[Federal Register Volume 79, Number 103 (Thursday, May 29, 2014)]
[Rules and Regulations]
[Pages 30703-30708]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-12429]



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  Federal Register / Vol. 79, No. 103 / Thursday, May 29, 2014 / Rules 
and Regulations  

[[Page 30703]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

[Docket No. FCIC-13-0001]
RIN 0563-AC24


Common Crop Insurance Regulations; Forage Seed Crop Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

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

SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the 
addition of a new regulation that provides forage seed insurance. The 
provisions will be used in conjunction with the Common Crop Insurance 
Policy Basic Provisions (Basic Provisions), which contain standard 
terms and conditions common to most crop insurance programs. The 
intended effect of this action is to convert the Forage Seed pilot crop 
insurance program to a permanent insurance program for the 2015 and 
succeeding crop years.

DATES: This rule is effective June 30, 2014.

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, 
PO 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 not significant for the purpose of Executive Order 12866 and, 
therefore, it has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    Pursuant to the provisions of the Paperwork Reduction Act of 1995 
(44 U.S.C. chapter 35), the collections of information in this rule 
have been approved by OMB under control number 0563-0053.

E-Government Act Compliance

    FCIC is committed to complying with the E-Government Act of 2002, 
to promote the use of the Internet and other information technologies 
to provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 
establishes requirements for Federal agencies to assess the effects of 
their regulatory actions on State, local, and tribal governments and 
the private sector. This rule contains no Federal mandates (under the 
regulatory provisions of title II of the UMRA) for State, local, and 
tribal governments or the private sector. Therefore, this rule is not 
subject to the requirements of sections 202 and 205 of the UMRA.

Executive Order 13132

    It has been determined under section 1(a) of Executive Order 13132, 
Federalism, that this rule does not have sufficient implications to 
warrant consultation with the States. The provisions contained in this 
rule will not have a substantial direct effect on States, or on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.

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 small entities are given the same 
opportunities as large entities to manage their risks through the use 
of crop insurance. A Regulatory Flexibility Analysis has not been 
prepared since this regulation does not have an impact on small 
entities, and, therefore, this regulation is exempt from the provisions 
of the Regulatory Flexibility Act (5 U.S.C. 605).

Federal Assistance Program

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

Executive Order 12372

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

Executive Order 12988

    This rule has been reviewed in accordance with Executive Order 
12988 on civil justice reform. The provisions of this rule will not 
have a retroactive effect. The provisions of this rule will preempt 
State and local laws to the extent such State and local laws are 
inconsistent herewith. With respect to any direct action taken by FCIC 
or to require the insurance provider to take specific action under the 
terms of the crop insurance policy, the administrative appeal 
provisions published at 7 CFR part 11 and 7 CFR part 400, subpart J, 
for the informal review process of good farming

[[Page 30704]]

practices, as applicable, must be exhausted before any action against 
FCIC 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

    This rule finalizes the addition to 7 CFR part 457 of a new Sec.  
457.174 Forage Seed Crop Provisions (7 CFR 457.174) that was published 
by FCIC on August 29, 2013 as notice of proposed rulemaking in the 
Federal Register 78 FR 53370. The public was afforded 30 days to submit 
comments after the regulation was published in the Federal Register.
    A total of 27 comments were received from 4 commenters. The 
commenters were a Risk Management Agency Regional Office, a seed 
company, an approved insurance provider, and a non-profit crop 
insurance trade organization.
    The public comments received and FCIC's responses to the comments 
are as follows:

