[Federal Register Volume 75, Number 60 (Tuesday, March 30, 2010)]
[Rules and Regulations]
[Pages 15603-15609]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-6975]


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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: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the 
Common Crop Insurance Regulations; Florida Avocado Crop Insurance 
Provisions to convert the Florida avocado pilot crop insurance program 
to a permanent insurance program for the 2011 and succeeding crop 
years.

DATES: Effective Date: April 29, 2010.

FOR FURTHER INFORMATION CONTACT: Claire White, Economist, Product 
Management, 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, 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

    The Risk Management Agency 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,

[[Page 15604]]

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 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.

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 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

    On Wednesday, May 20, 2009, FCIC published a notice of proposed 
rulemaking in the Federal Register at 74 FR 23660-23664 to add 7 CFR 
457.173 Florida avocado crop insurance provisions effective for the 
2011 and succeeding crop years. 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 three commenters. The 
commenters were two reinsured companies and one insurance service 
organization. The comments received and FCIC's responses are as 
follows:

General Comments

    Comment: One commenter supports the proposed changes along with the 
conversion of the Florida Avocado Pilot Crop Insurance Provisions to a 
permanent program for 2011.
    Response: FCIC thanks the commenter for their support.
    Comment: One commenter agrees with the proposed deletion of the 
``order of priority'' statement since the order of priority is covered 
in the Basic Provisions.
    Response: FCIC agrees with the commenter that the ``order of 
priority'' statement is no longer needed.
    Comment: One commenter states an underwriting guide was not 
developed for the Florida Avocado program during the pilot period as it 
was for other pilot programs. Underwriting guidelines are useful to 
ensure consistency among approved insurance providers (AIPs) and to 
provide guidance to AIPs throughout all aspects of the policy 
lifecycle.
    Response: FCIC will provide underwriting guidelines for the Florida 
Avocado program in the Crop Insurance Handbook.

Section 1--Definitions

    Comment: Two commenters state the defined term ``direct marketing'' 
is referenced in section 10 and section 11(c)(1)(B) as ``direct 
marketed.'' Therefore, the commenters recommend changing the defined 
term from ``direct marketing'' to ``direct marketed'' to be consistent 
with how it is referenced in sections 10 and 11(c)(1)(B).
    Response: FCIC agrees the defined term ``direct marketing'' should 
be consistent with the terms used in sections 10 and 11(c)(1)(B). 
However, FCIC does not agree with the recommendation to change the 
defined term from ``direct marketing'' to ``direct marketed.'' Instead, 
FCIC has changed the term ``direct marketed'' in sections 10 and 
11(c)(1)(B) to ``direct marketing'' to be consistent with the defined 
term since this is the term used in all other Crop Provisions. FCIC has 
also revised sections 10 and 11(c)(1)(B) by adding the phrase ``sold 
by'' before the term ``direct marketing'' so the provision reads 
clearly.
    Comment: Two commenters suggest revising the definition of 
``type.'' One commenter suggests revising the definition to be more 
consistent with other Crop Provisions to include, at the end of the 
definition, the phrase ``as specified in the Special Provisions.'' 
Another commenter suggests rearranging the definition so it reads 
``Either early varieties or late varieties of avocados,'' unless it is 
done otherwise in the Crop Provisions for other tree fruit crops.
    Response: FCIC agrees with both commenters and has revised the 
definition accordingly.
    Comment: One commenter questions if the definition of ``type'' 
means all early varieties will be one type and all late varieties will 
be a second type, or whether there will be more than two types.
    Response: There will only be two insurable types. All early 
varieties will be one type and all late varieties will be another type.

