[Title 7 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2003 Edition]
[From the U.S. Government Printing Office]



[[Page i]]



                    7


          Parts 400 to 699

                         Revised as of January 1, 2003

Agriculture





          Containing a codification of documents of general 
          applicability and future effect
          As of January 1, 2003
          With Ancillaries
          Published by
          Office of the Federal Register
          National Archives and Records
          Administration

A Special Edition of the Federal Register



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                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003



  For sale by the Superintendent of Documents, U.S. Government Printing 
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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 7:
    Subtitle B--Regulations of the Department of Agriculture 
      (Continued)
          Chapter IV--Federal Crop Insurance Corporation, 
          Department of Agriculture                                  5
          Chapter V--Agricultural Research Service, Department 
          of Agriculture                                           319
          Chapter VI--Natural Resources Conservation Service, 
          Department of Agriculture                                339
  Finding Aids:
      Table of CFR Titles and Chapters........................     485
      Alphabetical List of Agencies Appearing in the CFR......     503
      List of CFR Sections Affected...........................     513



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

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 7 CFR 400.1 refers 
                       to title 7, part 400, 
                       section 1.

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

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

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noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
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    To determine whether a Code volume has been amended since its 
revision date (in this case, January 1, 2003), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
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Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 2001, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, 1973-1985, or 1986-2000, published in 11 separate 
volumes. For the period beginning January 1, 2001, a ``List of CFR 
Sections Affected'' is published at the end of each CFR volume.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I). A list of CFR titles, chapters, 
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also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

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in the Code of Federal Regulations.

INQUIRIES

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volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
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or write to the Director, Office of the Federal Register, National 
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free). E-mail, gpoaccess@gpo.gov.

[[Page vii]]

    The Office of the Federal Register also offers a free service on the 
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                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

January 1, 2003.



[[Page ix]]



                               THIS TITLE

    Title 7--Agriculture is composed of fifteen volumes. The parts in 
these volumes are arranged in the following order: parts 1-26, 27-52, 
53-209, 210-299, 300-399, 400-699, 700-899, 900-999, 1000-1199, 1200-
1599, 1600-1899, 1900-1939, 1940-1949, 1950-1999, and part 2000 to end. 
The contents of these volumes represent all current regulations codified 
under this title of the CFR as of January 1, 2003.

    The Food and Nutrition Service current regulations in the volume 
containing parts 210-299, include the Child Nutrition Programs and the 
Food Stamp Program. The regulations of the Federal Crop Insurance 
Corporation are found in the volume containing parts 400-699.

    All marketing agreements and orders for fruits, vegetables and nuts 
appear in the one volume containing parts 900-999. All marketing 
agreements and orders for milk appear in the volume containing parts 
1000-1199. Part 900--General Regulations is carried as a note in the 
volume containing parts 1000-1199, as a convenience to the user.

[[Page x]]





[[Page 1]]



                          TITLE 7--AGRICULTURE




                  (This book contains parts 400 to 699)

  --------------------------------------------------------------------
                                                                    Part

  SUBTITLE B--Regulations of the Department of Agriculture (Continued)

chapter iv--Federal Crop Insurance Corporation, Department 
  of Agriculture............................................         400

chapter v--Agricultural Research Service, Department of 
  Agriculture...............................................         500

chapter vi--Natural Resources Conservation Service, 
  Department of Agriculture.................................         600

[[Page 3]]

  Subtitle B--Regulations of the Department of Agriculture (Continued)

[[Page 5]]



     CHAPTER IV--FEDERAL CROP INSURANCE CORPORATION, DEPARTMENT OF 
                               AGRICULTURE




  --------------------------------------------------------------------
Part                                                                Page
400             General administrative regulations..........           7
401             [Reserved]

402             Catastrophic Risk Protection Endorsement....          70
403-406         [Reserved]

407             Group risk plan of insurance regulations for 
                    the 2001 and succeeding crop years......          74
408-411         [Reserved]

412             Public information--Freedom of information..          91
413-456         [Reserved]

457             Common crop insurance regulations...........          92
458             [Reserved]

[[Page 7]]



PART 400--GENERAL ADMINISTRATIVE REGULATIONS--Table of Contents




                        Subparts A-B [Reserved].

      

     Subpart C--General Administrative Regulations; Mutual Consent 
                              Cancellation

400.27  Applicability.
400.28  Mutual consent criteria.
400.29  OMB control numbers.
400.30-400.36  [Reserved]

Subparts D-E [Reserved]

Subpart F--Food Security Act of 1985, Implementation; Denial of Benefits

400.45  Applicability.
400.46  Definitions.
400.47  Denial of crop insurance.
400.48  Protection of interests of tenants, landlords or producers.
400.49-400.50  [Reserved]

                  Subpart G--Actual Production History

400.51  Availability of actual production history program.
400.52  Definitions.
400.53  Yield certification and acceptability.
400.54  Submission and accuracy of production reports.
400.55  Qualifications for actual production history coverage program.
400.56  Administrative appeal exhaustion.
400.57  OMB control numbers.

   Subpart H--Information Collection Requirements Under the Paperwork 
                   Reduction Act; OMB Control Numbers

400.65  Purpose.
400.66  Display.

Subpart I [Reserved]

                       Subpart J--Appeal Procedure

Sec.
400.90  Definitions.
400.91  Applicability.
400.92  Appeals.
400.93  Administrative review.
400.94  Mediation.
400.95  Time limitations for filing and responding to requests for 
          administrative review.
400.96  Judicial review.
400.97  Reservations of authority.

Subpart K--Debt Management--Regulations for the 1986 and Succeeding Crop 
                                  Years

400.115  Purpose.
400.116  Definitions.
400.117  Determination of delinquency.
400.118  Demand for payment.
400.119  Notice to debtor; credit reporting agency.
400.120  Subsequent disclosure and verification.
400.121  Information disclosure limitations.
400.122  Attempts to locate debtor.
400.123  Request for review of the indebtedness.
400.124  Disclosure to credit reporting agencies.
400.125  Notice to debtor, collection agency.
400.126  Referral of delinquent debts to contract collection agencies.
400.127  OMB control numbers.
400.128  Definitions.
400.129  Salary offset.
400.130  Notice requirements before offset.
400.131  Request for a hearing and result if an employee fails to meet 
          deadlines.
400.132  Hearings.
400.133  Written decision following a hearing.
400.134  Review of FCIC record related to the debt.
400.135  Written agreement to repay debt as an alternative to salary 
          offset.
400.136  Procedures for salary offset; when deductions may begin.
400.137  Procedures for salary offset; types of collection.
400.138  Procedures for salary offset; methods of collection.
400.139  Nonwaiver of rights.
400.140  Refunds.
400.141  Internal Revenue Service (IRS) Tax Refund Offset.
400.142  Past-due legally enforceable debt eligible for refund offset.

 Subpart L--Reinsurance Agreement--Standards for Approval; Regulations 
              for the 1997 and Subsequent Reinsurance Years

400.161  Definitions.
400.162  Qualification ratios.
400.163  Applicability.
400.164  Availability of the Standard Reinsurance Agreement.
400.165  Eligibility for Standard Reinsurance Agreements.
400.166  Obligations of the Corporation.
400.167  Limitations on Corporation's obligations.
400.168  Obligations of participating insurance company.

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400.169  Disputes.
400.170  General qualifications.
400.171  Qualifying when a state does not require that an Annual 
          Statutory Financial Statement be filed.
400.172  Qualifying with less than two of the required ratios or ten of 
          the analytical ratios meeting the specified requirements.
400.173  [Reserved]
400.174  Notification of deviation from financial standards.
400.175  Revocation and non-acceptance.
400.176  State action preemptions.
400.177  [Reserved]

  Subpart M--Agency Sales and Service Contract--Standards for Approval

400.201  Applicability of standards.
400.202  Definitions.
400.203  Financial statement and certification.
400.204  Notification of deviation from standards.
400.205  Denial or termination of contract and administrative 
          reassignment of business.
400.206  Financial qualifications for acceptability.
400.207  Representative licensing and certification.
400.208  Term of the contract.
400.209  Electronic transmission and receiving system.
400.210  OMB control numbers.

Subpart N [Reserved]

 Subpart O--Non-Standard Underwriting Classification System Regulations 
                 for the 1991 and Succeeding Crop Years

400.301  Basic, purpose, and applicability.
400.302  Definitions.
400.303  Initial selection criteria.
400.304  Nonstandard Classification determinations.
400.305  Assignment of Nonstandard Classifications.
400.306  Spouses and minor children.
400.307  Discontinuance of participation.
400.308  Notice of Nonstandard Classification.
400.309  Requests for reconsideration.

           Subpart P--Preemption of State Laws and Regulations

400.351  Basis and applicability.
400.352  State and local laws and regulations preempted.

Subpart Q--General Administrative Regulations; Collection and Storage of 
   Social Security Account Numbers and Employer Identification Numbers

400.401  Basis and purpose and applicability.
400.402  Definitions.
400.403  Required system of records.
400.404  Policyholder responsibilities.
400.405  Agent and loss adjuster responsibilities.
400.406  Insurance provider responsibilities.
400.407  Restricted access.
400.408  Safeguards and storage.
400.409  Unauthorized disclosure.
400.410  Penalties.
400.411  Obtaining personal records.
400.412  Record retention.
400.413  OMB control numbers.

                          Subpart R--Sanctions

400.451  General.
400.452  Definitions.
400.453  Exhaustion of administrative remedies.
400.454  Civil penalties.
400.455  Governmentwide debarment and suspension (procurement).
400.456  Governmentwide debarment and suspension (nonprocurement).
400.457  Program Fraud Civil Remedies Act.
400.458  Scheme or device.
400.459  Indebtedness.
400.460-400.499  [Reserved]
400.500  OMB control numbers.

Subpart S [Reserved]

  Subpart T--Federal Crop Insurance Reform, Insurance Implementation; 
        Regulations for the 1999 and Subsequent Reinsurance Years

400.650  Purpose.
400.651  Definitions.
400.652  Insurance availability.
400.653  Determining crops of economic significance.
400.654  Application and acreage report.
400.655  Eligibility for other program benefits.
400.656-400.657  [Reserved]

 Subpart U--Ineligibility for Programs Under the Federal Crop Insurance 
                                   Act

400.675  Purpose.
400.676  OMB control numbers.
400.677  Definitions.
400.678  Applicability.

[[Page 9]]

400.679  Criteria for ineligibility.
400.680  Determination and notification of ineligibility.
400.681  Effect of ineligibility.
400.682  Criteria for reinstatement of eligibility.
400.683  Administration and maintenance.

 Subpart V--Submission of Policies, Provisions of Policies and Rates of 
                                 Premium

400.700  Basis, purpose, and applicability.
400.701  Definitions.
400.702  Confidentiality of submission and duration of confidentiality.
400.703  Timing of submission.
400.704  Type of submission.
400.705  Contents required for a new submission or changes to a 
          previously approved submission.
400.706  Review of submission.
400.707  Presentation to the Board for approval or disapproval.
400.708  Approved submission.
400.709  Roles and responsibilities.
400.710  Preemption and premium taxation.
400.711  Right of review, modification, and the withdrawal of 
          reinsurance.
400.712  Research and development reimbursement, maintenance 
          reimbursement, and user fees.
400.713  Non-reinsured supplemental (NRS) policy.

Subpart W [Reserved]

    Subpart X--Interpretations of Statutory and Regulatory Provisions

400.765  Basis and applicability.
400.766  Definitions.
400.767  Requester obligations.
400.768  FCIC obligations.

Subpart A-Subpart B [Reserved]



     Subpart C--General Administrative Regulations; Mutual Consent 
                              Cancellation

    Authority: 7 U.S.C. 1501 et seq.

    Source: 57 FR 56438, Nov. 30, 1992, unless otherwise noted.



Sec. 400.27  Applicability.

    Notwithstanding any provisions of the crop insurance policy to the 
contrary, the mutual consent provision contained herein shall be 
applicable to all new crop insurance policies issued by the Federal Crop 
Insurance Corporation (7 CFR part 401 et seq.), or by a company 
reinsured by the Federal Crop Insurance Corporation, effective for the 
applicable crop year only if those policies meet the requirements of 
Sec. 400.28 of this subpart and if the crop insured is the same as the 
crop for which a disaster payment application (CCC 441) was filed for 
the previous crop year.

[58 FR 67304, Dec. 21, 1993]



Sec. 400.28  Mutual consent criteria.

    (a) An insured may request policy cancellation for the crop year for 
which the insured filed a CCC 441 for the applicable crop year if 
written documentation is provided, signed by an authorized Agricultural 
Stabilization and Conservation Service official, certifying the 
cancellation is based on one of the following conditions:
    (1) Insurance was not a condition of eligibility for disaster 
payment, based on one or more of the statutory criteria; or
    (2) the producer withdrew his application for disaster payments with 
prejudice or it was rejected by Commodity Credit Corporation;
    (b) Cancellation requests must be received in writing no later than 
three weeks after the date:
    (1) The disaster payment check is issued; or
    (2) The producer is notified that an application for disaster 
payment has been rejected; or
    (3) The producer withdraws from the disaster payment program.
    (c) Carryover policies are not available for mutual consent 
cancellation. Crop insurance applications dated before the disaster 
cancellation date (available in the insureds' service office) are not 
eligible for mutual consent cancellations.

[57 FR 56438, Nov. 30, 1992, as amended at 58 FR 67304, Dec. 21, 1993]



Sec. 400.29  OMB control numbers.

    Office of Management and Budget control numbers (OMB) are contained 
in subpart H to part 400 in title 7 CFR.



Secs. 400.30-400.36  [Reserved]

Subparts D--E [Reserved]

[[Page 10]]



Subpart F--Food Security Act of 1985, Implementation; Denial of Benefits

    Authority: Secs. 1506, 1516, Pub. L. 75-430, 52 Stat. 73, 77, as 
amended (7 U.S.C. 1501 et seq.); sec. 1244, Pub. L. 99-198.

    Source: 52 FR 19128, May 21, 1987, unless otherwise noted.



Sec. 400.45  Applicability.

    (a) The regulations in this subpart implement Chapter XII and 
section 1764 of the Food Security Act of 1985 (Pub. L. 99-198) (the Act) 
requiring the denial of crop insurance to persons who are determined to 
have performed certain practices prohibited by the Act or who have 
violated certain federal or State statutes or the regulations 
implementing the Act. The provisions of this subpart are applicable to 
all crop insurance policies written by the Federal Crop Insurance 
Corporation (the Corporation) or reinsured by the Corporation.
    (b) The provisions of this subpart will be effective for the crop 
and crop year immediately following the first crop cancellation date 
occurring after the effective date of the Act for all crop policies 
reinsured by FCIC, and for all policies and regulations for crop 
insurance issued by FCIC.



Sec. 400.46  Definitions.

    For the purpose of this regulation and in addition to the 
definitions included at 7 CFR 12.2, the following definitions are 
applicable:
    (a) Controlled substance means any prohibited drug-producing plants 
including, but not limited to, cacti of the genus lophophora, coca 
bushes (erythroxylum coca), marijuana (cannabis satiua), opium poppies 
(papauer somniferum), and other drug-producing plants, the planting and 
harvesting of which is prohibited by Federal or State law.
    (b) Person means any producer, tenant, or landlord, insured under a 
policy of crop insurance issued by FCIC, or by a multi-peril insurance 
company whose crop insurance policy is reinsured by FCIC.
    (c) State means each of the fifty States, the District of Columbia, 
the Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United 
States, American Samoa, the Commonwealth of the Northern Mariana 
Islands, or the Trust Territory of the Pacific.
    (d) The Act means the Food Security Act of 1985 (Pub. L. 99-198).



Sec. 400.47  Denial of crop insurance.

    (a) Any person convicted under Federal or State law of planting, 
cultivating, growing, producing, harvesting or storing a controlled 
substance in any crop year will be ineligible for crop insurance during 
that crop year and the four succeeding crop years.
    (1) The insurance of such person insured by FCIC who found to be 
ineligible under paragraph (a) of this section will be null and void, 
and any indemnity paid on such insurance must be returned in full to 
FCIC. Any premium paid for insurance coverage declared null and void 
will be returned, less a reasonable amount for expenses and handling not 
to exceed 20 percent of the premium paid.
    (2) The application and policy of insurance will be voided, or the 
person will be removed from the policy and the policyholder share 
reduced in accordance with 7 CFR 400.681(b), when any person becomes 
ineligible for crop insurance under the provisions of paragraph (a) of 
this section. To obtain crop insurance coverage following the period of 
ineligibility, the person must submit a new application for crop 
insurance.
    (b) Any insurance written by a multi-peril crop insurance company to 
any person who is ineligible under the provisions of this subpart is not 
eligible for reinsurance under the Corporation's standard reinsurance 
agreement. Any premium subsidy and expense allowance or loss paid by the 
Corporation because of such agreement will be immediately refunded to 
the Corporation. Notwithstanding any other provision of law, policies 
written by multi-peril crop insurance companies to any person ineligible 
under the provisions of this subpart are null and void. Premium paid for 
such policies will be refunded to the person applying for insurance, 
less a reasonable amount for expenses and handling not to exceed 20

[[Page 11]]

percent of the premium paid, and no indemnity will be paid unless the 
multi-peril company expressly agrees to continue such policy in effect 
without FCIC reinsurance. However, if the reinsured company follows the 
procedure of the Corporation and the requirements of the regulations, 
reinsurance will continue to be provided under the reinsurance agreement 
on the policy unless it is shown that the agent or company had knowledge 
of facts which would indicate ineligibility on the part of the insured 
and failed to act on that knowledge.
    (c) FCIC employees or contractors are required to report all 
suspected cases of violation of the Act or the regulations to the 
appropriate agency for a determination of violation. Benefits shall not 
be paid in such cases pending a determination from the appropriate 
agency.
    (d) Notwithstanding any other provision of this subpart, any crop 
insurance policy where insurance attached to a crop prior to August 15, 
1986, will continue in effect for that crop until the next termination 
date following August 15, 1986.

[52 FR 19128, May 21, 1987, as amended at 58 FR 17945, Apr. 7, 1993; 61 
FR 38058, July 23, 1996; 65 FR 29942, May 10, 2000]



Sec. 400.48  Protection of interests of tenants, landlords or producers.

    Any tenant, landlord or producer on the farm separate from the 
person declared ineligible for crop insurance under the provisions of 
Sec. 400.47 of this part, will remain eligible for crop insurance on 
their insurable share in the crop, unless such tenant, landlord, or 
producer on the farm is:
    (a) Also convicted of planting, cultivating, growing, producing, or 
storing a controlled substance;
    (b) Otherwise determined by FCIC to be ineligible for crop 
insurance.

[52 FR 19128, May 21, 1987, as amended at 61 FR 38058, July 23, 1996]



Secs. 400.49-400.50  [Reserved]



                  Subpart G--Actual Production History

    Authority: 7 U.S.C. 1506, 1516.

    Source: 59 FR 47787, Sept. 19, 1994, unless otherwise noted.



Sec. 400.51  Availability of actual production history program.

    An Actual Production History (APH) Coverage Program is offered under 
the provisions contained in the following regulations:

7 CFR 401.110--Almond Endorsement
7 CFR part 405--Apple Crop Insurance
7 CFR 401.118--Canning and Processing Bean Endorsement
7 CFR part 409--Arizona-California Citrus Crop Insurance
7 CFR 401.127--Cranberry Endorsement
7 CFR part 433--Dry Beans Crop Insurance
7 CFR 401.116--Flaxseed Endorsement
7 CFR part 415--Forage Production Corp Insurance
7 CFR 401.130--Grape Endorsement
7 CFR part 455--Macadamia Nut Crop Insurance
7 CFR 401.126--Onion Endorsement
7 CFR part 447--Popcorn Crop Insurance
7 CFR part 403--Peach Crop Insurance
7 CFR 401.140--Pear Endorsement
7 CFR part 416--Pea Crop Insurance
7 CFR 401.146--Fresh Plum Endorsement
7 CFR part 422--Potato Crop Insurance
7 CFR part 450--Prune Crop Insurance
7 CFR 401.123--Safflower Seed Endorsement
7 CFR 401.133--Sugarcane Endorsement
7 CFR part 430--Sugar Beet Crop Insurance
7 CFR 401.124--Sunflower Seed Endorsement
7 CFR part 437--Sweet Corn Crop Insurance
7 CFR part 441--Table Grape Crop Insurance
7 CFR 401.129--Guaranteed Tobacco Endorsement
7 CFR 401.114--Canning and Processing Tomato Endorsement
7 CFR part 454--Guaranteed Production Plan of Fresh Market Tomato
7 CFR part 446--Walnut Crop Insurance
7 CFR part 457--Common Crop Insurance Regulations; and all special 
provisions thereto unless specifically excluded by the special 
provisions.

    The APH program operates within limits prescribed by, and in 
accordance with, the provisions of the Federal Crop Insurance Act, as 
amended (7 U.S.C. 1501 et seq.), only on those crops identified in this 
section in those areas where the Actuarial Table provides coverage. 
Except when in conflict with this subpart, all provisions of the 
applicable crop insurance contract for these crops apply.



Sec. 400.52  Definitions.

    In addition to the definitions contained in the crop insurance 
contract,

[[Page 12]]

the following definitions apply for the purposes of the APH Coverage 
Program:
    (a) APH--Actual Production History.
    (b) Actual yield--The yield per acre for a crop year calculated from 
the production records or claims for indemnities. The actual yield is 
determined by dividing total production (which includes harvested and 
appraised production) by planted acres for annual crops or by insurable 
acres for perennial crops.
    (c) Adjusted yield--The transitional or determined yield reduced by 
the applicable percentage for lack of records. The adjusted yield will 
equal 65 percent of the transitional or determined yield, if no producer 
records are submitted; 80 percent, if records for one year are 
submitted; and 90 percent, if two years of records are submitted.
    (d) Appraised production--Production determined by the Agricultural 
Stabilization and Conservation Service (ASCS), the FCIC, or a company 
reinsured by the FCIC, that was unharvested but which reflected the 
crop's yield potential at the time of the appraisal. For the purpose of 
APH ``appraised production'' specifically excludes production lost due 
to uninsurable causes.
    (e) Approved APH yield--A yield, calculated and approved by the 
verifier, used to determine the production guarantee and determined by 
the sum of the yearly actual, assigned, and adjusted or unadjusted 
transitional or determined yields divided by the number of yields 
contained in the database. The database may contain up to 10 consecutive 
crop years of actual and or assigned yields. At least four yields will 
always exist in the database.
    (f) Assigned yield--A yield assigned by FCIC in accordance with the 
crop insurance contract, if the insured does not file production reports 
as required by the crop insurance contract. Assigned yields are used in 
the same manner as actual yields when calculating APH yields except for 
purposes of the Nonstandard Classification System (NCS).
    (g) Base period--Ten consecutive crop years (except peaches, which 
have a five-year base period) immediately preceding the crop year 
defined in the insurance contract for which the approved APH yield is 
being established (except for sugarcane, which begins the calendar year 
preceding the immediate previous crop year defined in the insurance 
contract).
    (h) Continuous production reports--Reports submitted by a producer 
for each crop year that the unit was planted to the crop and for the 
most recent crop year in the base period.
    (i) Crop year--Defined in the crop insurance contract, however, for 
APH purposes the term does not include any year when the crop was not 
planted or when the crop was prevented from being planted by an 
insurable cause. For example, if an insured plants acreage in a county 
to wheat one year, that year is a crop year in accordance with the 
policy definition. If the land is summerfallowed the next calendar year, 
that calendar year is not a crop year for the purpose of APH.
    (j) Database--A minimum of four years up to a maximum of ten crop 
years of production data used to calculate the approved APH yield.
    (k) Determined yield (D-yield)--An estimated year for certain crops, 
which can be determined by multiplying an average yield for the crop 
(attained by using data available from The National Agricultural 
Statistics Service (NASS) or comparable sources) by a percentage 
established by the FCIC for each county.
    (l) Master yields--Approved APH yields, for certain crops and 
counties as initially designated by the FCIC, based on a minimum of four 
crop years of production records for a crop within a county.
    (m) New producer--A person who has not been actively engaged in 
farming for a share of the production of the insured crop for more than 
two crop years.
    (n) Production report--A written record showing the insured crop's 
annual production and used to determine the insured's yield for 
insurance purposes. The report contains yield history by unit, if 
applicable, including planted acreage for annual crops, insurable 
acreage for perennial crops, and harvested and appraised production for 
the previous crop years. This report must be supported by written

[[Page 13]]

verifiable records, measurement of farm stored production, or by other 
records of production approved by FCIC on an individual basis. 
Information contained in a claim for indemnity is considered a 
production report for the crop year for which the claim was filed.
    (o) Production Reporting Date (PRD)--The PRD is contained in the 
crop insurance contract and is the last date production reports will be 
accepted for inclusion in the database for the current crop year.
    (p) Transitional yield (T-Yield)--An estimated yield, for certain 
crops, generally determined by multiplying the ASCS program yield by a 
percentage determined by the FCIC for each county and provided on the 
actuarial table to be used in the APH yield calculation process when 
less than four consecutive crop years of actual or assigned yields are 
available.
    (q) Verifiable records--Contemporaneous records of acreage and 
production provided by the insured, which may be verified by FCIC 
through an independent source, and which are used to substantiate the 
acreage and production that have been reported on the production report.
    (r) Verifier--A person authorized by the FCIC to calculate approved 
APH yields.
    (s) Yield variance tables--Tables for certain crops that indicate 
unacceptable yield variations and yield trends which will require 
determination of the APH yield by the FCIC.



Sec. 400.53  Yield certification and acceptability.

    (a) Production reports must be provided to the crop insurance agent 
no later than the production reporting date for the crop insured.
    (1) Production reports must provide an accurate account of planted 
acreage for annual crops or insurable acres for perennial crops, as well 
as harvested and appraised production by unit.
    (2) The insured must certify the accuracy of the information.
    (3) Production reported for more than one crop year must be 
continuous. A year in which no acreage was planted to the crop on a unit 
or no acreage was planted to a practice, type, or variety requiring an 
APH yield will not be considered a break in continuity. Assigned yields, 
at the discretion of the FCIC, may be used to maintain continuity of 
yield data of file. Production on uninsured (for those years a crop 
insurance policy under the Federal Crop Insurance Act is in effect) or 
uninsurable acreage (for other years of the period) will not be used to 
determine APH yield unless production from such acreage is commingled 
with production from insured or insurable acreage.
    (b) Production reports and supporting records are subject to audit 
or review to verify the accuracy of the information certified. 
Production and supporting records may be reviewed and verified if a 
claim for indemnity is submitted on the insured crop. The reported yield 
is subject to revision, if needed, so that the claim conforms to the 
records submitted at that time.
    (1) Inaccurate production reports or failure to retain acceptable 
records shall result in the verifier combining optional farm units and 
recomputing the approved APH yield. These actions shall be taken at any 
time after reporting or record discrepancies are identified and may 
result in reduction of the approved APH yield for any calendar year.
    (2) Records must be provided by the insured at the time of an audit, 
review, or as otherwise requested, to verify that the acreage and 
production certified are accurate. Records of any other person having 
shares in the insured crop, which are used by the insured to establish 
the approved APH yield, must also be provided upon request.
    (3) In the event acreage or production data certified by two or more 
persons sharing in the crop on the same acreage is different, the 
verifier shall, at the verifier's discretion, determine which acreage 
and production data, if any, will be used to determine the approved APH 
yield. If the correct acreage and production cannot be determined, the 
data submitted will be considered unacceptable by the verifier for APH 
purposes.
    (4) Failure of the producer to report acreage and production 
completely and accurately may result in voidance of the crop insurance 
contract, as well as criminal or civil false claims penalties

[[Page 14]]

pursuant to applicable Federal criminal or civil statutes.



Sec. 400.54  Submission and accuracy of production reports.

    (a) The insured is solely responsible for the timely submission and 
certification of accurate, complete production reports to the agent. 
Production reports must be provided for all planted units.
    (b) Records may be requested by the FCIC, or an insurance company 
reinsured by the FCIC, or by anyone acting on behalf of the FCIC or the 
insurance company. The insured must provide such records upon request.
    (c) The agent will explain the APH Program to insureds and 
prospective insureds. When necessary, the agent will assist the insured 
in preparation of production reports. The agent will determine the 
adjusted or unadjusted transitional or determined yields in accordance 
with Sec. 400.54(b). The agent will review the production reports and 
forward them to the verifier, along with any requested and required 
supporting records for determination of an approved APH yield.
    (d) The verifier will determine if the certified production reports 
are acceptable and calculate the approved APH yield.



Sec. 400.55  Qualification for actual production history coverage program.

    (a) The approved APH yield is calculated from a database containing 
a minimum of four yields and will be updated each subsequent crop year. 
The database may contain a maximum of the 10 most recent crop years and 
may include actual, assigned, and adjusted or unadjusted T or D-Yields. 
T or D-Yields, adjusted or unadjusted, will only occur in the database 
when there are less than four years of actual and/or assigned yields.
    (b) The insured may be required to provide production records to 
determine the approved APH yield, if production records for the most 
recent crop year are available. If acceptable records of actual 
production are provided, the records must be continuous and contain at 
least the most recent crop year's actual yield.
    (1) If no acceptable production records are available, the approved 
APH yield is the adjusted T or D-Yield (65 percent of T or D-Yield).
    (2) If acceptable production records containing information for only 
the most recent crop year are provided, the three T or D-Yields adjusted 
by 80 percent will be used to complete the minimum database and 
calculate the approved APH yield.
    (3) If acceptable production records containing information for only 
the two most recent crop years are provided, the two T or D-Yields 
adjusted by 90 percent and the two actual yields will be used to 
complete the database and calculate the approved APH yield.
    (4) If acceptable production records containing information for only 
the three most recent crop years are provided, the three actual yields 
and one unadjusted T or D-Yield are used to complete the database and 
calculate the approved APH yield.
    (5) When the database contains four or more (up to ten) continuous 
actual yields, the approved APH yield is a simple average of the actual 
yields.
    (6) New producers may have their approved APH yields based on 
unadjusted T or D-Yields or a combination of actual and unadjusted T or 
D-Yields.
    (7) Producers who add land or new practice, types and varieties to 
their farming operations and who do not have available records for the 
added land, practice, types or varieties may have approved APH yields 
for the added land, practice, types or varieties that are based on 
adjusted or unadjusted T or D-Yields as determined by FCIC.
    (8) If the producer's crop is destroyed or if it produces a low 
actual yield due to insured causes of loss, the resulting average yield 
may qualify for catastrophic yield adjustment according to FCIC 
guidelines. APH yields qualifying for catastrophic yield adjustment may 
be adjusted to mitigate the effect of catastrophic years. Premium rates 
for approved APH yields, which are adjusted for catastrophic years, may 
be based on the producer's APH average yield prior to the catastrophic 
adjustment or such other basis as determined appropriate by FCIC.

[[Page 15]]

    (c) If no insurable acreage of the insured crop is planted for a 
year, a production report indicating zero planted acreage will maintain 
the continuity of production reports for APH record purposes and that 
calendar year will not be included in the APH yield calculations.
    (d) Actual yields calculated from the claim for indemnity will be 
entered in the database. The resulting average yield will be used to 
determine the premium rate and approved APH yield, at the discretion of 
FCIC.
    (e) Optional units are not available to an insured who does not 
provide acceptable production reports for at least the most recent crop 
year with which to calculate an approved APH yield.
    (f) FCIC may determine approved APH yields for designated crops in 
the following situations:
    (1) If less than four years of yield history is certified and T or 
D-Yields are not provided in the actuarial documents,
    (2) If actual yield exceed tolerances specified in yield variance 
tables, and
    (3) For perennial crops:
    (i) If significant upward or downward yield trends are indicated;
    (ii) If tree or vine damage, or cultural practices will reduce the 
production level;
    (iii) if more than two percent of the trees or vines have been 
removed within the last two years; or
    (iv) If yield trends are evident and yields greater than the average 
yield are requested by the insured.
    (g) APH yields will not be approved the first insurance year on 
perennial crops until an inspection acceptable to FCIC has been 
performed and the acreage is accepted for insurance purposes in 
accordance with the crop insurance contract.
    (h) APH Master Yields may be established whenever crop rotation 
requirements and land leasing practices limit the yield history 
available. FCIC will establish crops and locations for which Master 
Yields are available. To qualify, the producer must have at least four 
recent continuous crop years' annual production reports and must certify 
the authenticity of the production reports of the insured crop. Master 
Yields are based on acreage and production history from all acreage of 
the insured crop in the county in which the operator has shared in the 
crop's production.
    (i) FCIC may use any production report available under the 
provisions of any crop insurance contract, whether continuous or not, 
involving the interests of the person's insured crops in determining the 
approved APH yield.



