[Federal Register Volume 77, Number 46 (Thursday, March 8, 2012)]
[Rules and Regulations]
[Pages 13961-13967]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-5652]



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  Federal Register / Vol. 77, No. 46 / Thursday, March 8, 2012 / Rules 
and Regulations  

[[Page 13961]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

[Docket No. FCIC-11-0004]
RIN 0563-AC29


Common Crop Insurance Regulations; Onion Crop Insurance 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the 
Common Crop Insurance Regulations, Onion 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 program fraud, waste, and 
abuse. The changes will apply for the 2013 and succeeding crop years.

DATES: This rule is effective April 9, 2012.

FOR FURTHER INFORMATION CONTACT: Director, Product Administration and 
Standards Division, Risk Management Agency, United States Department of 
Agriculture, Beacon Facility, Stop 0812, Room 421, P.O. Box 419205, 
Kansas City, MO 64141-6205, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be non-significant for the 
purposes of Executive Order 12866 and, therefore, it has not been 
reviewed by the Office of Management and Budget.

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.

E-Government Act Compliance

    FCIC is committed to complying with the E-Government Act, 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.

Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments. The review reveals that this regulation will not have 
substantial and direct effects on Tribal governments and will not have 
significant Tribal implications.

Regulatory Flexibility Act

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

Federal Assistance Program

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

Executive Order 12372

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

Executive Order 12988

    This final 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 action by FCIC directing 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, or 7 CFR part 400, 
subpart J for determinations of good farming practices, as applicable, 
must be exhausted before any action against FCIC for judicial review 
may be brought.

[[Page 13962]]

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

    This rule finalizes changes to the Common Crop Insurance 
Regulations (7 CFR part 457), Onion Crop Insurance Provisions that were 
published by FCIC on July 21, 2011, as a notice of proposed rulemaking 
in the Federal Register at 76 FR 43606-43610. The public was afforded 
60 days to submit comments after the regulation was published in the 
Federal Register.
    A total of 35 comments were received from 6 commenters. The 
commenters were insurance providers, an insurance service organization, 
and other interested parties.
    The public comments received regarding the proposed rule and FCIC's 
responses to the comments are as follows:

General

    Comment: A commenter stated many of the proposed changes in the 
Onion Crop Provisions Proposed Rule, as explained in the ``Background'' 
section, appear to be reasonable.
    Response: FCIC thanks the commenter for their review of the 
proposed rule and their support.