Section 3--Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities

    Comment: Two commenters state section 3(a) allows the producer to 
elect different coverage levels for each separate type being insured 
under these provisions, if the Special Provisions provide that the 
producer may elect different coverage levels for each avocado type 
listed in the Special Provisions. If this is the intent, one commenter 
states language needs to be clarified to read something like ``* * *

[[Page 15605]]

you may select a different coverage level for each separate type * * 
*.'' This revised language states a different coverage level can be 
elected for each type. When the language states one coverage level may 
be selected for each type, it is not clear if it must be the same or if 
it can vary by type. The language needs to be clarified so it is clear 
as to what is being intended. Another commenter states the language 
should be changed to something like ``* * * you may select a different 
coverage level for each avocado type * * *'' or ``* * * you may select 
one coverage level by type * * *'' to be clear that all types do not 
have to have the same (one) level except when Catastrophic Risk 
Protection (CAT) level of coverage is elected.
    Response: FCIC agrees with the commenters. The provision has been 
revised to clarify that different coverage may be selected for each 
type if permitted by the Special Provisions.
    Comment: One commenter states the added language in section 3(a) 
regarding CAT level of coverage states it ``* * * will be applicable to 
all insured types of avocados in the county.'' This not only suggests 
there are more than two types, but also the insured might be able to 
choose to insure some but not all of the types, which does not appear 
to match the language in section 6(a). Perhaps the word ``insured'' 
should be deleted.
    Response: FCIC agrees the word ``insured'' may cause confusion. All 
types of avocados in which the producer has a share must be insured. 
The producer cannot choose which types to insure. FCIC has revised 
section 3(a) by removing the word ``insured.'' The provision has also 
been clarified to state that the CAT level of coverage applies to all 
types grown by the producer.
    Comment: One commenter states language has been added to section 
3(a) to clarify if the producer elects the CAT level of coverage on any 
type, it must apply to all types in the county. The commenter suggests 
FCIC consider if similar language should be added in section 3(b) 
regarding the price election.
    Response: FCIC agrees and has revised section 3(b) to include 
language similar to that in section 3(a) regarding the CAT level of 
coverage.
    Comment: One commenter states the last sentence in section 3(b) 
refers to using the same price election percentage on ``* * * all other 
types.'' This appears to be standard language, but see earlier comments 
about whether or not there are more than two types of avocados.
    Response: FCIC agrees and has reworded the provision to specify 
that the 55 percent CAT coverage will apply to each type the producer 
grows in the county.
    Comment: Two commenters state section 3(d) allows the AIP to reduce 
the yield used to establish the production guarantee if certain things 
as specified in this section occur. The proposed provisions state the 
procedures for reducing the production guarantee are in accordance with 
the Special Provisions. The commenters say it is difficult to provide 
any comments since the proposed Special Provisions language is not 
provided, as this has been difficult to administer in the past. It 
would be helpful if FCIC would provide a copy of the proposed Special 
Provisions language so the commenters could offer input on how this is 
proposed to be implemented.
    Response: FCIC realizes it is not necessary to provide the 
procedures for reducing the yield used to establish the production 
guarantee in the Special Provisions. After further review, FCIC 
determined providing a Special Provisions statement to cover all 
conditions listed in section 3(d) would be difficult. The effects of 
interplanting a perennial crop; removal of trees; trees that have been 
buckhorned; damage; or a change in practices on yield potential of the 
insured crop could provide a wide range of possible problems that may 
need to be evaluated on an individual basis. Therefore, FCIC has 
retained the provision as it was stated in the pilot Florida Avocado 
Crop Provisions. This provision is consistent with provisions in other 
perennial Crop Provisions, such as Texas citrus fruit, peaches and 
pears, regarding reducing the yield used to establish the production 
guarantee.

