is later, insurance will not be considered 
to have attached for that crop year and no premium, administrative fee, 
or indemnity will be due for such crop year.
    (4) The calendar date for the end of the insurance period for each 
crop year is as follows, unless otherwise specified in the Special 
Provisions:
    (i) October 10 in Mississippi and Texas;
    (ii) November 10 in Arizona, California, Idaho, Oregon and 
Washington; and
    (iii) November 20 in all other states.
    (b) In addition to the provisions of section 11 of the Basic 
Provisions:
* * * * *
    10. Causes of Loss.
    (a) In accordance with the provisions of section 12 of the Basic 
Provisions,

[[Page 32057]]

insurance is provided only against the following causes of loss that 
occur during the insurance period:
* * * * *
    11. Duties in the Event of Damage or Loss.
    In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
* * * * *
    12. Settlement of Claim.
* * * * *
    (b) * * *
    (2) Multiplying each result in section 12(b)(1) by the respective 
price election you selected for each type or variety;
* * * * *
    (4) Multiplying the total production to count of each type or 
variety, if applicable, (see section 12 (c) through (e)) by the 
respective price election you selected;
* * * * *
    (c) * * *
    (2) All harvested production from the insurable acreage:
    (i) Grape production that is harvested and dried for raisins will 
be converted to a fresh weight basis by multiplying the number of tons 
of raisin production by 4.5.
    (ii) Grapes grown for wine, juice, raisins or canning and put to 
another use, will be counted as production to count on a tonnage basis. 
No quality adjustment other than that specifically provided for in your 
policy is available.
* * * * *
    (e) * * *
    (2) * * *
    (i) Dividing the value per ton of the damaged grapes by the value 
per ton for undamaged grapes (the value of undamaged grapes will be the 
lesser of the average market price or the maximum price election for 
such grapes); and
* * * * *

0
3. Amend Sec.  457.149 as follows:
0
a. In the introductory text, remove ``2001'' and add ``2010'' in its 
place and remove the phrase ``FCIC Policies'';
0
b. Remove the paragraph immediately preceding section 1;
0
c. Amend section 1 by revising the definitions of ``harvest'', ``lug'', 
and ``set out'', adding definitions of ``type'' ``USDA grade standard'' 
and ``variety'', and removing the definition of ``cluster thinning and 
removal'';
0
d. Revise sections 2 through 10;
0
e. Amend section 11 by revising the introductory text and paragraph 
(c); and
0
f. Amend section 12 by revising paragraphs (b)(2) and (4) and 
(c)(1)(iii).
    The added and revised text reads as follows:


Sec.  457.149  Table grape crop insurance provisions.

