[Federal Register Volume 77, Number 187 (Wednesday, September 26, 2012)]
[Rules and Regulations]
[Pages 59045-59050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-23571]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 77, No. 187 / Wednesday, September 26, 2012 /
Rules and Regulations
[[Page 59045]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
[Docket No. FCIC-11-0007]
RIN 0563-AC36
Common Crop Insurance Regulations; Prune 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, Prune 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 October 26, 2012.
FOR FURTHER INFORMATION CONTACT: Tim Hoffmann, 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 59046]]
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), Prune Crop Insurance Provisions that were
published by FCIC on December 5, 2011, as a notice of proposed
rulemaking in the Federal Register at 76 FR 75805-75809. The public was
afforded 60 days to submit comments after the regulation was published
in the Federal Register.
A total of 31 comments were received from 2 commenters. The
commenters were an insurance provider and an insurance service
organization.
The public comments received regarding the proposed rule and FCIC's
responses to the comments are as follows:
General
Comment: A few commenters stated they agree with the proposed
change to remove the quality adjustment provisions from the Prune Crop
Provisions.
Response: FCIC thanks the commenters for their review of the
proposed rule and for their support.
Section 3--Insurance Guarantees, Coverage Levels, and Prices for
Determining Indemnities
Comment: A few commenters stated the ``Background'' of the proposed
rule indicates that the phrase ``varietal group'' is being replaced by
the word ``type'' everywhere it appears. It goes on to indicate that
prunes are not categorized by varietal group in the Special Provisions
rather they are categorized by type. In addition, section 6(c) has been
revised to remove the requirements for the insured crop to be grown on
tree varieties that were commercially available at set out and on tree
varieties that are adapted to the area and replacing those requirements
with a list of varieties (assume this means types) as shown in the
Special Provision. The current Special Provisions for prunes list the
type as ``No Type Specified 997.'' The commenters asked if there are
plans to change the Special Provisions to list all of the insurable
types in lieu of ``No Type Specified 997'' or will there be a separate
listing of all of the possible insurable varieties somewhere else in
the Special Provisions besides under the ``type'' designation where all
such varieties will be listed to comply with the new proposed rule
language.
Response: For ease of administration, FCIC intends to classify the
prune types as ``Type 997'' and then provide a list of all insurable
types that qualify as a type 997.
Comment: A few commenters questioned using the word ``bearing'' in
section 3(b)(2). The commenters stated producers are required to report
their uninsurable acres and when trees are first planted they will be
non-bearing. The commenters asked if it is really the intent for
producers to report zero trees on their uninsurable acres. The
commenters stated that if the block consists of older trees and younger
interplanted trees of the same variety, and the insurance provider only
counts the bearing trees, they will have inconsistencies with the
acres, the tree spacing, and the density. If producers remove many
older trees and replace them with younger trees, they will need to
report them on the Producer's Pre-Acceptance Worksheet (PAW) as they
have performed cultural practices that will reduce the yield from
previous levels. Producers should be required to report all trees and
this number should remain constant until they remove trees or plant new
trees. Insurance providers should not be required to track only the
trees that are bearing and be required to revise this figure each year.
Response: No changes were proposed to this provision and the
comment does not address a conflict or vulnerability in the provision.
Therefore, FCIC cannot consider the recommended change because the
public was not given an opportunity to provide comments. No change has
been made to the final rule. However, in response to the concerns
raised, the information that must be submitted in accordance with
section 3(b) is required to establish the producer's actual production
history (APH) approved yield and the amount of their coverage. While
section 3(b)(2) only requires the bearing trees on insurable and
uninsurable acreage to be reported, the number of bearing and non-
bearing trees on insurable and uninsurable acreage must be reported on
the PAW. Perennial crop policies contain provisions for ``bearing
trees'' to identify such trees that meet the eligibility requirements
for insurance coverage. Since premium and indemnity payments are based
on the number of trees that meet eligibility requirements, insurance
providers are required to track bearing trees as outlined in the Crop
Provisions and the Crop Insurance Handbook (CIH). Requiring all trees
be reported under section 3(b)(2) would create confusion regarding
insurability and could result in the overstatement of premium and
liability.