General

    Comment: A commenter discussed the dormancy limitation in Montana 
and Wyoming where dormancy ratings greater than 4 are not insured 
unless under written agreement causing producers not to contract 
production of seed with higher dormancy ratings. The commenter wanted 
the Crop Provisions to be modified to allow dormancy ratings of greater 
than 4 without limitation.
    Response: FCIC notes that this is an underwriting issue that is not 
part of the rule. The appropriate regional office is reviewing this 
issue. This rule does not limit insuring the higher dormancy ratings if 
the regional office determines that such ratings can be appropriately 
rated and insured. No changes have been made.
    Comment: Two commenters stated ``The major concern is with the fall 
planted seed-to-seed practice in which the insured certifies the 
adequacy of the stand in the fall after it has been planted. The crop 
will normally have an adequate stand at this time but it is susceptible 
to winterkill damage the initial year after it is seeded. The current 
method and timing for certifying an adequate stand is acceptable for 
established stands as they are less susceptible to winterkill than when 
the crop is planted the initial year. We would recommend that the 
practice of fall planted seed-to-seed acreage be treated similar to 
winter wheat in a spring only county in that an inspection be done in 
the spring to ensure that an adequate stand exists. If an adequate 
stand does not exist, the insured would be required to either replant 
or sweeten the stand in order for insurance coverage to attach to such 
acreage. We feel that this is a potential vulnerability in the crop 
provisions that should be addressed prior to them being published as a 
final rule.'' One commenter added the related comment ``The biggest 
concern with the policy is that it should be a spring policy, not a 
fall policy. At a minimum, all acreage should pass an insurability 
inspection (by the AIP or insured) in the spring, not fall. Winterkill 
is by far the biggest peril on fall-seeded acreage of alfalfa seed. The 
current policy does not have a replant provision. A farmer is expected 
to replant to continue coverage when practical, whether there is a 
replant payment or not. The alfalfa seed farmers have been replanting 
(or sweetening the stand) of winterkilled or damaged acreage in the 
spring, long before the pilot MPCI policy was developed. We would 
propose that fall-seeded alfalfa seed would pass an insurability 
inspection in the spring, same as winter wheat in a spring wheat-only 
county. Currently, the fall-seeded acreage has a plant count for 
insurability in the fall and typically passes. This new acreage is very 
susceptible to winterkill. We insist that the insured then replants the 
damaged acreage (as he has always done before) in the spring to 
continue insurance. Insureds cannot collect a production loss when they 
have the opportunity to replant. We have talked to the seed companies 
and they have stated the same seed can be used for fall or spring 
planting or to sweeten the stand (unlike wheat). Whether fall-seeded, 
spring-seeded or established stand, the acreage should pass a stand 
count insurability inspection in the spring.
    Response: FCIC disagrees with these comments. When the pilot 
program was initially developed the industry wanted protection against 
perils such as adverse weather, including events that may occur during 
the winter months. Therefore, insurance attaches in the fall if the 
crop has an adequate stand and any loss due to winterkill is intended 
to be an insurable loss. To require an adequate stand in the spring 
before insurance attaches will effectively render the coverage for 
causes of loss occurring during the winter meaningless. To the extent 
that winterkill is a significant peril, it will be appropriately rated 
so that premium will cover all expected losses and a reasonable 
reserve. Insured may elect to sweeten the stand in the spring and that 
may be in their best interest to produce the crop rather than just 
collect the insurance. However, in case a program vulnerability is 
discovered in the future, FCIC will add the phrase '' unless otherwise 
specified in the Special Provisions '' after the words ``insurance 
period'' in section 7(c)(3) of this final rule to address this issue.

Section 1--Definitions

    Comment: Two commenters commented about hybrid seed production not 
being insurable except by written agreement and one of the commenters 
proposed changing the definition of Forage Seed Crop by adding the 
words ``including those grown for the production of hybrid seed, as'' 
between ``(e.g., alfalfa, clovers, etc.)'' and ``shown in the actuarial 
documents.,'' to allow production of hybrid seed to be insurable 
without doing a written agreement.
    Response: FCIC agrees with the proposed change to the definition of 
Forage Seed Crop and has made the change accordingly in this Final 
Rule.
    Comment: Two commenters suggested that a hyphen be added between 
the words ``small'' and ``seeded'' in the definition of Forage seed 
crop.
    Response: FCIC agrees with the proposed change and has made the 
change accordingly in this Final Rule.
    Comment: Two commenters questioned the use of the word ``and'' 
between the words ``price'' and ``used'' in the definition of ``price 
election.''
    Response: FCIC placed the word ``and'' between the words ``price'' 
and ``used'' in this definition to distinguish between how the price is 
determined from how such price will be used in the policy. FCIC has 
revised the phrase to read ``and will be used'' for clarity.
    Comment: Two commenters questioned the elimination of the 
definition of ``type'' in the Crop Provisions.
    Response: FCIC is not defining ``type'' in the Crop Provisions 
because ``type'' is defined in the Basic Provisions.

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

    Comment: Two commenters asked that consideration be given to 
deleting the phrase ``. . . grown in the county and designated in the 
actuarial documents . . .'' and adding ``you elect to insure'' after 
the words ``forage crop''.