Sec. 400.56  Administrative appeal exhaustion.

    The insured may appeal the approved APH yield in accordance with the 
procedures contained in 7 CFR part 400, subpart J. Administrative 
remedies through the appeal process must be exhausted prior to any 
action for judicial review. The approved APH yield determined as a 
result of the appeal process will be the yield applicable to the crop 
year.



Sec. 400.57  OMB control numbers.

    OMB control numbers are contained in 7 CFR part 400, subpart H.



   Subpart H--Information Collection Requirements Under the Paperwork 
                   Reduction Act; OMB Control Numbers

    Authority: 5 U.S.C. 1320, Pub. L. 96-511 (44 U.S.C., chapter 35).

    Source: 56 FR 49390, Sept. 30, 1991, unless otherwise noted.



Sec. 400.65  Purpose.

    This subpart collects and displays the control numbers assigned to 
information collection requirements of the Federal Crop Insurance 
Corporation (FCIC) by the Office of Management and Budget pursuant to 
the Paperwork Reduction Act of 1980 (Pub. L. 96-511). FCIC intends that 
this subpart comply with the requirements of section 3507(f) of the 
Paperwork Reduction Act, which requires that agencies display a current 
control number assigned by the Director of OMB for each agency 
information collection requirement.



Sec. 400.66  Display.

    (a) Crop Insurance Regulations promulgated by FCIC and contained in 
7

[[Page 16]]

CFR part 400 et seq., contain the following statement:

                           OMB Control Numbers

    The OMB control numbers are contained in subpart H of part 400, 
title 7 CFR.

    (b) Specific report title and agency forms approved by OMB are as 
follows:

----------------------------------------------------------------------------------------------------------------
                                                                                                      Expiration
                   FCI No.                                    Form title                  OMB No.        date
----------------------------------------------------------------------------------------------------------------
FCI-3........................................  Collector's Contact Report.............    0563-0043      8-31-94
FCI-5........................................  Contract Price Election Agreement          0563-0021      6-30-94
                                                Option for Non-Quota (additional)
                                                Peanuts.
FCI-5........................................  Request for Actuarial Change...........    0563-0042      9-30-94
FCI-5-A......................................  Request for Actuarial Change               0563-0042      9-30-94
                                                Continuation Sheet.
FCI-6........................................  Statement of Facts.....................    0563-0027      6-30-94
FCI-9........................................  Late Planting Agreement................    0563-0023      6-30-94
FCI-12.......................................  Crop Insurance Application.............    0563-0003      3-31-93
FCI-12-A.....................................  Contract Changes.......................    0563-0025      7-31-94
FCI-12-P.....................................  Pre-Acceptance Perennial Crop              0563-0031      7-31-94
                                                Inspection Report.
FCI-19.......................................  Crop Insurance Acreage Report..........    0563-0001      2-28-95
FCI-19-A.....................................  Actual Production History Review.......    0563-0036      7-31-94
FCI-19-A.....................................  Production and Yield Report............    0563-0029      7-31-94
FCI-19-C.....................................  Texas Citrus Grove Inspection Report...    0563-0017      4-30-95
FCI-20.......................................  Application for Assignment of Indemnity    0563-0014     12-31-93
FCI-21.......................................  Transfer of Right to an Indemnity......    0563-0014     12-31-93
FCI-63.......................................  Claim for Citrus Indemnity.............    0563-0007      2-28-95
FCI-63-A.....................................  Claim for Raisin Indemnity.............    0563-0007      2-28-95
FCI-63-A.....................................  Notice of Damage--Raisins..............    0563-0035      8-31-94
FCI-63-A.....................................  Adjuster's Florida Citrus Worksheet....    0563-0016      4-30-95
FCI-63-B.....................................  Tabulation of Production Records from      0563-0044      9-30-94
                                                Individual Load Certificates.
FCI-73.......................................  Certiication Form......................    0563-0033      7-31-94
FCI-74.......................................  Field Inspection and Claim for             0563-0007      2-28-95
                                                Indemnity.
FCI-74.......................................  Field Inspection and Claim for             0563-0007      2-28-95
                                                Indemnity (Continuation Sheet).
FCI-74-T-P-C.................................  Field Inspection and Claim for             0563-0007      2-28-95
                                                Indemnity (Tobacco, Peanuts, and
                                                Cotton).
FCI-74-T-P-C.................................  Field Inspection Claim for Indemnity       0563-0007      2-28-95
                                                (Continuation Sheet).
FCI-74-A.....................................  Adjuster's Apple Worksheet.............    0563-0016      4-30-95
FCI-74-A.....................................  Beans and Peas Appraisal Worksheet.....    0563-0016      4-30-95
FCI-74-A.....................................  Citrus Appraisal Worksheet.............    0563-0016      4-30-95
FCI-74-A.....................................  Stand Reduction and Hail Appraisal         0563-0016      4-30-95
                                                Worksheet.
FCI-74-A.....................................  Nut Tree Appraisal Worksheet...........    0563-0016      4-30-95
FCI-74-A.....................................  Adjuster's Citrus Worksheet............    0563-0016      4-30-95
FCI-74-A.....................................  Corn, Grain Sorghum, and Silage            0563-0016      4-30-95
                                                Appraisal Worksheet.
FCI-74-A.....................................  Cotton Appraisal Worksheet.............    0563-0016      4-30-95
FCI-74-A.....................................  Fig Appraisal Worksheet................    0563-0016      4-30-95
FCI-74-A.....................................  Flax Appraisal Worksheet...............    0563-0016      4-30-95
FCI-74-A.....................................  Forage Seeding Appraisal Worksheet.....    0563-0016      4-30-95
FCI-74-A.....................................  Fresh Sweet Corn Appraisal Worksheet...    0563-0016      4-30-95
FCI-74-A.....................................  Table Grape Appraisal Worksheet........    0563-0016      4-30-95
FCI-74-A.....................................  Peanut Appraisal Worksheet.............    0563-0016      4-30-95
FCI-74-A.....................................  Pear Appraisal Worksheet...............    0563-0016      4-30-95
FCI-74-A.....................................  Peppers, Fresh Tomatoes Appraisal          0563-0016      4-30-95
                                                Worksheet.
FCI-74-A.....................................  Fresh Plums Appraisal Worksheet........    0563-0016      4-30-95
FCI-74-A.....................................  Potato Appraisal Worksheet.............    0563-0016      4-30-95
FCI-74-A.....................................  Prune Appraisal Worksheet..............    0563-0016      4-30-95
FCI-74-A.....................................  Safflower Appraisal Worksheet..........    0563-0016      4-30-95
FCI-74-A.....................................  Wheat, Barley, Oats, Rye, Rice             0563-0016      4-30-95
                                                Appraisal Worksheet.
FCI-74-A.....................................  Soybean Appraisal Worksheet............    0563-0016      4-30-95
FCI-74-A.....................................  Stonefruit Appraisal Worksheet.........    0563-0016      4-30-95
FCI-74-A.....................................  Sugar Beet Appraisal Worksheet.........    0563-0016      4-30-95
FCI-74-A.....................................  Sugarcane Appraisal Worksheet..........    0563-0016      4-30-95
FCI-74-A.....................................  Sunflower Appraisal Worksheet..........    0563-0016      4-30-95

[[Page 17]]

 
FCI-74-A.....................................  Tobacco Appraisal Worksheet............    0563-0016      4-30-95
FCI-74-A.....................................  Adjuster's Peach Worksheet.............    0563-0016      4-30-95
FCI-74-A.....................................  Adjuster's Tomato Worksheet............    0563-0016      4-30-95
FCI-74-A.....................................  Texas Citrus Tree Appraisal Worksheet..    0563-0016      4-30-95
FCI-74-A.....................................  Macadamia Tree Worksheet...............    0563-0028      6-30-94
FCI-74-A.....................................  Macadamia Tree Worksheet (continuation)    0563-0028      6-30-94
FCI-74-A.....................................  Random Path Appraisal Worksheet........    0563-0039      8-31-94
FCI-74-B.....................................  Adjuster's Apple Worksheet.............    0563-0016      4-30-95
FCI-74-B.....................................  Peanut Computation Sheet...............    0563-0041      9-30-94
FCI-74-B.....................................  Stand Reduction Appraisal Worksheet....    0563-0016      4-30-95
FCI-74-B.....................................  Fresh Tomatoes Appraisal Worksheet.....    0563-0016      4-30-95
FCI-74-B.....................................  Peppers Appraisal Worksheet............    0563-0016      4-30-95
FCI-74-B.....................................  Cotton Claim for Indemnity.............    0563-0014     12-31-93
FCI-74-C.....................................  Summary of Harvested Production........    0563-0040      8-31-94
FCI-74-C.....................................  Hail Damage Appraisal Worksheet........    0563-0016      4-30-95
FCI-78.......................................  Request to Exclude Hail and Fire.......    0563-0032      6-30-94
FCI-78-A.....................................  Request to Exclude Hail and Fire.......    0563-0032      6-30-94
FCI-505......................................  Potato Crop Insurance Policy--Certified    0563-0029      6-30-94
                                                Seed Potato Option Amendment.
FCI-506......................................  Apple Fresh Fruit Option...............    0563-0020      6-30-94
FCI-513......................................  Waiver to Transfer Segregation II and      0563-0026      7-31-94
                                                III Peanuts to Quota Loan.
FCI-514......................................  Malting Barley Option..................    0563-0020      6-30-94
FCI-523......................................  Potato Quality Option..................    0563-0020      6-30-94
FCI-527......................................  Planting Record--Fresh Sweet Corn......    0563-0022      6-30-94
FCI-528......................................  Planting Record--Peppers...............    0563-0022      6-30-94
FCI-529......................................  Planting Record--Tomatoes (Fresh Market    0563-0022      6-30-94
                                                Dollar).
FCI-530......................................  Upland/ELS Cotton Program/                 0563-0038      8-31-94
                                                Identification of Cotton Prod.
FCI-532......................................  Power of Attorney......................    0563-0030      8-31-94
FCI-535......................................  Wheat Crop Insurance--Winter Coverage      0563-0020      6-30-94
                                                Option.
FCI-539......................................  Apple Sunburn Option...................    0563-0020      6-30-94
FCI-541......................................  Corn Silage Option.....................    0563-0020      6-30-94
FCI-544......................................  Underwriting Questionnaire (Container      0563-0034      7-31-94
                                                Stock Only).
FCI-545......................................  Nursey Container Report................    0563-0034      7-31-94
FCI-546......................................  Nursey Crop Insurance Inventory Summary    0563-0034      7-31-94
FCI-547......................................  Potato Crop Ins. Policy--Processing        0563-0020      6-30-94
                                                Potato Quality Option.
FCI-548......................................  Potato Crop Ins. Policy--Frost/Freeze      0563-0020      6-30-94
                                                Potato Option.
FCI-549......................................  High-Risk Land Exclusion Option........    0563-0018      6-30-95
FCI-550......................................  Fresh Market Tomato Minimum Value          0563-0020      6-30-94
                                                Option.
FCI-551......................................  Raisin Conditioning Pool--Production to    0563-0035      8-31-94
                                                Count.
FCI-552......................................  Self-Certification Replant Worksheet...    0563-0037      8-31-94
FCI-553......................................  Unit Division Option...................    0563-0001      2-28-95
FCI-554......................................  Macadamia Orchard Inspection Report....    0563-0015      4-30-95
FCI-555......................................  Peach Producer's Picking Records.......    0563-0024      6-30-94
FCI-819......................................  Raisin Supplement--Tonnage Report......    0563-0035      8-31-94
----------------------------------------------------------------------------------------------------------------


[56 FR 49390, Sept. 30, 1991, as amended at 58 FR 13531, Mar. 12, 1993]

Subpart I [Reserved]



                       Subpart J--Appeal Procedure

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

    Source: 67 FR 13251, Mar. 22, 2002, unless otherwise noted.



Sec. 400.90  Definitions.

    Act. The Federal Crop Insurance Act (7 U.S.C. 1501-1524).
    Administrative review. A review within the Department of Agriculture 
of an adverse decision.
    Adverse decision. A decision by an employee or Director of the 
Agency that is adverse to the participant. The term includes the denial 
of program benefits, written agreements, eligibility,

[[Page 18]]

etc. that results in the participant receiving less funds than the 
participant believes should have been paid or not receiving a benefit to 
which the participant believes he or she was entitled.
    Agency. RMA or FCIC, including the RSO, FOSD or any other division 
within the Agency with decision making authority.
    Appellant. Any participant who appeals or requests mediation of an 
adverse decision of the Agency in accordance with this subpart. Unless 
otherwise specified in this subpart, the term ``appellant'' includes an 
authorized representative.
    Authorized representative. Any person, whether or not an attorney, 
who has obtained a Privacy Act waiver and is authorized in writing by a 
participant to act for the participant in the administrative review, 
mediation, or appeal process.
    Certified State. A State with a mediation program, approved by the 
Secretary, that meets the requirements of 7 CFR part 1946, subpart A, or 
a successor regulation.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
Government corporation within USDA.
    FOSD. The Fiscal Operations and Systems Division established by the 
Agency for the purpose of making determinations of indebtedness for 
policies insured by FCIC and for determining ineligibility for policies 
both insured and reinsured by FCIC.
    FSA. The Farm Service Agency, an agency within USDA, or its 
successor agency.
    Good farming practices. The farming practices used in the area where 
the crop is produced, including sustainable farming practices, that are 
determined by FCIC to be necessary for the crop to make normal progress 
toward maturity and produce at least the yield used to determine the 
production guarantee or amount of insurance and to be compatible with 
the agronomic and weather conditions in the area or, for crops grown 
under an organic practice, the farming practices recommended by a 
private organization or government agency that certifies organic 
products and is accredited in accordance with the requirements of the 
Federal Organic Food Production Act of 1990.
    Mediation. A process in which a trained, impartial, neutral third 
party (the mediator), meets with the disputing parties, facilitates 
discussions, and works with the parties to mutually resolve their 
disputes, narrow areas of disagreement, and improve communication.
    NAD. The USDA National Appeals Division. See 7 CFR part 11.
    Non-certified State. A State that is not approved by the Secretary 
of Agriculture to participate in the USDA Mediation Program under 7 CFR 
part 1946, subpart A, or its successor regulation.
    Participant. An individual or entity that has applied for crop 
insurance or who holds a valid crop insurance policy that was in effect 
for the previous crop year and continues to be in effect for the current 
crop year. The term does not include individuals or entities whose 
claims arise under the programs excluded in the definition of 
participant published at 7 CFR 11.1.
    Reinsured company. A private insurance company, including its 
agents, that has been approved and reinsured by FCIC to provide 
insurance to participants.
    Reviewing authority. A person assigned the responsibility by the 
Agency of making a decision on a request for administrative review by 
the participant in accordance with this subpart.
    RMA. The Risk Management Agency, an agency within USDA, or its 
successor agency.
    RSO. The Regional Service Office established by the Agency for the 
purpose of providing program and underwriting services for private 
insurance companies reinsured by FCIC under the Act and for FCIC 
insurance contracts delivered through FSA offices.
    Secretary. The Secretary of Agriculture.
    USDA. United States Department of Agriculture.



Sec. 400.91  Applicability.

    (a) This subpart applies to:
    (1) Adverse decisions made by personnel of the Agency with respect 
to:
    (i) Contracts of insurance insured by FCIC; and
    (ii) Contracts of insurance of private insurance companies and 
reinsured by FCIC under the provisions of the Act.

[[Page 19]]

    (2) Determinations of good farming practices made by personnel of 
the Agency.
    (b) This subpart is not applicable to any decision:
    (1) Made by the Agency with respect to any matter arising under the 
terms of the Standard Reinsurance Agreement with the reinsured company; 
or
    (2) Made by any private insurance company with respect to any 
contract of insurance issued to any producer by the private insurance 
company and reinsured by FCIC under the provisions of the Act.
    (c) With respect to matters identified in Sec. 400.91(a)(1), 
participants may request an administrative review, mediation, or appeal 
of adverse decisions by the Agency made with respect to:
    (1) Denial of participation in the crop insurance program;
    (2) Compliance with terms and conditions of insurance;
    (3) Issuance of payments or other program benefits to a participant 
in the crop insurance program; and
    (4) Issuance of payments or other benefits to an individual or 
entity who is not a participant in the crop insurance program.
    (d) Only a participant may seek an administrative review or 
mediation under this subpart, as applicable.



Sec. 400.92  Appeals.

    (a) Except for determinations of good farming practices, nothing in 
this subpart prohibits a participant from filing an appeal of an adverse 
decision directly with NAD in accordance with part 11 of this title 
without first requesting administrative review or mediation under this 
subpart.
    (b) If the participant has timely requested administrative review or 
mediation, the participant may not participate in a NAD hearing until 
such administrative review or mediation is concluded. The time for 
appeal to NAD is suspended from the date of receipt of a request for 
administrative review or mediation until the conclusion of the 
administrative review or mediation. The participant will have only the 
remaining time to appeal to NAD after the conclusion of the 
administrative review or mediation.
    (c) There is no appeal to NAD of determinations regarding good 
farming practices.



Sec. 400.93  Administrative review.

    (a) With respect to adverse decisions, an appellant may seek one 
administrative review or seek mediation under Sec. 400.94, but not both. 
Only an administrative review is available for determinations of good 
farming practices. Mediation is not available for determinations of good 
farming practices.
    (b) If the appellant seeks an administrative review, the appellant 
must file a written request for administrative review with the reviewing 
authority in accordance with Sec. 400.95. The written request must state 
the basis upon which the appellant relies to show that:
    (1) The decision was not proper and not made in accordance with 
applicable program regulations and procedures; or
    (2) All material facts were not properly considered in such 
decision.
    (c) The reviewing authority will issue a written decision that will 
not be subject to further administrative review by the Agency.



Sec. 400.94  Mediation.

    For adverse decisions only:
    (a) Appellants have the right to seek mediation or other forms of 
alternative dispute resolution instead of an administrative review under 
Sec. 400.93.
    (b) All requests for mediation under this subpart must be made after 
issuance of the adverse decision by the Agency and before the appellant 
has a NAD hearing on the adverse decision.
    (c) An appellant who chooses mediation must request mediation not 
later than 30 calendar days from receipt of the written notice of the 
adverse decision. A request for mediation will be considered to have 
been ``filed'' when personally delivered in writing to the appropriate 
decision maker or when the properly addressed request, postage paid, is 
postmarked.
    (d) An appellant will have any balance of the days remaining in the 
30-day period to appeal to NAD if mediation is concluded without 
resolution. If a new adverse decision that raises new matters or relies 
on different

[[Page 20]]

grounds is issued as a result of mediation, the participant will have a 
new 30-day period for appeals to NAD.
    (e) An appellant is responsible for contacting the Certified State 
Mediation Program in States where such mediation program exists. The 
State mediation program will make all arrangements for the mediation 
process. A list of Certified State Mediation Programs is available at 
http://www.act.fcic.usda.gov.
    (f) An appellant is responsible for making all necessary contacts to 
arrange for mediation in non-certified States or in certified States 
that are not currently offering mediation on the subject in dispute. An 
appellant needing mediation in States without a certified mediation 
program may request mediation by contacting the RSO, which will provide 
the participant with a list of acceptable mediators.
    (g) An appellant may only mediate an adverse decision once.
    (h) If the dispute is not completely resolved in mediation, the 
adverse decision that was the subject of the mediation remains in effect 
and becomes the adverse decision that is appealable to NAD.
    (i) If the adverse decision is modified as a result of the mediation 
process, the modified decision becomes the new adverse decision for 
appeal to NAD.



Sec. 400.95  Time limitations for filing and responding to requests for administrative review.

    (a) A request for administrative review must be filed within 30 days 
of receipt of written notice of the adverse decision or determination 
regarding good farming practices. A request for an administrative review 
will be considered to have been ``filed'' when personally delivered in 
writing to the appropriate decision maker or when the properly addressed 
request, postage paid, is postmarked.
    (b) Notwithstanding paragraph (a) of this section, an untimely 
request for administrative review may be accepted and acted upon if the 
participant can demonstrate a physical inability to timely file the 
request for administrative review.



Sec. 400.96  Judicial review.

    (a) With respect to adverse determinations:
    (1) A participant must exhaust administrative remedies before 
seeking judicial review of an adverse decision. This requires the 
participant to appeal an Agency adverse decision to NAD in accordance 
with 7 CFR part 11 prior to seeking judicial review of the adverse 
decision.
    (2) If the adverse decision involves a matter determined by the 
Agency to be not appealable, the appellant must request a determination 
of non-appealability from the Director of NAD, and appeal the adverse 
decision to NAD if the Director determines that it is appealable, prior 
to seeking judicial review.
    (3) A participant with a contract of insurance reinsured by the 
Agency may bring suit against the Agency if the suit involves an adverse 
action in a United States district court after exhaustion of 
administrative remedies as provided in paragraphs (a) and (b) of this 
section. Nothing in this section can be construed to create privity of 
contract between the Agency and a participant.
    (b) With respect to determinations regarding good farming practices, 
participants are not required to exhaust their administrative remedies 
before bringing suit against FCIC in a United States district court. Any 
determination by the Agency, or reviewing authority, regarding good 
farming practices shall not be reversed or modified as the result of 
judicial review unless the determination is found to be arbitrary or 
capricious.



Sec. 400.97  Reservations of authority.

    (a) Representatives of the Agency may correct all errors in entering 
data on program contracts and other program documents, and the results 
of computations or calculations made pursuant to the contract.
    (b) Nothing contained in this subpart precludes the Secretary, the 
Manager of FCIC, or the Administrator of RMA, or a designee, from 
determining at any time any question arising under the programs within 
their respective authority or from reversing or modifying any adverse 
decision.

[[Page 21]]



Subpart K--Debt Management--Regulations for the 1986 and Succeeding Crop 
                                  Years

    Authority: Secs. 506, 516, Pub. L. 75-430, 52 Stat. 73, 77, as 
amended (7 U.S.C. 1506, 1516).

    Source: 51 FR 17316, May 12, 1986, unless otherwise noted.



Sec. 400.115  Purpose.

    This subpart sets forth procedures that will be followed, and the 
rights afforded to debtors, in connection with the reporting by the 
Federal Crop Insurance Corporation (FCIC) to credit reporting agencies 
of information with respect to current and delinquent debts owed to 
FCIC, and in connection with referral of delinquent debts to contract 
collection agencies.



Sec. 400.116  Definitions.

    (a) Credit reporting agency means (1) a reporting agency as defined 
at 4 CFR 102.5(a), or (2) any entity which has entered into an agreement 
with USDA concerning the referral of credit information.
    (b) Collection agency means a private debt collection contractor 
under Federal Supply Schedule contract with the General Services 
Administration (GSA) for professional debt collection services.
    (c) Comptroller means the employee of FCIC filling that position or 
the person designated by the Comptroller to perform that function.
    (d) Debt and claim are deemed synonymous and are used 
interchangeably herein. The debt or claim is an amount of money which 
has been determined by an appropriate agency official to be owed to FCIC 
by any individual, organization or entity, except another Federal 
agency; State, local or foreign government or agencies thereof; Indian 
tribal governments; or other public institutions.


The debt or claim may have arisen from overpayment, premium non-payment, 
interest, penalties, reclamations resulting from payments under good 
faith reliance provisions, or other causes.
    (e) Delinquent debt means (1) any debt owed to FCIC that has not 
been paid by the termination date specified in the applicable contract 
of insurance, or other due date for payment contained in any other 
agreement, or notification of indebtedness, and (2) any overdue amount 
owed to FCIC by a debtor which is the subject of an installment payment 
agreement which the debtor has failed to satisfy under the terms of such 
agreement.
    (f) System of records means a group of any records under the control 
of FCIC from which information is retrieved by the name of the 
individual by some identifying number, symbol, or other identification 
assigned to the individual.
    (g) Request for review means that request submitted to FCIC by a 
debtor for a review of the facts resulting in the determination of 
indebtedness to FCIC. FCIC allows 45 days for such request and any 
request submitted within that period is considered a timely request.



Sec. 400.117  Determination of delinquency.

    Prior to disclosing information about a debt to a credit reporting 
agency in accordance with this subpart, the FCIC claims official, 
designated as the Comptroller, FCIC, or the designee of the Comptroller 
who has jurisdiction over the claim, shall review the claim and 
determine that the claim is valid and overdue.



Sec. 400.118  Demand for payment.

    The Comptroller who is responsible for carrying out the provisions 
of this subpart with respect to the debt shall send to the debtor 
appropriate written demands for payment in terms which inform the debtor 
of the consequences of failure to make payment, in accordance with 
guidelines established by the Manager, FCIC, the Federal Claims 
Collection Standards at 4 CFR 102.2, or the contract between the General 
Services Administration (GSA) and the collection agency.



Sec. 400.119  Notice to debtor; credit reporting agency.

    (a) In accordance with guidelines established by the Manager, FCIC, 
the Comptroller who is responsible for disclosure of information with 
respect to delinquent debts to a credit reporting

[[Page 22]]

agency shall send written notice to the delinquent debtors that FCIC 
intends to disclose credit information to a credit reporting agency on a 
regular basis. In addition, delinquent debtors are to be informed:
    (1) Of the basis for the indebtedness;
    (2) That the payment is overdue;
    (3) That FCIC intends to disclose to a credit reporting agency that 
the debtor is responsible for the debt and with respect to an 
individual, that such disclosure shall be made not less than 60 days 
after notification to such debtor;
    (4) Of the specific information intended to be disclosed to the 
credit reporting agency;
    (5) Of the rights of such debtor to a full explanation of the claim 
and to dispute any information in the system of records of FCIC 
concerning the claim;
    (6) Of the debtor's right to administrative appeal or review with 
respect to the claim and how such review shall be obtained; and
    (7) Of the date after which the information will be reported to the 
credit reporting agency.
    (b) The content and standards for demand letters and notices sent 
under this section shall be consistent with the Federal Claims 
Collection Standards at 4 CFR 102.2.



Sec. 400.120  Subsequent disclosure and verification.

    (a) FCIC shall promptly notify each credit reporting agency to which 
the original disclosure of debt information was made of any substantial 
change in the condition or amount of the claim. A substantial change in 
condition may include, but is not limited to, notice of death, cessation 
of business, or relocation of the debtor. A substantial change in the 
amount may include, but is not limited to, payments received, additional 
amounts due, or offsets made with respect to the debt.
    (b) FCIC shall promptly verify or correct, as appropriate, 
information about the claim or request of such credit reporting agency 
for verification of any or all information so disclosed. The records of 
the debtor shall reflect any correction resulting from such request.
    (c) FCIC shall obtain satisfactory assurances from each reporting 
agency to which information will be provided that the agency is in 
compliance with the provisions of all laws and regulations of the United 
States relating to providing credit information.



Sec. 400.121  Information disclosure limitations.

    FCIC shall limit delinquent debt information disclosed to credit 
reporting agencies to:
    (a) The name, address, taxpayer identification number, and other 
information necessary to establish the identity of the debtor;
    (b) The amount, status, and history of the claim; and
    (c) The FCIC program under which the claim arose.



Sec. 400.122  Attempts to locate debtor.

    Before disclosing delinquent debt information to a credit reporting 
agency, FCIC shall take reasonable action to locate a debtor for whom 
FCIC does not have a current address in order to send the notification 
in accordance with Sec. 400.119 of this subpart.



Sec. 400.123  Request for review of the indebtedness.

    (a) Before disclosing delinquent debt information to a credit 
reporting agency, FCIC shall, upon request of the debtor, provide for a 
review of the claim, including an opportunity for reconsideration of the 
initial decision concerning the existence or amount of the claim, in 
accordance with applicable administrative appeal procedures.
    (b) Upon receipt of a timely request for review, FCIC shall suspend 
its schedule for disclosure of delinquent debt information to a credit 
reporting agency until such time as a final decision is made on the 
request.
    (c) Upon completion of the review, the reviewing office shall 
transmit to the debtor a written notification of the decision. If 
appropriate, notification shall inform the debtor of the scheduled date 
on or after which information concerning the debt will be provided to 
the credit reporting agency. The notification shall, if appropriate, 
also indicate any changes in the information to be disclosed to the 
extent such information differs from that provided in the initial 
notification.

[[Page 23]]



Sec. 400.124  Disclosure to credit reporting agencies.

    (a) In accordance with guidelines established by the Manager, FCIC, 
the Comptroller or designated manager of the systems of records shall 
disclose to credit reporting agencies the information specified in 
Sec. 400.121.
    (b) Disclosure of information to credit reporting agencies shall be 
made on or after the date specified in Secs. 400.119(a)(3) and 400.125 
and shall be comprised of the information set forth in the initial 
determination or any modification thereof.
    (c) This section shall not apply to disclosure of delinquent debts 
when:
    (1) The debtor has agreed to a repayment agreement for such debt and 
such agreement is still valid; or
    (2) The debtor has filed for review of the debt and the reviewing 
official or designee has not issued a decision on the review.



Sec. 400.125  Notice to debtor, collection agency.

    FCIC shall provide 30 days written notice to the debtor, mailed to 
the debtor's last known address, of FCIC's intent to forward the debt to 
a collection agency for further collection action.



Sec. 400.126  Referral of delinquent debts to contract collection agencies.

    (a) FCIC shall use the services of a contract collection agency 
which has entered into a contract with the General Services 
Administration to recover debts owed to FCIC.
    (b) If FCIC's collection efforts have been unsuccessful on a 
delinquent debt, and the delinquent debt remains unpaid, FCIC may refer 
the debt to a contract collection agency for collection.
    (c) FCIC shall retain the authority to resolve disputes, compromise 
claims, suspend or terminate collection action, and refer the matter for 
litigation.



Sec. 400.127  OMB control numbers.

    OMB control numbers are contained in subpart H of part 400, title 7 
CFR.



Sec. 400.128  Definitions.

    (a) Agency means (1) An Executive Agency as defined by 5 U.S.C. 105, 
the United States Postal Service, and the United States Postal Rate 
Commission, or (2) A Military Department, as defined by section 102 of 
Title 5 U.S.C.
    (b) Debt means:
    (1) An amount owed to the United States from sources including, but 
not limited to, insured or guaranteed loans, fees, leases, insurance 
premiums, interest (except where prohibited by law), rents, royalties, 
services, sale of real or personal property, overpayments, penalties, 
damages, fines and forfeitures (except those arising under the Uniform 
Code of Military Justice).
    (2) An amount owed to the United States by an employee for pecuniary 
losses where the employee has been determined to be liable because of 
such employee's negligent, willful, unauthorized or illegal acts, 
including but not limited to:
    (i) Theft, misuse, or loss of Government funds;
    (ii) False claims for services and travel reimbursement;
    (iii) Illegal, unauthorized obligations and expenditures of 
Government appropriations;
    (iv) Using or authorizing the use of Government owned or leased 
equipment, facilities, supplies and services for other than official or 
approved purposes;
    (v) Lost, stolen, damaged, or destroyed Government property;
    (vi) Erroneous entries on accounting records or reports; and
    (vii) Deliberate failure to provide physical security and control 
procedures for accountable officers, if such failure is determined to be 
the proximate cause for a loss of Government funds.
    (c) Department or USDA means the United States Department of 
Agriculture.
    (d) Disposable salary (pay) means any pay due an employee which 
remains after required deductions for Federal, State and local income 
taxes; Social Security taxes, including Medicare taxes; Federal 
retirement programs; premiums for life and health insurance benefits; 
and such other deductions as may be required by law to be withheld.
    (e) Employee means a current employee of an agency, including a 
current member of the Armed Forces or a Reserve of the Armed Forces.