Section 6--Insured Crop

    Comment: One commenter suggests removing the hyphen in the term 
``commercially grown'' in section 6(a).
    Response: FCIC agrees and has removed the hyphen.
    Comment: One commenter asks for clarification in section 6(a). When 
this section refers to ``* * * types in the county listed in the 
Special Provisions for which a premium rate is provided * * *'' the 
commenter questioned whether it means the types listed in the SPOI or 
the county listed in the SPOI.
    Response: FCIC agrees this language may be confusing. The language 
is intended to say the insured crop will be all commercially grown 
avocado types for which a premium rate is provided by the actuarial 
documents for the county. The provision has been revised accordingly.
    Comment: One commenter suggests FCIC consider changing ``* * * 
actuarial table'' to ``* * * actuarial documents'' in section 6(a) as 
has been done in other policies and procedures.
    Response: FCIC agrees and has revised the provision accordingly.
    Comment: Two commenters state section 6(b) provides that any 
avocados produced on trees that have not reached the fourth growing 
season after set out 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 are not insurable. The commenter says since 
the proposed Special Provisions language is not provided, it is 
difficult to provide any comments. It would be helpful if FCIC would 
provide a copy of the proposed Special Provisions language so the 
commenters could know if a change from the current 50 bushels per acre 
is being considered and therefore know what, if any, comments might be 
made. One commenter asks if changes to more or less than 50 bushels are 
being considered.
    Response: The Special Provisions allow changes in policy provisions 
by geographical area when appropriate based on agronomic conditions. 
When this policy is expanded, it is possible that the 50 bushels 
currently in the policy may not be appropriate to an area. Providing 
the minimum production per acre requirement in the Special Provisions 
will allow flexibility to change the minimum production per acre 
requirement, which will eliminate the administrative burden of revising 
the regulation when a simple numerical change is necessary. FCIC is not 
expecting the minimum production per acre to be more than 50 bushels.
    Comment: One commenter notes section 6(b) is revised to state 
coverage is not provided ``* * * 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.'' The explanation in the Proposed 
Rule is this provides flexibility for productive groves, compared to 
the current language, which states coverage is not provided ``* * * on 
trees that have not reached the fifth growing season after setout. 
However, we may agree in writing to insure avocados on acreage that has 
not reached this age if the acreage has produced at least 50 bushels of 
avocados per acre in a previous year.'' The commenter asks if this 
proposed ``flexibility'' is only in relation to the possible changes 
from the current 50-bushel figure, or whether it is also supposed to be 
related to the change from the fifth to the fourth growing

[[Page 15606]]

season after setout. The latter flexibility appears to have already 
existed since the AIP could agree in writing to insure avocados from 
younger trees as long as they had produced at least 50 bushels per acre 
in a previous year. The commenter asks how often were such agreements 
in writing necessary, how often did avocado trees produce at least 50 
bushels in the fourth growing season, and how often was that amount 
produced in the third or second growing seasons, which might no longer 
be insurable under the proposed language until the trees have reached 
the fourth growing season. The commenter also asks whether it is 
possible trees that have reached the fourth growing season (or more) 
will not yet have produced 50 bushels (or whatever the minimum 
production requirement per acre is as specified in the Special 
Provisions), and therefore not be insurable according to the proposed 
language.
    Response: The explanation in the Proposed Rule states providing the 
minimum production per acre on the Special Provisions allows the 
flexibility to specify a different minimum production per acre for 
early and for late varieties. Therefore, ``flexibility'' relates to 
providing separate minimum amounts of production per acre on the 
Special Provisions, if needed, for early varieties and late varieties.
    Insuring avocados on trees before the trees reached the fifth 
growing season after setout was allowed under the Florida Avocado Pilot 
Crop Insurance Provisions if the AIP agreed in writing. However, FCIC 
did not receive any written agreement requests to insure avocados grown 
on trees reaching the second, third or fourth growing season. Since 
FCIC did not receive any written agreements, FCIC cannot provide an 
estimate of how often avocado trees produced at least 50 bushels in the 
second, third or fourth growing seasons.
    It is possible trees reaching the fourth growing season (or more) 
will not yet have produced the minimum production per acre specified in 
the Special Provisions. Avocados grown on trees not reaching the fourth 
growing season and not meeting the minimum production per acre 
specified in the Special Provisions will not be insurable until the 
trees on which the avocados are grown have met both requirements. A 
written agreement will not be available for trees not reaching the 
fourth growing season and not meeting the minimum production per acre 
requirement.