[[Page 30705]]

    Response: The phrase ``grown in the county and designated in the 
actuarial documents'' is necessary because the forage seed policy may 
not be available in all counties and to determine where it is 
available, program participants must look to the actuarial documents 
for the county to see if premium rates have been provided. This is 
consistent with the language in section 7. To be consistent, FCIC 
agrees to add ``you elect to ensure'' after forage crop. No other 
changes will be made.

Section 6--Report of Acreage

    Comment: Two commenters asked that consideration be given to 
revising and rewriting this section to read:
    ``In addition to the requirements of section 6 of the Basic 
Provisions, you must submit to us, on or before the acreage reporting 
date or as otherwise specified in the special provisions:
    ``(a) A copy of your forage seed contract for your forage seed 
acreage; or,
    ``(b) A copy of your accepted certification application for your 
certified seed acreage.
    ``Failure to do so will result in denial of liability and no 
indemnity due.''
    Response: FCIC agrees with the proposed change and has made the 
change, with a few technical modifications, in this final rule.
    Comment: Two commenters asked if consideration had been given to 
the possibility of revising this section to require that a copy of the 
contract be obtained at time of claim.
    Response: FCIC has not considered this. In light of discussions 
with the Forage seed industry through the National Alfalfa and Forage 
Alliance, this was not an issue. This will not be changed.

Section 7--Insured Crop

    Comment: One commenter commented about the potential for insuring 
forage seed legume crops other than alfalfa and proposed that the words 
``unless otherwise specified in the Special Provisions.'', be inserted 
after ``seed production'' in section 7(c)(5) and to remove the word 
``solely'' from section 7(a)(2) to allow insuring forage seed legume 
crops other than alfalfa.
    Response: FCIC agrees that other forage seed legume crops could be 
insured under the Forage Seed Crop Provisions and has made the change 
accordingly in this Final Rule. FCIC also recognizes that certain 
legume crops, such as red clover that utilizes the practice of taking a 
hay crop to remove excess vegetation prior to taking the seed harvest, 
would not have been able to be insured under the proposed rule. Thus, 
the change will allow for certain other legume crops to be added to the 
Special Provisions as determined agronomically and actuarially 
appropriate by FCIC.

Section 8--Insurance Period

    Comment: Two commenters commented to have the following editorial 
changes made to this section:
    (a)(1)(i)-(ii): Instead of listing the states with the earlier date 
first, suggest switching (i) & (ii) so the group that includes ``. . . 
and other states'' is last. [Otherwise, (i) appears to be all-inclusive 
unless you read on to (ii) to see that California and Nevada have a 
different date.] This would match the order of the groupings in 
8(a)(2)(i)-(ii) and (b)(1)-(2). Also [ed.], add a comma or semicolon 
before ``. . . and other states'' [and likewise in 8(a)(2)(ii)], and 
consider if the phrase should be ``. . . and all other states'' as in 
(b)(2).
    Response: FCIC agrees with these proposed changes and has made the 
changes in this final rule accordingly.

Section 9--Causes of Loss

    Comment: Two commenters recommended that the cause of loss ``Fire'' 
be clarified as ``Fire, due to natural causes''.
    Response: FCIC disagrees that this change is necessary. The Act and 
the Basic Provisions make it very clear that only loss due to natural 
causes are covered and to add this phrase here and not all the other 
causes of loss could create an ambiguity. No change has been made.
    Comment: Two commenters asked if section 9(b)(2) is the only one 
that refers to the sole/direct cause of loss from section 9(a)(1)-(7), 
while the others only allow for the causes in section 9(a)(1)-(6). Is 
it intended that the other 3 are not affected by ``Failure of the 
irrigation water supply . . .''?
    Response: That is correct. Failure of the irrigation water supply 
does not apply to any provision in subsection (b) except paragraph (2).

Section 10--Settlement of Claim

    Comment: Two commenters commented that terminology for settling the 
claim was inconsistent.
    Response: FCIC is unclear of the claimed inconsistencies. The 
language used is standard to most Crop Provisions. No change has been 
made.
    Comment: Two commenters stated that a hyphen should be added to 
``45,000 pound guarantee'' and ``7,500 pound guarantee'' in the example 
so that it reads ``45,000-pound guarantee'' and ``7,500-pound 
guarantee''.
    Response: FCIC agrees with this proposed change and has made the 
change in this final rule accordingly.
    In addition to the review of the proposed rule regulation and 
comments received, FCIC is also adjusting the state alignment in 
section 5 and Section 8 to better align with the climatic and agronomic 
growing conditions.