[[Page 24]]

    (f) FCIC Official means the Manager, or the Manager's designee.
    (g) Hearing Officer means an Administrative Law Judge of the 
Department of Agriculture or another person not under the control of the 
USDA, designated by the FCIC Official to review the determination of the 
alleged debt.
    (h) Salary Offset means a deduction of a debt due the U.S. by 
deduction from the disposable salary of an employee without the 
employee's consent.
    (i) Waiver means the cancellation, remission, forgiveness, or non-
recovery of a debt owed by an employee as permitted or required by 5 
U.S.C. 5584, 10 U.S.C. 2774, 32 U.S.C. 716, 5 U.S.C. 8346(b), or any 
other law.

[53 FR 3, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.129  Salary offset.

    (a) Debt collection by salary offset is feasible if: the cost to the 
Government of collection by salary offset does not exceed the amount of 
the debt; there are no legal restrictions to the debt, such as the 
debtor being under the jurisdiction of a bankruptcy court or the 
expiration of a statute of limitations; or, other such legal 
restrictions. The Debt Collection Act permits collections of debts by 
offset for claims that have not been outstanding for more than 10 years.
    (b) The salary offset provisions contained herein provide procedures 
which must be followed before FCIC may request another Federal agency to 
offset any amount from the debtor's salary. Decisions made under the 
provisions of this section are not appealable under the provisions of 
the Appeal Regulations in part 400, subpart J of this title.
    (c) These regulations will not apply to any case where collection of 
a debt by salary offset is explicitly provided for by another statue as 
noted by the Comptroller General in 64 Comp. Gen. 142 (1984), including 
5 U.S.C. 5512(a), 5 U.S.C. 5513, 5 U.S.C. 5522(a) (1), 5 U.S.C. 5705 (1) 
and (2), and 5 U.S.C. 5724(f).
    (d) Salary offset may be used by FCIC to collect debts which arise 
from delinquent FCIC premium payments or delinquent repayment plans and 
other debts arising from, but not limited to, such sources as program 
theft, embezzlement, fraud, salary overpayments, underwithholding of any 
amounts due and payable for life and health insurance, advance travel 
payments, overpaid indemnities, and any amount owed by present or former 
employees from loss of federal funds through negligence and other 
matters. The debt does not have to be reduced to judgment and does not 
have to be covered by a security instrument.
    (e) FCIC may use salary offset against one of its employees who is 
indebted to another agency if requested to do so by that agency. Salary 
offset will not be initiated until after other servicing options 
available to the requesting agency have been utilized, and due process 
has been afforded to the FCIC employee. When salary offset is utilized, 
payment for the debt will be deducted from the employee's salary and 
sent directly to the creditor agency. Not more than fifteen percent 
(15%) of the employee's disposable salary can be offset in any one pay 
period, unless the employee agrees in writing to the deduction of a 
larger amount.
    (f) When FCIC is owed a debt by an employee of another agency, the 
other agency shall not initiate the requested offset until FCIC provides 
the agency with a written certification that the debtor owes FCIC a debt 
(including the amount and basis of the debt and the due date of the 
payment), and that FCIC has complied with Department regulations. If a 
repayment schedule is elected by the employee, interest will be charged 
in accordance with Departmental Regulation 2520-1, Interest Rate on 
Delinquent Debts; USDA Debt Collection Regulations in 7 CFR part 3; and 
4 CFR 102.13.
    (g) For the purposes of this section, the Manager, FCIC, or the 
Manager's designee, is delegated authority to:
    (1) Certify to the debtor's employing agency that the debt exists 
and the amount of the debt or delinquent balance;
    (2) Certify that, with respect to debt collection, the procedures 
and regulations of FCIC and the Department have been complied with; and
    (3) Request that salary offset be initiated by the debtor's 
employing agency.

[53 FR 3, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]

[[Page 25]]



Sec. 400.130  Notice requirements before offset.

    Salary offset will not be made unless the employee receives 30 
calendar days written notice. The notice of intent to offset salary 
(notice of intent) will state:
    (a) That FCIC has reviewed the records relating to the debt and has 
determined that the debt is owed, and has verified the amount of the 
debt, and the facts giving rise to the debt;
    (b) That FCIC intends to deduct an amount not to exceed 15% of the 
employees current disposable salary until the debt and all accumulated 
interest are paid in full;
    (c) The amount, frequency, approximate beginning date, and duration 
of the intended deductions;
    (d) An explanation of the requirements concerning interest, 
penalties, and administrative costs, including a statement that these 
assessments will be made unless waived in accordance with 31 U.S.C. 3717 
and 7 CFR 3.34;
    (e) That FCIC's records concerning the debt are available to the 
employee for inspection and that the employee may request a copy of such 
records;
    (f) That the employee has a right to voluntarily enter into a 
written agreement with FCIC for a repayment schedule with FCIC, which 
may be different from that proposed by FCIC, if the terms of the 
repayment agreement are agreed to by FCIC;
    (g) That the employee has the right to a hearing conducted by an 
Administrative Law Judge of USDA, or a hearing official not under the 
control of USDA, concerning the determination of the debt, the amount of 
the debt, or the percentage of disposable salary to be deducted each pay 
period, if the petition for a hearing is filed by the employee as 
prescribed by FCIC;
    (h) The method and time period allowable for a petition for a 
hearing;
    (i) That the timely filing of a hearing petition will stay the 
offset collection proceedings;
    (j) That a final decision on the hearing will be issued at the 
earliest practical date, but not later than 60 calendar days after the 
filing of the petition, unless the employee requests, and the hearing 
officer grants, a delay in the proceedings;
    (k) That any knowingly false or frivolous statement, representation, 
or evidence may subject the employee to:
    (1) Disciplinary procedures appropriate under 5 U.S.C. Chapter 75, 5 
CFR part 752, or any other applicable Statutes or regulations;
    (2) Penalties under the False Claims Act, 31 U.S.C. 3729-3731, or 
any other applicable statutory authority: or
    (3) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002, or 
any other applicable statutory authority;
    (l) Any other rights or remedies available to the employee under any 
statute or regulations governing the program for which collection is 
being made;
    (m) That the employee may request waiver of salary overpayment under 
applicable statutory authority (5 U.S.C. 5584, 10 U.S.C. 2774, 32 U.S.C 
716, or 5 U.S.C 8346(b)), or may request waiver in the case of general 
debts and if waiver is available under any statutory provision 
pertaining to the particular debt being collected. The employee may 
question the amount or validity of the salary overpayment or general 
debt by submitting a claim to the Comptroller General in accordance with 
General Accounting Officer procedure.
    (n) That amounts paid on or deducted for the debt which are later 
waived or found not to be owed to the United States will be promptly 
refunded to the employee, unless there are applicable contractual or 
statutory provisions to the contrary; and
    (o) The name and address of an official of FCIC to whom the employee 
should direct any communication with respect to the debt.

[53 FR 4, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.131  Request for a hearing and result if an employee fails to meet deadlines.

    (a) Except as provided in paragraph (c) of this section, an employee 
must file a petition for hearing that is received by the FCIC Official 
not later than 30 calendar days from the date of the notice of intent to 
collect a debt by salary offset, if the employee wants a hearing 
concerning:

[[Page 26]]

    (1) The existence or amount of the debt; or
    (2) The FCIC Official's proposed offset schedule, including the 
percentage of deduction.
    (b) The petition must be signed by the employee and should clearly 
identify and explain with reasonable specificity and brevity the facts, 
evidence and witnesses which the employee believes support the his or 
her position. If the employee objects to the percentage of disposable 
salary to be deducted from each check, the petition should state the 
objection and the reasons for it.
    (c) If the employee files a petition for hearing later than the 30 
days provided in paragraph (a) of this section, the FCIC Official may 
accept the petition if the employee is able to show that the delay 
caused by conditions beyond his or her control, or because the employee 
failed to received the notice of the filing deadline (unless the 
employee has actual notice of the deadline).
    (d) An employee will not be granted a hearing and will have his or 
her disposable salary offset in accordance with the FCIC Official's 
announced schedule if the employee:
    (1) Fails to file a petition for hearing as set forth in this 
subsection; or
    (2) Is scheduled to appear and fails to appear at the hearing.

[53 FR 4, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.132  Hearings.

    (a) If an employee timely files a petition for a hearing, the FCIC 
Official will select the date, time, and location for the hearing.
    (b) The hearing shall be conducted by an appropriately designated 
Hearing Official.
    (c) Rules of evidence shall not be observed, but the hearing officer 
will consider all evidence that he or she determines to be relevant to 
the debt that is the subject of the hearing, and weigh all such evidence 
accordingly, given all the facts and circumstances surrounding the debt.
    (d) The burden of proof with respect to the existence of the debt 
rests with FCIC.
    (e) The employee requesting the hearing shall bear the ultimate 
burden of proof.
    (f) The evidence presented by the employee must prove that no debt 
exists, or cast sufficient doubt such that reasonable minds could differ 
as to the existence of the debt.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.133  Written decision following a hearing.

    (a) At the conclusion of the hearing, a written decision will be 
provided which will include:
    (1) A statement of the facts presented at the hearing supporting the 
nature and origin of the alleged debt and those presented to refute the 
debt;
    (2) The hearing officer's analysis, findings, and conclusions, 
considering all the evidence presented and the respective burdens of the 
parties, in light of the hearing;
    (3) The amount and validity of the alleged debt determined as a 
result of the hearing;
    (4) The payment schedule (including the percentage of disposable 
salary), if applicable; and
    (5) The determination of the amount of the debt at this hearing is 
the final agency action on this matter.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.134  Review of FCIC record related to the debt.

    An employee who intends to inspect or copy FCIC records related to 
the debt must send a letter to the FCIC official (designated in the 
notice of intent) stating his or her intentions. The letter must be 
received by the FCIC official within 30 calender days of the date of the 
notice of intent. In response to the timely notice submitted by the 
debtor, the FCIC official will notify the employee of the location and 
time when the employee may inspect and copy FCIC records related to the 
debt.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]

[[Page 27]]



Sec. 400.135  Written agreement to repay debt as an alternative to salary offset.

    The employee may propose, in response to a notice of intent, a 
written agreement to repay the debt as an alternative to salary offset. 
The proposed written agreement to repay the debt must be received by the 
FCIC official within 30 calendar days of the date of the notice of 
intent. The FCIC official will notify the employee whether the 
employee's proposed written agreement for repayment is acceptable. The 
FCIC official may accept a repayment agreement instead of proceeding by 
offset. In making this determination, the FCIC official will balance the 
FCIC interest in collecting the debt against hardship to the employee. 
If the debt is delinquent and the employee has not disputed its 
existence or amount, the FCIC official will accept a repayment 
agreement, instead of offset, for good cause such as, if the employee 
establishes that offset would result in undue financial hardship, or 
would be against equity and good conscience.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.136  Procedures for salary offset; when deductions may begin.

    (a) Deductions to liquidate an employee's debt will be made by the 
method and in the amount outlined in the Notice of Intent to collect 
from the employee's salary, as provided for in Sec. 400.130.
    (b) If the employee files a petition for a hearing before the 
expiration of the period provided for in Sec. 400.130, then deductions 
will begin after the hearing officer has provided the employee with a 
final written decision in favor of FCIC.
    (c) If an employee retires or resigns before collection of the 
amount of the indebtedness is completed, the remaining indebtedness will 
be collected in accordance with procedures for administrative offset.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.137  Procedures for salary offset; types of collection.

    A debt will be collected in a lump-sum or in installments. 
Collection will be by lump-sum collection unless the employee is 
financially unable to pay in one lump-sum, or if the amount of the debt 
exceeds 15 percent of the disposable pay for an ordinary pay period. In 
these cases, deduction will be by installments as set forth in 
Sec. 400.138.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.138  Procedures for salary offset; methods of collection.

    (a) General. A debt will be collected by deductions at officially-
established pay intervals from an employee's current pay account, unless 
the employee and the hearing official agree to alternative arrangements 
for repayment under Sec. 400.135.
    (b) Installment deductions. Installment deductions will be made over 
a period not greater than the anticipated period of employment. The size 
and frequency of the installment deductions will bear a reasonable 
relation to the size of the debt and the employee's ability to pay. If 
possible, the installment payment will be sufficient in size and 
frequency to liquidate the debt in no more than three years. Installment 
payments of less than $25.00 per pay period, or $50.00 per month, will 
be accepted only in the most unusual circumstances.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.139  Nonwaiver of rights.

    So long as there are no statutory or contractual provisions to the 
contrary, no employee payment (or all or portion of a debt) collected 
under these regulations will be interpreted as a waiver of any rights 
that the employee may have under the provisions of 5 U.S.C. 5514.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.140  Refunds.

    FCIC will promptly refund to the appropriate individual amounts 
offset under these regulations when:

[[Page 28]]

    (a) A debt is waived or otherwise found not owing to the United 
States (unless expressly prohibited by statute or regulation); or
    (b) FCIC is directed by an administrative or judicial order to 
refund amounts deducted from an employee's current pay.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.141  Internal Revenue Service (IRS) Tax Refund Offset.

    Under the provisions of 31 U.S.C. 3720A, the (IRS) may be requested 
to collect a legally enforceable debt owing to any Federal agency by 
offset against a taxpayer's Federal income tax refund. This section 
provides policies and procedures to implement IRS tax refund offsets in 
accordance with the provisions set forth in Sec. 301.6402-6T of 26 CFR 
chapter I.
    (a) Any person who is indebted to the Federal Crop Insurance 
Corporation (FCIC) is entitled to the extent of FCIC's administrative 
due process including review and appeal of the debt under the Appeal 
Regulations in 7 CFR part 400, subpart J.
    (b) If, after such administrative due process is exhausted, the debt 
is still outstanding with no other means of collection, the debtor will 
be notified by letter of FCIC's intention to refer such debt to the IRS 
for collection by tax refund offset. The notification letter will inform 
the debtor that their account is delinquent and that IRS will be 
requested to reduce the amount of any tax refund check due the debtor by 
the amount of the deliquency. The debtor will be given 60 days in which 
to write to the Manager, FCIC, providing written evidence that the debt 
is not legally enforceable. FCIC will refer the debt to IRS for 
collection by offset after the 60-day period if no response is received 
from the debtor. Decisions made under the provisions of this section are 
not appealable under the provisions of the Appeal Regulations in 7 CFR 
part 400, subpart J.
    (c) If the debtor has requested a review, and has provided written 
evidence that the debt is not legally enforceable, the Manager, with the 
assistance of the Office of General Counsel, USDA, will review the 
debtor's reasons for believing that the debt is not legally enforceable. 
The debtor will then be notified of the results of the review.
    (d) FCIC will notify IRS of those accounts against which offset 
action is to be taken.
    (e) If, during the period of review, the debtor pays the debt in 
full, the collection of the debt by tax refund offset procedure will be 
halted. Changes in debtor status that eliminate the debtor from IRS 
offset will be reported to IRS by FCIC and the debtor's refund will not 
be offset.
    (f) Amounts offset for delinquent debt which are later found to be 
not owed to FCIC, will be promptly refunded.
    (g) Debtors will not be subject to IRS offset for any of the 
following reasons:
    (1) Debtors who are discharged in bankruptcy or who are under the 
jurisdiction of a bankruptcy court;
    (2) Debtors who are employed by the Federal Government;
    (3) Debtors whose cases are in suspense because of actions pending 
by or taken by FCIC;
    (4) Debtors who have not provided a Social Security Number (SSN) and 
no SSN can be obtained;
    (5) Debtors whose indebtedness is less than $25;
    (6) Debtors whose account is more than ten (10) years delinquent; 
except in the case of a judgment debt; or
    (7) Debtors whose account has not been first reported to a consumer 
credit reporting agency.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.142  Past-due legally enforceable debt eligible for refund offset.

    For purposes of this section, a past-due, legally enforceable debt 
which may be referred by FCIC to IRS for offset is a debt which:
    (a) Except in the case of a judgement debt, has been delinquent for 
at least three months but has not been delinquent for more than 10 years 
at the time the offset is made;
    (b) Cannot be currently collected pursuant to the salary offset 
provisions of 5 U.S.C. 5514(a)(1);
    (c) Is ineligible for administrative offset under 31 U.S.C. 3716(a) 
by reason

[[Page 29]]

of 31 U.S.C. 3716(c)(2), or cannot be collected by administrative offset 
under 31 U.S.C. 3716(a) by the referring agency against amounts payable 
to the debtor by the referring agency;
    (d) With respect to which the agency has given the employee at least 
60 days to present evidence that all or part of the debt is not past-due 
or legally enforceable, has considered evidence presented by such 
employee, and has determined that an amount of such debt is past-due and 
legally enforceable;
    (e) Has been disclosed by FCIC to a consumer reporting agency as 
authorized by 31 U.S.C. 3711(f), in the case of a debt to be referred to 
IRS after June 30, 1986;
    (f) With respect to which that FCIC has notified, or has made a 
reasonable attempt to notify, the employee that:
    (1) The debt is past due; and
    (2) Unless repaid within 60 days thereafter, will be referred to IRS 
for offset against any overpayment of tax; and
    (3) Which is at least $25.00.

[53 FR 6, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



 Subpart L--Reinsurance Agreement--Standards for Approval; Regulations 
              for the 1997 and Subsequent Reinsurance Years

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

    Source: 52 FR 17543, May 11, 1987, unless otherwise noted. 
Redesignated at 53 FR 3, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988.



Sec. 400.161  Definitions.

    In addition to the terms defined in the Standard Reinsurance 
Agreement, the following terms as used in this rule are defined to mean:
    (a) Annual Statutory Financial Statement means the annual financial 
statement of an insurer prepared in accordance with Statutory Accounting 
Principles and submitted to the state insurance department if required 
by any state in which the insurer is licensed.
    (b) Company means the company reinsured by FCIC or apply to FCIC for 
a Standard Reinsurance Agreement.
    (c) Corporation means the Federal Crop Insurance Corporation.
    (d) FCIC means the Federal crop Insurance Corporation.
    (e) Financial statement means any documentation submitted by a 
company as required by this subpart.
    (f) Guaranty fund assessments means the state administered program 
utilized by some state insurance regulatory agencies to obtain funds 
with which to discharge unfunded obligations of insurance companies 
licensed to do business in that state.
    (g) Insurer means an insurance company that is licensed or admitted 
as such in any State, Territory, or Possession of the United States.
    (h) MPUL means the maximum possible underwriting loss that an 
insurer can sustain on policies it intends to reinsure with FCIC, after 
adjusting for the effect of any reinsurance agreement with FCIC, and any 
outside reinsurance agreements, as evaluated by FCIC.
    (i) Obligations mean crop or indemnity for crop loss on policies 
reinsured under the Standard Reinsurance Agreement.
    (j) Plan of operation means a statment submitted to FCIC each year 
in which a reinsured or a prospective reinsured specifies the 
reinsurance options it wishes to use, its marketing plan, and similar 
information as required by the Corporation.
    (k) Quarterly Statutory Financial Statement means the quarterly 
financial statement of an insurer prepared in accordance with Statutory 
Accounting Principles and submitted to the state insurance department if 
required by any state in which the insurer is licensed.
    (l) Reinsurance agreement means an agreement between two parties by 
which an insurer cedes to a reinsurer certain liabilities arising from 
the insurer's sale of insurance policies.
    (m) Reinsured means the insurer which is a party to the Standard 
Reinsurance Agreement with FCIC.
    (n) Standard Reinsurance Agreement (Agreement) means the reinsurance 
agreement between the reinsured and FCIC.

[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and 
53 FR 10527, Apr. 1, 1988, as amended at 57 FR 34666, Aug. 6, 1992; 60 
FR 57903, Nov. 24, 1995]

[[Page 30]]



Sec. 400.162  Qualification ratios.

    The sixteen qualification ratios include:
    (a) Eleven National Association of Insurance Commissioner's (NAIC's) 
Insurance Regulatory Information System (IRIS) ratios found in 
Secs. 400.170(d)(1)(ii) and 400.170(d)(2) (i), (ii), (iii), (vi), (vii), 
(ix), (xi), (xii), (xiii), and (xiv) and referenced in ``Using the NAIC 
Insurance Regulatory Information System'' distributed by NAIC, 120 West 
12th St., Kansas City, MO 64105-1925;
    (b) Three ratios used by A.M. Best Company found in 
Sec. 400.170(d)(2) (v), (viii), and (x) and referenced in Best's Key 
Rating Guide, A.M. Best, Ambest Road, Oldwick, N.J. 08858-0700;
    (c) One ratio found in Sec. 400.170(d)(1)(i) is calculated the same 
as the Gross Premium to Surplus IRIS ratio, with Gross Premium adjusted 
to exclude the MPCI premium assumed by FCIC; and
    (d) One ratio found in Sec. 400.170(d)(2)(iv) which is formulated by 
FCIC and is calculated the same as the One-Year Change to Surplus IRIS 
ratio but for a two-year period.

[60 FR 57903, Nov. 24, 1995]



Sec. 400.163  Applicability.

    The standards contained herein shall be applicable to insurers who 
apply for or enter into a Standard Reinsurance Agreement effective for 
the 1997 and subsequent reinsurance years or who continue with a prior 
years Standard Reinsurance Agreement into the 1997 and subsequent 
reinsurance years.

[60 FR 57903, Nov. 24, 1995]



Sec. 400.164  Availability of the Standard Reinsurance Agreement.

    Federal Crop Insurance Corporation will offer Standard Reinsurance 
Agreements to eligible Companies under which the Corporation will 
reinsure policies which the Companies issue to producers of agricultural 
commodities. The Standard Reinsurance Agreement will be consistent with 
the requirements of the Federal Crop Insurance Act, as amended, and 
provisions of the regulations of the Corporation found at chapter IV of 
title 7 of the Code of Federal Regulations.



Sec. 400.165  Eligibility for Standard Reinsurance Agreements.

    A Company will be eligible to participate in an Agreement if the 
Corporation determines the Company meets the standards and reporting 
requirements of this subpart.



Sec. 400.166  Obligations of the Corporation.

    The Agreement will include the following among the obligations of 
the Corporation.
    (a) The Corporation will reinsure policies written on terms, 
including premium rates, approved by the Corporation, on crops and in 
areas approved by the Corporation, and in accordance with the provisions 
of the Federal Crop Insurance Act, as amended, and the provisions of 
these regulations.
    (b) The Corporation will pay a portion of each producer's premium on 
the policies reinsured under the Agreement, as authorized by the Federal 
Crop Insurance Act, as amended.
    (c) The Corporation will assume all obligations for unpaid losses on 
policies reinsured under the Agreement in the event any company 
reinsured under the Agreement is unable to fulfill its obligations to 
any holder of a Multiple Peril Crop Insurance Policy reinsured by the 
Corporation by reason of a directive or order issued by any State 
Department of Insurance, State Commissioner of Insurance, any court of 
law having competent jurisdiction or any other similar authority of any 
jurisdiction to which the Company is subject.
    (d) Each policy reinsured by the Corporation must be clearly 
identified by including in bold face or large type the following 
statement as item number 1 in its General Provisions:
This insurance policy is reinsured by the Federal Crop Insurance 
Corporation under the provisions of the Federal Crop Insurance Act, as 
amended (the Act) (7 U.S.C. 1501 et seq.), and all terms of the policy 
and rights and responsibilities of the parties are specifically subject 
to the Act and the regulations under the Act published in chapter IV of 
7 CFR.

[[Page 31]]



Sec. 400.167  Limitations on Corporation's obligations.

    The Agreement will include the following among the limitations on 
the obligations of the Corporation.
    (a) The Corporation may, at any time, suspend its obligation to 
accept additional liability from the Company by providing written notice 
to that effect.
    (b) The obligations of the Corporation under the Agreement are 
contingent upon the availability of appropriations.
    (c) The Corporation will not reinsure any policy sold by the Company 
to a producer after the date Company receives notice that the 
Corporation has determined that the producer is ineligible to receive 
Federal Crop Insurance.



Sec. 400.168  Obligations of participating insurance company.

    The Agreement will include the following among the obligations of 
the Company.
    (a) The Company shall follow all applicable Corporation procedures 
in its administration of the crop insurance policies reinsured.
    (b) The Company shall make available to all eligible producers in 
the areas designated in its plan of operations as approved by the 
Corporation:
    (1) The crop insurance plans for the crops designated in its plan of 
operation in those counties within a State, or a portion of a State, 
where the Secretary of Agriculture has determined that insurance is 
available through local offices of the United States Department of 
Agriculture; and
    (2) Catastrophic risk protection, limited, and additional coverage 
plans of insurance for all crops, for which such insurance is made 
available by the Corporation, in all counties within a state, or a 
portion of State, where the Secretary of Agriculture has determined that 
insurance is no longer available through local offices of the United 
States Department of Agriculture.
    (c) The Company shall provide the Corporation, on forms approved by 
the Corporation all information that the Corporation may deem relevant 
in the administration of the Agreement, including a list of all 
applicants determined to be ineligible for crop insurance coverage and 
all insured producers cancelled or terminated from insurance, along with 
the reason for such action, the crop program, and the amount of coverage 
for each.
    (d) The Company shall utilize only loss adjustment procedures and 
methods that are approved by the Corporation.
    (e) The Company shall sell the policies covered under the Agreement 
through licensed agents or brokers who have successfully completed a 
training course approved by the Corporation.
    (f) The Company shall not discriminate against any employee, 
applicant for employment, insured or applicant for insurance because of 
race, color, religion, sex age, handicap, or national origin.

[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and 
53 FR 10527, Apr. 1, 1988, as amended at 61 FR 34368, July 2, 1996; 61 
FR 65153, Dec. 11, 1996]



Sec. 400.169  Disputes.

    (a) If the company believes that the Corporation has taken an action 
that is not in accordance with the provisions of the Standard 
Reinsurance Agreement or any reinsurance agreement with FCIC, except 
compliance issues, it may request the Deputy Administrator of Insurance 
Services to make a final administrative determination addressing the 
disputed action. The Deputy Administrator of Insurance Services will 
render the final administrative determination of the Corporation with 
respect to the applicable actions. All requests for a final 
administrative determination must be in writing and submitted within 45 
days after receipt after the disputed action.
    (b) With respect to compliance matters, the Compliance Field Office 
renders an initial finding, permits the company to respond, and then 
issues a final finding. If the company believes that the Compliance 
Field Office's final finding is not in accordance with the applicable 
laws, regulations, custom or practice of the insurance industry, or FCIC 
approved policy and procedure, it may request, the Deputy Administrator 
of Compliance to make a final

[[Page 32]]

administrative determination addressing the disputed final finding. The 
Deputy Administrator of Compliance will render the final administrative 
determination of the Corporation with respect to these issues. All 
requests for a final administrative determination must be in writing and 
submitted within 45 days after receipt of the final finding.
    (c) A company may also request reconsideration by the Deputy 
Administrator of Insurance Services of a decision of the Corporation 
rendered under any Corporation bulletin or directive which bulletin or 
directive does not interpret, explain, or restrict the terms of the 
reinsurance agreement. The company, if it disputes the Corporation's 
determination, must request a reconsideration of that determination in 
writing, within 45 days of the receipt of the determination. The 
determinations of the Deputy Administrator will be final and binding on 
the company. Such determinations will not be appealable to the Board of 
Contract Appeals.
    (d) Appealable final administrative determinations of the 
Corporation under paragraph (a) or (b) of this section may be appealed 
to the Board of Contract Appeals in accordance with the provisions of 
subtitle A, part 24 of title 7 of the Code of Federal Regulations.

[65 FR 3782, Jan. 25, 2000]



Sec. 400.170  General qualifications.

    To qualify initially or thereafter for a Standard Reinsurance 
Agreement with FCIC, an insurer must:
    (a) Be licensed or admitted in any state, territory, or possession 
of the United States;
    (b) Be licensed or admitted, or use as a policy-issuing Company an 
insurer that is licensed or admitted, in each state from which the 
insurer will cede policies to FCIC for reinsurance;
    (c) Have surplus, as reported in its most recent Annual or Quarterly 
Statutory Financial Statement, that is at least equal to the MPUL for 
the company's estimated retained premium proposed to be reinsured, 
multiplied by the appropriate Minimum Surplus Factor found in the 
Minimum Surplus Table. For the purposes of the Minimum Surplus Table, an 
insurer is considered to issue policies in a state if at least two and 
one-half percent (2.5%) of all its reinsured retained premium is written 
in that state;

                          Minimum Surplus Table
------------------------------------------------------------------------
                                                               Minimum
                                                               surplus
 Number of states in which a company issues FCIC-reinsured      factor
                          policies                           (multiplied
                                                               by MPUL)
------------------------------------------------------------------------
1 through 10...............................................          2.5
11 or more.................................................          2.0
------------------------------------------------------------------------

    (d) Have and meet the ratio requirements of the Gross Premium to 
Surplus and Net Premium to Surplus required ratios and at least ten of 
the fourteen analytical ratios in this section based on the most recent 
Annual Statutory Financial Statement, or comply with Sec. 400.172:

------------------------------------------------------------------------
                   Ratio                          Ratio requirement
------------------------------------------------------------------------
(1) Required:
    (i) Gross Premium to Surplus..........  Less than 900%.
    (ii) Net Premium to Surplus...........  Less than 300%.
(2) Analytical:
    (i) Two-Year Overall Operating Ratio..  Less than 100%.
    (ii) Agents' Balances to Surplus......  Less than 40%.
    (iii) One-Year Change in Surplus......  Greater than -10% and less
                                             than 50%.
    (iv) Two-Year Change in Surplus.......  Greater than -10%.
    (v) Combined Ratio After Policyholder   Less than 115%.
     Dividends.
    (vi) Change in Writing................  Greater than -33% and less
                                             than 33%.
    (vii) Surplus Aid to Surplus..........  Less than 15%.
    (viii) Quick Liquidity................  Greater than 20%.
    (ix) Liabilities to Liquid Asset......  Less than 105%.
    (x) Return on Surplus.................  Greater than -5%.
    (xi) Investment Yield.................  Greater than 4.5% and less
                                             than 10%.
    (xii) One-Year Reserve Development to   Less than 20%.
     Surplus.
    (xiii) Two-Year Reserve Development to  Less than 20%.
     Surplus.
    (xiv) Estimated Current Reserve         Less than 25%.
     Deficiency to Surplus.
------------------------------------------------------------------------

    (e) Submit to FCIC all of the following statements:
    (1) Annual and Quarterly Statutory Financial Statements;
    (2) Statutory Management Discussion & Analysis;

[[Page 33]]

    (3) Most recent State Insurance Department Examination Report;
    (4) Actuarial Opinion of Reserves;
    (5) Annual Audited Financial Report; and
    (6) Any other appropriate financial information or explanation of 
IRIS ratio discrepancies as determined by the company or as requested by 
FCIC.

[60 FR 57903, Nov. 24, 1995]



Sec. 400.171  Qualifying when a state does not require that an Annual Statutory Financial Statement be filed.

    An insurer exempt by the insurance department of the states where 
they are licensed from filing an Annual Statutory Financial Statement 
must, in addition to the requirements of Sec. 400.170 (a), (b), (c) and 
(d), submit an Annual Statutory Financial Statement audited by a 
Certified Public Accountant in accordance with generally accepted 
auditing standards, which if not exempted, would have been filed with 
the insurance department of any state in which it is licensed.