Comment: In regard to section 3(b)(3), a commenter questioned the
need to know the planting pattern. This requires space on the PAW that
could better be used to ask if the producer is ``intending to direct
market'' any portion of their crop. Insurance providers already capture
tree spacing and tree count and this is what is needed to determine if
there have been tree removals or acreage reductions.
Response: No changes were proposed to this provision and the
comment does not address a conflict or vulnerability in the provision.
Therefore, FCIC cannot consider the recommended change because the
public was not given an opportunity to provide comments. No change has
been made to the final rule. However, with respect to the concerns
expressed by the commenter, the planting pattern consists of tree
spacing and arrangement. FCIC requires the producer to report the
planting pattern so the insurance provider can use this information to
determine if there is adequate tree spacing for the producer to carry
out recommended orchard management practices and to determine the
number of trees per acre.
Comment: In regard to section 3(c), a commenter stated there
appears to be a lack of consistency between similar perennial crops
whose Crop Provisions were recently revised or issued. The Olive, Pear
and Macadamia Nut Crop Provisions all contain similar if not the same
verbiage as found in the Prune Crop Provisions prior to this Proposed
Rule. On the other hand, the Stonefruit Crop Provision language is very
similar to the Prune Crop Provision Proposed Rule language with the
significant difference in that the results as found in (c)(1), (2) and
(3) are hinged upon when the situation ``occurred'' as opposed to when
the situation was ``reported.'' This is a very significant difference.
The commenter proposes some level of similarity and/or consistency be
used for this provision for perennial crops.
Response: FCIC agrees with the commenter and the provision has been
revised by changing the term ``reported'' to ``occurred.''
Comment: A few commenters stated the last sentence in section
3(c)(3) states ``We will reduce the yield used to establish your
production guarantee for the subsequent crop year.'' The commenters
question what if the event that occurred was something that only
affects the crop for the year in question and has no carryover effect
on the yield into the next year. In this type of situation the yield
used to establish the
[[Page 59047]]
production guarantee for the next year should not be affected by the
event that occurred. However, based on the above referenced language,
the yield would have to be reduced and reduced by the same amount as
determined during the year in which the event occurred. This language
needs to be revised to provide the insurance providers with some
latitude as to whether the subsequent years yield should be reduced and
to what extent it should be reduced. The producer could also have
certain events that occur which have some effect on the next year, but
the effect is less than the production that was assessed for the year
in which the event occurred. Therefore, this sentence needs to be
modified to allow the insurance providers to have some flexibility to
be able to determine how much, if any, the yield should be reduced for
the subsequent crop year.
Response: FCIC agrees with the commenter that some latitude should
be allowed to determine if the yield should be reduced in subsequent
years. FCIC has revised section 3(c)(3) to state the insurance provider
``may'' reduce the yield used to establish your production guarantee
for the subsequent crop year to reflect any reduction in the productive
capacity of the trees.
Comment: A few commenters stated section 3(d) states ``You may not
increase your elected or assigned coverage level or the ratio of your
price election to the maximum price election we offer if a cause of
loss that could or would reduce the yield of the insured crop is
evident prior to the time that you request the increase.'' The
commenters feel this is a difficult provision to administer and
recommend it be removed from the policy. The PAW contains the following
question: ``Has damage (i.e., disease, hail, freeze) occurred to Trees/
Vines/Bushes/Bog or have cultural practices been performed that will
reduce the insured crop's production from previous levels?'' If damage
has occurred, and the question has been answered ``Yes,'' the approved
APH yield will be adjusted accordingly to reflect the reduced potential
production. This question on the PAW appears to address the issues this
section is intending to handle. In addition, the sales closing dates
are generally established based on the precept that any applications
taken by that date will not be subject to adverse selection.
If the decision is made to retain this provision, it might help to
clarify what time frame 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.'' Consider rewriting something like:
``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: No changes were proposed to this provision and the
comment does not address a conflict or vulnerability in the provision.
