[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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Rules and Regulations
Federal Register
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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.
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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
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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