[60 FR 57904, Nov. 24, 1995]



Sec. 400.172  Qualifying with less than two of the required ratios or ten of the analytical ratios meeting the specified requirements.

    An insurer with less than two of the required ratios or ten of the 
analytical ratios meeting the specified requirements in Sec. 400.170(d) 
may qualify if, in addition to the requirements of Sec. 400.170 (a), 
(b), (c) and (e), the insurer:
    (a) Submits a financial management plan acceptable to FCIC to 
eliminate each deficiency indicated by the ratios, or an acceptable 
explanation why a failed ratio does not accurately represent the 
insurer's insurance operations; or
    (b) Has a binding agreement with another insurer that qualifies such 
insurer under this subpart to assume financial responsibility in the 
event of the reinsured company's failure to meet its obligations on FCIC 
reinsured policies.

[60 FR 57904, Nov. 24, 1995]



Sec. 400.173  [Reserved]



Sec. 400.174  Notification of deviation from financial standards.

    An insurer must immediately advise FCIC if it deviates from 
compliance with any of the requirements of this chapter. FCIC may 
require the insurer to update its financial statements during the year. 
FCIC may terminate the reinsurance agreement if the Company is out of 
compliance with the requirements of this chapter.

[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and 
53 FR 10527, Apr. 1, 1988, as amended at 60 FR 57904, Nov. 24, 1995]



Sec. 400.175  Revocation and non-acceptance.

    (a) FCIC will deny reinsurance to any insurer or will terminate any 
existing reinsurance agreement if any false or misleading statement is 
made in the financial statements or any other document submitted by the 
insurer in connection with its qualification for FCIC reinsurance.
    (b) No policy issued by an insurer subsequent to revocation of a 
reinsurance agreement will be reinsured by FCIC. Policies in effect at 
the time of revocation will continue to be reinsured by FCIC for the 
balance of the crop year then in effect for the applicable crop. 
However, if materially false information is made to the Corporation and 
that information directly affects the ability of the Company to perform 
under the Agreement, or if the Company commits any fraudulent or 
criminal act in relation to the Standard Reinsurance Agreement or any 
policy reinsured under the Agreement, FCIC may require that the Company 
transfer the servicing and contractual right to all business in effect 
and reinsured by the Corporation to the Corporation.

[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and 
53 FR 10527, Apr. 1, 1988, as amended at 60 FR 57904, Nov. 24, 1995]



Sec. 400.176  State action preemptions.

    (a) No policyholder shall have recourse to any state guaranty fund 
or similar state administered program for crop or premium losses 
reinsured under such Standard Reinsurance Agreement.

[[Page 34]]

No assessments for such State funds or programs shall be computed or 
levied on companies for or on account of any premiums payable on 
policies of Multiple Peril Crop Insurance reinsured by the Corporation.
    (b) No policy of insurance reinsured by the Corporation and no 
claim, settlement, or adjustment action with respect to any such policy 
shall provide a basis for a claim of damages against the Company issuing 
such policy, other than damages to which the Corporation would be liable 
under federal law if the Corporation had issued the policy of insurance 
under its direct writing program, unless the claimant establishes in a 
court of competent jurisdiction, or to the satisfaction of the 
Corporation in the event of a settlement, that such damages were caused 
by the culpable failure of the Company to substantially comply with the 
Corporation's procedures or instructions in the handling of the claim or 
in servicing the insured' policy, or unless the Company or its agents 
were acting outside the scope of their authority (apparent or implied) 
in performing or omitting the actions claimed as a basis for the damage 
action.



Sec. 400.177  [Reserved]



  Subpart M--Agency Sales and Service Contract--Standards for Approval

    Authority: 7 U.S.C. 1506, 1516.

    Source: 53 FR 24015, June 27, 1988, unless otherwise noted.



Sec. 400.201  Applicability of standards.

    Federal Crop Insurance Corporation will offer an Agency Sales and 
Service Contract (the Contract) to private entities meeting the 
requirements set forth in this subpart under which the Corporation will 
insure producers of agricultural commodities. The Contract will be 
consistent with the requirements of the Federal Crop Insurance Act, as 
amended, and the provisions of the regulations of the Corporation found 
at chapter IV of title 7 of the Code of Federal Regulations. The 
Standards contained herein are required for an entity to be a contractor 
under the Contract.



Sec. 400.202  Definitions.

    For the purpose of these Standards:
    (a) Agency Sales and Service Contract or the Contract means the 
written agreement between the Federal Crop Insurance Corporation 
(Corporation) and a private entity (Contractor) for the purpose of 
selling and servicing Federal Crop Insurance policies and includes, but 
is not limited to, the following:
    (1) The Agency Sales and Service Contract;
    (2) Any Appendix to the Agency Sales and Service Contract issued by 
the Corporation;
    (3) The annual approved Plan or Operation; and
    (4) Any amendment adopted by the parties.
    (b) BELL 208B (or compatible) modem--means a modem meeting the 
standards developed by BELL Laboratories for dial-up, half-duplex, 4800 
or 9600 bits per second (bps) transmission of data utilizing 3780 (or 
2780) protocol.
    (c) Contract, the see Agency Sales and Service Contract.
    (d) Contractor's electronic system (system) means the data 
processing hardware and software, data communications hardware and 
software, and printers utilized with the system.
    (e) CPA means a Certified Public Accountant who is licensed as such 
by the State in which the CPA practices.
    (f) CPA Audit means a professional examination conducted by a CPA in 
accordance with generally accepted auditing standards of a Financial 
Statement on the basis of which the CPA expresses an independent 
professional opinion respecting the fairness of presentation of the 
Financial Statement.
    (g) Current Assets means cash and other assets that are reasonably 
expected to be realized in cash or sold or consumed during the normal 
operation cycle of the business or within one year if the operation 
cycle is shorter than one year.
    (h) Current Liabilities means those liabilities expected to be 
satisfied by either the use of assets classified as current in the same 
balance sheet, or the creation of other current liabilities, or

[[Page 35]]

those expected to be satisfied within a relatively short period of time, 
usually one year.
    (i) Financial Statement means the documents submitted to the 
Corporation by a private entity which portray the financial information 
of the entity. The financial statement must be prepared in accordance 
with Generally Accepted Accounting Principles (GAAP) and reflect the 
financial position in the Statement of Financial Condition or Balance 
Sheet; and the result of operations in the Statement of Profit and Loss 
or Income Statement.
    (j) Processing representative means a person or organization 
designated by the Contractor to be responsible for data entry and 
electronic transmission of data contained on crop insurance documents.
    (k) Sales means new applications and renewals of FCIC policies.
    (l) Suspended Data Notice means a notification of a temporary stop 
or delay in the processing of data transmitted to the Corporation by the 
Contractor because the same is incomplete, non-processable, obsolete, or 
erroneous.
    (m) 3780 protocol--means the data communications protocol (standard) 
that is a binary synchronous communications (BSC), International 
Business Systems (IBM)-defined, byte controlled communications protocol, 
using control characters and synchronized transmission of binary coded 
data.



Sec. 400.203  Financial statement and certification.

    (a) An entity desiring to become or continue as a contractor shall 
submit to the Corporation a financial statement which is as of a date 
not more than eighteen (18) months prior to the date of submission.
    (b) The financial statement submitted shall be audited by a CPA (CPA 
Audit); or if a CPA audited financial statement is not available, the 
statement submitted to the Corporation must be accompanied by a 
certification of:
    (1) The owner, if the business entity is a sole proprietorship; or
    (2) At least one of the general partners, if the business entity is 
a partnership; or
    (3) The Chief Executive Officer and Treasurer, if the business 
entity is a Corporation, that said statement fairly represents the 
financial condition of the entity on the date of such certification to 
the Corporation. If the financial statement as certified by the Chief 
Executive Officer and Treasurer, partner, or owner is submitted, a CPA 
audited financial statement must be submitted if subsequently available.



Sec. 400.204  Notification of deviation from standards.

    A Contractor shall advise the Corporation immediately if the 
Contractor deviates from the requirements of these standards. The 
Corporation may require the Contractor to show compliance with these 
standards during the contract year if the Corporation determines that 
such submission is necessary. If the Corporation determines that the 
deviation is temporary, the Corporation may grant a temporary waiver 
pending compliance within a specified period of time. A waiver of any 
provision of these standards will not be granted to an applicant for a 
contract.



Sec. 400.205  Denial or termination of contract and administrative reassignment of business.

    Non-compliance with these standards will result in:
    (a) The denial of a Contract; or
    (b) Termination of an existing Contract.
    In the event of denial or termination of the Contract, all crop 
insurance policies of the Corporation sold by the Contractor and all 
business pertaining thereto may be assumed by the Corporation and may be 
administratively reassigned by the Corporation to another Contractor.



Sec. 400.206  Financial qualifications for acceptability.

    The financial statement of an entity must show total allowable 
assets in excess of liabilities and the ability of the entity to meet 
current liabilities by the use of current assets.

[[Page 36]]



Sec. 400.207  Representative licensing and certification.

    (a) A Contractor must maintain twenty-five (25) licensed and 
certified Contractor Representatives.
    (b) A Contractor's Representative who solicits, sells and services 
FCIC policies or represents the Contractor in solicitation, sales or 
service of such policies must hold a license as issued by the State or 
States in which the policies are issued, which license authorizes the 
sales of insurance in any one or more of the following lines:
    (1) Multiple peril crop insurance;
    (2) Crop hail insurance;
    (3) Casualty insurance;
    (4) Property insurance;
    (5) Liability insurance; or
    (6) Fire insurance and allied lines.
    The Contractor must submit evidence, satisfactory to the 
Corporation, verifying the type of State license held by each 
Representative and the date of expiration of each license.
    (c) A Contractor's Representative must have achieved certification 
by the Corporation for each crop upon which the Representative sells and 
services insurance.



Sec. 400.208  Term of the contract.

    (a) The term of the Contract shall commence on July 1 or when 
signed. The contract will continue from year to year with an annual 
renewal date of July 1 for each succeeding year unless the Corporation 
or the Contractor gives at least ninety (90) days advance notice in 
writing to the other party that the contract is not to be renewed. Any 
breach of the contract, or failure to comply with these Standards, by 
the Contractor, may result in termination of the contract by the 
Corporation upon written notice of termination to the Contractor. That 
termination will be effective thirty (30) days after mailing of the 
notice and termination to the Contractor.
    (b) A Contractor who elects to continue under the Contract for a 
subsequent year must, prior to the month of June, submit a completed 
Plan of Operation which includes the Certifications as required by 
Sec. 400.203 of this subpart. The Contractor may not perform under the 
contract until the Plan of Operation is approved by the Corporation.



Sec. 400.209  Electronic transmission and receiving system.

    Any Contractor under the Contract is required to:
    (a) Adopt a plan for the purpose of transmitting and receiving 
electronically, information to and from the Corporation concerning the 
original executed crop insurance documents;
    (b) Maintain an electronic system which must be tested and approved 
by the Corporation;
    (c) Maintain Corporation approval of the electronic system as a 
condition to the electronic transmission and reception of data by the 
Contractor;
    (d) Utilize the Corporation approved automated data processing and 
electronic data transmission capabilities to process crop insurance 
documents as required herein; and
    (e) Establish and maintain the electronic equipment and computer 
software program capability to:
    (1) Receive and store actuarial data electronically via 
telecommunications utilizing 3780 protocol and utilizing a BELL 208B or 
compatible modem at 4800 bits per second (bps);
    (2) Enter and store information from original crop insurance 
documents into electronic format;
    (3) Verify electronically stored information recorded from crop 
insurance documents with electronically stored actuarial information;
    (4) Compute and print the data elements in the Summary of 
Protection;
    (5) Transmit crop insurance data electronically, via 3780 protocol 
utilizing a BELL 208B or compatible modem at 4800 bps;
    (6) Receive electronic acknowledgements, error messages, and other 
data via 3780 protocol utilizing a BELL 208B or compatible modem at 4800 
bps, and relate error messages to original crop insurance documents; and
    (7) Store backup data and physical documents.

    (The Corporation may approve other compatible specifications if 
accepted by the Corporation and if requested by the Contractor)



Sec. 400.210  OMB control numbers.

    OMB control numbers are contained in subpart H of part 400, title 7 
CFR.

[[Page 37]]

Subpart N [Reserved]



 Subpart O--Non-Standard Underwriting Classification System Regulations 
                 for the 1991 and Succeeding Crop Years

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

    Source: 55 FR 32595, Aug. 10, 1990, unless otherwise noted.



Sec. 400.301  Basis, purpose, and applicability.

    The regulations contained in this subpart are issued pursuant to the 
Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et seq.), to 
prescribe the procedures for nonstandard determinations and the 
assignment of assigned yields or premium rates in conformance with the 
intent of section 508 of the Act (7 U.S.C. 1508). These regulations are 
applicable to all policies of insurance insured or reinsured by the 
Corporation under the Act and on those policies where the insurance 
coverage or indemnities are based on determinations applicable to the 
individual insured. These regulations will not be applicable to any 
policy where the amount of coverage or indemnities are based on the 
experience of the area.

[62 FR 22876, Apr. 28, 1997]



Sec. 400.302  Definitions.

    Act--means Federal Crop Insurance Act as amended (7 U.S.C. 1501 et 
seq.).
    Actively engaged in farming means a person who, in return for a 
share of profits and losses, makes a contribution to the production of 
an insurable crop in the form of capital, equipment, land, personal 
labor, or personal management.
    Actual Yield--means total harvested production of a crop divided by 
the number of acres on which the crop was planted. For insured acres, 
actual yield is the total production to count as defined in the 
insurance policy, divided by insured acres.
    Assigned yield--means units of crop production per acre 
administratively assigned by the Corporation for the purpose of 
determining insurance coverage.
    Corporation--means the Federal Crop Insurance Corporation.
    Cumulative earned premium rate--is the total premium earned for all 
years in the base period, divided by the total liability for all years 
in the base period with the result expressed as a percentage.
    Cumulative loss ratio--means the ratio of total indemnities to total 
earned premiums during the base period expressed as a decimal.
    Earned premium means premium earned (both the amount subsidized and 
the amount paid by the producer, but excluding any amount of the subsidy 
attributed to the operating and administrative expenses of the insurance 
provider) for a crop under a policy insured or reinsured by the 
Corporation.
    Earned premium rate--means premium earned divided by liability and 
expressed as a percentage.
    Entity--means a person as defined in this subpart other than an 
individual.
    Indemnified loss means a loss applicable for the policy for any year 
during the NCS base period for which the total indemnity exceeds the 
total earned premium. If the person has insurance for the crop in more 
than one county for any crop year, indemnities and premiums will be 
accumulated for all counties for each crop year to determine an 
indemnified loss.
    Insurance experience means earned premiums, indemnities paid (but 
not including replant payments), and other data for the crop (after 
applicable adjustments), resulting from all of the insured's crop 
insurance policies insured or reinsured by the Corporation for one or 
more crop years and will include all information from all counties in 
which the person was insured.
    Loss ratio--means the ratio of indemnity to earned premium expressed 
as a decimal.
    NCS means nonstandard classification system.
    NCS base period means the 10 consecutive crop years (as defined in 
the crop policy) ending 2 crop years prior to the crop year in which the 
NCS classification becomes effective for all crops, except those 
specified on the Special Provisions. For these excepted crops, the

[[Page 38]]

NCS base period means the 10 consecutive crop years ending 3 crop years 
prior to the crop year in which the NCS classification becomes 
effective. For example: An NCS classification effective for the 1996 
crop year against a producer of citrus production in Arizona, 
California, and Texas, or sugarcane would have a NCS base period that 
includes the 1984 through 1993 crop years. An NCS classification 
effective for the 1996 crop year against a producer of all other crops 
would have a NCS base period that includes the 1985 through 1994 crop 
years.
    Person--means an individual, partnership, association, corporation, 
estate, trust, or other legal entity, and whenever applicable, a State 
or a political subdivision, or agency of a state.
    Substantial beneficial interest--means an interest of 10 percent or 
more. In determining whether such an interest equals at least 10 
percent, all interests which are owned directly or indirectly through 
such means as ownership of shares in a corporation which owns the 
interest will be taken into consideration.

[55 FR 32595, Aug. 10, 1990, as amended at 62 FR 22876, Apr. 28, 1997]



Sec. 400.303  Initial selection criteria.

    (a) Nonstandard classification procedures in this subpart initially 
apply when all of the following insurance experience criteria (including 
any applicable adjustment in Sec. 400.303(d)) for the crop have been 
met:
    (1) Three (3) or more indemnified losses during the NCS base period;
    (2) Cumulative indemnities in the NCS base period that exceed 
cumulative premiums during the same period by at least $500;
    (3) The result of dividing the number of indemnified losses during 
the NCS base period by the number of years premium is earned for that 
period equals .30 or greater; and
    (4) Either of the following apply:
    (i) The natural logarithm of the cumulative earned premium rate 
multiplied by the square root of the cumulative loss ratio equals 2.00 
or greater; or
    (ii) Five (5) or more indemnified losses have occurred during the 
NCS base period and the cumulative loss ratio equals or exceeds 1.50.
    (b) The minimum standards provided in paragraphs (a) (2), (3), and 
(4) of this section may be increased in a specific county if that 
county's overall insurance experience for the crop is substantially 
different from the insurance experience for which the criteria was 
determined. The increased standard will apply until the conditions 
requiring the increase no longer apply. Any change in the standards will 
be contained in the Special Provisions for the crop.
    (c) Selection criteria may be applied on the basis of insurance 
experience of a person, insured acreage, or the combination of both.
    (1) Insurance experience of a person will include:
    (i) Insurance experience of the person;
    (ii) Insurance experience of other insured entitites in which the 
person had substantial beneficial interest if the person was actively 
engaged in farming of the insured crop by virtue of the person's 
interest in those insured entities;
    (iii) Insurance experience of a spouse and minor children if the 
person is an individual and the spouse and minor children are considered 
the same as the individual under Sec. 400.306.
    (2) Insurance experience of insured acreage includes all insurance 
experience during the base period resulting from the production of the 
insured crop on the acreage.
    (3) Where insurance experience is based on a combination of person 
and insured acreage, the insurance experience will include the 
experience of the person as defined in paragraph (b) of this section (1) 
only on the specific insured acreage during the base period.
    (d) Insurance experience for the crop will be adjusted, by county 
and crop year, to discount the effect of indemnities caused by 
widespread adverse growing conditions. Adjustments are determined as 
follows:
    (1) Determine the average yield for the county using the annual 
county crop yields for the previous 20 crop years, unless such data is 
not available;

[[Page 39]]

    (2) Determine the normal variability in the average yield for the 
county, expressed as the standard deviation;
    (3) Subtract the result of Sec. 400.303(d)(2) from 
Sec. 400.303(d)(1);
    (4) Divide the annual crop yield for the county for each crop year 
in the NCS base period by the result of Sec. 400.303(d)(3), the result 
of which may not exceed 1.0;
    (5) Subtract the result of Sec. 400.303(d)(4) for each crop year 
from 1.0;
    (6) Multiply the result of Sec. 400.303(d)(5) by the liability for 
the crop year; and
    (7) Subtract the result of Sec. 400.303(d)(6) from any indemnity for 
that crop year.
    (e) FCIC may substitute the crop yields of a comparable crop in 
determining Sec. 400.303(d) (1) and (2), or may adjust the average yield 
or the measurement of normal variability for the county crop, or any 
combination thereof, to account for trends or unusual variations in 
production of the county crop or if the availability of yield and loss 
data for the county crop is limited. Information about how these 
determinations are made is available by submitting a request to the FCIC 
Regional Service Office for the producer's area. Alternate methods of 
determining the effects of adverse growing conditions on insurance 
experience may be implemented by FCIC if allowed in the Special 
Provisions.

[55 FR 32595, Aug. 10, 1990, as amended at 62 FR 22876, Apr. 28, 1997]



Sec. 400.304  Nonstandard Classification determinations.

    (a) Nonstandard Classification determinations can affect a change in 
assigned yields, premium rates, or both from those otherwise prescribed 
by the insurance actuarial tables.
    (b) Changes of assigned yields based on insurance experience of 
insured acreage (or of a person on specific insured acreage) will be 
based on the simple average of available actual yields from the insured 
acreage during the base period.
    (c) Changes of assigned yields based on insurance experience of a 
person without regard to any specific insured acreage will be determined 
by an assigned yield factor calculated by multiplying excess loss cost 
ratio by loss frequency and subtracting that product from 1.00 where:
    (1) Excess loss cost ratio is total indemnities divided by total 
liabilities for all years of insurance experience in the base period and 
the result of which is then reduced by the cumulative earned premium 
rate, expressed as a decimal, and
    (2) Loss frequency is the number of crop years in which an indemnity 
was paid divided by the number of crop years in which premiums were 
earned during the base period.
    (d) Changes of premium rates will be made to reflect premium rates 
that would have resulted in insurance experience during the base period 
with a loss ratio of 1.00 but:
    (1) A higher loss ratio than 1.00 may be used for premium rate 
determinations provided that the higher loss ratio is applied uniformly 
in a county; and
    (2) If a Nonstandard Classification change has been made to current 
assigned yields, insurance experience during the base period will be 
adjusted to reflect the affects of changed assigned yields before 
changes of premium rates are calculated based on that experience.
    (e) Once selection criteria have been met in any year, Nonstandard 
Classification adjustments will be made from year to year until no 
further changes are necessary in assigned yields or premium rates under 
the conditions set forth in Sec. 400.304(f). In determining whether 
further changes are necessary, the eligibility criteria will be 
recomputed each subsequent year using the premium rates and yields which 
would have been applicable had this part not been in effect.
    (f) Nonstandard Classification changes will not be made that:
    (1) Increase assigned yields or decrease premium rates from those 
otherwise assigned by the actuarial tables, or
    (2) Result in less than a 10 percent decrease in assigned yields or 
less than a 10 percent increase in premium rates from those otherwise 
assigned by the actuarial tables.

[[Page 40]]



Sec. 400.305  Assignment of Nonstandard Classifications.

    (a) Assignment of a Nonstandard Classification of assigned yields, 
assigned yield factors, or premium rates shall be made on forms approved 
by the Corporation and included in the actuarial tables for the county.
    (b) Nonstandard classification assignment will be made each year, 
for the year identified on the assignment forms, and are not subject to 
change under the provisions of this subpart by the Corporation for that 
year when included in the actuarial tables for the county, except as a 
result of a request for reconsideration as provided in section 400.309, 
or as the result of appeals under 7 CFR part 11.
    (c) A nonstandard classification may be assigned to identified 
insurable acreage; a person; or to a combination of person and 
identified acreage for a crop or crop practice, type, variety, or crop 
option or amendment whereby:
    (1) Classifications assigned to identified insurable acreage apply 
to all acres of the insured crop grown on the identified acreage;
    (2) Classifications assigned to a person apply to all insurable 
acres of the insured crop on which the person and any entity in which 
the person has substantial beneficial interest is actively engaged in 
farming; and
    (3) Classifications assigned to a combination of a person and 
identified insurable acreage will only apply to those acres of the 
insured crop grown on the identified acreage on which the named person 
is actively engaged in producing such crop.

[55 FR 32595, Aug. 10, 1990, as amended at 62 FR 22877, Apr. 28, 1997]



Sec. 400.306  Spouses and minor children.

    (a) The spouse and minor children of an individual are considered to 
be the same as the individual for purposes of this subpart except that:
    (1) The spouse who was actively engaged in farming in a separate 
farming operation prior to their marriage will be a separate person with 
respect to that separate farming operation so long as that operation 
remains separate and distinct from any farming operation conducted by 
the other spouse;
    (2) A minor child who is actively engaged in farming in a separate 
farming operation will be a separate person with respect to that 
separate farming operation if:
    (i) The parent or other entity in which the parent has a substantial 
beneficial interest does not have any interest in the minor's separate 
farming operation or in any production from such operation;
    (ii) The minor has established and maintains a separate household 
from the parent;
    (iii) The minor personally carries out the farming activities with 
respect to the minor's farming operation; and
    (iv) The minor establishes separate accounting and recordkeeping for 
the minor's farming operation.
    (b) An individual shall be considered to be a minor until the age of 
18 is reached. Court proceedings conferring majority on an individual 
under 18 years of age will not change such individual's status as a 
minor.



Sec. 400.307  Discontinuance of participation.

    If the person has discontinued participation in the crop insurance 
program, the person will still be included on the NCS list in the county 
until the person has discontinued participation as a policyholder or a 
person with a substantial beneficial interest in a policyholder for at 
least 10 consecutive crop years. The most recent nonstandard 
classification assigned will be continued from year to year until 
participation has been renewed for at least one crop year and at least 
three years of insurance experience have occurred in the current base 
period. A nonstandard classification will no longer be applicable to the 
person or the person on identified acreage if the Corporation determines 
the person is deceased.

[62 FR 22877, Apr. 28, 1997]

[[Page 41]]



Sec. 400.308  Notice of Nonstandard Classification.

    (a) The Corporation will give written notice to all persons to whom 
a Nonstandard Classification will be assigned. The notice will give the 
Nonstandard Classification and the person's rights and responsibilities 
according to this subpart.
    (b) The person, upon receiving notice from the Corporation, will be 
responsible for giving notice of the Nonstandard Classification to any 
other person with an insurable interest affected by the classification. 
The person will give notice to any other affected person:
    (1) Prior to the sales closing date if the other affected person has 
an established insurable interest at the time the classified person is 
notified by the Corporation; or
    (2) Prior to the Classified person's establishing an insurable 
interest of another person that will be affected by the classification.



Sec. 400.309  Requests for reconsideration.

    (a) Any person to be assigned a nonstandard classification under 
this subpart will be notified of and allowed not less that 30 days from 
the date notice is received to request reconsideration before the 
nonstandard classification becomes effective. The request will be 
considered to have been made when received, in writing, by the 
Corporation.
    (b) Upon receipt of a timely request for reconsideration from the 
person to whom the classification will be assigned, the Corporation 
will:
    (1) Review all information supplied by, and respond to all questions 
raised by the individual, or
    (2) In the absence of information and questions, review insurance 
experience and determinations for compliance with this subpart and 
report review results to the individual requesting reconsideration.
    (c) Upon review of a request for reconsideration, the classification 
to be assigned will be corrected for:
    (1) Errors and omissions in insurance experience;
    (2) Incorrect calculations under procedures in this subpart, and
    (3) Typographical errors.
    (d) If the review finds no cause for change, the classification will 
be assigned and placed on file in the actuarial tables for the county.
    (e) Any person not satisfied by a determination of the Corporation 
upon reconsideration may further appeal under the provisions of 7 CFR 
part 11.

[55 FR 32595, Aug. 10, 1990, as amended at 62 FR 22877, Apr. 28, 1997]



           Subpart P--Preemption of State Laws and Regulations

    Authority: 7 U.S.C. 1506, 1516.

    Source: 55 FR 23069, June 6, 1990, unless otherwise noted.



Sec. 400.351  Basis and applicability.

    The regulations contained in this subpart are issued pursuant to the 
Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et seq.) (the 
Act), to prescribe the procedures for Federal preemption of State laws 
and regulations not consistent with the purpose, intent, or authority of 
the Act. These regulations are applicable to all policies of insurance, 
insured or reinsured by the Corporation, contracts, agreements, or 
actions authorized by the Act and entered into or issued by FCIC.



Sec. 400.352  State and local laws and regulations preempted.

    (a) No State or local governmental body or non-governmental body 
shall have the authority to promulgate rules or regulations, pass laws, 
or issue policies or decisions that directly or indirectly affect or 
govern agreements, contracts, or actions authorized by this part unless 
such authority is specifically authorized by this part or by the 
Corporation.
    (b) The following is a non-inclusive list of examples of actions 
that State or local governmental entities or non-governmental entities 
are specifically prohibited from taking against the Corporation or any 
party that is acting pursuant to this part. Such entities may not:
    (1) Impose or enforce liens, garnishments, or other similar actions 
against proceeds obtained, or payments issued in accordance with the 
Federal Crop Insurance Act, these regulations, or

[[Page 42]]

contracts or agreements entered into pursuant to these regulations;
    (2) Tax premiums associated with policies issued hereunder;
    (3) Exercise approval authority over policies issued;
    (4) Levy fines, judgments, punitive damages, compensatory damages, 
or judgments for attorney fees or other costs against companies, 
employees of companies including agents and loss adjustors, or Federal 
employees arising out of actions or inactions on the part of such 
individuals and entities authorized or required under the Federal Crop 
Insurance Act, the regulations, any contract or agreement authorized by 
the Federal Crop Insurance Act or by regulations, or procedures issued 
by the Corporation (nothing herein is intended to preclude any action on 
the part of any authorized State regulatory body or any State court or 
any other authorized entity concerning any actions or inactions on the 
part of the agent, company or employee of any company whose action or 
inaction is not authorized or required under the Federal Crop Insurance 
Act, the regulations, any contract or agreement authorized by the 
Federal Crop Insurance Act or by regulations or procedures issued by the 
Corporation); or
    (5) Assess any tax, fee, or amount for the funding or maintenance of 
any State or local insolvency pool or other similar fund.
    The preceding list does not limit the scope or meaning of paragraph 
(a) of this section.



Subpart Q--General Administrative Regulations; Collection and Storage of 
   Social Security Account Numbers and Employer Identification Numbers

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

    Source: 57 FR 46297, Oct. 8, 1992, unless otherwise noted.



Sec. 400.401  Basis and purpose and applicability.

    (a) The regulations contained in this subpart are issued pursuant to 
the Act to prescribe procedures for the collection, use, and 
confidentiality of Social Security Numbers (SSN) and Employer 
Identification Numbers (EIN) and related records.
    (b) These regulations are applicable to:
    (1) All holders of crop insurance policies issued by FCIC under the 
Act and sold and serviced by local FSA offices.
    (2) All holders of crop insurance policies sold by insurance 
providers and all insurance providers, their contractors and 
subcontractors, including past and present officers and employees of 
such companies, their contractors and subcontractors.
    (3) Any agent, general agent, or company, or any past or present 
officer, employee, contractor or subcontractor of such agent, general 
agent, or company under contract to FCIC or an insurance provider for 
loss adjustment or any other purpose related to the crop insurance 
programs insured or reinsured by FCIC; and
    (4) All past and present officers, employees, elected officials, 
contractors, and subcontractors of FCIC and FSA.

[57 FR 46297, Oct. 8, 1992, as amended at 62 FR 28608, May 27, 1997]



Sec. 400.402  Definitions.

    Act--The Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et 
seq.).
    Applicant--A person who has submitted an application for crop 
insurance coverage under the Act.
    Authorized person--Any current or past officer, employee, elected 
official, general agent, contractor, or loss adjuster of FCIC, the 
insurance provider, or any other government agency whose duties require 
access to administer the Act.
    Disposition of records--The act of removing and disposing of records 
containing a participant's SSN or EIN by FCIC, or the insurance 
provider.
    FCIC--The Federal Crop Insurance Corporation of the United States 
Department of Agriculture or any successor agency.
    FSA--The Farm Service Agency of the United States Department of 
Agriculture, or a successor agency.
    Insurance provider--A private insurance company approved by FCIC, or 
a local FSA office providing crop insurance coverage to producers 
participating in any program administered under the Act.

[[Page 43]]

    Past officers and employees--Any officer or employee of FCIC or the 
insurance provider who leaves the employ of FCIC or the insurance 
provider subsequent to the effective date of this rule.
    Person--An individual, partnership, association, corporation, 
estate, trust, or other legal entity, and whenever applicable, a state, 
political subdivision, or an agency of a state.
    Policyholder--An applicant whose application for insurance under the 
crop insurance program has been accepted by FCIC or the insurance 
provider.
    Retrieval of records--Retrieval of a person's records by that 
person's SSN or EIN, or name.
    Safeguards--Methods of security to be employed by FCIC or the 
insurance provider to protect a participant's SSN or EIN from unlawful 
disclosure and access.
    Storage--The secured storing of records kept by FCIC or the 
insurance provider on computer disks or drives, computer printouts, 
magnetic tape, index cards, microfiche, microfilm, etc.
    Substantial beneficial interest--Any person having an interest of at 
least 10 percent in the applicant or policyholder.
    System of records--Records established and maintained by FCIC or the 
insurance provider containing SSN or EIN data, name, address, city and 
State, applicable policy numbers, and other information related to 
multiple peril crop insurance policies as required by FCIC, from which 
information is retrieved by a personal identifier including, but not 
limited to the SSN, EIN, or name.