Therefore, FCIC cannot consider the recommended change because the
public was not given an opportunity to provide comments. However, FCIC
will consider this change the next time the Prune Crop Provisions are
revised. No change has been made to the final rule.
Section 6--Insured Crop
Comment: A few commenters stated the proposed language in section
6(c) states ``That are grown on trees [change from ``tree varieties'']
that: (1) Are listed in the Special Provisions * * *.'' The commenters
suggested keeping the original ``tree varieties'' (or ``varieties of
trees,'' if preferred) since the Special Provisions presumably will
list the ``insurable varieties'' (as stated in the ``Background'')
rather than some other description of ``trees.'' If this change is not
accepted, at the very least section (c)(1) needs to include
``varieties'' after the word ``Are''.
Response: FCIC agrees with the commenters. Since FCIC will list the
insurable types of trees in the Special Provisions, the phrase
``insurable types'' has been added to section 6(c)(1).
Comment: A few commenters stated the 2001 Prune Crop Provisions
reads ``Are irrigated (except where otherwise provided in the Special
Provisions)'' but this would be deleted according to the ``Background''
because insurable practices are listed in the Special Provisions. The
commenters question if this is a good argument; if so, why would
6(c)(1) be needed since the tree varieties also are listed in the
Special Provisions? The commenters state that generally the Crop
Provisions identify irrigated as the insurable practice when non-
irrigated is not an equally available practice for the crop. This would
seem to be more informative than having the Crop Provisions be silent
on that matter and identifying any limitation of insurable practices
only in the Special Provisions. The commenters recommended this section
of the policy be retained as a part of the Final Rule.
Response: FCIC agrees with the commenters. The original language
from section 6(c)(4) requiring crops to be grown on acreage that is
irrigated has been retained.
Section 8--Insurance Period
Comment: A few commenters recommended combining sections 8(a)(1)
and 8(c) since both identify when coverage begins, (a)(1) for the year
of application, and (c) for subsequent crop years.
Response: FCIC agrees with the commenters. Sections 8(a)(1) and
8(c) have been combined under section 8(a)(1).
Comment: A few commenters stated the phrase ``after an inspection''
should be removed from section 8(b)(1). If damage has not generally
occurred in the area where such acreage is located, it should be at the
insurance provider's discretion to decide whether the acreage needs an
inspection to be considered acceptable. The language in this section
already refers to the insurance providers having the ability to
consider the acreage acceptable. Since the acreage and production
reporting dates are after insurance attaches, the insurance provider
may not know if the acreage was acquired after coverage began, but
before the acreage reporting date. The insurance provider needs the
right to inspect if they deem necessary, but this should not be a
requirement. The commenters also recommended additional language be
added to section 8(b)(1) to allow insurance providers the opportunity
to inspect and insure any additional acreage that is acquired after the
acreage reporting date if they wish to do so. Insurance providers
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: No changes were proposed to this provision and the
comment does not address a conflict or vulnerability in the provision.
Therefore, FCIC cannot consider the recommended changes because the
public was not given an opportunity to comment. No change has been made
to the final rule. However, with respect to acreage acquired after the
acreage report, section 6(f) of the Basic Provisions, which allows the
insurance provider to determine by unit the insurable crop acreage,
share, type and practice, or to deny liability if the producer fails to
report all units, would apply. FCIC approved procedures allow the
insurance provider to revise an acreage report to increase 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.
[[Page 59048]]
Comment: A commenter stated the provision in section 8(c) has been
added to most, if not all, of the perennial crops. The commenter agrees
with the concept of continuous coverage applying for carryover
producers, but has some concerns with language as it currently reads.
The present language indicates for each subsequent crop year the policy
remains continuously in force, coverage begins on the day immediately
following the end of the insurance period for the prior crop year. The
commenter raised issues about damage that occurs to next year's buds
prior to this year's end of the insurance period date. The commenter
asked whether this damage is intended to be covered by this language.