List of Subjects in 7 CFR Part 457

    Crop insurance, Forage seed, 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 2015 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 457.174 is added to read as follows:


Sec.  457.174  Forage Seed crop insurance provisions.

    The forage seed crop provisions for the 2015 and succeeding crop 
years are as follows:
FCIC policies: United States Department of Agriculture, Federal Crop 
Insurance Corporation
Forage Seed Crop Provisions
    1. Definitions.
    Actual value. The dollar value received, or that could be received, 
for the forage seed if the forage seed production is properly handled 
in accordance with the requirements in the forage seed contract or the 
applicable certifying agency's requirements.
    Adequate stand. A population of live plants that equals or exceeds 
the minimum required number of plants per square foot as shown in the 
actuarial documents.
    Amount of insurance. The amount obtained by multiplying the 
production guarantee per acre for each type and practice in the unit by 
the insured acreage of that type and practice, by the applicable base 
price, and by the percentage of base price you elected. The total of 
these results will be the amount of insurance for the unit.
    Base price. For seed under a forage seed contract, the price per 
pound (excluding any discounts or incentives that may apply) stated in 
the forage seed contract. For certified forage seed not under a forage 
seed contract, and for

[[Page 30706]]

forage seed producers who are also forage seed companies, the price 
contained in the actuarial documents.
    Certification application. The form used to request certification 
of forage seed by the certifying agency.
    Certification standards. The standards and procedures of the 
certification agency to assure genetic purity and identity of the seed 
certified.
    Certified forage seed. Forage seed that meets the certification 
standards administered by a certifying agency at the time of harvest 
and that has been grown under a certification application accepted by 
the certifying agency on or before the acreage reporting date or as 
otherwise specified in the Special Provisions.
    Certifying agency. An agency authorized under the laws of a State, 
Territory, or possession, to officially certify seed, which has 
standards and procedures to assure the genetic purity and identity of 
the seed certified, and approves certification applications for the 
certified forage seed that meets the certification standards at time of 
harvest.
    Established stand. An adequate stand of live plants for crop years 
after the seed-to-seed year.
    Fall planted. Forage seed crop planted after May 31 of the previous 
crop year.
    Forage seed company. A business enterprise that possesses all 
licenses for marketing forage seed required by the state in which it is 
domiciled or operates, and which possesses facilities with enough 
storage and capacity to accept and process the insured crop timely.
    Forage seed contract. A written contract executed between the 
forage seed crop producer and a forage seed company containing, at a 
minimum:
    (a) The producer's commitment to plant, grow, and deliver the 
forage seed produced from such plants to the seed company;
    (b) The seed company's commitment to purchase all the production 
from a specified number of acres or the specified quantity of 
production stated in the contract; and
    (c) Either a fixed price per unit of the forage seed or a formula 
to determine the price per unit value of such seed. Any formula for 
establishing value must be specified in the written contract. If the 
formula uses a future price that is settled after the applicable 
acreage reporting date, then the base price contained in the actuarial 
documents will apply.
    Forage seed crop. Small-seeded legume plants grown for seed (e.g., 
alfalfa, clovers, etc.), including those grown for the production of 
hybrid seed, as shown in the actuarial documents.
    Harvest. Removal of seed from the windrow or field.
    Pound. Sixteen (16) ounces avoirdupois.
    Price election. In lieu of the definition in section 1 of the Basic 
Provisions, the price election will be the base price and will be used 
for the purposes of determining premium and indemnity under the policy.
    Qualified seed testing laboratory. Laboratory qualified by the 
State to test the forage seed to determine whether it qualifies as 
certified forage seed.
    Seed-to-seed year. The calendar year in which planting occurs for 
spring planted forage seed and the subsequent calendar year for fall 
planted forage seed.
    Spring planted. Forage seed crop planted before June 1 of the 
current crop year.
    2. Unit Division.
    In lieu of the optional unit provisions in section 34 of the Basic 
Provisions, you may select optional units by forage seed contract or 
variety if permitted by 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 elect only one percentage of base price and one 
coverage level for each forage seed crop you elect to ensure, grown in 
the county, and designated in the actuarial documents. If separate base 
prices are available by forage seed crop type, the percentage election 
of base price and coverage level you choose for each forage seed crop 
type must be the same. For example, if you choose 100 percent of the 
base price and 65 percent coverage level for a specific forage seed 
crop type, you must choose 100 percent of the base price and 65 percent 
coverage level for all the forage seed crop types.
    (b) For each unit, separate guarantees will be determined by forage 
seed crop type and practice.
    4. Contract Changes.
    In accordance with section 4 of the Basic Provisions, the contract 
change date is June 30 preceding the cancellation date.
    5. Cancellation and Termination Dates.
    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