[62 FR 28608, May 27, 1997]



Sec. 400.403  Required system of records.

    Insurance providers are required to implement a system of records 
for obtaining, using, and storing documents containing SSN or EIN data 
before they accept or receive any applications for insurance. This data 
should include: name; address; city and state; SSN or EIN; and policy 
numbers which have been used by FCIC or the insurance provider.

[62 FR 28608, May 27, 1997]



Sec. 400.404  Policyholder responsibilities.

    (a) The policyholder or applicant for crop insurance must provide a 
correct SSN or EIN to FCIC or the insurance provider to be eligible for 
insurance. The SSN or EIN will be used by FCIC and the insurance 
provider in:
    (1) Determining the correct parties to the agreement or contract;
    (2) Collecting premiums or other amounts due FCIC or the insurance 
provider;
    (3) Determining the amount of indemnities;
    (4) Establishing actuarial data on an individual policyholder basis; 
and
    (5) Determining eligibility for crop insurance program participation 
or other United States Department of Agriculture benefits.
    (b) If the policyholder or applicant for crop insurance does not 
provide the correct SSN or EIN on the application and other forms where 
such SSN or EIN is required, FCIC or the reinsured company shall reject 
the application.
    (c) The policyholder or applicant is required to provide to FCIC or 
the insurance provider, the name and SSN or EIN of any individual or 
other entity:
    (1) holding or acquiring a substantial beneficial interest in such 
policyholder or applicant; or
    (2) having any interest in the policyholder or applicant and 
receiving separate benefits under another United States Department of 
Agriculture program as a direct result of such interest.
    (d) If a policyholder or applicant is using an EIN for a policy in 
an individual person's name, the SSN of the policyholder or applicant 
must also be provided.

[62 FR 28608, May 27, 1997]



Sec. 400.405  Agent and loss adjuster responsibilities.

    (a) The agent or loss adjuster shall provide his or her correct SSN 
to FCIC or the insurance provider, whichever is applicable, to be 
eligible to participate in the crop insurance program. The SSN will be 
used by FCIC and the insurance provider in establishing a database for 
the purposes of:
    (1) Identifying agents and loss adjusters on an individual basis;

[[Page 44]]

    (2) Evaluating agents and loss adjusters to determine level of 
performance;
    (3) Determining eligibility for program participation; and
    (4) Collection of any amount which may be owed by the agent and loss 
adjuster to the United States.
    (b) If the loss adjuster contracting with FCIC to participate in the 
crop insurance program does not provide his or her correct SSN on forms 
or contracts where such SSN is required, the loss adjuster's contract 
will be cancelled effective on the date of refusal and the loss adjuster 
will be subject to suspension and debarment in accordance with the 
suspension and debarment regulations of the United States Department of 
Agriculture.
    (c) If the agent or loss adjuster contracting with an insurance 
provider, who is also a private insurance company, to participate in the 
crop insurance program does not provide his or her correct SSN on forms 
or contracts where such SSN is required, the premium subsidy payable for 
administrative and operating expenses under the Standard Reinsurance 
Agreement, or any other reinsurance agreement, will not be paid on those 
policies lacking the correct SSN.

[62 FR 28609, May 27, 1997]



Sec. 400.406  Insurance provider responsibilities.

    The insurance provider is required to collect and record the SSN or 
EIN on each application or on any other form required by FCIC.

[62 FR 28609, May 27, 1997]



Sec. 400.407  Restricted access.

    The Manager, other officer, or employee of FCIC or an authorized 
person may have access to the SSNs and EINs obtained pursuant to this 
subpart, only for the purpose of establishing and maintaining a system 
of records necessary for the effective administration of the Act.

[62 FR 28609, May 27, 1997]



Sec. 400.408  Safeguards and storage.

    Records must be maintained in secured storage with proper safeguards 
sufficient to enforce the restricted access provisions of this subpart.

[62 FR 28609, May 27, 1997]



Sec. 400.409  Unauthorized disclosure.

    Anyone having access to the records identifying a participant's SSN 
or EIN will abide by the provisions of section 205(c)(2)(C) of the 
Social Security Act (42 U.S.C. 405(c)(2)(C), and section 6109(f), 
Internal Revenue Code of 1986 (26 U.S.C. 6109(f) and the Privacy Act of 
1974 (5 U.S.C. 552a). All records are confidential, and are not to be 
disclosed to unauthorized personnel.

[57 FR 46297, Oct. 8, 1992. Redesignated at 62 FR 28608, May 27, 1997]



Sec. 400.410  Penalties.

    Unauthorized disclosure of SSN's or EIN's by any person may subject 
that person, and the person soliciting the unauthorized disclosure, to 
civil or criminal sanctions imposed under various Federal statutes, 
including 26 U.S.C. 7613, 5 U.S.C. 552a, and 42 U.S.C. 408.

[57 FR 46297, Oct. 8, 1992. Redesignated at 62 FR 28608, May 27, 1997]



Sec. 400.411  Obtaining personal records.

    Policyholders, agents, and loss adjusters in the crop insurance 
program will be able to review and correct their records as provided by 
the Privacy Act. Records may be requested by:
    (a) Mailing a signed written request to the headquarters office of 
FCIC; the FCIC Regional Service Office, or the insurance provider; or
    (b) Making a personal visit to the above mentioned establishments 
and showing valid identification.

[57 FR 46297, Oct. 8, 1992. Redesignated and amended at 62 FR 28608, 
28609, May 27, 1997]



Sec. 400.412  Record retention.

    (a) FCIC or the insurance provider will retain all records of 
policyholders for a period of not less than 3 years from the date of 
final action on a policy for the crop year, unless further maintenance 
of specific records is requested by FCIC. Final actions on insurance 
policies include conclusion of insurance events, such as the latest of 
termination of the policy, completion

[[Page 45]]

of loss adjustment, or satisfaction of claim.
    (b) The statute of limitations for FCIC contract claims may permit 
litigation to be instituted after the period of record retention. 
Destruction of records prior to the expiration of the statute of 
limitations will not provide a defense to any action by FCIC against any 
private insurance company.

[62 FR 28609, May 27, 1997]



Sec. 400.413  OMB control numbers.

    The collecting of information requirements in this subpart has been 
approved by the Office of Management and Budget and assigned OMB control 
number 0563-0047.

[62 FR 28609, May 27, 1997]



                          Subpart R--Sanctions

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

    Source: 58 FR 53110, Oct. 14, 1993, unless otherwise noted.



Sec. 400.451  General.

    (a) The Federal Crop Insurance Corporation (FCIC) has implemented a 
system of sanctions to prevent waste, fraud, and abuse within its 
programs and insurance delivery systems. Such sanctions include civil 
penalties and disqualification from the crop insurance program under the 
Federal Crop Insurance Act, 7 U.S.C. 1506(m); government wide debarment 
and suspension; and civil penalties and assessments under the Program 
Fraud Civil Remedies Act, 31 U.S.C. 3801--31 U.S.C. 3812.
    (b) The provisions of this subpart apply to all contracts and 
agreements to which FCIC is a party unless otherwise specifically 
provided for in this subpart, including those in which FCIC provides 
administrative expense reimbursement, premium subsidy, or reinsurance 
benefits.
    (c) The provisions of this subpart are in addition to any other 
sanctions specifically provided in applicable contracts and agreements.
    (d) This subpart is applicable to any act or omission by any 
affected party after October 14, 1993.



Sec. 400.452  Definitions.

    For purposes of this subpart, a person means an individual, 
partnership, association, corporation, estate, trust, or other business 
enterprise or legal entity, and wherever applicable, a state, a 
political subdivision of a state, or any agency thereof.



Sec. 400.453  Exhaustion of administrative remedies.

    All administrative remedies contained herein or incorporated herein 
by reference must be exhausted before Judicial Review in the United 
States Courts may be sought, unless review is specifically required by 
statute.



Sec. 400.454  Civil penalties.

    (a) Any person who willfully and intentionally provides any 
materially false or inaccurate information to FCIC or to any approved 
insurance provider reinsured by FCIC with respect to an insurance plan 
or policy issued under the authority of the Federal Crop Insurance Act, 
as amended, (7 U.S.C. 1501 et seq.) may be subject to a civil fine of up 
to an amount specified in Sec. 3.91(b)(7) of this title and 
disqualification from participation in:
    (1) The catastrophic risk protection plan of insurance and the 
noninsured crop disaster assistance program for a period not to exceed 
two (2) years; or
    (2) Any plan of insurance providing protection in excess of that 
provided under the catastrophic risk protection plan of insurance for a 
period not to exceed ten (10) years.
    (b) FCIC may make the payment of a civil penalty under this section 
a prior condition for the issuance, renewal, restoration, or continuing 
validity of any crop insurance policy or other approval.
    (c) FCIC may compromise, modify, settle, collect, or remit with or 
without conditions, any civil penalty which is subject to imposition or 
which has been imposed under this section whenever it considers it to be 
appropriate or advisable.
    (d) If a director, officer, or agent of a corporation provides false 
or inaccurate information, they may be separately subject to the fine 
specified in paragraph (a) of this section without

[[Page 46]]

regard to any penalties to which the corporation may be subject.
    (e) The liability of any person for any penalty under this subpart 
or any related charges arising in connection therewith shall be in 
addition to any other liability of such person under any civil or 
criminal fraud statute or any other statute or provision of law.
    (f) Proceedings under this Sec. 400.454 will be in accordance with 
subpart H of 7 CFR part 1, ``Rules of Practice Governing Formal 
Adjudicatory Proceedings Instituted by the Secretary under Various 
Statutes,'' by which the Manager, FCIC, shall initiate proceedings by 
filing a complaint with the Hearing Clerk, United States Department of 
Agriculture.

[58 FR 53110, Oct. 14, 1993, as amended at 60 FR 37323, July 20, 1995; 
62 FR 40928, July 31, 1997]



Sec. 400.455  Governmentwide debarment and suspension (procurement).

    (a) This section prescribes the terms and conditions under which 
persons or business entities may be debarred or suspended by FCIC from 
contracting with the Federal government.
    (b) This section is in accordance with 48 CFR part 9, subpart 9.4 
and 48 CFR part 409, subpart 409.4 and shall be applicable to all FCIC 
debarment and suspension proceedings undertaken pursuant to the Federal 
Acquisition Regulations, except that the authority to debar or suspend 
is reserved to the Manager, FCIC, or the Manager's designee.
    (c) Any individual or entity suspended or debarred under the 
provisions of 48 CFR part 9, subpart 9.4 will not be eligible to 
contract with FCIC or be employed by or contract with any insurance 
company that sells or adjusts FCIC's crop insurance contracts or which 
company's crop insurance contracts are reinsured by FCIC. FCIC may waive 
this provision if it is satisfied that the insurance company has taken 
sufficient action to insure that the suspended or debarred entity or 
individual will not be involved, in any way, with FCIC or FCIC reinsured 
crop insurance contracts.



Sec. 400.456  Governmentwide debarment and suspension (nonprocurement).

    (a) This section prescribes the terms and conditions under which 
individuals or entities may be debarred or suspended by FCIC from 
participation in Federal assistance and benefits under Federal programs 
and activities.
    (b) This section, in accordance with 7 CFR part 3017, shall be 
applicable to all FCIC debarment and suspension proceedings other than 
those undertaken pursuant to the Federal Acquisition Regulations.
    (c) Proceedings under this section are not applicable to 
determinations of eligibility under the provisions of the crop insurance 
contracts or determinations to be made under 7 CFR 400.454.
    (d) The Manager, FCIC, shall be the debarring and suspending 
official for all debarment or suspension proceedings undertaken by FCIC 
under the provisions of 7 CFR part 3017.



Sec. 400.457  Program Fraud Civil Remedies Act.

    (a) This section is in accordance with the Program Fraud Civil 
Remedies Act of 1986 (31 U.S.C. 3801-U.S.C. 3831) which provides for 
civil penalties and assessments against persons who make, submit, or 
present, or cause to be made, submitted, or presented, false, 
fictitious, or fraudulent claims or written statements to Federal 
authorities or to their agents.
    (b) Proceedings under this section will be in accordance with 
subpart L of 7 CFR part 1, ``Procedures Related to Administrative 
Hearings Under the Program Fraud Civil Remedies Act of 1986.''
    (c) The Director, Appeals and Litigation Staff, FCIC, or the 
Director's designee, is authorized to serve as Agency Fraud Claims 
Officer for the purpose of implementing the requirements of this 
section.



Sec. 400.458  Scheme or device.

    (a) In addition to the penalties specified in this part, if a person 
has knowingly adopted a material scheme or device to obtain catastrophic 
risk protection, other plans of insurance coverage, or noninsured 
assistance benefits to which the person is not entitled, has evaded the 
provisions of the Federal

[[Page 47]]

Crop Insurance Act, or has acted with the purpose of evading the 
provisions of the Federal Crop Insurance Act, the person shall be 
ineligible to receive any and all benefits applicable to any crop year 
for which the scheme or device was adopted.
    (b) A scheme or device may include, but is not limited to, creating 
or using another entity, or concealing or providing false information 
with respect to your interest in the policyholder, to evade:
    (1) Suspension, debarment, or disqualification from participation in 
the program;
    (2) The assignment of the nonstandard classification system; or
    (3) Ineligibility for a delinquent debt owed to FCIC or the 
insurance company.

[60 FR 37324, July 20, 1995]



Sec. 400.459  Indebtedness.

    Any person who owes a debt to FCIC, or an approved insurance 
provider, arising from any program administered under the Act, and that 
debt is delinquent, will be ineligible to participate in all such 
programs until the debt is paid in full or the person enters into an 
agreement, acceptable to FCIC or the approved insurance provider, to 
repay the debt. If the person provides adequate evidence to demonstrate 
that the amount of debt is in dispute, the person's application will be 
accepted or their insurance will remain in effect, but no indemnity 
payment will be made, until the disputed issue is resolved between that 
person and FCIC or the approved insurance provider through the available 
appeal process.

[60 FR 51321, Oct. 2, 1995]



Secs. 400.460-400.499  [Reserved]



Sec. 400.500  OMB control numbers.

    Office of Management and Budget (OMB) control numbers are contained 
in subpart H of 7 CFR part 400.

Subpart S [Reserved]



  Subpart T--Federal Crop Insurance Reform, Insurance Implementation; 
        Regulations for the 1999 and Subsequent Reinsurance Years

    Authority: 7 U.S.C. 1506(l) and 1506(p).

    Source: 61 FR 42975, Aug. 20, 1996, unless otherwise noted.



Sec. 400.650  Purpose.

    The Reform Act requires FCIC to implement a crop insurance program 
that offers several levels of insurance coverage for producers. These 
levels of protection include catastrophic risk protection, limited 
coverage, and additional coverage insurance. This subpart provides 
notice of the availability of these crop insurance options and 
establishes provisions and requirements for implementation of the 
insurance provisions of the Reform Act.



Sec. 400.651  Definitions.

    Act. The Federal Crop Insurance Act, as amended (7 U.S.C. Secs. 1501 
et seq.).
    Additional coverage. Plans of crop insurance providing a level of 
coverage equal to or greater than sixty-five percent (65%) of the 
approved yield indemnified at one hundred percent (100%) of the expected 
market price, or comparable coverage as established by FCIC.
    Administrative fee. An amount the producer must pay for 
catastrophic, limited, and additional coverage each crop year on a per 
crop and county basis as specified in the Basic Provisions or the 
Catastrophic Risk Protection Endorsement.
    Approved insurance provider. A private insurance company, including 
its agents, that has been approved and reinsured by FCIC to provide 
insurance coverage to producers participating in the Federal crop 
insurance program.
    Approved yield. The amount of production per acre computed in 
accordance with FCIC's Actual Production History Program (7 CFR part 
400, subpart G) or for crops not included under 7 CFR part 400, subpart 
G, the yield

[[Page 48]]

used to determine the guarantee in accordance with the crop provisions 
or the Special Provisions.
    Catastrophic risk protection. The minimum level of coverage offered 
by FCIC which is required before a person may qualify for certain other 
USDA program benefits unless the producer executes a waiver of any 
eligibility for emergency crop loss assistance in connection with the 
crop. For the 1995 through 1998 crop years, such coverage will offer 
protection equal to fifty percent (50%) of the approved yield 
indemnified at sixty percent (60%) of the expected market price, or a 
comparable coverage as established by FCIC. For the 1999 and subsequent 
crop years, such coverage will offer protection equal to fifty percent 
(50%) of the approved yield indemnified at fifty-five percent (55%) of 
the expected market price, or a comparable coverage as established by 
FCIC.
    Catastrophic Risk Protection Endorsement. The part of the crop 
insurance policy that contains provisions of insurance that are specific 
to catastrophic risk protection.
    Crop of economic significance. A crop that has either contributed in 
the previous crop year, or is expected to contribute in the current crop 
year, ten percent (10%) or more of the total expected value of the 
producer's share of all crops grown in the county. However, a crop will 
not be considered a crop of economic significance if the expected 
liability under the Catastrophic Risk Protection Endorsement is equal to 
or less than the administrative fee required for the crop.
    Expected market price. (price election) The price per unit of 
production (or other basis as determined by FCIC) anticipated during the 
period the insured crop normally is marketed by producers. This price 
will be set by FCIC before the sales closing date for the crop. The 
expected market price may be less than the actual price paid by buyers 
if such price typically includes remuneration for significant amounts of 
post-production expenses such as conditioning, culling, sorting, 
packing, etc.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
Government Corporation within USDA.
    FSA. The Farm Service Agency, an agency of the United States 
Department of Agriculture or any successor agency.
    Insurable interest. The value of the producer's interest in the crop 
that is at risk from an insurable cause of loss during the insurance 
period. The maximum indemnity payable to the producer may not exceed the 
indemnity due on the producer's insurable interest at the time of loss.
    Intended crop. A crop stated on the application as submitted on or 
before the sales closing date for the crop which the producer intended 
to plant in the crop year for which application is made.
    Limited coverage. Plans of insurance offering coverage that is equal 
to or greater than fifty percent (50%) of the approved yield indemnified 
at one hundred percent (100%) of the expected market price, or a 
comparable coverage, but less than sixty-five percent (65%) of the 
approved yield indemnified at one hundred percent (100%) of the expected 
market price, or a comparable coverage.
    Linkage requirement. The legal requirement that a producer must 
obtain at least catastrophic risk protection coverage for any crop of 
economic significance as a condition of receiving benefits for such crop 
from certain other USDA programs in accordance with Sec. 400.655, unless 
the producer executes a waiver of any eligibility for emergency crop 
loss assistance in connection with the crop.
    Person. An individual, partnership, association, corporation, 
estate, trust, or other legal entity, and wherever applicable, a state 
or a political subdivision or agency of a state.
    Reform Act. The Federal Crop Insurance Reform Act of 1994, Public 
Law 103-354.
    Secretary. The Secretary of the United States Department of 
Agriculture.
    Substitute crop. An alternative crop whose sales closing date has 
passed and that is planted on acreage that is prevented from being 
planted to an intended crop or where an intended crop is planted and 
fails.
    Zero acreage report. An acreage report filed by the producer that 
certifies that

[[Page 49]]

the producer does not have a share in the crop for that crop year.

[61 FR 42975, Aug. 20, 1996, as amended at 63 FR 40634, July 30, 1998; 
64 FR 40742, July 28, 1999]



Sec. 400.652  Insurance availability.

    (a) If sufficient actuarial data are available, FCIC will offer 
catastrophic risk protection, limited, and additional coverage plans of 
insurance to indemnify persons for FCIC insured or reinsured crop loss 
due to loss of yield or prevented planting, if the crop loss or 
prevented planting is due to an insured cause of loss specified in the 
applicable crop insurance policy.
    (b) Catastrophic risk protection coverage may be offered through 
approved insurance providers and through local offices of the Farm 
Service Agency specified by the Secretary. Limited and additional 
coverage will only be offered through approved insurance providers 
unless there is not a sufficient number of approved insurance providers 
that offer such insurance within a service area.
    (c) A person must obtain at least catastrophic risk protection for 
the crop on all insurable acreage in the county in which the person has 
a share on or before the sales closing date designated by FCIC for the 
crop in the county in order to satisfy the linkage requirements unless 
the producer executes a waiver of any eligibility for emergency crop 
loss assistance in connection with the crop.
    (d) For limited and additional coverage, in areas where insurance is 
not available for a particular agricultural commodity that is insurable 
elsewhere, FCIC may enter into a written agreement with a person to 
insure the commodity, provided that the person has actuarially sound 
data relating to the production of the commodity that is acceptable to 
FCIC and that such written agreement is specifically allowed by the crop 
insurance regulations applicable to the crop.
    (e) Failure to comply with all provisions of the policy constitutes 
a breach of contract and may result in ineligibility for certain other 
farm program benefits for that crop year and any benefit already 
received must be refunded. If a producer breaches the insurance 
contract, the execution of a waiver of eligibility for emergency crop 
loss assistance will not be effective for the crop year in which the 
breech occurred.



Sec. 400.653  Determining crops of economic significance.

    To be eligible for certain other program benefits under Sec. 400.655 
the following conditions will apply with respect to crops of economic 
significance if the producer does not execute a waiver of any 
eligibility for emergency crop loss assistance in connection with the 
crop.
    (a) If a producer planted a crop of economic significance in the 
preceding crop year, and does not intend to plant the same crop in the 
present crop year, the producer does not have to obtain insurance 
coverage or execute a waiver of any eligibility for emergency crop loss 
assistance in connection with the crop in the present crop year to 
comply with the linkage requirements. However, if the producer later 
decides to plant that crop, the producer will be unable to obtain 
insurance after the sales closing date and must execute a waiver of any 
eligibility for emergency crop loss assistance in connection with the 
crop to be eligible for benefits as specified in Sec. 400.655. Failure 
to execute such a waiver will require the producer to refund any 
benefits already received under a program specified in Sec. 400.655.
    (b) The producer is initially responsible to determine the crops of 
economic significance in the county. The insurance provider may assist 
the producer in making these initial determinations. However, these 
determinations will not be binding on the insurance provider. To 
determine the percentage value of each crop:
    (1) Multiply the acres planted to the crop times the producer's 
share, times the approved yield, and times the price;
    (2) Add the values of all crops grown by the producer (in the 
county); and
    (3) Divide the value of the specific crop by the result of paragraph 
(b)(2).
    (c) The producer may use the type of price, such as the current 
local market price, futures price, established price, highest amount of 
insurance, etc., for the price when calculating the value of each crop, 
provided that the producer

[[Page 50]]

uses the same type of price for all crops in the county.
    (d) The producer may be required to justify the calculation and 
provide adequate records to enable the insurance provider to verify 
whether a crop is of economic significance.

[61 FR 42975, Aug. 20, 1996, as amended at 64 FR 40742, July 28, 1999]



Sec. 400.654  Application and acreage report.

    (a) To participate in catastrophic risk protection, limited, or 
additional coverage plans of insurance, a producer must submit an 
application for insurance on or before the applicable sales closing 
date.
    (b) In order to remain eligible for certain farm programs, as 
specified in Sec. 400.655, a producer must obtain at least catastrophic 
risk protection on all crops of economic significance, if catastrophic 
risk protection is available in the county, unless the producer executes 
a waiver of any eligibility for emergency crop loss assistance in 
connection with the crop.
    (c) Notwithstanding the requirements of Sec. 400.654(a) that 
applications for insurance be submitted on or before the applicable 
sales closing date, FCIC may permit a producer to insure crops other 
than those specified on the application under the following conditions:
    (1) The producer must be unable to plant the intended crop or it is 
not practical to replant a failed crop before the final planting date. 
FCIC will take into consideration marketing windows when determining 
whether it was not practical to replant.
    (2) Conditions must exist to warrant allowing a producer to insure 
crops other than the intended crop.
    (3) The producer must submit an application for the substitute crop 
on or before the acreage reporting date for the substitute crop and pay 
any applicable administrative fee. A producer may not substitute a crop 
that the producer planted in the preceding crop year unless that crop 
was listed on a timely filed application for the current crop year.
    (4) If the producer plants a substitute crop that is a crop of 
economic significance, the producer must obtain CAT coverage, if 
available, to comply with the linkage requirements specified in 
Sec. 400.655. The producer may not substitute a crop under this 
provision if the producer has signed or intends to sign a waiver for 
emergency crop loss assistance for the crop year.
    (5) The substitute crop must be planted on or before the final 
planting date or within the late planting period, if applicable, for the 
substitute crop.
    (6) Under no circumstances may a producer submit an application for 
limited or additional coverage after the sales closing date for the 
substitute crop.
    (d) For all coverages, including catastrophic risk protection, 
limited, and additional coverages, the producer must file a signed 
acreage report on or before the acreage reporting date. Any person may 
sign any document relative to crop insurance coverage on behalf of any 
other person covered by such a policy, provided that the person has a 
properly executed power of attorney or other legally sufficient document 
authorizing such person to sign.
    (e) Under catastrophic risk protection, unless the other person with 
an insurable interest in the crop objects in writing prior to the 
acreage reporting date and provides a signed acreage report on their own 
behalf an operator may sign the acreage report for all other persons 
with an insurable interest in the crop without a power of attorney. All 
persons with an insurable interest in the crop, and for whom the 
operator purports to sign and represent, are bound by the information 
contained in that acreage report.

[61 FR 42975, Aug. 20, 1996, as amended at 64 FR 40742, July 28, 1999]



Sec. 400.655  Eligibility for other program benefits.

    The producer must obtain at least catastrophic coverage for each 
crop of economic significance in the county in which the producer has an 
insurable share, if insurance is available in the county for the crop, 
unless the producer executes a waiver of any eligibility for emergency 
crop loss assistance in connection with the crop, to be eligible for:
    (a) Benefits under the Agricultural Market Transition Act;

[[Page 51]]

    (b) Loans or any other USDA provided farm credit, including: 
guaranteed and direct farm ownership loans, operating loans, and 
emergency loans under the Consolidated Farm and Rural Development Act 
provided after October 13, 1994; and
    (c) Benefits under the Conservation Reserve Program derived from any 
new or amended application or contract executed after October 13, 1994.

[61 FR 42975, Aug. 20, 1996. Redesignated at 63 FR 40634, July 30, 1998]



Secs. 400.656-400.657  [Reserved]



 Subpart U--Ineligibility for Programs Under the Federal Crop Insurance 
                                   Act

    Authority: 7 U.S.C. 1506(1), 1506(p).

    Source: 62 FR 42042, Aug. 5, 1997, unless otherwise noted.



Sec. 400.675  Purpose.

    This rule prescribes conditions under which a person may be 
determined to be ineligible to participate in any program administered 
by FCIC under the Federal Crop Insurance Act, as amended. This rule also 
establishes the criteria for reinstatement of eligibility.



Sec. 400.676  OMB control numbers.

    The collecting of information requirements in this subpart has been 
approved by the Office of Management and Budget and assigned OMB control 
number 0563-0047.



Sec. 400.677  Definitions.

    Act. The Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et 
seq.).
    Actively engaged in farming. Means a person who, in return for a 
share of profits and losses, makes a contribution to the production of 
an insurable crop in the form of capital, equipment, land, personal 
labor, or personal management.
    Applicant. A person who has submitted an application for crop 
insurance coverage under the Act.
    Authorized person. Any current or past officer, employee, elected 
official, general agent, agent, contractor, or loss adjuster of FCIC, 
the insurance provider, or any other government agency whose duties 
require access to the Ineligible Tracking System to administer the Act.
    CAT. The catastrophic risk protection plan of insurance.
    Controlled substance. Any prohibited drug-producing plants 
including, but not limited to, cacti of the genus (lophophora), coca 
bushes (erythroxylum coca), marijuana (cannabis sativa), opium poppies 
(papaver somniferum), and other drug-producing plants, the planting and 
harvesting of which is prohibited by Federal or state law.
    Debt. An amount of money which has been determined by an appropriate 
agency official to be owed, by any person, to FCIC or an insurance 
provider under any program administered under the Act based on evidence 
submitted by the insurance provider. The debt may have arisen from an 
overpayment, premium or administrative fee nonpayment, interest, 
penalties, or other causes.
    Debtor. A person who owes a debt and that debt is delinquent.
    Delinquent debt. Any debt owed to FCIC or the insurance provider, 
that arises under any program administered under the authority of the 
Act, that has not been paid by the termination date specified in the 
applicable contract of insurance, or other due date for payment 
contained in any other agreement or notification of indebtedness, or any 
overdue debt owed to FCIC or the insurance provider which is the subject 
of a scheduled installment payment agreement which the debtor has failed 
to satisfy under the terms of such agreement. Such debt may include any 
accrued interest, penalty, and administrative charges for which demand 
for repayment has been made, or unpaid premium including any accrued 
interest, penalty and administrative charges (7 CFR 400.116). A 
delinquent debt does not include debts discharged in bankruptcy and 
other debts which are legally barred from collection.
    EIN. An Employer Identification Number as required under section 
6109 of the Internal Revenue Code of 1986.

[[Page 52]]

    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
government corporation within the United States Department of 
Agriculture.
    FSA. The Farm Service Agency or a successor agency.
    Ineligible person. A person who is denied participation in any 
program administered by FCIC under the Act.
    Insurance provider. A reinsured company or FSA providing crop 
insurance coverage to producers participating in any Federal crop 
insurance program administered under the Act.
    Minor. Any person under 18 years of age. Court proceedings 
conferring majority on an individual under 18 years of age will result 
in such persons no longer being considered as a minor.
    Person. An individual, partnership, association, corporation, 
estate, trust, or other legal entity, and wherever applicable, a State, 
political subdivision, or an agency of a State.
    Policyholder. An applicant whose properly completed application for 
insurance under the crop insurance program has been accepted by FCIC or 
an insurance provider.
    Reinsurance agreement. An agreement between two parties by which an 
insurer cedes to a reinsurer certain liabilities arising from the 
insurer's sale of insurance policies.
    Reinsured company. A private insurance company having a Standard 
Reinsurance Agreement, or other reinsurance agreement, with FCIC, whose 
crop insurance policies are approved and reinsured by FCIC.
    Scheduled installment payment agreement. An agreement between a 
person and FCIC or the insurance provider to satisfy financial 
obligations of the person under conditions which modify the terms of the 
original debt.
    Settlement. An agreement between a person and FCIC or the insurance 
provider to resolve a dispute arising from a debt or other 
administrative determination.
    SSN. An individual's Social Security Number as required under 
section 6109 of the Internal Revenue Code of 1986.
    Standard Reinsurance Agreement (SRA). The primary reinsurance 
agreement between the reinsured company and FCIC.
    Substantial beneficial interest. An interest held by any person of 
at least 10 percent or more in the applicant or policyholder.
    System of records. Records established and maintained by FCIC and 
FSA containing SSN or EIN data, name, address, city and State, 
applicable policy numbers, and other information related to Federal crop 
programs as required by FCIC, from which information is retrieved by a 
personal identifier including the SSN, EIN, name, or other unique 
identifier of a person.

[62 FR 42042, Aug. 5, 1997, as amended at 63 FR 40631, July 30, 1998]



Sec. 400.678  Applicability.

    This subpart applies to any program administered by FCIC under the 
Act, including:
    (a) The catastrophic risk protection plan of insurance;
    (b) The limited and additional coverage plans of insurance as 
authorized under sections 508(c) and 508(m) of the Act; and
    (c) Private insurance products authorized under section 508(h) of 
the Act and reinsured by FCIC.