Section 1--Definitions

    Comment: A few commenters recommended beginning the definition of 
``non-storage onions'' with the phrase ``Onions of a Bermuda, Granex, 
or Grano variety * * *'' consistent with the definition of ``storage 
onions.''
    Response: FCIC agrees with the commenters and has revised the 
provision accordingly.
    Comment: A few comments were received regarding the definition of 
``onion production.'' The commenters stated FCIC proposed removing the 
phrase ``of recoverable size and condition'' because as stated in the 
Background of the proposed rule ``these terms are vague and 
ambiguous.'' However, if that phrase is deleted, the commenters 
questioned whether it will mean that onions that are too small to 
recover could be considered ``onion production.'' The definition of 
``damaged onion production'' includes onions that do not meet certain 
grade standards. The commenters questioned whether it is supposed to be 
implied that (undamaged) ``onion production'' will always meet those 
standards. The commenters questioned whether this definition should 
also include some reference to those standards. While damaged onions 
are considered storage type onions that do not grade U.S. No. 1 or do 
not satisfy any other standards that may be contained in the Special 
Provisions, or non-storage type onions that do not satisfy any 
applicable marketing order (i.e., U.S. commercial), there are many 
times the insurance provider has had to deal with unharvested onions 
that obviously made grade, but there is a crop production loss, and 
they are able to determine the production to count based on weighing 
what the harvest equipment could pick up without having to have the 
crop graded by state/federal graders. The insurance provider was able 
to get the producer to harvest a representative strip and did not have 
to manually dig the onions with shovels, or deal with grading. The 
commenters felt the deleted phrase either needs to be retained, or if 
it is considered to be too vague, it can be further defined by 
indicating something about the size and condition that can be picked up 
by normal harvesting equipment. It would be very inefficient for 
adjusters to hand dig, bag and haul the really small onions that would 
not have been picked up by the harvesting equipment to have them graded 
because of the multitude of different marketing orders for size 
requirements that may be in effect. Additionally, if there is no 
language that production has to be of recoverable size and condition, 
would this mean insurance providers have to appraise every single 
harvested field to prove that any onions left in the field after 
harvest did not make grade? Would the insurance providers have to go to 
the Loss Adjustment Manual and prove the small onions were not able to 
be mechanically harvested?
    Response: FCIC agrees and has retained the deleted phrase ``of 
recoverable size and condition'' and has retained the current 
definition in the final rule.
    Comment: A commenter stated the definition of ``planted acreage'' 
states, ``in addition to the definition contained in the Basic 
Provisions, onions must be planted in rows.'' The commenter noted in 
the Basic Provisions, planted acreage is ``land in which seeds, plants, 
or trees have been placed * * *'' The commenter asks if an onion set 
(bulb) may not be considered a seed (otherwise a conflict between 
direct seeded and transplanted will result). The commenter asked FCIC 
to consider revising the definition of ``planted acreage'' in the Onion 
Crop Provisions to ``* * * land in which seeds, sets, or plants have 
been placed * * *''
    Response: Although no changes were proposed to this provision, the 
commenter has identified a potential conflict within the policy because 
sets, which are bulbs, are not considered seeds, plants or trees, which 
are used in the definition of planted acreage in the Basic Provisions. 
Therefore, sets must be added to the definition in these Crop 
Provisions. FCIC has revised the definition of ``planted acreage'' 
include a reference to sets.
    Comment: A few commenters supported the change to the definition of 
``production guarantee (per acre)'' that increased the first stage 
production guarantee for direct seeded onions from 35 percent to 45 
percent of the final stage production guarantee, and also supported the 
corresponding change of the prevented planting coverage from 45 percent 
to 35 percent in section 15. The commenters wanted FCIC to adequately 
account for any increased coverage in the rating methodology for areas 
where this first stage guarantee was not previously increased in the 
Special Provisions.
    Response: FCIC agrees with the commenters and will evaluate and 
adjust premium rates as necessary.
    Comment: A commenter stated the term ``sets'' is added as a 
definition, but is not used in the current Onion Crop Provisions or the 
proposed rule. The definition of ``transplanted'' continues to refer to 
``* * * placing of the onion plant or bulb * * *'' The commenter asked 
FCIC to consider revising the definition of ``transplanted'' to read 
``* * * placing of the plant or sets * * *'' and replace the term 
``bulb'' with ``sets'' where it appears in the Onion Crop Provisions 
and is used in the context of planting the crop. The commenter stated 
this change provides consistency with usage of the term ``sets'' in 
proposed section 3(b)(2)(ii).
    Response: FCIC agrees with the commenter and has revised the 
definition of ``transplanted'' by replacing the word ``bulb'' with 
``sets.'' FCIC also agrees that transplanted and sets are used in the 
context of planting the acreage and has revised the definition of 
``planted acreage'' to include direct seeded and transplanting to 
clarify the methods of planting the crops. These changes will provide 
consistency within the Crop Provisions.
    Comment: A few commenters stated the definition of ``storage 
onions'' begins with the phrase ``Onions other than a Bermuda, Granex, 
or Grano variety'' and ends with the added sentence ``Includes 
varieties grown for a processor under the requirements of a processor

[[Page 13963]]

contract.'' The commenters questioned if Bermuda, Granex or Grano 
onions could ever be grown for processing resulting in a contradiction 
between these two sentences. The commenters stated perhaps this 
potential conflict could be resolved by moving the added language to 
the first sentence to state ``Onions other than a Bermuda, Granex, or 
Grano variety, or hybrids developed from these varieties, and including 
onions grown under a processor contract.'' The commenters stated 
another alternative is if the added last sentence is left where it is, 
it could begin with ``Storage onions include varieties * * *'' and 
consider if it would be sufficient to say ``grown under a processor 
contract'' or ``grown for processing'' instead of ``grown for a 
processor under the requirements of a processor contract.''
    Response: FCIC agrees with the commenters and has revised the 
provisions by removing the last sentence. It is the type of onion that 
determines whether it is a storage onion, not whether it is grown under 
a contract. Therefore, this provision is not needed. Any onions meeting 
the definition are considered storage onions, and this would include 
onions grown under a processing contract if they meet the requirements.
    Comment: A few commenters recommended in the definition of 
``storage onions'' to add a comma in the first sentence after the 
phrase ``or hybrids developed from these varieties'' similar to the 
definition of ``non-storage onions.''
    Response: FCIC agrees with the commenters and has revised the 
definition accordingly.