For example, assume a producer is insured and a severe hail storm
occurs in July. This damage may injure this year's crop as well as the
buds that will produce next year's crop. However, this damage would be
outside the current insurance period based on the current language. If
the intent is to cover this damage for carryover producers, the
language should be revised to something along the lines of the language
in the Adjusted Gross Revenue handbook which states that insurance
providers cover damage that occurred due to insurable causes during the
previous crop year. The commenter feels that it will be difficult to
assess such damage and that it should be covered under the policy. If
this is not the intent, it should be stated very clearly that insurance
providers will not cover damage that occurs the previous crop year if
such damage occurs prior to the end of the previous year's end of
insurance period.
Response: The Prune Crop Provisions do not provide coverage for
damage to fruit if the damage occurs outside of the insurance period as
provided in section 9(a). FCIC disagrees language should be added to
section 8(c) to clarify that coverage is not provided for damage to
fruit if the damage occurs outside of the insurance period since this
information is already contained in section 9(a). FCIC cannot consider
the recommended change to the Prune Crop Provisions to provide coverage
for damage that occurs outside of the insurance period since this
change was not proposed, the comment does not address a conflict or
vulnerability, and the public has not been given an opportunity to
provide comments. However, FCIC will consider this change the next time
the Prune Crop Provisions are revised. No change has been made to the
final rule.
Section 9--Causes of Loss
Comment: A commenter recommended that section 9(a)(2) insured cause
of loss be clarified as ``Fire, due to natural causes, * * * '' (or
``Fire, if caused by lightning, * * *'',).
Response: No changes were proposed to this provision and the
comment does not address a conflict or vulnerability in the provision.
Therefore, FCIC cannot consider the recommended changes because the
public was not given an opportunity to comment. No change has been made
to the final rule. However, section 12 of the Basic Provisions already
states all insured causes of loss must be due to a naturally occurring
event. In addition, the Federal Crop Insurance Act is clear that only
natural causes can be covered under the policy.
Section 10--Duties in the Event of Damage or Loss
Comment: A few commenters stated the language in the second
sentence of section 10(b)(2) states in part that ``We will conduct an
appraisal that will be used to determine your production to count * *
*'' The commenters recommend that this language be revised as follows:
``We will conduct an appraisal that may be used to determine your
production to count * * *''. Additional language in this section
indicates that ``* * * These appraisals, and any acceptable records
provided by you, will be used to determine your production to count * *
*''. Insurance providers need to maintain the ability to use the actual
records if they believe those records are more accurate than the
appraisal as noted in this additional language. Therefore, the word
``will'' should be changed to ``may'' in order to allow insurance
providers the flexibility to apply this language accordingly.
Response: No changes were proposed to this provision and the
comment does not address a conflict or vulnerability in the provision.
Therefore, FCIC cannot consider the recommended changes because the
public was not given an opportunity to provide comments. No change has
been made to the final rule. However, this provision is consistent with
other Crop Provisions, such as apples, stonefruit and pears, that
contain language regarding production that is sold by direct marketing.
Section 11--Settlement of Claim
Comment: A commenter questioned if it is correct that only prunes
meeting the definition of standard prunes will be counted as production
to count for claims and APH purposes, and although a producer may sell
prunes of lesser quality, such production will not be counted as
production to count as described above.
Response: FCIC disagrees that only prunes meeting the definition of
standard prunes will be counted as production to count for claims and
APH purposes. Only counting standard prunes as production to count
regardless of the cause of loss would create a program vulnerability.
FCIC proposed to remove the quality adjustment provision to alleviate
the time and effort required to apply a quality adjustment factor which
ultimately results in zero production to count for harvested
substandard prunes damaged due to insured causes of loss. The proposed
removal of the quality adjustment provision, which only adjusts the
quantity of substandard prunes damaged by insurable causes of loss, was
not intended to prevent substandard prunes damaged by uninsurable
causes of loss or production sold as standard prunes from being
considered as production to count. Therefore, section 11(c)(1) has been
revised to clarify that for appraised unharvested production, only
prunes meeting the definition of standard prunes will be considered as
production to count unless the prunes are damaged due to an uninsurable
cause of loss or the prunes or prune acreage meets any of the other
conditions described in section 11(c)(1). Section 11(c)(2) has been
revised to clarify that for harvested production, prunes meeting the
definition of standard prunes, prunes harvested for fresh fruit, prunes
sold as standard prunes and prunes damaged due to uninsured causes will
be considered as production to count.