Sec. 400.679  Criteria for ineligibility.

    Any person may be determined to be ineligible to participate in any 
program administered by FCIC under the authority of the Act, if the 
person meets one or more of the following criteria:
    (a) Has a delinquent debt on a crop insurance policy, issued or 
reinsured by FCIC, or any delinquent debt due FCIC under the Act. Any 
person with a delinquent debt owed to FCIC or to the insurance provider 
shall be ineligible to participate in any program administered under the 
authority of the Act. Such determinations will be in accordance with 7 
CFR 400.459. The existence and delinquency of the debt must be 
verifiable.
    (b) Has violated the controlled substance (7 CFR part 718) 
provisions of the Food Security Act of 1985, as amended. Any person who 
violates the controlled substance provisions of the Food Security Act of 
1985, as amended, shall be ineligible to participate in any program 
administered under the Act.

[[Page 53]]

    (c) Has been disqualified under section 506(n) of the Act and 7 CFR 
part 400, subpart R. Any person who is disqualified in any 
administrative proceeding shall be ineligible to participate in any 
program administered under the Act. Ineligibility determinations 
resulting from administrative proceedings will not be stayed pending 
review. However, reversal of the determination will date back to the 
time of determination.



Sec. 400.680  Determination and notification of ineligibility.

    (a) The insurance provider must send a written notice of the debt to 
the person, including the time frame in which the debt must be paid, and 
provide the person with a meaningful opportunity to contest the amount 
or existence of the debt. After the insurance provider has evaluated the 
person's response, if any, and determined that the debt is owed and 
delinquent, the insurance provider should submit the documentation 
establishing the existence and amount of the debt to FCIC, including any 
response by the person.
    (b) If an insurance provider or any other authorized person has 
evidence that a person meets any other criteria set forth in 
Sec. 400.679, they must submit the evidence to FCIC.
    (c) After FCIC verifies that the person has met one or more of the 
criteria stated in Sec. 400.679, FCIC will issue a Notice of 
Ineligibility and mail such notice to the person's last known address 
and to the insurance provider.
    (d) The Notice of Ineligibility will state the criteria upon which 
the determination of ineligibility has been based, a brief statement of 
the facts to support the determination, the time period of 
ineligibility, and the persons right to an appeal of the ineligibility 
determination.
    (e) Within 30 days of receiving the Notice of Ineligibility, any 
person receiving such a notice may appeal the determination of 
ineligibility to the National Appeals Division in accordance with 7 CFR 
part 11.
    (f) If the person appeals the determination of ineligibility to the 
National Appeals Division, the insurance provider will be notified and 
provided with an opportunity to participate in the proceeding if 
permitted by 7 CFR part 11.



Sec. 400.681  Effect of ineligibility.

    (a) The period of ineligibility will be effective:
    (1) For ineligibility as a result of a delinquent debt, the date the 
debt has been determined to be delinquent until the debt has been paid 
in full, discharged in bankruptcy, or the person has executed a 
scheduled installment payment agreement;
    (2) For ineligibility as a result of a violation of the controlled 
substance provisions of the Food Security Act of 1985, at the beginning 
of the crop year in which the producer was convicted and the four 
subsequent consecutive crop years; and
    (3) For ineligibility as a result of a disqualification under 
section 506(n) of the Act, the date that the Administrative Law Judge 
signs the order disqualifying the person until the period specified in 
the order of disqualification has expired.
    (b) Once the person has been determined to be ineligible:
    (1) All policies in which the ineligible person is the sole insured 
will be void for the period specified in Sec. 400.681(a);
    (2) If the ineligible person is a general partnership, all partners 
will be individually ineligible and any policy in which a partner has a 
100 percent interest will be void for the period specified in 
Sec. 400.681(a). The partnership and all partners will be removed from 
any policy in which they have a substantial beneficial interest, and the 
policyholder share under the policies will be reduced commensurate with 
the ineligible person's share;
    (3) If the applicant or policyholder is a corporation, partnership, 
or other business entity, and an ineligible person has a substantial 
beneficial interest in the applicant or policyholder, the application 
may be accepted or existing policies remain in effect, although the 
ineligible person will be removed from the policies and the policyholder 
share under the policies will be reduced commensurate with the 
ineligible person's share;
    (4) If the applicant or policyholder is a corporation, partnership, 
or other business entity that was created to

[[Page 54]]

conceal the interest of a person in the farming operation or to evade 
the ineligibility determination of a person with a substantial 
beneficial interest in the applicant or policyholder, the corporation, 
partnership or other business entity will be disregarded, the individual 
shareholders or partners will be personally responsible, and any 
shareholder or partner that is ineligible will be removed from the 
policy and the policyholder share under the policies will be reduced 
commensurate with the ineligible person's share;
    (5) Any indemnities or payments made on a voided policy, or on the 
portion of the policy reduced because of ineligibility, will be declared 
overpayments and must be repaid; and
    (6) If the policy is voided, all producer paid premiums may be 
refunded, or if an ineligible person is removed from a policy, the 
portion of the producer paid premium commensurate with the ineligible 
person's share may be refunded, less a reasonable amount for expense and 
handling in accordance with 7 CFR 400.47.
    (c) The spouse and minor children of an individual are considered to 
be the same as the individual for purposes of this subpart except that:
    (1) The spouse who was actively engaged in farming in a separate 
farming operation will be a separate person with respect to that 
separate farming operation so long as that operation remains separate 
and distinct from any farming operation conducted by the other spouse 
(Transfers of interest in a farming operation from one spouse to another 
will not be considered as a separate farming operation.);
    (2) A minor child who is actively engaged in farming in a separate 
farming operation will be a separate person with respect to that 
separate farming operation if:
    (i) The parent or other entity in which the parent has a substantial 
beneficial interest does not have any interest in the minor's separate 
farming operation or in any production from such operation;
    (ii) The minor has established and maintains a separate household 
from the parent;
    (iii) The minor personally carries out the farming activities with 
respect to the minor's farming operation; and
    (iv) The minor establishes separate accounting and record keeping 
for the minor's farming operation.



Sec. 400.682  Criteria for reinstatement of eligibility.

    A person who has been determined ineligible may have eligibility 
reinstated as follows:
    (a) A delinquent debt owed on a crop insurance policy insured or 
reinsured by FCIC or any delinquent debt due FCIC. Eligibility may be 
reinstated after the debt is paid in full or discharged in bankruptcy, 
or the person has executed a scheduled installment payment agreement 
accepted by FCIC or the insurance provider. Eligibility may be 
reinstated as of the date the debt is paid, the date the agreement is 
accepted, or the date the debt is discharged in bankruptcy.
    (b) Violations of the controlled substance provisions of the Food 
Security Act of 1985, as amended. Eligibility may be reinstated after 
the period of ineligibility stated in Sec. 400.681 has expired.
    (c) Disqualification under section 506(n) of the Act. Eligibility 
may be reinstated when the period of disqualification determined in the 
administrative proceedings has expired and payment of all penalties and 
overpayments have been completed.
    (d) Timing of reinstatement of eligibility. After eligibility has 
been reinstated, the person must complete a new application for crop 
insurance coverage on or before the applicable sales closing date. If 
the date of reinstatement of eligibility occurs after the applicable 
sales closing date for the crop year, the person may not participate 
until the following crop year. If the National Appeals Division 
determines that the person should not have been placed on the Ineligible 
Tracking System, reinstatement will be effective at the beginning of the 
crop year for which the producer was listed on the Ineligible Tracking 
System and the person will be entitled to all applicable benefits under 
the policy.

[[Page 55]]



Sec. 400.683  Administration and maintenance.

    (a) Ineligible producer data will be maintained in a system of 
records in accordance with the Privacy Act, 5 U.S.C. 552a.
    (1) The Ineligible Tracking System is a record of all persons who 
have been determined to be ineligible for participation in any program 
pursuant to this subpart. This system contains identifying information 
of the ineligible person including, but not limited to, name, address, 
telephone number, SSN or EIN, reason for ineligibility, and time period 
for ineligibility.
    (2) Information in the Ineligible Tracking System may be used by 
Federal agencies, FCIC employees, contractors, and reinsured companies 
and their personnel who require such information in the performance of 
their duties in connection with any program administered under the Act. 
The information may be furnished to other users including, but not 
limited to, FCIC contracted agencies; credit reporting agencies and 
collection agencies; in response to judicial orders in the course of 
litigation; and other users as may be appropriate or required by law or 
regulation. The individual information will be made available in the 
form of various reports and notices produced from the Ineligible 
Tracking System, based on valid requests.
    (3) Supporting documentation regarding the determination of 
ineligibility and reinstatement of eligibility will be maintained by 
FCIC and FSA, or its contractors, reinsured companies, and Federal and 
State agencies. This documentation will be maintained consistent with 
the electronic information contained within the Ineligible Tracking 
System.
    (b) Information may be entered into the Ineligible Tracking System 
by FCIC or FSA personnel.
    (c) All persons applying for or renewing crop insurance contracts 
issued or reinsured by FCIC will be subject to validation of their 
eligibility status against the Ineligible Tracking System. Applications 
or benefits approved and accepted are considered approved or accepted 
subject to review of eligibility status in accordance with this subpart.



 Subpart V--Submission of Policies, Provisions of Policies and Rates of 
                                 Premium

    Authority: 7 U.S.C. 1506(1), 1506(p).

    Source: 66 FR 47951, Sept. 17, 2001, unless otherwise noted.



Sec. 400.700  Basis, purpose, and applicability.

    This subpart establishes guidelines for the submission of policies, 
plans of insurance, and rates of premium to the Board under section 
508(h) of the Act and for non-reinsured supplemental policies in 
accordance with the SRA, and the roles and responsibilities of FCIC and 
the applicant. It also specifies the procedures for requesting 
reimbursement for research and development and maintenance costs for 
products and the approval process.



Sec. 400.701  Definitions.

    Act. The Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et 
seq.)
    Actuarial documents. The forms and associated materials applicable 
to a crop or insurance year, which are available for public inspection 
in an agent's office and FCIC's website at www.act.fcic.usda.gov. These 
materials show the insurable acreage or commodities, the applicable 
guarantees, coverage levels, premium rates, insurable cropping practices 
common to the area, and other related information regarding crop 
insurance or other risk management plans of insurance in the county or 
state.
    Actuarially appropriate. Premium rates determined to cover the 
anticipated loss and a reasonable reserve based on valid reasoning, an 
examination of all known risk data, and founded on thorough knowledge or 
experience of the expected value of all future costs associated with a 
risk transfer.
    Administrative and operating (A&O) subsidy. An amount for expenses 
associated with selling and servicing insurance products authorized by 
the Act and paid by FCIC on behalf of the producer to approved insurance 
providers.
    Applicant. Any person or entity that submits a policy, provisions of 
a policy, or premium rates to the Board for approval under section 
508(h) of the Act.

[[Page 56]]

    Approved insurance provider. A private insurance company that has 
been approved by FCIC to provide insurance coverage to producers 
participating in programs authorized by the Act.
    Board. The Board of Directors of FCIC.
    Complexity. Complexity takes into consideration such factors as 
originality, the number and type of factual determinations necessary to 
establish insurable interest, evaluate risk, and determine whether an 
indemnity is payable, the number of commodities and areas to which the 
product is applicable, the rating methodology, the number of risks 
covered, unique policy provisions or endorsements, the delivery process 
of the submission, and the process of creating rules, policy terms and 
conditions, underwriting procedures, rating methodologies, 
administrative and operating procedures, and supporting materials.
    Development. The process of creating rules, methodologies, 
administrative and operating procedures, supporting materials, and 
documentation necessary to submit, gain approval, and implement a 
proposed policy or coverage.
    Endorsement. A document appended to a policy reinsured under the Act 
that supplements or amends the insurance coverage of that policy.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
government corporation within USDA.
    Maintenance. The process of continual support and improvement, as 
needed, for a policy or plan of insurance, including the periodic review 
of setting prices, updating premium rates or the rating methodology, 
updating or modifying policy terms and conditions, expanding into new 
commodities and areas, and other measures necessary to assure financial 
viability and actuarial soundness or to respond to statutory or 
regulatory changes.
    Maintenance costs. Specific expenses associated with the maintenance 
of a policy during the maintenance period.
    Maintenance period. A period of time that begins on the date the 
Board approves the submission for maintenance and ends on the date that 
is not more than four reinsurance years after such approval.
    Manager. The Manager of FCIC.
    Marketable. An evaluation by the Board of the marketing plan 
submitted by the applicant that determines that producers will purchase 
the product and approved insurance providers will sell the product based 
on credible evidence provided by the applicant.
    Marketing plan. A detailed, written plan that identifies, at a 
minimum, the expected number of potential buyers, premium, and 
liability, the data upon which such information is based and a 
prescribed insurance year cycle.
    Multiple peril crop insurance (MPCI). All insurance policies 
reinsured by FCIC that offers coverage for loss of production.
    National Agricultural Statistics Service (NASS). An agency of the 
United States Department of Agriculture, or a successor agency.
    Non-reinsured supplemental policy (NRS). A policy, endorsement or 
other risk management tool that is developed by an approved insurance 
provider, or an entity affiliated in some manner with an approved 
insurance provider, that offers coverage, other than for loss related to 
hail, for commodities in addition to coverage available under a policy 
or plan of insurance that is reinsured by FCIC. This policy, endorsement 
or other risk management tool has not been submitted under 508(h) for 
FCIC approval for reinsurance.
    Non-significant changes. Minor changes to the policy or plan of 
insurance, such as technical corrections, that do not affect the rating 
or pricing methodologies, the amount of subsidy owed, the amount of 
coverage, the interests of producers, FCIC's reinsurance risk, or any 
condition that may affect liability or the amount of loss to be paid 
under the policy. This includes any changes due to statutory or 
regulatory requirements.
    Policy. A contract for insurance that includes an application, Basic 
Provisions, applicable commodity provisions, other applicable options 
and endorsements, the actuarial documents for the insured commodity, and 
related materials.

[[Page 57]]

    Plan of insurance. A class of policies, such as MPCI or Crop Revenue 
Coverage, that offer a specific type of coverage to one or more 
agricultural commodities.
    Rate of premium. The dollar amount per insured unit or percentage 
rate per dollar of liability that is needed to pay anticipated losses 
and provide a reasonable reserve.
    Related materials. The actuarial documents, special provisions, and 
any underwriting or loss adjustment manuals, handbooks, forms or other 
materials.
    Research. The processes used to determine the need, producer 
interest, if the product is marketable, and feasibility of a proposed 
policy, plan of insurance or rate of premium.
    Research and development costs. Specific expenses incurred and 
directly related to research and development of a submission approved by 
the Board.
    Revenue insurance. Plans of insurance providing protection against 
loss of income or change in price.
    Risk Management Agency (RMA). An agency of USDA responsible for the 
administration of all programs authorized under the Act and other 
authorities.
    Risk subsidy. The portion of the approved premium paid by FCIC on 
behalf of the insured person.
    Sales closing date. The final calendar date on which an approved 
insurance provider may accept an application by a producer for 
insurance.
    Secretary. The Secretary of the United States Department of 
Agriculture.
    Significant change. Any change to the policy or plan of insurance 
that may affect the rating and pricing methodologies, the amount of 
subsidy owed, the amount of coverage, the interests of producers, FCIC's 
reinsurance risk, or any condition that may affect liability or the 
amount of loss to be paid under the policy.
    Special Provisions. The part of the policy that contains specific 
provisions of insurance for each insured crop that may vary by 
geographic area.
    Submission. A policy, plan of insurance, provision of a policy or 
plan of insurance, or rates of premium provided by an applicant to FCIC 
in accordance with the requirements of this subpart.
    USDA. The United States Department of Agriculture.
    User fees. Fees, approved by the Board, that can be charged to 
approved insurance providers for use of a policy or plan of insurance.



Sec. 400.702  Confidentiality of submission and duration of confidentiality.

    (a) Prior to approval by the Board, any submission made to the Board 
under section 508(h) of the Act, including any information generated 
from the submission, will be considered confidential commercial or 
financial information for purposes of 5 U.S.C. 552(b)(4) and will not be 
released by FCIC to the public, unless the applicant authorizes such 
release in writing.
    (b) Once the Board approves a submission, all information provided 
with the submission, or generated in the approval process, may be 
released to the public, including any mathematical modeling and data, 
unless it remains confidential business information under 5 U.S.C. 
552(b).
    (c) Any submission disapproved by the Board will remain confidential 
commercial or financial information in accordance with 5 U.S.C. 552(b) 
and no information related to such submission will be released by FCIC 
unless authorized in writing by the applicant.



Sec. 400.703  Timing of submission.

    (a) A submission may only be provided to FCIC the first 5 business 
days of the months of, January, April, July, and October.
    (b) Any submission not provided within the first 5 business days of 
a month stated in paragraph (a) of this section, will be considered to 
have been provided the next month stated in paragraph (a). For example, 
if an applicant provides a submission on the January 10, it will be 
considered to have been received on April 1.
    (c) Any submission must be provided to the Deputy Administrator, 
Research and Development (or any successor), Risk Management Agency, 
6501 Beacon Drive, Stop 0812, Kansas City, MO 64133-4676, not later than 
180 days prior to the earliest proposed sales closing

[[Page 58]]

date to be considered for sale in the requested crop year.



Sec. 400.704  Type of submission.

    (a) An applicant may submit to the Board in accordance with 
Sec. 400.705:
    (1) A policy or plan of insurance not currently reinsured by FCIC;
    (2) One or more proposed revisions to a policy or plan of insurance 
authorized under the Act; or
    (3) Rates of premium for any policy or plan of insurance authorized 
under the Act.
    (b) An applicant must submit to the Board any significant change to 
a previously approved submission prior to making the change.



Sec. 400.705  Contents required for a new submission or changes to a previously approved submission.

    A complete submission must contain the following material, as 
applicable, in the order given, in a 3-ring binder, with section 
dividers clearly labeling each section. The entire submission must be 
included in an electronic format acceptable to RMA. Six identical copies 
of each submission must be sent to the Deputy Administrator, Research 
and Development (or successor), Risk Management Agency, 6501 Beacon 
Drive, Stop 0812, Kansas City, MO 64133-4676, and one identical copy of 
each submission provided to the Administrator, Risk Management Agency, 
1400 Independence Ave., Stop 0801, Room 3053 South Building, Washington, 
DC 20250-0801.
    (a) The first section will contain general information, including, 
as applicable:
    (1) The applicant's name, address or primary business location, 
phone number, and e-mail address;
    (2) The type of submission (see Sec. 400.704);
    (3) A statement of whether the applicant is requesting:
    (i) Reinsurance, which includes risk subsidy and A&O subsidy;
    (ii) Costs for reimbursement for research and development; or
    (iii) Estimated costs for reimbursement for maintenance.
    (4) The proposed agricultural commodities, including types, 
varieties, and practices covered by the submission;
    (5) The crop and reinsurance years in which the submission is 
proposed to be available for purchase by producers;
    (6) The proposed sales closing date;
    (7) The proposed duration and scope of the plan of insurance;
    (8) A marketing plan;
    (9) Any known or anticipated future expansion plans;
    (10) Identification, including names, addresses, telephone numbers, 
and e-mail addresses, of the persons responsible for:
    (i) Addressing questions regarding the policy, underwriting rules 
and procedures, rate and price methodologies, data processing and record 
keeping requirements, and any other questions that may arise in 
administering the program after it is approved; and
    (ii) Annual reviews to ensure compliance with all requirements of 
the Act, this subpart, and any agreements executed between the applicant 
and FCIC.
    (11) A statement whether the submission will be filed with the 
applicable office responsible for regulating insurance in each state 
proposed for insurance coverage, and, if not, reasons why the submission 
will not be filed for review.
    (b) The second section must contain the benefits of the plan, 
including, as applicable, a statement about the plan that demonstrates:
    (1) How the submission offers coverage or other benefits not 
currently available from existing public and private programs.
    (2) The demand for the submission, which must be supported by 
information from market research, producers or producer groups, agents, 
lending institutions, and other interested parties that provide 
verifiable evidence of demand; and
    (3) How the submission meets public policy goals and objectives 
consistent with the Act and other laws, as well as policy goals 
supported by USDA and the Federal Government.
    (c) The third section must contain the policy, including, as 
applicable:
    (1) If the submission involves a new insurance policy or plan of 
insurance:
    (i) All applicable policy provisions; and,

[[Page 59]]

    (ii) A list and description of any additional coverage that may be 
elected by the insured, including how such coverage may be obtained.
    (2) If the submission involves a change to a previously approved 
policy, plan of insurance, or rates of premium, the proposed revisions, 
rationale for each change, data and analysis supporting each change, the 
impact of each change, and the impact of all changes in aggregate.
    (d) The fourth section must contain the information related to the 
marketing of the policy or plan of insurance, including, as applicable:
    (1) A list of states and counties where the submission is proposed 
to be offered;
    (2) The amount of commodity (acres, head, board feet, etc.), the 
amount of production, and the value of each agricultural commodity 
proposed to be covered in each proposed county and state;
    (3) The expected liability and premium for each proposed county and 
state;
    (4) If available, any insurance experience for each year and in each 
proposed county and state in which the policy has been previously 
offered for sale including an evaluation of the policy's performance 
and, if data are available, a comparison with other similar insurance 
policies reinsured under the Act; and
    (5) The projected frequency and severity of loss if the proposed 
submission is approved.
    (e) The fifth section must contain the information related to the 
underwriting of the submission, including, as applicable:
    (1) A sample of each document or form that will be used to present 
and sell the product;
    (2) Detailed rules for determining insurance eligibility, including 
all producer reporting requirements;
    (3) Relevant dates, if not included in the proposed policy;
    (4) Detailed examples of the data and calculations needed to 
establish the insurance guarantee, liability, and premium per acre or 
other unit of measure, including worksheets that provide the 
calculations in sufficient detail and in the same order as presented in 
the policy to allow verification that the premiums charged for the 
coverage are consistent with policy provisions;
    (5) A detailed example of calculations used to determine a claim for 
indemnity for each unique situation in which a loss may be payable;
    (6) A detailed description of the causes of loss covered by the 
policy or plan of insurance and any causes of loss excluded; and
    (7) Any statements to be included in the actuarial documents.
    (f) The sixth section must contain the information related to prices 
and the rates of premium, including, as applicable:
    (1) A list of all assumptions made in the premium rating and 
commodity pricing methodologies, and the basis for these assumptions;
    (2) A detailed description of the pricing and rating methodologies, 
including supporting documentation, all mathematical formulas, 
equations, and data sources used in determining rates and prices and an 
explanation of premium components that detail how rates were determined 
for each component, that demonstrate the rate is appropriate;
    (3) An example of a rate calculation and an example of a price 
calculation;
    (4) A discussion of the reliability of the data; and
    (5) An analysis of the results of simulations or modeling showing 
the performance of proposed rates and commodity prices, as applicable, 
based on one or more of the following (Such simulations must use all 
years of experience available to the applicant):
    (i) A recalculation of total premium and losses compared to a 
similar or comparable insurance plan offered under the authority of the 
Act with modifications, as needed, to represent the components of the 
submission;
    (ii) A simulation based on the probability distributions used to 
develop the rates and commodity prices, as applicable, including 
sensitivity tests that demonstrate price or yield extremes, and the 
impact of inappropriate assumptions; or
    (iii) Any other comparable simulation that provides results 
indicating both aggregate and individual performance of the submission 
under various

[[Page 60]]

scenarios depicting good and poor actuarial experience.
    (g) The seventh section must contain an evaluation and certification 
from an accredited associate or fellow of the Casualty Actuarial 
Society, or other similarly qualified professional, that certifies the 
submission is actuarially appropriate and consistent with appropriate 
insurance principles and practices.
    (h) The eighth section must contain all forms applicable to the 
submission, including:
    (1) An application for insurance and procedures for accepting the 
application; and
    (2) All applicable policy forms, instructions and procedures that 
are necessary to establish the amounts of coverage or loss.
    (i) The ninth section must contain the following;
    (1) A statement agreeing that sales will be deferred until the next 
applicable sales closing date if policy information, forms, premium 
rates, prices, any automated premium calculator, and other related 
information or documents are not made available to all approved 
insurance providers:
    (i) For a new submission, at least 60 days prior to the earliest 
sales closing date specified in the submission; or
    (ii) For a revised submission, at least 60 days prior to the 
earliest contract change date specified in the submission;
    (2) An explanation of any provision of the policy not authorized 
under the Act and identification of the portion of the rate of premium 
due to these provisions;
    (3) Agent and loss adjuster training plans; and
    (4) A certification from the applicant's legal counsel that the 
submission meets and complies with all requirements of the Act, 
applicable regulations, and any reinsurance agreement.
    (j) The tenth section must contain the documents that demonstrate 
the submission complies in all respects with the standards established 
for processing and acceptance of data as specified in the FCIC Data 
Acceptance System Handbook (Manual 13), unless other arrangements have 
been made with RMA. This handbook is available from the Risk Management 
Agency, 6501 Beacon Drive, Stop 0812, Kansas City, MO 64133-4676 or on 
the FCIC web site (http://www.rma.usda.gov/data/m13).
    (k) The eleventh section must contain the information related to a 
request for reimbursement of research and development costs, and 
maintenance costs, as applicable, in accordance with Sec. 400.712.
    (l) The twelfth section must contain executed certification 
statements in accordance with the following:
    (1) ``{Applicant's Name{time}  hereby claim that the amounts set 
forth in this section and Sec. 400.712 are correct and due and owing to 
{Applicant's Name{time}  by FCIC under the Federal Crop Insurance Act.''
    (2) ``{Applicant Name{time}  understands that, in addition to 
criminal fines and imprisonment, the submission of false or fraudulent 
statements or claims may result in civil and administrative sanctions.''



Sec. 400.706  Review of submission.

    (a) Prior to providing any submission, including a new submission, a 
resubmission, or a change to a previously approved submission, to the 
Board for its review, RMA will:
    (1) Review the submission for completeness to determine if all 
necessary and appropriate documentation is included in accordance with 
Sec. 400.705;
    (2) Review the submission to determine whether the documentation is 
of a level of quality to conduct a meaningful review by the Board;
    (3) If the submission is determined to be complete and the 
documentation of sufficient quality to permit a meaningful review, the 
submission will be considered to have been submitted to the Board for 
approval or disapproval. The date that FCIC determines that the 
submission is complete, as notified to the applicant, will be the date 
that the time frame for approval or disapproval by the Board begins;
    (4) Return to the applicant any submission lacking any of the 
information required in Sec. 400.705, or with documentation that is of 
insufficient quality to permit a meaningful review (such submission will 
not be considered

[[Page 61]]

as provided to the Board for the purpose of commencing the period by 
which the submission must be approved or disapproved by the Board. If 
the submission is resubmitted, it will be considered a new submission.);
    (b) When FCIC determines that the submission is complete and the 
documentation of sufficient quality to permit a meaningful review, it 
will forward the submission to the Board for consideration for approval 
or disapproval.
    (c) During the consideration process, the Board will:
    (1) For all new submissions or significant changes to previously 
approved submissions, contract with five independent persons with 
underwriting or actuarial experience to review the submission:
    (i) Of the five reviewers, no more than one will be employed by the 
Federal Government, and none may be employed by any approved insurance 
provider or their representatives; and
    (ii) The reviewers will each provide their assessment of whether the 
submission protects the interests of agricultural producers and 
taxpayers, is actuarially appropriate, follows appropriate insurance 
principles, meets the requirements of the Act, does not contain 
excessive risks, follows sound, reasonable, and appropriate underwriting 
principles, as well as other items the Board may deem necessary;
    (2) For all submissions:
    (i) Request review by FCIC to determine whether the submission 
protects the interests of agricultural producers and taxpayers, is 
actuarially appropriate, follows appropriate insurance principles, meets 
the requirements of the Act, does not contain excessive risks, is 
consistent with USDA's public policy goals, does not increase or shift 
risk to any other FCIC reinsured policy, can be administered and 
delivered efficiently and effectively, and meets the standards pursuant 
to Sec. 400.712 for reimbursement of research and development costs and 
maintenance costs, if requested, and determine whether the requested 
amount of government reinsurance, risk subsidy, and administrative and 
operating subsidies is reasonable and appropriate for the type of 
coverage provided by the policy submission; and
    (ii) Seek review from the Office of the General Counsel (OGC) to 
determine whether the interests of producers are adequately protected 
and if the submission conforms to the requirements of the Act.
    (3) Render a decision to approve or give notice of an intent to 
disapprove within 90 days after the date the submission is considered 
submitted to the Board in accordance with paragraph (a)(3) of this 
section, unless the applicant and Board agree to a time delay in 
accordance with paragraph (h) of this section.
    (d) All comments and evaluations will be forwarded to the Board by a 
date determined to allow the Board adequate time for review.
    (e) The Board will consider all comments, evaluations, and 
recommendations in its review process. Prior to making a decision, the 
Board may request additional information from RMA, OGC, the independent 
reviewers, or the applicant.
    (f) The Board may disapprove a submission if it determines that:
    (1) The interests of producers are not protected;
    (2) The premium rates are not actuarially appropriate;
    (3) The submission does not conform to sound insurance and 
underwriting principles;
    (4) The risks associated with the submission are excessive; or
    (5) There is insufficient time before the submission would become 
effective under section 508(h) of the Act for the Board to make an 
informed decision with respect to whether the interests of producers are 
protected, the premium rates are actuarially appropriate, or the risks 
associated with the submission are excessive.
    (g) If the Board intends to disapprove the submission, the applicant 
will be notified in writing at least 30 days prior to the Board taking 
such action. The Board will provide the applicant with a written 
explanation for the intent to disapprove the submission.
    (h) An applicant may request, at any time, a time delay before the 
Board provides a notice of intent to disapprove the submission. The 
Board is

[[Page 62]]

not required to agree to such an extension.
    (1) The applicant understands that any requested time delay will not 
be limited in the length time or the number of delays. However, delays 
may make implementation of the submission for the targeted crop year 
impractical or impossible.
    (2) The time period during which the Board must make a decision to 
approve or disapprove the submission is not in effect during any time 
delay requested by the applicant.
    (3) The Board and the applicant must agree to a time period in which 
the Board must make its decision to approve or disapprove after the 
expiration of any requested time delay.
    (i) The applicant may withdraw a submission at any time by written 
request to the Board. A withdrawn submission that is resubmitted will 
result in the submission being deemed a new submission for the purposes 
of determining the amount of time that the Board must act on such 
submission.
    (j) Prior to any Board action taken or after the Board has provided 
formal notice of its intent to disapprove all or part of a submission:
    (1) Modification can occur in writing or orally prior to the Board 
providing notice of its intent to disapprove all or part of a 
submission.
    (2) After formal notice of intent to disapprove all or part of a 
submission has been provided by the Board, the applicant must provide 
written to the Board that the submission will be modified not later than 
30 days after the Board provided such notice. Except as provided in 
paragraph (j)(5) of this section, the applicant must also include the 
date that the modification will be provided to the Board.
    (3) If the modification is in direct response to reviewer comments, 
the Board may act on the modification immediately or seek further review 
within the 30 day time period allowed.
    (4) The Board will approve or disapprove a modified submission not 
later than 30 days after receiving a modified submission from the 
applicant, unless the applicant and the Board agree to a time delay. If 
a time delay is agreed upon the time period during which the Board must 
act on the modified submission will not be in effect during the delay.
    (5) The Board will disapprove a modified submission if:
    (i) All causes for disapproval stated by the Board in its 
notification of its intent to disapprove the submission are not 
satisfactorily addressed;
    (ii) Insufficient time is available for review of the modified 
submission to determine whether all causes for disapproval have been 
satisfactorily addressed; or
    (iii) If modification is so substantial that the Board determines 
that additional independent review is required and a time delay can not 
be agreed to allow for such review.
    (k) When the applicant is notified of the Board's intent to 
disapprove and the submission is not revised or withdrawn, the Board 
will provide written notification to the applicant that the submission 
has been disapproved no less than 30 days after the date that the notice 
of intent to disapprove was provided to the applicant.
    (l) If the Board fails to take action on a new submission within the 
prescribed 90 day period in paragraph (c)(3) of this section, or within 
the time period in accordance with paragraph (h)(3) of this section 
after receiving the revised submission, such submission will be deemed 
approved by the Board for the initial reinsurance year designated for 
the submission. The Board must approve the submission for it to be 
available for any subsequent reinsurance year.