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

    Comment: A commenter recommended revising section 3(b) from ``* * * 
same stage to qualify for the applicable stage guarantee * * *'' to ``* 
* * same stage to qualify for the first and second stages * * *'' The 
commenter stated the current provision incorrectly suggests that 
eligibility for the final stage requires a determination that at least 
75 percent of the plants have reached the final stage when in fact the 
final stage is based on the completion of topping and lifting or 
digging the onion acreage.
    Response: Although no changes were proposed to this provision, the 
commenter has identified a conflict in the provisions that need to be 
corrected to eliminate this ambiguity. FCIC has revised section 3(b) to 
clarify all stages are determined on an acre basis and only the first 
and second stage rely on a percentage of plants reaching a growth stage 
to determine eligibility for the applicable stage.
    Comment: A commenter questioned if the phrase ``* * * until 
eligible for the final stage'' is required in section 3(b)(2), should 
it not also be included in section 3(b)(1) as follows ``* * * until 
eligible for the second stage.''
    Response: No changes were proposed to this provision and the 
proposed change does not address a conflict or vulnerability in the 
provision. No change has been made to the final rule.
    Comment: Several commenters requested FCIC further clarify the 
phrase ``* * * the majority of producers in the area would not normally 
further care for the onions * * *'' in section 3(c). The commenters 
stated the insurance providers need to have the option to stage the 
crop according to the date of damage based on their assessment of the 
severity of the damage without this being a point of contention with 
producers. The commenters stated this language has proved extremely 
difficult to administer and poses a real problem in areas where there 
are very few producers of a particular crop.
    Response: FCIC understands the commenters concern that it can be 
difficult to determine a majority in an area that has few producers of 
the insured crop. The provision is flexible so that no matter the total 
number of producers of the crop in the area, an insurance provider will 
base their determination on a simple majority. This provision is 
necessary to prevent program abuse of advancing the stages of a heavily 
damaged crop in order to receive a higher production guarantee 
resulting in a larger indemnity payment. When an insurance provider 
determines the crop is damaged to the extent that the majority of 
producers would not further care for the damaged crop then the 
liability will be limited to the stage production guarantee when the 
damage occurred. The proposed first sentence ``The indemnity payable 
for any acreage of onions will be based on the stage the plants 
achieved when damage occurred'' could be misinterpreted to mean that 
any amount of damage to the onion crop would stop the progression of 
the production guarantee. FCIC has revised section 3(c) by removing the 
proposed first sentence because it conflicts with the rest of the 
provision.

Section 5--Cancellation and Termination Dates

    Comment: A commenter stated the proposed cancellation and 
termination date of November 30 for all California Counties, except 
Lassen, Modoc, Shasta and Siskiyou do not align with the distinct 
growing period of California. The commenter stated the planting of 
onions in California generally begins as early as September and, 
therefore, September 30 would be a more appropriate date for 
cancellation and termination in this region of the country.
    Response: FCIC agrees with the commenter and has revised the 
provision accordingly.

Section 6--Report of Acreage

    Comment: A few commenters stated the Special Provisions for onions 
in Georgia designate separate planting periods, but the Onion Crop 
Provisions are silent on this issue. The commenters requested the Onion 
Crop Provisions or the Special Provisions for Georgia be amended to 
include a definition of ``planting period.'' The commenters also 
requested adding a provision to section 6 of the Onion Crop Provisions 
which would amend section 6(a)(3) of the Basic Provisions, and make it 
clear when acreage reports for onions are due in these counties in 
situations where producers may also have other crops insured under the 
same policy.
    Response: FCIC disagrees that the Special Provisions for Georgia 
designate separate planting periods. The Special Provisions for Georgia 
list planting dates for separate practices of planting such as direct 
seeded and transplanted. The onion crop is planted earlier for the 
direct seeded practice and later for the transplanted practice. For 
either practice of planting the onion crop results in similar 
development, maturity, and harvest periods. Since there are not 
separate planting periods, section 6(a)(3) of the Basic Provisions is 
not applicable. The planted and insured onion crop acres must be 
reported by the latest applicable acreage reporting date specified in 
the Special Provisions. No change has been made to the final rule.