Section 8--Insurance Period

    Comment: One commenter suggests moving the parenthetical phrase at 
the end of both sections 8(a)(i) and 8(a)(ii) to an unnumbered 
paragraph following (ii) so it applies to both but is stated only once.
    Response: FCIC agrees with the commenter. FCIC moved this 
parenthetical to a new section 8(a)(iii) and revised sections 8(a), 
8(a)(i), and 8(a)(ii) to make the provisions less redundant.
    Comment: One commenter suggests adding a hyphen in ``* * * 10-day 
period * * *'' in section 8(a)(1)(ii).
    Response: FCIC agrees and has revised the provision accordingly.
    Comment: One commenter states section 8(b)(1) only addresses 
acquiring an insurable share in acreage after coverage begins but on or 
before the acreage reporting date. The commenter suggests adding some 
additional language to address acquiring an insurable share in acreage 
after the acreage reporting date. The commenter recommends such 
additional language allow AIPs the opportunity to inspect and insure 
such acreage if they wish to do so. AIPs should have the opportunity to 
accept or deny coverage in these types of situations. This would be 
similar to what is currently allowed for acreage that is not reported 
per section 6(f) of the Basic Provisions.
    Response: Section 8(b)(1) is silent regarding allowing AIPs the 
opportunity to inspect and insure acreage that was acquired after the 
acreage reporting date. Therefore, section 6(f) of the Basic 
Provisions, which allows the AIPs to determine by unit the insurable 
crop acreage, share, type and practice, or to deny liability if the 
producer failed to report all units, has been applied in this situation 
under other Crop Provisions and would apply here. The provisions in 
this final rule are consistent with provisions in other perennial Crop 
Provisions, such as Texas citrus fruit, peaches and pears and to change 
them here would suggest that section 6(f) of the Basic Provisions would 
not be applicable to these other policies, creating an unnecessary 
ambiguity. The Crop Insurance Handbook also allows for AIPs to revise 
an acreage report that increases liability if the crop is inspected and 
the appraisal indicates the crop will produce at least 90 percent of 
the yield used to determine the guarantee or amount of insurance for 
the unit. No change has been made.

Section 9--Causes of Loss

    Comment: One commenter recommends the insured cause of loss in 
section 9(a)(2) be clarified as ``Fire, due to natural causes, * * *'' 
(or ``Fire, if caused by lightning, * * *'', as in the proposed 
revisions to the Tobacco Crop Provisions).
    Response: Revising the insured cause of loss to read ``Fire, due to 
natural causes, unless weeds and other forms of undergrowth have not 
been controlled or pruning debris has not been removed from the grove'' 
is not necessary since section 12 of the Basic Provisions states all 
insured causes of loss must be due to a naturally occurring event. To 
repeat this requirement for a single cause of loss in the Crop 
Provisions will only create confusion regarding whether or not the 
other listed causes must be naturally occurring. FCIC also disagrees 
with revising the insured cause of loss to read ``Fire, if caused by 
lightning * * *'' as in the proposed revisions to the Tobacco Crop 
Provisions. Due to public comments, the original provision, mirrored 
here and in other Crop Provisions, was retained. No change has been 
made.
    Comment: One commenter notes ``Insects, but not damage due to 
insufficient or improper application of pest control measures'' in 
section 9(a)(7) and ``Plant disease, but not due to insufficient or 
improper application of disease control measures'' in section 9(a)(8) 
are at the end of the list of insured causes of loss. The commenter 
states the order makes sense since they are unlikely to be the cause of 
``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,'' which is stated in section 9(a)(6), but this is not 
the usual order of the causes of loss in other Crop Provisions.
    Response: FCIC agrees this is not the usual order of the causes of 
loss in other Crop Provisions. However, while this is a change, it does 
not change the meaning of the provisions because failure of the 
irrigation water supply cannot be caused by insects or plant disease in 
this policy or any other policy.