Sec. 400.707  Presentation to the Board for approval or disapproval.

    (a) The Board will inform the applicant of the date, time, and place 
of the Board meeting.
    (b) The applicant will be given the opportunity and is encouraged to 
present the submission to the Board in person. The applicant must 
confirm, in writing, whether the applicant will present the submission 
to the Board.
    (c) If the applicant elects, at any time, not to present the 
submission to the Board, the Board will make its decision based on the 
submission and the reviews provided in accordance with Sec. 400.706(c).

[[Page 63]]



Sec. 400.708  Approved submission.

    (a) After a submission is approved by the Board, and prior to it 
being made available for sale to producers, the following items, as 
applicable, must be completed:
    (1) If the Board requires, an agreement between the applicant and 
FCIC that specifies the responsibilities of each with respect to the 
implementation, delivery and oversight of the submission, including the 
disposition of property rights for the policy; and
    (2) A reinsurance agreement if terms and conditions differ from the 
Standard Reinsurance Agreement.
    (b) A submission approved by the Board under this subpart will be 
made available to all approved insurance providers under the same 
reinsurance and subsidy terms and conditions as received by the 
applicant.
    (c) Any solicitation, sales, marketing, or advertising of the 
approved submission by the applicant before FCIC has made the submission 
and related materials available to all interested parties through its 
official issuance system will result in the denial of reinsurance, risk 
subsidy, and A&O subsidy for those policies affected.



Sec. 400.709  Roles and responsibilities.

    (a) With respect to the applicant:
    (1) The applicant is responsible for:
    (i) Preparing and ensuring that all policy documents, rates of 
premium, and supporting materials, including actuarial materials, are 
submitted to FCIC in the form approved by the Board;
    (ii) Except as provided in Sec. 400.712(k)(2), annually updating and 
providing maintenance changes no later than 180 days prior to the 
earliest sales closing date for the commodity in all counties or states 
in which the policy or plan of insurance is sold and;
    (iii) Addressing responses to procedural issues, questions, problems 
or clarifications in regard to a policy or plan of insurance (all such 
resolutions will be communicated to all approved insurance providers 
through FCIC's official issuance system.);
    (2) Only the applicant may make changes to the policy, plan of 
insurance, or rates of premium approved by the Board (Any changes, both 
non-significant and significant, must be submitted to FCIC no later than 
180 days prior to the earliest sales closing date for the commodity in 
all counties or states in which the policy or plan of insurance is sold. 
Significant changes must be submitted to the Board for review in 
accordance with this subpart and will be considered as a new 
submission.);
    (3) Except as provided in paragraph (a)(4) of this section, the 
applicant is solely liable for any mistakes, errors, or flaws in the 
submitted policy, plan of insurance, their related materials, or the 
rates of premium that have been approved by the Board unless the policy 
or plan of insurance is transferred to FCIC in accordance with 
Sec. 400.712(k)(2), the applicant remains liable for any mistakes, 
errors, or flaws that occurred prior to the transfer of the policy or 
plan of insurance;
    (4) If the mistake, error, or flaw in the policy, plan of insurance, 
their related materials, or the rates of premium is discovered not less 
than 45 days prior to the cancellation or termination date for the 
policy or plan of insurance, the applicant may request in writing that 
FCIC withdraw the approved policy, plan of insurance, or rates of 
premium:
    (i) Such request must state the discovered mistake, error, or flaw 
in the policy, plan of insurance, or rates of premium, and the expected 
impact on the program; and
    (ii) For all timely received requests for withdrawal, no liability 
will attach to such policies, plans of insurance, or rates of premium 
that have been withdrawn and no producer, approved insurance provider, 
or any other person will have a right of action against the applicant; 
and
    (5) Notwithstanding the policy provisions regarding cancellation, 
any policy, plan of insurance, or rates of premium that have been timely 
withdrawn are deemed canceled and applications for insurance are not 
accepted as of the date that FCIC publishes the notice of withdrawal on 
its website at www.act.fcic.usda.gov. Producers will have the option of 
selecting any other policy or plan of insurance authorized under the Act 
that is available in their

[[Page 64]]

area by the sales closing date for such policy or plan of insurance.
    (6) Failure of the applicant to perform the applicant's 
responsibilities may result in the denial of reinsurance for the policy 
or plan of insurance.
    (b) With respect to FCIC:
    (1) FCIC is responsible for:
    (i) Ensuring that all approved insurance providers receive the 
approved policy or plan of insurance, and related materials, for sale to 
producers in a timely manner (All such information shall be communicated 
to all approved insurance providers through FCIC's official issuance 
system.);
    (ii) Ensuring that all approved insurance providers receive 
reinsurance under the same terms and conditions as the applicant 
(approved insurance providers should contact FCIC to obtain and execute 
a copy of the reinsurance agreement) if required;
    (iii) Conducting the best review of the submission possible in the 
time allowed; and
    (iv) Reviewing the activities of approved insurance providers, 
agents, loss adjusters, and producers to ensure that they are in 
accordance with the terms of the policy or plan of insurance, the 
reinsurance agreement, and all applicable procedures;
    (2) FCIC will not be liable for any mistakes, errors, or flaws in 
the policy, plan of insurance, their related materials, or the rates of 
premium and no cause of action will exist against FCIC as a result of 
such mistake, error, or flaw in a submission submitted under this 
subpart;
    (3) If at any time prior to the cancellation or termination date, 
FCIC discovers that there is a mistake, error, or flaw in the policy, 
plan of insurance, their related materials, or the rates of premium that 
results in over or under insurance, FCIC will deny reinsurance to such 
policy or plan of insurance:
    (4) If reinsurance is denied under paragraph (b)(3) of this section, 
the approved insurance provider will have the option of:
    (i) Selling and servicing the policy or plan of insurance at its own 
risk and without any subsidy; or
    (ii) Canceling the policy or plan of insurance in accordance with 
its terms; and
    (5) If the applicant transfers the policy or plan of insurance to 
FCIC in accordance with Sec. 400.712 (k)(2), FCIC will assume the 
liability for any mistakes, errors, or flaws that occur after the policy 
or plan insurance as been transferred and FCIC is in control of 
maintenance.



Sec. 400.710  Preemption and premium taxation.

    A policy or plan of insurance that is approved by the Board for FCIC 
reinsurance is preempted from state and local taxation.



Sec. 400.711  Right of review, modification, and the withdrawal of reinsurance.

    At any time after approval, the Board may review any policy, plan of 
insurance, related materials, and rates of premium approved under this 
subpart and request additional information to determine whether the 
policy, plan of insurance, related materials, and rates of premium 
comply with statutory or regulatory changes or court orders, are still 
actuarially appropriate, and protect program integrity and the interests 
of producers. The Board will notify the applicant of any problem or 
issue that may arise and allow the applicant an opportunity to make any 
needed change. The Board may deny reinsurance for the applicable policy, 
plan of insurance or rate of premium if:
    (a) The applicant fails to perform their responsibilities under 
Sec. 400.709; or
    (b) If the applicant does not satisfactorily provide materials or 
resolve any issue so that necessary changes can be made prior to the 
earliest contract change date.



Sec. 400.712  Research and development reimbursement, maintenance reimbursement, and user fees.

    (a) Submissions approved by the Board for reinsurance under section 
508(h) of the Act may be eligible for a one time payment of research and 
development costs and maintenance costs for up to four reinsurance 
years, as determined by the Board after the date

[[Page 65]]

such costs have been approved by the Board. Reimbursements made under 
this section will be considered as payment in full for research, 
development, and maintenance, as applicable, for any policy or plan of 
insurance and any property rights to the policy or plan of insurance.
    (b) For submissions submitted to the Board for reinsurance after 
publication of this subpart, an estimate of a request for reimbursement 
of research and development costs and maintenance costs, as applicable, 
must be included with the original submission to the Board in accordance 
with this section. These estimates will only be used by FCIC for the 
purpose of tracking potential expenditures and will not provided a basis 
for making any reimbursements under this section. Documentation of 
actual costs allowed under this section will be used to determine any 
reimbursement.
    (c) For a submission approved by the Board, or submitted to the 
Board, prior to publication of this subpart, a request for reimbursement 
for research and development costs and estimated maintenance costs must 
be received within 60 days following publication of this subpart or 
approval of the submission by the Board. This request should be sent to 
the Deputy Administrator, Research and Development (or any successor), 
Risk Management Agency, 6501 Beacon Drive, Stop 0812, Kansas City, MO 
64133-4676, and also provide one identical copy of each submission to 
the Administrator, Risk Management Agency, 1400 Independence Ave., Stop 
0801, Room 3053 South Building, Washington, D.C. 20250-0801.
    (d) To be eligible for any reimbursement under this section, FCIC 
must determine that a submission is marketable.
    (e) To be considered for reimbursement in any fiscal year, complete 
and final requests for research and development costs and maintenance 
costs, as applicable, must be received by FCIC not later than August 1. 
For 2001 fiscal year only, FCIC may consider reimbursement for research 
and development costs on approved submissions for any request received 
by September 1, 2001. Given the limitation on funds, regardless of when 
the request is received, no payment will be made prior to September 15 
of the applicable fiscal year.
    (f) There are limited funds available on an annual fiscal year basis 
as contained in the Act. Therefore, requests for reimbursement will not 
be considered in the order in which they are received. Consistent with 
paragraphs (g), (h), (i), (j), and (l) of this section, if all 
applicants' requests for reimbursement of research and development costs 
and maintenance costs in any fiscal year:
    (1) Do not exceed the maximum amount authorized by law, the 
applicants may receive the full amount of reimbursement authorized under 
these subsections.
    (2) Exceed the amount authorized by law, each applicant's 
reimbursement will be determined by dividing the total amount of each 
individual applicants' reimbursable costs authorized in paragraphs (g), 
(h), (i), (j), and (l) by the total amount of the aggregate of all 
applicants' reimbursable costs authorized in paragraphs (g), (h), (i), 
(j), and (l) for that year and multiplying the result by the amount of 
reimbursement authorized under the Act.
    (g) The amount of reimbursement for research and development costs 
and maintenance costs, as applicable, will be determined based on the 
amount of reimbursement authorized under paragraph (f) of this section, 
adjusted for the complexity of the policy, plan of insurance, or rates 
of premium, as determined by FCIC, and the size of the area in which the 
policy, plan of insurance, or rates of premium may be offered.
    (1) Policies or plans of insurance that offer new and innovative 
coverages that are not currently available will be eligible for a higher 
reimbursement than policies or plans of insurance that are, or have 
components that are, based on existing policies or plans of insurance.
    (2) Policies or plans of insurance that offer new premium rating or 
market price methodologies will be eligible for a higher reimbursement 
than policies or plans of insurance that use existing premium rating or 
market price methodologies.
    (3) Policies or plans of insurance that cover new commodities that 
are not

[[Page 66]]

otherwise covered by crop insurance or that offer innovative coverage 
and original policy language will be eligible for a higher reimbursement 
than policies or plans of insurance for commodities for which insurance 
is currently available.
    (4) Policies or plans of insurance that may be offered for sale 
nationwide or in large geographical regions will be eligible for higher 
reimbursement than those that are applicable to only a few counties or 
states or a small geographical region.
    (5) Any reimbursement under this subpart will be scored as follows:
    (i) Complexity scores:
    (A) Basic or Common Provisions:
    (1) Uses existing policies or plans of insurance: 0.05
    (2) Contains modifications to existing policies or plans of 
insurance: 0.10
    (3) Original (See paragraph (g)(3) of this section): 0.20
    (B) Crop Provisions and Special Provisions:
    (1) Uses existing policies or plans of insurance: 0.05
    (2) Contains modifications to existing policies or plans of 
insurance: 0.10
    (3) Original (See paragraph (g)(3) of this section): 0.20
    (C) Market prices:
    (1) Uses existing policies or plans of insurance: 0.05
    (2) Contains modifications to existing policies or plans of 
insurance: 0.10
    (3) Original (See paragraph (g)(3) of this section): 0.20
    (D) Rates of Premium:
    (1) Uses existing policies or plans of insurance: 0.05
    (2) Contains modifications to existing policies or plans of 
insurance: 0.10
    (3) Original (See paragraph (g)(3) of this section): 0.20
    (E) Underwriting:
    (1) Uses existing policies or plans of insurance: 0.05
    (2) Contains modifications to existing policies or plans of 
insurance: 0.10
    (3) Original (See paragraph (g)(3) of this section): 0.20
    (ii) Geographic scope scores:
    (A) Potential national availability: 0.10
    (B) Potential regional, state or county availability: 0.05
    (6) In accordance with paragraph (e) of this section, those policies 
or plans of insurance that receive a summed total score for both 
complexity and geographic scope that is:
    (i) Equal to or greater than 0.6 may receive the full amount of 
reimbursement approved by the Board under paragraphs (h), (i) or (j) of 
this section;
    (ii) Greater than 0.25 but lower than 0.60 will receive a 
reimbursement that is not greater than 75 percent of the full amount of 
reimbursement approved by the Board under paragraphs (h), (i) or (j) of 
this section; and
    (iii) Equal to or less than 0.25 will receive a reimbursement that 
is not greater than 50 percent of the full amount of reimbursement 
approved by the Board under paragraphs (h), (i) or (j) of this section.
    (h) For those submissions that were approved by the Board prior to 
the date of publication of this subpart, reimbursement for research and 
development costs will be determined in accordance with paragraph (i) of 
this section or by multiplying the average number of policies earning 
premium each crop year since inception of the policy or plan of 
insurance by $7.00 and multiplying the result by the complexity and 
scope score from paragraph (g) of this section.
    (i) For those submissions submitted to the Board prior to the date 
of publication of this subpart but not yet approved, or submitted to the 
Board for approval after the date of publication of this part, research 
and development costs must be supported by itemized statements and 
supporting documentation (copies of contracts, billing statements, time 
sheets, travel vouchers, accounting ledgers, etc.). Actual costs 
submitted will be examined for reasonableness and may be adjusted at the 
sole discretion of the Board.
    (1) Allowable research and development expense items (directly 
related to research and development of the submission only) may include 
the following;
    (i) Straight-time hourly wage, exclusive of bonuses, overtime pay, 
or shift differentials (One line per employee, include job title, total 
hours, and total dollars. Compensation amounts will be

[[Page 67]]

compared with the Occupational Employment Statistics Survey, published 
each January by the U.S. Department of Labor, Bureau of Labor 
Statistics);
    (ii) Benefit cost per employee (Benefit costs are considered 
overhead and will be compared with the Employment Cost Index Annual 
Employer Cost Survey published each March by the U.S. Department of 
Labor, Bureau of Labor Statistics.);
    (iii) Contracted expenses (include a copy of the contract, billing 
statements, accounting records, etc.);
    (iv) Professional fees (include the job title, straight-time hourly 
wage, total hours, and total dollars);
    (v) Travel and transportation (One line per event, include the job 
title, destination, purpose of travel, lodging cost, mileage, air or 
other identified transportation costs, food and miscellaneous expenses, 
other costs, and the total cost);
    (vi) Software and computer programming developed specifically to 
determine appropriate rates, prices, or coverage amounts (Identify the 
item, include the purpose, and provide receipts or contract or straight-
time hourly wage, hours, and total cost. Software developed to calculate 
premiums or losses, or development of software to send or receive data 
between the producer, agent, approved insurance provider or RMA or such 
other similar software may not be included as an allowable cost.);
    (vii) Miscellaneous expenses such as postage, telephone, express 
mail, and printing (Identify the item, cost per unit, number of items, 
and total dollars);
    (2) The following expenses are specifically not eligible for 
research and development cost reimbursement:
    (i) Copyright or patent fees;
    (ii) Training costs;
    (iii) State filing fees and expenses;
    (iv) Normal ongoing administrative expenses;
    (v) Paid or incurred losses;
    (vi) Loss adjustment expenses;
    (vii) Sales commission;
    (viii) Marketing costs;
    (ix) Indirect overhead costs;
    (x) Lobbying costs;
    (xi) Product or applicant liability resulting from the research, 
development, preparation or marketing of the policy;
    (xii) Copyright infringement claims resulting from the research, 
development, preparation or marketing of the policy;
    (xiii) Costs of making program changes as a result of case or 
statutory law effecting the policy; and
    (xiv) Maintenance costs associated with the submission.
    (j) Requests for reimbursement of maintenance costs for submissions 
approved after publication of this subpart must be supported by itemized 
statements and supporting documentary evidence for each reinsurance year 
in the maintenance period. For submissions approved prior to publication 
of this subpart, the applicant may provide itemized statements and 
supporting documentary evidence or may request to receive not more than 
15 percent of the amount of reimbursement for research and development 
costs, as determined in accordance with Sec. 400.712, for the first 
reinsurance year in the maintenance period. For all subsequent 
reinsurance years, itemized and supporting documentary evidence must be 
provided. Actual costs submitted will be examined for reasonableness and 
may be adjusted at the sole discretion of the Board.
    (1) Maintenance costs for the following activities may be 
reimbursed:
    (i) Expansion of the original submission to cover additional 
commodities;
    (ii) Expansion of the original submission into additional counties 
or states;
    (iii) Reasonable and required modifications to the policy and any 
related materials;
    (iv) Adjustment to premium rates and commodity prices as necessary 
or required; and
    (v) Other costs associated with maintaining the policy, as 
determined by the Board.
    (2) [Reserved]
    (k) Not later than six months prior to the end of the last 
reinsurance year in which a maintenance reimbursement will be paid, as 
approved by the Board, the applicant must notify FCIC regarding its 
election of the treatment of the policy or plan of insurance for 
subsequent reinsurance years.

[[Page 68]]

    (1) The applicant must notify FCIC whether it intends to:
    (i) Continue to maintain the policy or plan of insurance and charge 
a user fee, as approved by the Board, to approved insurance providers 
for all policies earning premium to cover maintenance expenses. It is 
the sole responsibility of the applicant to collect such fees from the 
approved insurance providers and any indebtedness for such fees must be 
resolved by the applicant and approved insurance provider. Applicants 
may request that FCIC provide the number of policies sold by each 
approved insurance provider. Such information will be provided not later 
than 90 days after such request is made or not later than 90 days after 
the requisite information has been provided to FCIC by the approved 
insurance provider, which ever is later; or
    (ii) Transfer responsibility for maintenance to FCIC.
    (2) If the applicant elects to:
    (i) Transfer the policy or plan of insurance to FCIC, FCIC may, at 
its sole discretion, elect to withdraw the availability of the policy or 
plan of insurance or continue to maintain the policy or plan of 
insurance; or
    (ii) Continue to maintain the policy or plan of insurance, at the 
time of the election, the applicant must submit a request for approval 
of the user fee by the Board.
    (3) Requests for approval of the user fee must be accompanied by 
written documentation to support that the amount requested will only 
cover maintenance costs.
    (4) The Board will approve the amount of user fee that is payable to 
the applicant by approved insurance providers unless the Board 
determines that the user fee charged:
    (i) Is unreasonable in relation to the maintenance costs associated 
with the policy or plan of insurance; or
    (ii) Unnecessarily inhibits the use of the policy or plan of 
insurance by other approved insurance providers.
    (5) Reasonableness of the user fees will be determined by the Board 
based on a comparison with the amount of reimbursement for maintenance 
previously received, the number of policies, the number of approved 
insurance providers, and the expected total amount of user fees to be 
received in any reinsurance year.
    (6) A user fee unnecessarily inhibits the use of a policy or plan of 
insurance if it is so high that other approved insurance providers are 
unable to pay such fees because of the volume of business currently 
underwritten by the approved insurance provider.
    (7) The user fee charged to each approved insurance provider will be 
considered payment in full for the use of such policy, plan of insurance 
or rate of premium for the reinsurance year in which payment is made.
    (l) The Board may consider information from the Equal Access to 
Justice Act, 5 U.S.C. 504, the Bureau of Labor Statistic's Occupational 
Employment Statistics Survey, the Bureau of Labor Statistic's Employment 
Cost Index, and any other information determined applicable by the 
Board, in making a determination whether to approve a submission for 
reimbursement of research, development, or maintenance costs under this 
section or the amount of reimbursement.
    (m) For purposes of this section, rights to, or obligations of, 
research and development reimbursement, maintenance cost reimbursement, 
or user fees cannot be transferred from any individual or entity unless 
specifically approved in writing by the Board.



Sec. 400.713  Non-Reinsured supplemental (NRS) policy.

    (a) The reinsured company must submit three copies of the new or 
revised NRS policy and related materials to the Deputy Administrator, 
Research and Development (or successor), Risk Management Agency, 6501 
Beacon Drive, Stop 0812, Kansas City, MO 64133-4676 for review, approval 
or disapproval at least 90 days prior to the first sales closing date 
applicable to the policy reinsured by FCIC.
    (b) FCIC will approve the NRS policy if it does not increase or 
shift risk to the underlying policy or plan of insurance reinsured by 
FCIC, affect any rights of the insured with respect to the underlying 
reinsured policy or plan of insurance, or cause disruption in the 
marketplace for products reinsured by FCIC. Marketplace disruption 
includes

[[Page 69]]

adversely affecting sales or administration of the underlying reinsured 
policy, undermining producers' confidence in the Federal crop insurance 
program, decreasing the producer's willingness or ability to use 
Federally reinsured risk management products, or harming public 
perception of the Federal crop insurance program.
    (c) Failure to timely submit the NRS policy to FCIC will result in 
the denial of reinsurance and subsidy for all policies reinsured by FCIC 
for which the insured has obtained the NRS policy.

Subpart W [Reserved]



    Subpart X--Interpretations of Statutory and Regulatory Provisions

    Source: 63 FR 70313, Dec. 21, 1998, unless otherwise noted.



Sec. 400.765  Basis and applicability.

    (a) The regulations contained in this subpart prescribe the rules 
and criteria for obtaining a final agency determination of the 
interpretation of any provision of the Act or the regulations 
promulgated thereunder.
    (b) Requesters may seek interpretations of those provisions of the 
Act and the regulations promulgated thereunder that are in effect for 
the crop year in which the request under this subpart is being made and 
the three previous crop years.
    (c) All final agency determinations issued by FCIC, and published in 
accordance with Sec. 400.768(f ), will be binding on all participants in 
the Federal crop insurance program.

[63 FR 70313, Dec. 21, 1998, as amended at 64 FR 50246, Sept. 16, 1999]



Sec. 400.766  Definitions.

    Act. The Federal Crop Insurance Act, 7 U.S.C. 1501 et seq.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
government corporation within the United States Department of 
Agriculture.
    Participant. Any applicant for crop insurance, a producer with a 
valid crop insurance policy, or a private insurance company with a 
reinsurance agreement with FCIC or their agents, loss adjusters, 
employees or contractors.
    Regulations. All provisions contained in 7 CFR chapter IV.



Sec. 400.767  Requester obligations.

    (a) All requests for a final agency determination under this subpart 
must:
    (1) Be submitted, in writing by certified mail to the Associate 
Administrator, Risk Management Agency, United States Department of 
Agriculture, Stop Code 0801, 1400 Independence Avenue, SW., Washington, 
DC 20250-0801, facsimile at (202) 690-5879 or by electronic mail at 
RMA533@wdc.fsa.usda.gov;
    (2) State that it is being submitted under section 506(s) of the 
Act;
    (3) Identify and quote the specific provision in the Act or 
regulations for which a final agency determination is requested;
    (4) State the crop year for which the interpretation is sought;
    (5) State the name, address, and telephone number of a contact 
person affiliated with the request; and
    (6) Contain the requester's detailed interpretation of the 
regulation.
    (b) The requestor must advise FCIC if the request for a final agency 
determination will be used in a lawsuit or the settlement of a claim.
    (c) Each request for final agency determination under this subpart 
must contain no more than one request for an agency interpretation.

[63 FR 70313, Dec. 21, 1998, as amended at 64 FR 50246, Sept. 16, 1999]



Sec. 400.768  FCIC obligations.

    (a) FCIC will not interpret any specific factual situation or case, 
such as actions of any participant under the terms of a policy or any 
reinsurance agreement.
    (b) If, in the sole judgement of FCIC, the request is unclear, 
ambiguous, or incomplete, FCIC will not provide an interpretation, but 
will notify the requester that the request is unclear, ambiguous or 
incomplete, within 30 days of such request.
    (c) FCIC will provide a final determination of the interpretation to 
a request that meets all the conditions

[[Page 70]]

stated herein to the requester in writing, and at FCIC's discretion in 
the format in which it was received, within 90 days of the date of 
receipt by FCIC.
    (d) If a requestor is notified that a request is unclear, ambiguous 
or incomplete under section 400.768(b), the time to respond will be 
tolled from the date FCIC notifies the requestor until the date that 
FCIC receives a clear, complete, and unambiguous request.
    (e) If a response is not provided within 90 days, the requestor may 
assume the interpretation provided is correct for the applicable crop 
year.
    (f) All agency final determinations will be published by FCIC as 
specially numbered documents on the RMA Internet website.
    (g) All final agency determinations are considered matters of 
general applicability that are not appealable to the National Appeals 
Division. Before obtaining judicial review of any final agency 
determination, the person must obtain an administratively final 
determination from the Director of the National Appeals division on the 
issue of whether the final agency determination is a matter of general 
applicability.

                           PART 401 [Reserved]



PART 402--CATASTROPHIC RISK PROTECTION ENDORSEMENT--Table of Contents




Sec.
402.1  General statement.
402.2  Applicability.
402.3  OMB control numbers.
402.4  Catastrophic Risk Protection Endorsement Provisions.

    Authority: 7 U.S.C. 1506(l) and 1506(p).

    Source: 61 FR 42985, Aug. 20, 1996, unless otherwise noted.



Sec. 402.1  General statement.

    The Federal Crop Insurance Act, as amended by the Federal Crop 
Insurance Reform Act of 1994, requires the Federal Crop Insurance 
Corporation to implement a catastrophic risk protection plan of 
insurance that provides a basic level of insurance coverage to protect 
producers in the event of a catastrophic crop loss due to loss of yield 
or prevented planting, if provided by the Corporation, provided the crop 
loss or prevented planting is due to an insured cause of loss specified 
in the crop insurance policy. This Catastrophic Risk Protection 
Endorsement is a continuous endorsement that is effective in conjunction 
with a crop insurance policy for the insured crop. Catastrophic risk 
protection coverage will be offered through approved insurance providers 
if there are a sufficient number available to service the area. If there 
are an insufficient number available, as determined by the Secretary, 
local offices of the Farm Service Agency will provide catastrophic risk 
protection coverage.



Sec. 402.2  Applicability.

    This Catastrophic Risk Protection Endorsement is applicable to each 
crop for which catastrophic risk protection coverage is available and 
for which the producer elects such coverage.



Sec. 402.3  OMB control numbers.

    The information collection activity associated with this rule has 
been approved by the Office of Management and Budget (OMB) pursuant to 
the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB 
control number 0563-0003.



Sec. 402.4  Catastrophic Risk Protection Endorsement Provisions.

    The Catastrophic Risk Protection Endorsement Provisions for the 2001 
and succeeding crop years are as follows:

                        Department of Agriculture

Federal Crop Insurance Corporation

                Catastrophic Risk Protection Endorsement

(This is a continuous endorsement)

    If a conflict exists between this Endorsement and any of the 
policies specified in section 2 or the Special Provisions for the 
insured crop, this endorsement will control.

                          Terms and Conditions

                             1. Definitions

    Approved insurance provider. A private insurance company, including 
its agents, that has been approved and reinsured by FCIC to provide 
insurance coverage to producers participating in the Federal Crop 
Insurance program.
    Approved yield. The amount of production per acre computed in 
accordance with FCIC's

[[Page 71]]

actual production history program (7 CFR part 400, subpart G) or for 
crops not included under 7 CFR part 400, subpart G, the yield used to 
determine the guarantee in accordance with the Crop Provisions or the 
Special Provisions, and any adjustments elected in accordance with 
section 36 of the Basic Provisions.
    County. The political subdivision of a state listed in the actuarial 
table and designated on your accepted application, including land in an 
adjoining county, provided such land is part of a field that extends 
into the adjoining county and the county boundary is not readily 
discernable. For peanuts and tobacco, the county will also include any 
land identified by a FSA farm serial number for the county but 
physically located in another county.
    Crop of economic significance. A crop that has either contributed in 
the previous crop year, or is expected to contribute in the current crop 
year, ten percent (10%) or more of the total expected value of your 
share of all crops grown in the county. However, a crop will not be 
considered a crop of economic significance if the expected liability 
under the Catastrophic Risk Protection Endorsement is equal to or less 
than the administrative fee required for the crop.
    Expected market price. (price election) The price per unit of 
production (or other basis as determined by FCIC) anticipated during the 
period the insured crop normally is marketed by producers. This price 
will be set by FCIC before the sales closing date for the crop. The 
expected market price may be less than the actual price paid by buyers 
if such price typically includes remuneration for significant amounts of 
post-production expenses such as conditioning, culling, sorting, 
packing, etc.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
Government Corporation within USDA.
    FSA. The Farm Service Agency, an agency of the United States 
Department of Agriculture or any successor agency.
    Insurance is available. When crop information is contained in the 
county actuarial documents for a particular crop.
    Linkage requirement. The legal requirement that a producer must 
obtain at least catastrophic risk protection coverage for any crop of 
economic significance as a condition of receiving benefits for such crop 
from certain other USDA programs in accordance with section 12(e), 
unless the producer executes a waiver of any eligibility for emergency 
crop loss assistance in connection with the crop.
    Secretary. The Secretary of the United States Department of 
Agriculture.
    USDA. The United States Department of Agriculture.
    Zero acreage report. An acreage report filed by you that certifies 
you do not have a share in the crop for that crop year.

      2. Eligibility, Life of Policy, Cancellation, and Termination

    (a) You must have one of the following policies in force to elect 
this Endorsement:
    (1) The General Crop Insurance Policy (7 CFR 401.8) and crop 
endorsement;
    (2) The Common Crop Insurance Policy (7 CFR 457.8) and crop 
provisions;
    (3) The Group Risk Plan Policy, if available for catastrophic risk 
protection; or
    (4) A specific named crop insurance policy.
    (b) You must have made application for catastrophic risk protection 
on or before the sales closing date for the crop in the county.
    (c) You must be a ``person'' as defined in the crop policy to be 
eligible for catastrophic risk protection coverage.

                            3. Unit Division

    (a) This section is in lieu of the unit provisions specified in the 
applicable crop policy.
    (b) For catastrophic risk protection coverage, a unit will be all 
insurable acreage of the insured crop in the county on the date coverage 
begins for the crop year:
    (1) In which you have one hundred percent (100%) crop share; or
    (2) Which is owned by one person and operated by another person on a 
share basis.

(Example: If, in addition to the land you own, you rent land from five 
landlords, three on a crop share basis and two on a cash basis, you 
would be entitled to four units; one for each crop share lease and one 
that combines the two cash leases and the land you own.)

    (c) Further division of the units described in paragraph (b) above 
is not allowed under this Endorsement.