Section 10--Insurance Period

    Comment: A commenter stated the proposed language separating the 
end of insurance date for Walla Walla Sweets (July 31st) from other 
non-storage onions (August 31st) is incorrect for Oregon and 
Washington. The commenter recommended revising the language for Oregon 
and Washington to read ``July 31 for fall planted non-storage onions in 
Oregon and Washington.''
    Response: FCIC agrees with the commenter and has revised the 
provision accordingly.
    Comment: A commenter stated in section 10(b)(2) the words ``Basic

[[Page 13964]]

Provision'' should be corrected to ``Basic Provisions.''
    Response: FCIC agrees with the commenter and has revised the 
provision accordingly.

Section 11--Causes of Loss

    Comment: A commenter recommended section 11(a)(2) be revised to 
clarify an insured cause of loss is ``Fire, due to natural causes, * * 
*'' or ``Fire, if caused by lightning, * * *'' as in the proposed 
revisions to the Tobacco Crop Provisions.
    Response: FCIC disagrees with the commenter. Revising the insured 
cause of loss to read ``Fire, due to natural causes * * *'' is not 
necessary since section 12 of the Basic Provisions states all insured 
causes of loss must be due to a naturally occurring event. Further, the 
Federal Crop Insurance Act also limits coverage to naturally occurring 
events. To include this requirement for a single cause of loss in the 
Onion 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. ``Fire, if caused by lightning * * *'' was proposed in 
the Tobacco Proposed Rule but due to public comments, the original 
provision, ``Fire,'' was retained because there are naturally occurring 
fires caused by something other than lightning, such as wildlife 
getting stuck in transformers causing sparks to trigger a fire. No 
change has been made to the final rule.

Section 13--Duties in the Event of Damage or Loss

    Comment: Several commenters recommended revising section 13(a). A 
commenter suggested removing the word ``unharvested'' as representative 
samples of the unharvested crop that may be required cannot be topped, 
lifted, or dug as the term ``harvest'' by definition applies only after 
the acreage has been topped, lifted or dug, thus such acreage that is 
topped, lifted, or dug is still unharvested. This commenter further 
stated the proposed change does not achieve its objective (leaving the 
acreage undisturbed) as in the following sentence, ``The samples must 
not be harvested or destroyed until the earlier of our inspection * * 
*'' reverts back to the harvest term which describes removal of the 
onions from the field after lifting or digging. A few other commenters 
suggested moving the proposed phrase ``cannot be topped, lifted, or dug 
and'' to the last sentence, which would be revised to read, ``The 
samples must not be topped, lifted, dug, harvested or destroyed until 
the earlier of our inspection or 15 days after harvest of the balance 
of the unit is completed.'' These commenters suggested if the phrase is 
left in the first sentence to add a comma after the phrase ``or dug''.
    Response: FCIC agrees with the commenters and will remove the word 
``unharvested.'' FCIC will also move the added phrase ``cannot be 
topped, lifted, or dug and'' to the last sentence and change the 
wording accordingly as suggested.