* * * * *
    1. Definitions.
* * * * *
    Harvest. Removing the mature grapes from the vines either by hand 
or machine.
* * * * *
    Lug.
    (1) Twenty (20) pounds of table grapes in the Coachella Valley, 
California district, and all other States.
    (2) Twenty-one (21) pounds in all other California districts.
    (3) Or as otherwise specified in the Special Provisions.
    Set out. Physically planting the grape plants in the vineyard.
* * * * *
    Type. A category of grapes (one or more varieties) identified as a 
type in the Special Provisions.
    USDA grade standard. (1) United States standard used to determine 
the minimum quality grade will be:
    (i) The United States Standards for Grades of Table Grapes 
(European or Vinifera Type);
    (ii) The United States Standards for Grades of American (Eastern 
Type Bunch Grapes; and
    (iii) The United States Standards for Grades of Muscadine (Vitis 
rotundifolia) Grapes. The quantity and number of samples required will 
be determined in accordance with procedure issued by FCIC or as 
provided on the Special Provisions of Insurance.
    Variety. A kind of grape that is distinguished from any other by 
unique characteristics such as, but not limited to, size, color, skin 
thickness, acidity, flavors and aromas. In Arizona and California each 
variety is identified as a separate type in the Special Provisions 
except for type 095 (other varieties). Type 095 is used to designate 
varieties not listed as a separate type.
    2. Unit Division.
    (a) In Arizona and California only:
    (1) A basic unit as defined in section 1 of the Basic Provisions 
will be divided into additional basic units by each table grape variety 
that you insure; and
    (2) Provisions in the Basic Provisions that provide for optional 
units by section, section equivalent, or FSA farm serial number and by 
irrigated and non-irrigated practices are not applicable. Unless 
otherwise allowed by written agreement, optional units may only be 
established if each optional unit is located on non-contiguous land or 
grown and insured under an organic farming practice.
    (b) In all states except Arizona and California, in addition to, or 
instead of, establishing optional units by section, section equivalent, 
or FSA farm serial number and by irrigated and non-irrigated acreage 
and for acreage grown and insured under an organic farming practice as 
provided in the unit division provisions contained in the Basic 
Provisions, a separate optional unit may be established if each 
optional unit:
    (1) Is located on non-contiguous land; or
    (2) Consists of a separate type when separate types are specified 
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) In Arizona and California, you may select only one coverage 
level and price election for each table grape variety you elect to 
insure in the county.
    (b) In all states except Arizona and California, you may select 
only one coverage level and price election for each table grape type in 
the county as specified in the Special Provisions. The coverage level 
you choose for each table grape type is not required to have same 
percentage relationship. The price election you choose for each type is 
not required to have the same percentage relationship to the maximum 
price election offered by us for each type. For example, if you choose 
75 percent coverage level and 100 percent of the maximum price election 
for one type, you may choose 65 percent coverage level and 75 percent 
of the maximum price election for another type. If you elect the 
Catastrophic Risk Protection (CAT) level of insurance for any grape 
type, the CAT level of coverage will be applicable to all insured grape 
acreage in the county.
    (c) In all states except Arizona and California, if you acquire a 
share in any grape acreage after you submit your application, such 
acreage is insurable under the terms of the policy and you did not 
include the grape type on your application, we will assign the 
following:
    (1) A coverage level equal to the lowest coverage level you 
selected for any other grape type: and
    (2) A price election percentage equal to the type with the lowest 
coverage level you selected, if you elected additional coverage; or 55 
percent of the maximum price election, if you elected CAT.
    (d) You must report by the production reporting date designated in 
section 3 of the Basic Provisions, by type or variety if applicable:
    (1) Any damage, removal of bearing vines, change in practices or 
any other

[[Page 32058]]

circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing vines on insurable and uninsurable 
acreage;
    (3) The age of the vines and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and any time the planting pattern of such 
acreage is changed:
    (i) The age of the interplanted crop, and the table grape type or 
variety, if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    (e) We will reduce the yield used to establish your production 
guarantee, based on our estimate of the effect on yield potential of 
any of the items listed in section 3(d)(1) through (4). If you fail to 
notify us of any circumstance that may reduce your yields from previous 
levels, we will reduce your production guarantee at any time we become 
aware of the circumstance.
    (f) Your request to increase the coverage level or price election 
percentage will not be accepted if a cause of loss that could or would 
reduce the yield of the insured crop is evident when your request is 
made.
    4. Contract Changes.
    In accordance with section 4 of the Basic Provisions, the contract 
change date is October 31 preceding the cancellation date for Arizona 
and California and August 31 preceding the cancellation date for all 
other states.
    5. Cancellation and Termination Dates.
    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are January 31 in Arizona and 
California, and November 20 for all other states.
    6. Report of Acreage.
    In addition to the requirements of section 6 of the Basic 
Provisions, you must report your acreage:
    (a) In Arizona and California, by each table grape variety you 
insure; or
    (b) In all other states, by each table grape type.
    7. Insured Crop.
    In accordance with section 8 of the Basic Provisions, the crop 
insured will be any insurable variety of table grapes that you elect to 
insure in Arizona and California, or in all other states all insurable 
types, in the county for which a premium rate is provided by the 
actuarial documents:
    (a) In which you have a share;
    (b) That are grown for harvest as table grapes;
    (c) That are adapted to the area;
    (d) That are grown in a vineyard that, if inspected, is considered 
acceptable by us;
    (e) That, after being set out or grafted, have reached the number 
of growing seasons designated by the Special Provisions; or
    (f) That have produced an average of at least 150 lugs of table 
grapes per acre (or as otherwise provided in the Special Provisions) in 
at least one of the three crop years immediately preceding the insured 
crop year, unless we inspect and allow insurance on acreage that has 
not produced this amount.
    8. Insurable Acreage.
    In lieu of the provisions in section 9 of the Basic Provisions that 
prohibit insurance attaching to a crop planted with another crop, table 
grapes interplanted with another perennial crop are insurable unless we 
inspect the acreage and determine that it does not meet the 
requirements contained in your policy.
    9. Insurance Period.
    (a) In accordance with the provisions of section 11 of the Basic 
Provisions
    (1) For the year of application, coverage begins on February 1 in 
Arizona and California, and November 21 in all other states. 
Notwithstanding the previous sentence, if your application is received 
by us after January 12 but prior to February 1 in Arizona or 
California, or after November 1 but prior to November 21 in all other 
states, insurance will attach on the 20th day after your properly 
completed application is received in our local office, unless we 
inspect the acreage during the 20-day period and determine that it does 
not meet insurability requirements. You must provide any information 
that we require for the crop or to determine the condition of the 
vineyard.
    (2) For each subsequent crop year that the policy remains 
continuously in force, coverage begins on the day immediately following 
the end of the insurance period for the prior crop year. Policy 
cancellation that results solely from transferring to a different 
insurance provider for a subsequent crop year will not be considered a 
break in continuous coverage.
    (3) If in accordance with the terms of the policy, your table grape 
policy is cancelled or terminated for any crop year after insurance 
attached for that crop year, but on or before the cancellation and 
termination dates, whichever is later, insurance will not be considered 
to have attached for that crop year and no premium, administrative fee, 
or indemnity will be due for such crop year.
    (4) The calendar date for the end of insurance period for each crop 
year is the date specified in the Special Provisions.
    (b) In addition to the provisions of section 11 of the Basic 
Provisions:
    (1) If you acquire an insurable share in any insurable acreage 
after coverage begins, but on or before the acreage reporting date for 
the crop year, and after an inspection we consider the acreage 
acceptable; insurance will be considered to have attached to such 
acreage on the calendar date for the beginning of the insurance period. 
Acreage acquired after the acreage reporting date will not be insured.
    (2) If you relinquish your insurable share on any insurable acreage 
of table grapes on or before the acreage reporting date for the crop 
year, insurance will not be considered to have attached to, and no 
premium will be due or 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.
    10. 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 during 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 vineyard;
    (3) Insects, except as excluded in 10(b)(1), 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 irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (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) Phylloxera, regardless of cause; or
    (2) Inability to market the table grapes for any reason other than 
the 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

[[Page 32059]]

due to quarantine, boycott, or refusal of any person to accept 
production.
    11. Duties in the Event of Damage or Loss.
    In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
* * * * *
    (c) If the crop has been damaged during the growing season and you 
previously gave notice in accordance with section 14 of the Basic 
Provisions, you must also provide notice at least 15 days prior to the 
beginning of harvest if you intend to claim an indemnity as a result of 
the damage previously reported. You must not destroy the damaged crop 
until the earlier of 15 days from the date you gave notice of loss, or 
our written consent to do so. If you fail to meet requirements of this 
section all such production will be considered undamaged and included 
as production to count.
* * * * *
    12. Settlement of Claim.
* * * * *
    (b) * * *
    (2) Multiplying each result in section 12(b)(1) by the respective 
price election you selected for each type or variety;
* * * * *
    (4) Multiplying the total production to count of each type or 
variety, if applicable, (see section 12(c)) by the respective price 
election you selected;
* * * * *
    (c) * * *
    (1) * * *
    (iii) Unharvested production that meets, or would meet if properly 
handled, the state quality standards, if specified in the Special 
Provisions, or the appropriate USDA grade standard (if no state 
standard is specified); and
* * * * *

    Signed in Washington, DC, on June 24, 2009.
William J. Murphy,
Acting Manager, Federal Crop Insurance Corporation.
[FR Doc. E9-15498 Filed 7-6-09; 8:45 am]
BILLING CODE 3410-08-P