California, Nevada and Utah. October 31;
All Other States. September 30.
    6. Report of Acreage.
    (a) In addition to the requirements of section 6 of the Basic 
Provisions, you must submit to us, on or before the acreage reporting 
date or as otherwise specified in the Special Provisions:
    (1) A copy of your forage seed contract for your contracted forage 
seed acreage; or,
    (2) A copy of the accepted certification application for your 
certified seed acreage.
    (b) Failure to provide a copy of the forage seed contract or the 
certification application accepted by the certifying agency by the 
acreage reporting date or the date otherwise specified in the Special 
Provisions will result in denial of liability and no indemnity due.
    7. Insured Crop.
    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all types and practices of each forage seed crop you 
elect to insure, that is grown in the county and for which a premium 
rate is provided by the actuarial documents:
    (1) In which you have a share; and
    (2) That is grown for harvest as:
    (i) Certified forage seed; or
    (ii) Seed grown under a forage seed contract executed on or before 
the acreage reporting date or the date otherwise specified in the 
Special Provisions.
    (b) For contracted acreage of forage seed crops only, you will not 
be considered to have a share in the insured crop unless, under the 
terms of the forage seed contract, you are at risk of a financial loss 
at least equal to the amount of insurance on such acreage.
    (c) In addition to the crop and acreage listed as not insured in 
sections 8 and 9 of the Basic Provisions, we will not insure any forage 
seed crop that:
    (1) Is interplanted with another crop, unless otherwise specified 
in the Special Provisions;
    (2) Is planted into an established grass or legume;
    (3) Does not have an adequate stand at the beginning of the 
insurance period unless otherwise specified in the Special Provisions;
    (4) Exceeds the age limitations for the forage seed crop or type 
contained in the Special Provisions; or
    (5) Is utilized for any purpose during the crop year other than for 
seed production, unless otherwise specified in the Special Provisions.
    (d) A forage seed producer who is also a forage seed company may 
establish an insurable interest if the following requirements are met:
    (1) The producer must comply with these Crop Provisions; and
    (2) All the forage seed grown by the forage seed company is 
enrolled with the appropriate certifying agency.

[[Page 30707]]