Section 14--Settlement of Claim

    Comment: A commenter stated in the section 14(b)(7) example, the 
total production to count is determined at the unit level not for part 
of the unit. The commenter asked FCIC to consider revising ``total 
production to count'' to ``harvested production to count.'' Similar 
revisions elsewhere in this example should be made using the words 
``appraised'' or ``harvested'' as applicable or by removing the word 
``total'' all together.
    Response: FCIC has reviewed all references to the word ``total'' 
throughout the section 14(b)(7) example and revised them as necessary.
    Comment: A commenter suggested in the introduction to the section 
14(b)(7) example, revising the phrase ``16,000 hundredweight total 
production to count'' to ``16,000 hundredweight of harvested production 
to count.''
    Response: FCIC agrees with the commenter and has revised the 
provision accordingly.
    Comment: A commenter suggested in step (3) of the section 14(b)(7) 
example, adding the word ``guarantee'' as in ``$24,000 value of second 
stage production guarantee * * *''
    Response: FCIC agrees with the commenter and has revised the 
provision accordingly.
    Comment: A commenter suggested in step (4) of the section 14(b)(7) 
example, adding the phrase ``step 4'' into the phrase ``* * * (from 
section 14(c)(1)(iv) example) * * *''
    Response: FCIC agrees with the commenter and has revised the 
provision to read ``(from step 4 of the section 14(c)(1)(iv) 
example).''
    Comment: A commenter suggested in the section 14(c)(1)(iv) example, 
revising the phrase ``total production to count'' to ``appraised 
production to count'' for each instance the phrase is used. The 
commenter states section 14(c)(1) deals with determining appraised 
production to count, not total production to count. The commenter also 
states total production to count is determined at the unit level not 
for part of the unit.
    Response: FCIC agrees with the commenter that section 14(c)(1) 
deals with appraised production, but the example for section 
14(c)(1)(iv) deals with determining production to count for appraised 
production on acreage that does not qualify for the final stage 
guarantee. FCIC has revised the provisions by removing the term 
``total'' but has not added the term ``appraised.''
    Comment: A commenter suggested numbering the steps in the section 
14(c)(1)(iv) example similar to how the steps were numbered for the 
section 14(b)(7) example.
    Response: FCIC agrees with the commenter and has revised the 
provision accordingly.
    Comment: A commenter suggested in the fourth step of the section 
14(c)(1)(iv) example adding the phrase ``step 4'' into the phrase ``* * 
* (for section 14(b) example) * * *''
    Response: FCIC agrees with the commenter and has revised the 
provision to read ``(for step 4 of the section 14(b) example).''
    Comment: A few commenters stated the section 14(c)(1)(iv) example 
disrupts the flow from (i), (ii), (iii), (iv), and (v). The commenters 
suggested three possible solutions for consideration: (1) Move the 
example to the end of 14(c); (2) Move both examples from section 14 to 
the end of the Crop Provisions with references to the examples in 
sections 14(b) and (c); or (3) Move the ``; and'' following section 
14(c)(1)(iv) to the end of the example.
    Response: FCIC disagrees with the commenters because the cited 
example after section 14(c)(1)(iv) specifically addresses the 
provisions as stated in section 14(c)(1)(iv). No change has been made.

Section 15--Prevented Planting

    Comment: A few commenters expressed their support for the proposed 
change to the prevented planting coverage from 45 percent to 35 percent 
in section 15 and the corresponding increasing of the first stage 
coverage from 35 percent to 45 percent of the final stage production 
guarantee in the section 1 ``production guarantee (per acre)'' 
definition. The commenters stated that this change recognizes there are 
more costs incurred by a producer for onions damaged in the first stage 
versus a prevented planting situation.
    Response: FCIC thanks the commenter for their review of the 
proposed rule and their support. The proposed changes have been 
retained in this final rule.

[[Page 13965]]

List of Subjects in 7 CFR Part 457

    Crop insurance, Onion, Reporting and recordkeeping requirements.