In addition to the changes described above, FCIC has made minor
editorial changes.
List of Subjects in 7 CFR Part 457
Crop insurance, Prune, 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. 457.133 as follows:
0
a. In the introductory text by removing ``2001'' and adding ``2013'' in
its place;
0
b. By removing the undesignated paragraph immediately preceding section
1;
0
c. In section 1:
[[Page 59049]]
0
i. By removing the definitions of ``market price for standard prunes''
and ``substandard prunes''; and
0
ii. In the definition of ``standard prunes'' by removing the word
``grading'' and adding in its place the word ``grade'' in paragraph
(b).
0
d. In section 3:
0
i. By revising paragraph (a);
0
ii. By revising paragraph (b) introductory text and (b)(4)(i);
0
iii. By redesignating paragraph (c) as paragraph (d);
0
iv. By designating the undesignated paragraph following paragraph (b)
as paragraph (c); and
0
v. By revising newly designated paragraph (c).
0
e. In section 6:
0
i. By revising paragraph (c); and
0
ii. By removing paragraphs (d) and (e).
0
f. In section 8:
0
i. By revising paragraph (a)(1);
0
ii. By removing paragraph (c);
0
iii. By redesignating paragraph (d) as paragraph (c); and
0
iv. In newly designated paragraph (c) by adding a comma after the
phrase ``cancellation and termination dates''.
0
g. In section 9(a)(5) by removing the word ``or'' after the semicolon
at the end of the sentence;
0
h. In section 9(a)(6) by removing the period at the end of the sentence
and adding a semicolon in its place;
0
i. By adding section 9(a)(7);
0
j. By adding section 9(a)(8);
0
k. By revising section 9(b);
0
l. In section 10:
0
i. By designating the introductory text as paragraph (b) and adding a
new paragraph (a); and
0
ii. Redesignate paragraphs (a) through (d) in redesignated paragraph
(b) as (1) through (4), respectively;
0
m. By revising section 11(b)(1) through (7) and the example;
0
n. By revising section 11(c) introductory text, (c)(1)(iii), and
(c)(2); and
0
o. By removing section 11 (e).
The revisions and additions read as follows:
Sec. 457.133 Prune crop insurance provisions.
* * * * *
3. * * *
* * * * *
(a) You may select only one price election for all the prunes 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 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 also choose 100 percent of the maximum
price election for all other types.
(b) You must report, by the production reporting date designated in
section 3 of the Basic Provisions, by type if applicable:
* * * * *
(4) * * *
(i) The age of the interplanted crop, and type, if applicable;
* * * * *
(c) We will reduce the yield used to establish your production
guarantee, as necessary, based on our estimate of the effect of any
such situation listed in section 3(b) that may occur. If you fail to
notify us of any situation in section 3(b), we will reduce the yield
used to establish your production guarantee at any time we become aware
of the circumstance. If the situation in section 3(b) occurred:
(1) Before the beginning of the insurance period, the yield used to
establish your production guarantee will be reduced for the current
crop year regardless of whether the situation was due to an insured or
uninsured cause of loss;
(2) After the beginning of the insurance period and you notify us
by the production reporting date, the yield used to establish your
production guarantee will be reduced for the current crop year only if
the potential reduction in the yield used to establish your production
guarantee is due to an uninsured cause of loss; or
(3) After the beginning of the insurance period and you fail to
notify us by the production reporting date, an amount equal to the
reduction in the yield will be added to the production to count
calculated in section 11(c) due to uninsured causes when determining
any indemnity. We may reduce the yield used to establish your
production guarantee for the subsequent crop year to reflect any
reduction in the productive capacity of the trees.