Section 11--Settlement of Claim

    Comment: One commenter suggests adding a comma in section 11(b)(2) 
before the phrase ``* * * if applicable'' as in sections 11(b)(1) and 
11(b)(4).
    Response: FCIC agrees and has revised the provision accordingly.
    Comment: One commenter suggests moving the comma in section 
11(b)(4) after the parenthetical phrase ``(see subsection 11(c))'' and 
placing it before the parenthetical phrase.
    Response: Moving the comma after the parenthetical could give a 
different meaning to the provision. Instead, FCIC has revised the 
provision by placing the parenthetical phrase between the words

[[Page 15607]]

``counted'' and ``by'' because the parenthetical phrase is more 
appropriately placed here because section 11(c) is the provision 
regarding production to count. FCIC has also removed the word 
``subsection'' in the parenthetical phrase and replaced it with 
``section'' to be consistent with the other references to ``section'' 
in section 11.
    Comment: One commenter suggests changing the semicolon after the 
phrase ``* * * abandon or no longer care for'' to a comma in section 
11(c)(1)(iv).
    Response: In the Proposed Rule, a comma comes after the phrase ``* 
* * abandon or no longer care for.'' Therefore, there is no need to 
change a semicolon to a comma. No change has been made.
    In addition to the changes described above, FCIC has made the 
following changes:
    1. Added a comma after the phrase ``by type'' in the introductory 
text in section 3(c) and after the phrase ``and type'' in section 
3(c)(5)(i).
    2. Removed the word ``setout'' in section 6(b)(1) and replaced it 
with the words ``set out'' to be consistent with the defined term ``set 
out.''
    3. Revised the provisions in section 8(a)(ii) to remove the phrase 
``, acreage and production reports are'' and add the word ``is'' in its 
place. The current language states for the year of application, if the 
producer applies for coverage after November 21, but prior to December 
1, insurance will attach on the 10th day after the producer's properly 
completed application, acreage and production reports are received. It 
is not necessary for the producer to submit, at the time of 
application, his acreage and production reports, as those are not due 
until the acreage reporting date. Therefore, FCIC has removed the 
requirement for the producer to submit acreage and production reports 
at the time of application.

List of Subjects in 7 CFR Part 457

    Crop insurance, Florida Avocado, Reporting and recordkeeping 
requirements.

Final Rule

0
Accordingly, as set forth in the preamble, the Federal Crop Insurance 
Corporation amends 7 CFR part 457, Common Crop Insurance Regulations, 
for the 2011 and succeeding crop years as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS

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

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


0
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. Either early varieties or late varieties of avocados, as 
specified in the Special Provisions.
    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 a different 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 types of avocados you produce 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 the other type. However, if you elect the CAT level of 
coverage, the price election percentage will be equal to 55 percent of 
the applicable price election for each type of avocado you produce in 
the county.
    (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 
as necessary at any time we become aware of the circumstance.
    4. Contract Changes.
    In accordance with section 4 of the Basic Provisions, the contract 
change

[[Page 15608]]

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 for which a 
premium rate is provided by the actuarial documents for the county:
    (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:
    (1) Reached the fourth growing season after set out; and
    (2) 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:
    (i) If you apply for coverage on or before November 21st, coverage 
begins for the crop year on December 1 of the calendar year; or
    (ii) If you apply for coverage after November 21 but prior to 
December 1, insurance will attach on the 10th day after your properly 
completed application is received in our local office, unless we 
inspect the acreage during the 10-day period and determine that it does 
not meet the requirements for insurability contained in your policy.
    (iii) 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 sold by direct marketing.
    (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 sold by 
direct marketing 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;

[[Page 15609]]

    (3) Totaling the results in section 11(b)(2);
    (4) Multiplying the total production to be counted (see section 
11(c)) by type, if applicable, 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 sold by direct marketing 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 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 March 24, 2010.
William J. Murphy,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2010-6975 Filed 3-29-10; 8:45 am]
BILLING CODE 3410-08-P