Final Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation amends 7 CFR part 457 effective for the 2013 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. Amend Sec.  457.135 as follows:
0
a. Revise the introductory text;
0
b. Add definitions in section 1 for ``Processor'', ``Processor 
contract'', and ``Sets''; and revise the definitions of ``Direct 
seeded'', ``Non-storage onions'', ``Planted acreage'', ``Production 
guarantee (per acre)'', ``Storage onions'', ``Topping'', 
``Transplanted''; and remove the definition of ``Type'';
0
c. Remove the first section 2 heading and revise section 2;
0
d. Amend section 3(a) by removing the phrase ``(Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities)'';
0
e. Revise section 3(b) introductory text;
0
f. Revise sections 3(b)(2)(i), 3(b)(2)(ii), and 3(b)(3);
0
g. Revise section 3(c);
0
h. Revise section 4;
0
i. Revise section 5;
0
j. Redesignate sections 6 through 14 as sections 7 through 15, 
respectively, and add a new section 6;
0
k. Amend newly redesignated section 7 by removing the phrase ``(Annual 
Premium)'';
0
l. Revise newly redesignated section 8 introductory text;
0
m. Amend newly redesignated section 9 introductory text by removing the 
phrase ``(Insurable Acreage)'';
0
n. Amend newly redesignated section 9(a) by removing the word 
``specified'' and adding the word ``designated'' in its place;
0
o. Amend newly redesignated section 10(a) by removing the phrase 
``addition to'' and adding the phrase ``accordance with'' in its place, 
and also removing the phrase ``(Insurance Period)'';
0
p. Revise newly redesignated section 10(b);
0
q. Amend newly redesignated sections 11(a) introductory text and 11(b) 
by removing the phrase ``(Causes of Loss)'';
0
r. Amend newly redesignated section 12(a) by removing the phrase 
``(Replanting Payment)'';
0
s. Revise newly redesignated section 13(a);
0
t. Amend newly redesignated section 14 by removing the phrase ``section 
13'' and adding the phrase ``section 14'' in its place everywhere it 
appears;
0
u. Amend newly redesignated section 14(b)(6) by removing the phrase 
``13(b)(3)'' and adding the phrase ``14(b)(3)'' in its place;
0
v. Add an example after newly redesignated section 14(b)(7);
0
w. Amend newly redesignated section 14(c)(1)(i)(B) by removing the 
phrase ``section 12'' and adding the phrase ``section 13'' in its 
place;
0
x. Revise newly redesignated section 14(c)(1)(iv);
0
y. Add an example after newly redesignated section 14(c)(1)(iv); and
0
z. Revise newly redesignated section 15.
    The revised and added text reads as follows:


Sec.  457.135  Onion crop insurance provisions.

    The onion crop insurance provisions for the 2013 and succeeding 
crop years are as follows:
* * * * *
    1. Definitions.
* * * * *
    Direct seeded. Onions planted by placing onion seed by machine or 
by hand at the correct depth, into a seedbed that has been properly 
prepared for the planting method and production practice.
* * * * *
    Non-storage onions. Onions of a Bermuda, Granex, or Grano variety, 
or hybrids developed from these varieties, that are harvested as a bulb 
and dried only a short time, and consequently have a higher moisture 
content. They are thinner skinned, contain a higher sugar content, and 
are milder in flavor than storage onions. Due to a higher moisture and 
sugar content, they are subject to deterioration both on the surface 
and internally if not used shortly after harvest.
* * * * *
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, onions, including sets, must be direct seeded in rows 
or transplanted in rows.
    Processor. Any business enterprise regularly engaged in buying and 
processing onions, that possesses all licenses and permits for 
processing onions required by the State in which it operates, and that 
possesses facilities, or has contractual access to such facilities, 
with enough equipment to accept and process contracted onions within a 
reasonable amount of time after harvest.
    Processor contract. A written agreement between the producer and a 
processor, containing at a minimum:
    (a) The producer's commitment to plant and grow onions of the types 
designated in the Special Provisions and to deliver the onion 
production to the processor;
    (b) The processor's commitment to purchase all the production from 
a specified number of acres or the specified quantity of onion 
production stated in the processor contract; and
    (c) The price that will be paid for the production.
    Production guarantee (per acre).
    (a) First stage production guarantee--Forty-five percent (45%) of 
the final stage production guarantee for direct seeded and transplanted 
storage and non-storage onions, unless otherwise specified in the 
Special Provisions.
    (b) Second stage production guarantee--Seventy percent (70%) of the 
final stage production guarantee for direct seeded storage onions and 
60 percent (60%) of the final stage production guarantee for 
transplanted storage onions and all non-storage onions, unless 
otherwise specified in the Special Provisions.
    (c) Final stage production guarantee--The quantity of onions (in 
hundredweight) determined by multiplying the approved yield per acre by 
the coverage level percentage you elect.
    Sets. Onion bulbs that are planted by hand or by machine.
    Storage onions. Onions, other than a Bermuda, Granex, or Grano 
variety, or hybrids developed from these varieties, that are harvested 
as a bulb and dried to a lower moisture content, are firmer, have more 
outer layers of paper-like skin, and are darker in color than non-
storage onions. They are more pungent, have a lower sugar content, and 
can be stored for several months under proper conditions prior to use 
without deterioration.
    Topping. A pre-harvest process to initiate curing, in which onion 
foliage is removed or broken.
    Transplanted. Onions planted by placing of the onion plant or sets, 
by machine or by hand at the correct depth, into a seedbed that has 
been properly prepared for the planting method and production practice.
    2. Unit Division.
    In addition to the requirements of section 34 of the Basic 
Provisions, optional units may be established by type, if separate 
types are designated in the Special Provisions.