    8. Insurance Period.
    (a) Insurance attaches on acreage with an adequate stand on the 
later of the date we accept your application or the applicable date as 
follows, unless provided otherwise in the Special Provisions:
    (1) For fall planted seed-to-seed year and established stands of 
forage seed crops, coverage begins for each crop year on:
    (i) November 1 for counties in California, Utah and Nevada; and
    (ii) October 1 for counties in Idaho, Montana, Oregon, Washington, 
Wyoming and all other states.
    (2) For spring planted seed-to-seed year stands of forage seed 
crops coverage begins:
    (i) May 1 for counties in California and Washington; and
    (ii) May 15 for counties in Idaho, Montana, Nevada, Oregon, Utah, 
Wyoming and all other states.
    (b) The calendar dates for the end of the insurance period for 
counties in the following states are as follows unless otherwise 
provided in the Special Provisions:
    (1) California, Nevada and Utah. October 31.
    (2) Idaho, Oregon, Montana, Washington, Wyoming and all other 
states. September 30.
    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 during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Insects and plant disease, but not damage due to insufficient 
or improper application of control measures;
    (4) Wildlife;
    (5) Earthquake;
    (6) Volcanic eruption; or
    (7) Failure of the irrigation water supply, if caused by a peril 
specified in sections 9(a)(1) through (6) that occurs during the 
insurance period.
    (b) In addition to the causes of loss excluded in section 12 of the 
Basic Provisions, we will not insure against damage or loss of 
production due to:
    (1) The crop not being timely harvested, unless such delay in 
harvesting is solely and directly caused by a cause of loss specified 
in sections 9(a)(1) through (6);
    (2) Insufficient supply of pollinators, as determined by us, unless 
lack of pollinators or pollination is solely and directly caused by a 
cause of loss specified in sections 9(a)(1) through (7);
    (3) Failure of the certification standard or forage seed company 
contract acceptance caused by failure to follow proper isolation 
requirements or inadequate weed control, as determined by us, unless 
such failure is solely and directly due to a cause of loss specified in 
sections 9(a)(1) through (6); or
    (4) Failure of the certification standard or forage seed contract 
acceptance due to failure to follow all other certification or contract 
requirements, as determined by us, unless such failure is solely and 
directly caused by a cause of loss specified in sections 9(a)(1) 
through (6).
    10. Settlement of Claim.
    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such 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 to your forage seed crop covered 
by this policy, we will settle your claim by:
    (1) Multiplying the insured acreage for each type and practice by 
the production guarantee;
    (2) Multiplying each result in section 10(b)(1) by the price 
election;
    (3) Totaling the results in section 10(b)(2);
    (4) Multiplying the total production to count for each type and 
practice by the price election;
    (5) Totaling the results of each crop type in section 10(b)(4);
    (6) Subtracting the result in section 10(b)(5) from the result in 
section 10(b)(3); and
    (7) Multiplying the result in section 10(b)(6) by your share.
    (c) The total forage seed production to count (in pounds) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is put to another use without our consent;
    (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; and
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached 
and if:
    (A) You do not elect to continue to care for the crop, we may give 
you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do 
not leave the required samples intact, or fail to provide sufficient 
care for the samples, our appraisals made prior to giving consent to 
put the acreage to another use will be used to determine the amount of 
production to count);
    (B) You elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage in 
accordance with section 10 (e).
    (d) In addition to the provisions of section 15 of the Basic 
Provisions, we may determine the amount of production of any 
unharvested forage seed on the basis of our field appraisals conducted 
after the normal time of harvest for the area. If the acreage is later 
harvested, production records must be provided and if the harvested 
production exceeds the appraised production, the claim will be 
adjusted.
    (e) Production not meeting the minimum quality requirements 
contained in the forage seed contract or certifying agency's standards 
based on tests conducted by a qualified seed testing laboratory due to 
insurable causes will be reduced as follows:
    (1) Divide the actual value by the base price for the insured type; 
and
    (2) Multiply the result (not to exceed 1.0) by the number of pounds 
of such production.
    Example:
    You have a 100 percent share and 100 acres of forage seed in the 
unit, with a guarantee of 600 pounds per acre on 75 acres of an 
established stand of forage seed and a guarantee of 300 pounds per acre 
on 25 acres of a spring planted seed-to-seed year stand. All acreage is 
contracted with a base price of $1.20 per pound and you have selected 
100 percent of the base price. Losses due to insured causes of loss 
have reduced production and quality and you only harvested 37,000 
pounds of seed. A

[[Page 30708]]

portion of the total production was of poor quality; 10,000 pounds of 
seed failed to achieve the contract minimum germination requirement; 
and the salvaged production was valued at $0.80 per pound. Your 
indemnity would be calculated as follows:
    (1) 75 acres x 600 pounds = 45,000-pound guarantee
    25 acres x 300 pounds = 7,500-pound guarantee;
    (2) 45,000 pounds x $1.20 per pound price election = $54,000 value 
guarantee
    7,500 pounds x $1.20 per pound price election = $9,000 value 
guarantee;
    (3) $54,000 + $9,000 = $63,000 total value of the guarantee;
    (4) 27,000 pounds met the contract quality requirements = 27,000 
pounds production to count
    27,000 pounds x $1.20 per pound = $32,400 10,000 pounds x ($0.80 
per pound/$1.20 per pound) = 6,667 pounds production to count
    6,667 pounds x $1.20 per pound = $8,000;
    (5) $32,400 + $8,000 = $40,400 total value of production to count;
    (6) $63,000 - $40,400 = $22,600 loss; and
    (7) $22,600 x 100% share = $22,600 indemnity payment.
    11. Late and Prevented Planting.
    The late and prevented planting provisions of the Basic Provisions 
are not applicable for forage seed.

    Signed in Washington, DC, on May 22, 2014.
Brandon Willis,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2014-12429 Filed 5-28-14; 8:45 am]
BILLING CODE 3410-08-P