* * * * *
6. * * *
* * * * *
(c) That are grown on trees that:
(1) Are listed as insurable types in the Special Provisions;
(2) Are grown on rootstock that is adapted to the area;
(3) Are irrigated (except where otherwise provided in the Special
Provisions);
(4) Are grown in an orchard that, if inspected, is considered
acceptable by us; and
(5) Have reached at least the seventh growing season after being
set out.
* * * * *
8. * * *
(a) * * *
(1) For the year of application, coverage begins on March 1. For
each subsequent crop year 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.
* * * * *
9. Causes of Loss.
(a) * * *
(7) Insects, but not damage due to insufficient or improper
application of pest control measures; or
(8) Plant disease, but not damage 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 inability to market the prunes 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.
10. Duties in the Event of Damage or Loss.
(a) In accordance with the requirements of section 14 of the Basic
Provisions, you must leave representative samples in accordance with
our procedures.
* * * * *
11. * * *
* * * * *
(b) * * *
(1) Multiplying the insured acreage for each type, if applicable,
by its respective production guarantee;
(2) Multiplying the result of 11(b)(1) by the respective price
election for each type, if applicable;
(3) Totaling the results of section 11(b)(2);
(4) Multiplying the total production to count (see section 11(c)),
of each type, if applicable, by its respective price election;
(5) Totaling the results of section 11(b)(4);
(6) Subtracting the result of section 11(b)(5) from the result of
section 11(b)(3); and
(7) Multiplying the result of section 11(b)(6) by your share.
[[Page 59050]]
Example 1: You select 75 percent coverage level, 100 percent of
the price election, and have a 100 percent share in 50.0 acres of
type A prunes in the unit. The production guarantee is 2.5 tons per
acre and your price election is $630.00 per ton. You harvest 10.0
tons. Your indemnity would be calculated as follows:
(1) 50.0 acres x 2.5 tons = 125.0-ton production guarantee;
(2) 125.0-ton guarantee x $630.00 price election = $78,750 value
of production guarantee;
(4) 10.0 tons x $630.00 price election = $6,300 value of
production to count;
(6) $78,750-$6,300 = $72,450 loss; and
(7) $72,450 x 1.000 share = $72,450 indemnity payment.
Example 2: In addition to the information in the first example,
you have an additional 50.0 acres of type B prunes with 100 percent
share in the same unit. The production guarantee is 2.0 tons per
acre and the price election is $550.00 per ton. You harvest 5.0
tons. Your total indemnity for both types A and B would be
calculated as follows:
(1) 50.0 acres x 2.5 tons = 125.0-ton production guarantee for
type A and 50.0 acres x 2.0 tons = 100.0-ton production guarantee
for type B;
(2) 125.0-ton guarantee x $630.00 price election = $78,750 value
of production guarantee for type A and 100.0-ton guarantee x $550.00
price election = $55,000 value production guarantee for type B;
(3) $78,750 + $55,000 = $133,750 total value of production
guarantee;
(4) 10.0 tons x $630.00 price election = $6,300 value of
production to count for type A and 5.0 tons x $550.00 price election
= $2,750 value of production to count for type B;
(5) $6,300 + $2,750 = $9,050 total value of production to count;
(6) $133,750-$9,050 = $124,700 loss; and
(7) $124,700 loss x 1.000 share = $124,700 indemnity payment.
(c) The total production to count (in tons) from all insurable
acreage on the unit will include:
(1) * * *
* * * * *
(iii) Unharvested production that meets the definition of standard
prunes; and
* * * * *
(2) All harvested production from the insurable acreage that:
(i) Meets the definition of standard prunes;
(ii) Is intended for use as fresh fruit;
(iii) Is sold as standard prunes; or
(iv) Is damaged due to uninsured causes.
* * * * *
Signed in Washington, DC, on September 18, 2012.
Michael F. Hand,
Acting Manager, Federal Crop Insurance Corporation.
[FR Doc. 2012-23571 Filed 9-25-12; 8:45 am]
BILLING CODE 3410-08-P