[[Page 13966]]

    3. Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities.
* * * * *
    (b) Your production guarantee progresses, in stages, to the final 
stage production guarantee. Stages will be determined on an acre basis. 
At least 75 percent (75%) of the plants on such acreage must be at the 
same stage to qualify for the first and second stages. The stages are 
as follows:
    (2) * * *
    (i) For direct seeded storage and non-storage onions, from the 
emergence of the fourth leaf until eligible for the final stage; and
    (ii) For transplanted storage and non-storage onions, from the 31st 
day after transplanting of onion plants or sets until eligible for the 
final stage.
    (3) Final stage extends from the completion of topping and lifting 
or digging on the acreage until the end of the insurance period.
    (c) Any acreage of onions damaged in the first or second stage, to 
the extent that the majority of producers in the area would not 
normally further care for the onions, will have a production guarantee 
for indemnity purposes, based on the stage in which the damage 
occurred, even if you continue to care for the damaged onions.
    4. Contract Changes.
    In accordance with section 4 of the Basic Provisions, the contract 
change date is:
    (a) June 30 preceding the cancellation date for counties with an 
August 31, September 30, or November 30 cancellation date;
    (b) November 30 preceding the cancellation date for counties with a 
February 1 cancellation date; or
    (c) As designated in the Special Provisions.
    5. Cancellation and Termination Dates.
    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are as follows, unless otherwise 
designated in the Special Provisions:

----------------------------------------------------------------------------------------------------------------
          State & County                      Cancellation date                       Termination date
----------------------------------------------------------------------------------------------------------------
Arizona; Georgia; Kinney, Uvalde,   August 31............................  August 31.
 Medina, Bexar, Wilson, Karnes,
 Bee, and San Patricio Counties,
 Texas, and all Texas Counties
 lying south thereof.
Umatilla County, Oregon; and       August 31.............................  September 30.
 Walla Walla County, Washington.
All California Counties, except    September 30..........................  September 30.
 Lassen, Modoc, Shasta and
 Siskiyou.
Hawaii...........................  September 30..........................  November 30.
All other states and counties....  February 1............................  February 1.
----------------------------------------------------------------------------------------------------------------

    6. Report of Acreage.
    In addition to the provisions of section 6 of the Basic Provisions, 
if the Special Provisions require a processor contract to insure your 
onions, you must provide a copy of all your processor contracts to us 
on or before the acreage reporting date.
* * * * *
    8. Insured Crop.
    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the storage and non-storage onions (excluding green 
(bunch) or seed onions, chives, garlic, leeks, shallots, and scallions) 
in the county for which a premium rate is provided by the actuarial 
documents:
* * * * *
    10. Insurance Period.
* * * * *
    (b) In accordance with the provisions of section 11 of the Basic 
Provisions, unless otherwise designated in the Special Provisions, the 
insurance period ends at the earliest of:
    (1) The calendar date for the end of the insurance period as 
follows:
    (i) May 20 for 1015 Super Sweets, and any other non-storage onions 
in Cameron, Hidalgo, Starr, and Willacy Counties, Texas;
    (ii) June 1 for Vidalia, and any other non-storage onions planted 
in the state of Georgia;
    (iii) June 30 for all storage and non-storage onions in Arizona;
    (iv) July 15 for 1015 Super Sweets, and any other non-storage 
onions for all Texas counties except Cameron, Hidalgo, Starr, and 
Willacy;
    (v) July 31 for fall planted non-storage onions in Oregon and 
Washington;
    (vi) August 31 for all non-storage onions not otherwise specified; 
and
    (vii) October 15 for all storage onions not otherwise specified; or
    (2) In addition to the requirements of section 11(b) of the Basic 
Provisions, fourteen days after lifting or digging.
* * * * *
    13. Duties in the Event of Damage or Loss.
    (a) In accordance with the requirements of section 14 of the Basic 
Provisions, any representative samples of the crop that may be required 
must be at least 10 feet wide and extend the entire length of each 
field in the unit. The samples must not be topped, lifted, dug, 
harvested or destroyed until the earlier of our inspection or 15 days 
after harvest of the balance of the unit is completed.
* * * * *
    14. Settlement of Claim.
* * * * *
    (b) * * *
    (7) * * *
    For Example:
    You have a 100 percent share in 100 acres of a unit of transplanted 
storage onions with a production guarantee of 200 hundredweight per 
acre, and you select 100 percent of the price election of $8.00 per 
hundredweight. Your crop suffers a covered cause of loss on 25 acres 
during the second stage which has a second stage production guarantee 
of 60 percent of the final stage production guarantee which equals 120 
hundredweight per acre. The appraised production on the 25 acres was 
2,500 hundredweight of onion production. Your harvested onion 
production on the remaining 75 acres is 16,000 hundredweight of 
harvested production to count. Your indemnity will be calculated as 
follows:
    (1) 25 acres x 120 hundredweight (200 x .60) second stage 
production guarantee = 3,000 hundredweight, and 75 acres x 200 
hundredweight final stage production guarantee = 15,000 hundredweight;
    (2) 3,000 hundredweight second stage production guarantee x $8.00 
price election = $24,000 value of second stage production guarantee, 
and 15,000 hundredweight final stage production guarantee x $8.00 price 
election = $120,000 value of final stage production guarantee;
    (3) $24,000 value of second stage production guarantee + $120,000 
value of final stage production guarantee = $144,000 total value of 
production guarantee;
    (4) 500 hundredweight second stage production to count (from step 4 
of the section 14(c)(1)(iv) example) x $8.00 price election = $4,000 
value of second stage production to count, and 16,000 hundredweight 
final stage production to count x 8.00 price election = $128,000 value 
of final stage production to count;

[[Page 13967]]

    (5) $4,000 value of second stage production to count + $128,000 
value of final stage production to count = $132,000 total value of 
production to count;
    (6) $144,000 total value of production guarantee -$132,000 total 
value of production to count = $12,000 value of loss; and
    (7) $12,000 x 100 percent share = $12,000 indemnity payment.
    (c) * * *
    (1) * * *
    (iv) For acreage that does not qualify for the final stage 
production guarantee, and is not subject to section 14 (c)(1)(i) and 
(ii), the appraised production is reduced by the difference between the 
first or second stage (as applicable) and the final stage production 
guarantee; and
    For Example:
    You have 100 acres of a unit of transplanted storage onions with a 
production guarantee of 200 hundredweight per acre. Your crop suffers a 
covered cause of loss on 25 acres during the second stage which has a 
second stage production guarantee of 60 percent of the final stage 
production guarantee. The appraised production on the 25 acres was 
2,500 hundredweight of onion production. Your second stage production 
to count on the 25 acres will be calculated as follows:
    (1) 25 acres x 200 hundredweight final stage production guarantee = 
5,000 hundredweight final stage production guarantee,
    (2) 5,000 hundredweight final stage production guarantee x 60 
percent second stage production guarantee = 3,000 hundredweight second 
stage production guarantee,
    (3) 5,000 hundredweight final stage production guarantee -3,000 
hundredweight second stage production guarantee = 2,000 hundredweight 
difference between second stage and final stage production guarantee, 
and
    (4) 2,500 hundredweight appraised -2,000 hundredweight difference = 
500 hundredweight second stage production to count (for step 4 of the 
section 14(b) example).
* * * * *
    15. Prevented Planting.
    Your prevented planting coverage will be 35 percent (35%) of your 
final stage production guarantee for timely planted acreage. Additional 
prevented planting coverage levels are not available for onions.

    Signed in Washington, DC, on February 29, 2012.
William J. Murphy,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2012-5652 Filed 3-7-12; 8:45 am]
BILLING CODE 3410-08-P