  4. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) Notwithstanding any provision contained in any other policy 
document, for the 1995 through 1998 crop years, catastrophic coverage 
will offer protection equal to fifty percent (50%) of your approved 
yield indemnified at sixty percent (60%) of the expected market price, 
or a comparable coverage as established by FCIC.
    (b) Notwithstanding any provision contained in any other policy 
document, for the 1999 and subsequent crop years, catastrophic coverage 
will offer protection equal to fifty percent (50%) of your approved 
yield indemnified at fifty-five percent (55%) of the expected market 
price, or a comparable coverage as established by FCIC.
    (c) If the crop policy denominates coverage in dollars per acre or 
other measure, or any other alternative method of coverage, such 
coverage will be converted to the amount of

[[Page 72]]

coverage that would be payable at fifty percent (50%) of your approved 
yield indemnified at sixty percent (60%) of the expected market price 
for the 1995 through 1998 crop years and fifty percent (50%) of your 
approved yield indemnified at fifty-five percent (55%) of the expected 
market price for the 1999 and subsequent crop years.
    (d) You may elect catastrophic coverage for any crop insured or 
reinsured by FCIC on either an individual yield and loss basis or an 
area yield and loss basis, if both options are offered as set out in the 
Actuarial Table or the Special Provisions.
    (e) To be eligible for an indemnity under this endorsement you must 
have suffered at least a 50 percent loss in yield.

                          5. Report of Acreage

    (a) The report of crop acreage that you file in accordance with the 
crop policy must be signed on or before the acreage reporting date. For 
catastrophic risk protection, unless the other person with an insurable 
interest in the crop objects in writing prior to the acreage reporting 
date and provides a signed acreage report on their own behalf, the 
operator may sign the acreage report for all other persons with an 
insurable interest in the crop without a power of attorney. All persons 
with an insurable interest in the crop, and for whom the operator 
purports to sign and represent, are bound by the information contained 
in that acreage report.
    (b) For the purpose of determining the amount of indemnity only, 
your share will not exceed your insurable interest at the earlier of the 
time of loss or the beginning of harvest. Unless the accepted 
application clearly indicates that insurance is requested for a 
partnership or joint venture, insurance will only cover the crop share 
of the person completing the application. The share will not extend to 
any other person having an interest in the crop except as may otherwise 
be specifically allowed in this endorsement. Any acreage or interest 
reported by or for your spouse, child or any member of your household 
may be considered your share. A lease containing provisions for both a 
minimum payment (such as a specified amount of cash, bushels, pounds, 
etc.) and a crop share will be considered a crop share lease. A lease 
containing provisions for either a minimum payment (such as a specified 
amount of cash, bushels, pounds, etc.,) or a crop share will be 
considered a cash lease. Land rented for cash, a fixed commodity 
payment, or any consideration other than a share in the insured crop on 
such land will be considered as owned by the lessee.

                6. Annual Premium and Administrative Fees

    (a) Notwithstanding any provision contained in any other policy 
document, you will not be responsible to pay a premium, nor will the 
policy be terminated because the premium has not been paid. FCIC will 
pay a premium subsidy equal to the premium established for the coverage 
provided under this endorsement.
    (b) In return for catastrophic risk protection coverage, you must 
pay an administrative fee to the insurance provider within 30 days after 
you have been billed by us, unless otherwise specified in 7 CFR part 400 
(You will be billed by the date stated in the Special Provisions);
    (1) The administrative fee owed is $100 for each crop in the county.
    (2) Payment of an administrative fee will not be required if you 
file a bona fide zero acreage report on or before the acreage reporting 
date for the crop (if you falsely file a zero acreage report you may be 
subject to criminal and administrative sanctions).
    (c) The administrative fee provisions of paragraph (b) of this 
section do not apply if you meet the definition of a limited resource 
farmer (see section 1). If you qualify as a limited resource farmer and 
desire to be exempted from paying the administrative fee you must sign 
the waiver at the time of application (on or before the sales closing 
date.)
    (d) When a crop policy has provisions to allow you the option to 
separately insure individual crop types or varieties, you must pay a 
separate administrative fee in accordance with paragraph (b) of this 
section for each type or variety you elect to separately insure.
    (e) If the administrative fee is not paid when due, you, and all 
persons with an insurable interest in the crop under the same contract, 
may be ineligible for certain other USDA program benefits as set out in 
section 12, and all such benefits already received for the crop year 
must be refunded.

                             7. Insured Crop

    The crop insured is specified in the applicable crop policy, 
however:
    (a) Notwithstanding any other policy provision requiring the same 
insurance coverage on all insurable acreage of the crop in the county, 
if you purchase additional coverage for a crop, you may separately 
insure acreage under catastrophic coverage that has been designated as 
``high risk'' land by FCIC, provided that you execute a High Risk Land 
Exclusion Option and obtain a catastrophic risk protection policy with 
the same approved insurance provider, if available, on or before the 
applicable sales closing date. If catastrophic coverage is not available 
from the same insurance provider, you may obtain the catastrophic risk 
protection policy for the high risk land from another approved insurance 
provider or FSA, if available. You will be required to pay a separate 
administrative fee for both the additional coverage policy and the 
catastrophic coverage policy.

[[Page 73]]

    (b) A tobacco producer may insure one hundred percent (100%) of the 
tobacco crop that is identified by a tobacco marketing card issued by 
FSA for a specific producer and Farm Serial Number under one CAT policy, 
provided the producer and other persons each have a share in the crop, 
all the shareholders agree in writing to such arrangement, and none of 
the persons hold any other interest in another tobacco crop for which 
they are required to obtain at least catastrophic coverage. If the 
tobacco crop is insured under one policy:
    (1) The linkage requirements will be satisfied for each shareholder 
of the crop; and
    (2) The producer insuring the crop will:
    (i) Make application for insurance and provide the name and social 
security number, or employer identification number, of each person with 
a share in the tobacco crop;
    (ii) File the acreage report showing a one-hundred percent (100%) 
share in the crop (all insurable acreage covered by such marketing card 
will be considered as one unit);
    (iii) Be responsible to pay the one administrative fee for all the 
producers within the county;
    (iv) Fulfill all requirements under the crop insurance contract; and
    (v) Receive any indemnity payment under his or her social security 
number or employer identification number and distribute the indemnity 
payments to the other persons sharing in the crop.
    (c) A landowner will be allowed to obtain catastrophic coverage to 
satisfy linkage requirements for all other landowners who hold an 
undivided interest in the insurable acreage, provided:
    (1) All the landowners must agree in writing to such arrangement and 
have their social security number or employer identification number 
listed on the application, without regard to the actual amount of their 
interest in the insured acreage;
    (2) All landowners must have an undivided interest in the insurable 
acreage;
    (3) None of the landowners may hold any share in other acreage for 
which they are required to obtain at least catastrophic coverage;
    (4) The total cumulative liability under the Catastrophic Risk 
Protection Endorsement for all landowners must be $2,500 or less;
    (5) The landowner insuring the crop will:
    (i) Make application for insurance and provide the name and social 
security number or employer identification number of each person with an 
undivided interest in the insurable acreage;
    (ii) Be responsible to pay the one administrative fee for all the 
producers within the county;
    (iii) Fulfill all requirements under the insurance contract; and
    (iv) Receive any indemnity payment under the landowner's social 
security number, or when applicable, employer identification number, and 
distribute the indemnity payments to the other persons sharing in the 
crop.

                          8. Replanting Payment

    Notwithstanding any provision contained in any other crop insurance 
document, no replant payment will be paid whether or not replanting of 
the crop is required under the policy.

                         9. Claim for Indemnity

    (a) If two or more insured crop types, varieties, or classes are 
insured within the same unit, and multiple price elections are 
applicable, the dollar amount of insurance and the dollar amount of 
production to be counted will be determined separately for each type, 
variety, class, etc., that have separate price elections and then 
totaled to determine the total liability or dollar amount of production 
to be counted for the unit.
    (b) If you are eligible to receive an indemnity under this 
endorsement and benefits compensating you for the same loss under any 
other USDA program, you must elect the program from which you wish to 
receive benefits. Only one payment or program benefit is allowed. 
However, if other USDA program benefits are not available until after 
you filed a claim for indemnity, you may refund the total amount of the 
indemnity and receive the other program benefit. Notwithstanding the 
first sentence of this subsection, farm ownership, operating, and 
emergency loans may be obtained from the USDA in addition to an 
indemnity under this endorsement.

                        10. Concealment or Fraud

    Notwithstanding any provision contained in any other crop insurance 
document, your CAT policy may be voided by us on all crops without 
waiving any of our rights, including the right to collect any amounts 
due:
    (a) If at any time you conceal or misrepresent any material fact or 
commit fraud relating to this or any other contract issued under the 
authority of the Federal Crop Insurance Act with any insurance provider; 
and
    (b) The voidance will be effective as of the beginning of the crop 
year during which such act or omission occurred. After the policy has 
been voided, you must make a new application to obtain catastrophic risk 
protection coverage for any subsequent crop year. If your policy is 
voided under this section, any waiver of eligibility for emergency crop 
loss assistance in connection with the crop will not be effective for 
the crop for the year in which the voidance occurred.

[[Page 74]]

                        11. Exclusion of Coverage

    (a) Options or endorsements that extend the coverage available under 
any crop policy offered by FCIC will not be available under this 
endorsement, except the Late Planting Agreement Option. Written 
agreements are not available for any crop insured under this 
endorsement.
    (b) Notwithstanding any provision contained in any other crop 
policy, hail and fire coverage and high-risk land may not be excluded 
under catastrophic risk protection.

             12. Eligibility for Other USDA Program Benefits

    (a) Even if it was a crop of economic significance for the previous 
crop year, if you do not intend to plant the crop in the current crop 
year, you do not have to obtain crop insurance or execute a waiver of 
your eligibility for any emergency crop loss assistance in connection 
with the crop to remain eligible for the USDA program benefits specified 
in subsection (e). However, if, after the sales closing date, you plant 
that crop, you will be unable to obtain insurance for that crop and you 
must execute a waiver of your eligibility for emergency crop loss 
assistance in connection with the crop to remain eligible for the USDA 
program benefits specified in section 12(e). Failure to execute such a 
waiver will require you to refund any benefits already received under a 
program specified in section 12(e).
    (b) You are initially responsible to determine the crops of economic 
significance in the county. The insurance provider may assist you in 
making these initial determinations. However, these determinations will 
not be binding on the insurance provider. To determine the percentage 
value of each crop:
    (1) Multiply the acres planted to the crop, times your share, times 
the approved yield, and times the price;
    (2) Add the values of all crops grown by the producer in the county; 
and
    (3) Divide the value of the specific crop by the result of section 
12(b)(2).
    (c) You may use the type of price such as the current local market 
price, futures price, established price, highest amount of insurance, 
etc., for the price when calculating the value of each crop, provided 
that you use the same type of price for all crops in the county.
    (d) You may be required to justify the calculation and provide 
adequate records to enable the insurance provider to verify whether a 
crop is of economic significance.
    (e) You must obtain at least catastrophic coverage for each crop of 
economic significance in the county in which you have an insurable 
share, if insurance is available in the county for the crop, unless you 
execute a waiver of any eligibility for emergency crop loss assistance 
in connection with the crop to be eligible for:
    (1) Benefits under the Agricultural Market Transition Act;
    (2) Loans or any other USDA provided farm credit, including: 
guaranteed and direct farm ownership loans, operating loans, and 
emergency loans under the Consolidated Farm and Rural Development Act 
provided after October 13, 1994; and
    (3) Benefits under the Conservation Reserve Program derived from any 
new or amended application or contracts executed after October 13, 1994.
    (f) Failure to comply with all provisions of the policy constitutes 
a breach of contract and may result in ineligibility for certain other 
farm program benefits for that crop year and any benefit already 
received must be refunded. If you breach the insurance contract, the 
execution of a waiver of any eligibility for emergency crop loss 
assistance will not be effective for the crop year in which the breach 
occurs.

[61 FR 42985, Aug. 20, 1996, as amended at 63 FR 40631, July 30, 1998; 
64 FR 40740, July 28, 1999; 65 FR 40484, June 30, 2000]

                        PART 403--406 [RESERVED]



PART 407--GROUP RISK PLAN OF INSURANCE REGULATIONS FOR THE 2001 AND SUCCEEDING CROP YEARS--Table of Contents




Sec.
407.1  Applicability.
407.2  Availability of Federal crop insurance.
407.3  Premium rates, amounts of protection, and coverage levels.
407.4  OMB control numbers.
407.5  Creditors.
407.6  Good faith reliance on misrepresentation.
407.7  The contract.
407.8  The application and policy.
407.9  Group risk plan common policy.
407.10  Group risk plan for barley.
407.11  Group risk plan for corn.
407.12  Group risk plan for cotton.
407.13  Group risk plan for forage.
407.14  Group risk plan for peanuts.
407.15  Group risk plan for sorghum.
407.16  Group risk plan for soybean.
407.17  Group risk plan for wheat.

    Authority: 7 U.S.C. 1506(1), 1506(p).

    Source: 64 FR 30219, June 7, 1999, unless otherwise noted.



Sec. 407.1  Applicability.

    The provisions of this part are applicable only to those crops and 
crop

[[Page 75]]

years for which a Crop Provision is contained in this part.



Sec. 407.2  Availability of Federal crop insurance.

    (a) Insurance shall be offered under the provisions of this part on 
the insured crop in counties within the limits prescribed by and in 
accordance with the provisions of the Federal Crop Insurance Act, (7 
U.S.C. 1501 et seq.) (the Act). The crops and counties shall be 
designated by the Manager of the Federal Crop Insurance Corporation 
(FCIC) from those approved by the Board of Directors of FCIC.
    (b) The insurance will be offered through companies reinsured by 
FCIC under the same terms and conditions as the contract contained in 
this part. These contracts are clearly identified as being reinsured by 
FCIC. Additionally, the contract contained in this part may be offered 
directly to producers through agents of the United States Department of 
Agriculture. Those contracts are specifically identified as being 
offered by FCIC.
    (c) No person may have in force more than one insurance policy 
issued or reinsured by FCIC on the same crop for the same crop year, in 
the same county, unless specifically approved in writing by FCIC.
    (d) If a person has more than one contract under the Act outstanding 
on the same crop for the same crop year, in the same county, that have 
not been properly approved by FCIC, all such contracts shall be voided 
for that crop year and the person will be liable for the premium on all 
contracts, unless the person can show to the satisfaction of FCIC that 
the multiple contracts of insurance were inadvertent and without the 
fault of the person.
    (e) If the unapproved multiple contracts of insurance are shown to 
be inadvertent, and without the fault of the insured, the contract with 
the earliest application will be valid and all other contracts on that 
crop in the county for that crop year will be canceled. No liability for 
indemnity or premium will attach to the contracts so canceled.
    (f) The person must repay all amounts received in violation of this 
section with interest at the rate contained in the contract (see 
Sec. 407.8, paragraph 21).
    (g) A person whose contract with FCIC or with a company reinsured by 
FCIC under the Act has been terminated because of violation of the terms 
of the contract is not eligible to obtain crop insurance under the Act 
with FCIC or with a company reinsured by FCIC unless the person can show 
that the termination was improper and should not result in subsequent 
ineligibility.
    (h) All applicants for insurance under the Act must advise the 
insurance provider, in writing at the time of application, of any 
previous applications for insurance or contracts of insurance under the 
Act within the last 5 years and the present status of any such 
applications or insurance.



Sec. 407.3  Premium rates, amounts of protection, and coverage levels.

    (a) The Manager of FCIC shall establish premium rates, amounts of 
protection, and coverage levels for the insured crop that will be 
included in the actuarial documents on file in the insurance provider's 
office. Premium rates, amounts of protection, and coverage levels may be 
changed from year to year.
    (b) At the time the application for insurance is made, the person 
must elect an amount of protection and a coverage level from among those 
contained in the actuarial documents for the crop year.



Sec. 407.4  OMB control numbers.

    The information collection activity associated with this rule has 
been previously approved by the Office of Management and Budget (OMB) 
under control number 0563-0053.



Sec. 407.5  Creditors.

    An interest of a person in an insured crop existing by virtue of a 
lien, mortgage, garnishment, levy, execution, bankruptcy, involuntary 
transfer or other similar interest shall not entitle the holder of the 
interest to any benefit under the contract.

[[Page 76]]



Sec. 407.6  Good faith reliance on misrepresentation.

    (a) Notwithstanding any other provision of the crop insurance 
contract, an insured shall be granted relief to the extent of the 
insured's detrimental reliance or the extent of the policy benefits, 
whichever is less, under the following conditions:
    (1) The person has entered into a contract of crop insurance under 
this part;
    (2) A representative of FCIC made a misrepresentation or other 
erroneous action or advice;
    (3) Such error concerned provisions of the insurance contract not 
contained in the Group Risk Plan of Insurance Basic Provisions, the Crop 
Provisions, the Federal Crop Insurance Act, or the regulations contained 
in this chapter;
    (4) As a result of the error, the insured:
    (i) Is indebted for additional premiums; or
    (ii) Has suffered a loss to a crop which is not insured or for which 
the person is not entitled to an indemnity because of failure to comply 
with the terms of the insurance contract, but which the person believed 
to be insured, or believed the terms of the insurance contract to have 
been complied with or waived; and
    (5) The Manager finds that:
    (i) A representative of FCIC made such misrepresentation or took 
other erroneous action or gave erroneous advice;
    (ii) The person reasonably and in good faith relied on such 
misrepresentation, erroneous action or advice to the person's detriment; 
and
    (iii) To require the payment of the additional premiums or to deny 
such person's entitlement to the indemnity would not be fair and 
equitable.
    (b) For FCIC Policies only, requests for relief under this section 
must be submitted to FCIC in writing. FCIC's reviewing officers must 
refer such application for relief to the Manager of FCIC for 
determination as to whether to grant relief. FCIC's reviewing officers 
do not have authority to grant relief under this section.
    (c) For Reinsured Policies only, requests for relief under this 
section must be submitted to the reinsured company in writing. The 
reinsured companies shall use arbitration, in accordance with the rules 
of the American Arbitration Association, under contracts for insurance 
issued by them under the Act to grant relief under the same terms and 
conditions as contained in this section or may establish procedures to 
administratively handle relief in accordance with this section. Granting 
relief under this section does not absolve the reinsured company from 
liability to FCIC for unauthorized acts of its agents.



Sec. 407.7  The contract.

    The insurance contract shall become effective upon the acceptance by 
FCIC or the reinsured company of a complete, duly executed application 
for insurance on a form prescribed or approved by FCIC. The contract 
shall consist of the accepted application, Group Risk Plan of Insurance 
Basic Provisions, Crop Provisions, Special Provisions, Actuarial Table, 
and any amendments, endorsements, or options thereto. Changes made in 
the contract shall not affect its continuity from year to year. Except 
as may be allowed under Sec. 407.6, and at the sole discretion of the 
Corporation, no indemnity shall be paid unless the person complies with 
all terms and conditions of the contract. The forms required under this 
part and by the contract are available at the office of the insurance 
provider, or the local FSA office, if applicable.



Sec. 407.8  The application and policy.

    (a) Application for insurance, on a form prescribed or approved by 
FCIC, must be made by any person who wishes to participate in the 
program in order to cover such person's share in the insured crop as 
landlord, owner-operator, tenant, or other crop ownership interest. No 
other person's interest in the crop may be insured under the 
application. The application must be submitted to the insurance provider 
on or before the applicable sales closing date on file in the insurance 
provider's local office.
    (b) FCIC or the reinsured company may reject or no longer accept 
applications upon the FCIC's determination that the insurance risk is 
excessive. The Manager of the Corporation is authorized in any crop year 
to extend the

[[Page 77]]

sales closing date for submitting applications for fall planted crops, 
unless prohibited by law, upon determining that the probability and 
severity of claims will not increase because of the extension, by 
placing the extended date on file in the insurance provider's office and 
publishing a notice in the Federal Register. If adverse conditions 
should develop during the extended period, the Corporation will require 
the insurance provider to immediately discontinue acceptance of 
applications.
    (c) Since this Group Risk Plan differs significantly from 
traditional Multiple Peril Crop Insurance, persons who purchase the 
Group Risk Plan and their crop insurance agents will be required to 
execute an ``Acknowledgment of Differences'' that explains that the 
terms and conditions of the Group Risk Plan are different from 
traditional crop insurance in that:
    (1) The Group Risk Plan indemnity payment, if any, will be made 
after the Group Risk Plan premium is received;
    (2) A person may have a low yield on his or her individual farm and 
not receive a payment under Group Risk Plan; and
    (3) A person may not have any loss of production and still collect 
under the policy if a loss of production is general in the area.
    (4) By executing the ``Acknowledgment of Differences,'' the insured 
certifies that:
    (i) He or she understands the terms of the Group Risk Plan;
    (ii) An MPCI policy may be available in the county; and
    (iii) Both a Group Risk Plan and a MPCI Plan cannot be purchased on 
the same crop by the same insured in the same county.



Sec. 407.9  Group risk plan common policy.

    The provisions of the Group Risk Plan Common Policy for the 2001 and 
succeeding crop years are as follows:

    [FCIC policies]

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                      Group Risk Plan Common Policy

    [Reinsured policies]
(Appropriate title for insurance provider)
(This is a continuous policy. Refer to Section 18.)

    [FCIC policies]
    This insurance policy establishes a risk management program 
developed by the Federal Crop Insurance Corporation (FCIC), an agency of 
the United States Government, under the authority of the Federal Crop 
Insurance Act (Act), as amended (7 U.S.C. 1501 et seq.). All terms of 
the policy and rights and responsibilities of the parties hereto are 
subject to the Act and all regulations under the Act published in 7 CFR 
chapter IV. The provisions of this policy may not be waived or varied in 
any way by the crop insurance representative, or any other 
representative or employee of FCIC, the Risk Management Agency (RMA) or 
the Farm Service Agency (FSA). In the event that the company cannot pay 
a loss, the claim will be settled in accordance with the provisions of 
the policy and paid by FCIC. No state guarantee fund will be liable to 
pay the loss.
    Throughout this policy, ``you'' and ``your'' refer to the person 
shown on the accepted application and ``we,'' ``us,'' and ``our'' refer 
to the Federal Crop Insurance Corporation. Unless the context indicates 
otherwise, the use of the plural form of a word includes the singular 
use and the singular form of the word includes the plural.
    [Reinsured policies]
    This insurance policy establishes a risk management program created 
by the Federal Crop Insurance Corporation (FCIC), an agency of the 
United States Government, under the authority of the Federal Crop 
Insurance Act (Act), as amended (7 U. S. C. 1501 et seq.).
    This insurance policy is reinsured by FCIC under the provisions of 
the Act. All terms of the policy and rights and responsibilities of the 
parties are subject to the Act and all regulations under the Act 
published in 7 CFR chapter IV, and may not be waived or varied in any 
way by the crop insurance representative, any other representative or 
employee of the company, any representative or employee of FCIC, the 
Risk Management Agency, or the Farm Service Agency (FSA). All provisions 
of State and local law in conflict with the provisions of this policy as 
published in 7 CFR part 407 are preempted and the provisions of such 
part will control.
    Throughout this policy, ``you'' and ``your'' refer to the person 
shown on the accepted application and ``we,'' ``us,'' and ``our'' refer 
to the reinsured company issuing this policy. Unless the context 
indicates otherwise, the use of the plural form of a word includes the 
singular use and the singular form of the word includes the plural.
    [Both policies]
    The Group Risk Plan of Insurance (GRP) is designed as a risk 
management tool to insure against widespread loss of production of the 
insured crop in a county. It is primarily intended for use by those 
producers whose

[[Page 78]]

farm yields tend to follow the average county yield. It is possible for 
you to have a low yield on the acreage that you insure and still not 
receive a payment under this plan.
    For additional coverage you may select any percent coverage level 
shown on the actuarial documents. Multiplying your coverage level 
percent by the expected county yield shown on the actuarial documents 
gives your trigger yield. If the payment yield that FCIC publishes for 
the insured crop year falls below your trigger yield, you will receive a 
payment.
    On or before the sales closing date, you may select any dollar 
amount of protection between 60 and 100 percent (except for Catastrophic 
Risk Protection (CAT) which is 55 percent) of the maximum protection per 
acre shown on the actuarial documents. This protection will be provided 
for each acre of the crop planted by the acreage reporting date and 
shown on your acreage report (unless otherwise provided in the crop 
provisions) in which you have a share.
    In accordance with the Act, FCIC will pay a portion of your premium, 
as published in the actuarial documents. The premium rates, practices, 
types, maximum protection per acre, and maximum subsidy per acre are 
also shown on the actuarial documents.
    FCIC will issue the payment yield in the calendar year following the 
crop year insured. This yield will be the official estimated yield 
published by the National Agricultural Statistics Service (NASS). You 
will be paid if the payment yield falls below your trigger yield. The 
amount of your payment per net insured acre will be calculated by 
subtracting the payment yield from the trigger yield, dividing that 
quantity by the trigger yield, and multiplying that result by your 
protection per acre for each net acre that you have insured.
    To be eligible to participate in the Group Risk Plan of Insurance 
for any crop in any county, and to receive an indemnity thereunder, you 
must have an insurable interest in an insured crop that is planted in 
the county shown on the approved application. The crop must be planted 
for harvest and be reported to us by the acreage reporting date. You may 
only purchase coverage under the Group Risk Plan of Insurance on your 
net acres of the insured crop.
    The insurance contract shall become effective upon the acceptance by 
us of a duly executed application for insurance on our form. Acceptance 
occurs when we issue a Summary of Protection to you. The policy shall 
consist of the accepted application, Group Risk Plan of Insurance Common 
Policy Basic Provisions, Crop Provisions, Special Provisions, actuarial 
documents, and any amendments, endorsements, or options.

                           Agreement To Insure

    In return for your payment of the premium and your compliance with 
all applicable provisions, we agree to provide risk protection as stated 
in this policy. If a conflict exists among the policy provisions, the 
order of priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) the Crop 
Provisions; and (4) the Group Risk Plan Basic Provisions, with (1) 
controlling (2), etc.

                          Terms and Conditions

              Group Risk Plan of Insurance Basic Provisions

                             1. Definitions

    Acreage report. A report required by section 7 of these Basic 
Provisions that contains, in addition to other information, your report 
of your share of all acreage of an insured crop in the county, whether 
insurable or not insurable.
    Acreage reporting date. The date contained in the Special Provisions 
by which you must submit your acreage report in order to be eligible for 
Group Risk Insurance.
    Act. Federal Crop Insurance Act, (7 U.S.C. 1501 et seq.).
    Actuarial documents. The material for the crop year which is 
available for public inspection in your insurance provider's local 
office, and which shows the maximum protection per acre, expected county 
yield, coverage levels, premium rates, practices, program dates, and 
other related information regarding crop insurance in the county.
    Additional coverage. For GRP, an amount of protection greater than 
catastrophic risk protection. The protection is on a per acre basis as 
specified in the actuarial documents for the crop, practice, and type.
    Billing date. The date, contained in the actuarial documents, by 
which we will bill you for the premium and administrative fee on the 
insured crop.
    Cancellation date. The calendar date specified in the Crop 
Provisions on which insurance for the next crop year will automatically 
renew unless the policy is canceled in writing by either you or us or 
terminated in accordance with policy terms.
    Catastrophic risk protection. The minimum level of coverage offered 
by FCIC. For GRP, an amount of protection equal to 65 percent of the 
expected county yield indemnified at 55 percent of the maximum 
protection per acre specified in the actuarial documents for the crop, 
practice, and type.
    County. Any county, parish, or other political subdivision of a 
state shown on your accepted application.
    Crop practice. The combination of inputs such as fertilizer, 
herbicide, and pesticide, and operations such as planting, cultivation, 
and irrigation, used to produce the insured

[[Page 79]]

crop. The insurable practices are contained in the actuarial documents.
    Crop Provisions. The part of the policy that contains the specific 
provisions of insurance for each insured crop.
    Crop year. The period of time within which the insured crop is 
normally grown and designated by the calendar year in which the crop is 
normally harvested.
    Dollar amount of protection per acre. The percentage of coverage 
selected by you multiplied by the maximum protection per acre specified 
in the actuarial documents for the crop, practice, and type. The dollar 
amount of protection per acre is shown on your Summary of Protection.
    Expected county yield. The yield contained in the actuarial 
documents, on which your coverage for the crop year is based. This yield 
is determined using historical NASS county average yields, as adjusted 
by FCIC.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
corporation within USDA.
    FSA. The Farm Service Agency, an agency of the United States 
Department of Agriculture, or a successor agency.
    Good farming practices. The cultural practices generally in use in 
the county for the crop to make normal progress toward maturity, and are 
those recognized by the Cooperative State Research, Education, and 
Extension Service as compatible with agronomic and weather conditions in 
the county.
    GRP. Group Risk Plan of Insurance.
    Insurance provider. The FSA or a private insurance company approved 
by FCIC which provides crop insurance coverage to producers 
participating in any Federal crop insurance program administered under 
the Act.
    Maximum protection per acre. The highest amount of protection 
specified in the actuarial documents.
    MPCI. Multiple peril crop insurance, an insurance product based on 
an individual yield or amount of insurance.
    NASS. National Agricultural Statistics Service, an agency within 
USDA, or its successor, that publishes the official United States 
Government yield estimates.
    Net acres. The planted acreage of the insured crop multiplied by 
your share.
    Payment yield. The yield determined by FCIC based on NASS yields for 
each insurable crop's type and practice, as adjusted by FCIC, and used 
to determine whether an indemnity will be due.
    Person. An individual, partnership, association, corporation, 
estate, trust, or other legal entity, and wherever applicable, a state 
or a political subdivision or agency of a state.
    Sales closing date. The date contained in the Special Provisions by 
which an application must be filed. The last date by which you may 
change your crop insurance coverage for a crop year.
    Share. Your percentage of interest in the insured crop, as an owner, 
operator, or tenant at the time insurance attaches. Premium will be 
determined on your share as of the acreage reporting date. However, only 
for the purpose of determining the amount of indemnity, your share will 
not exceed your share at the acreage reporting date or on the date of 
harvest, whichever is less.
    Special provisions. The part of the policy that contains specific 
provisions of insurance for each crop that may vary by geographic area.
    Subsidy. The portion of your premium, shown on the actuarial 
documents, that FCIC will pay in accordance with the Act.
    Summary of protection. Our statement to you of the crop insured, 
dollar amount of protection per acre, premiums, and other information 
obtained from your accepted application, acreage report, and the 
actuarial documents.
    Termination date. The calendar date contained in the Crop Provisions 
upon which insurance ceases to be in effect because of nonpayment of any 
amount due us under the policy, including premium and administrative 
fees.
    Trigger yield. The result of multiplying the expected county yield 
by the coverage level percentage chosen by you. When the payment yield 
falls below the trigger yield, an indemnity is due.
    Type. Plants of the insured crop having common traits or 
characteristics that distinguish them as a group or class, and which are 
designated in the actuarial documents.
    USDA. United States Department of Agriculture.

                             2. Insured Crop

    The insured crop will be the crop shown on your accepted 
application, as specified in the applicable Crop Provisions, and must be 
grown on insurable acres.

                    3. Insured and Insurable Acreage

    (a) The insurable acreage is all of the acreage of the insured crop 
for which premium rates are provided by the actuarial documents and in 
which you have a share and which is in the county listed in your 
accepted application. The dollar amount of protection per acre, amount 
of premium, and indemnity will be calculated separately for each county, 
type, and practice.
    (b) Only the acreage seeded to the insured crop on or before the 
acreage reporting date (unless otherwise provided in the Crop 
Provisions) and physically located in the county listed on your accepted 
application will be insured. Crops grown on acreage physically located 
in another county must be reported and insured separately.

[[Page 80]]

    (c) We will not insure any crop grown on any acreage where the crop 
was destroyed or put to another use during the insurance period for the 
purpose of conforming with, or obtaining a payment under, any other 
program administered by the USDA.
    (d) We will not insure any acreage where you have failed to follow 
good farming practices for the insured crop.

                          4. Policy Protection

    (a) For catastrophic risk protection GRP policies, the dollar amount 
of protection per acre will be 55 percent of the maximum protection per 
acre specified on the actuarial documents for each insured crop, 
practice, and type. For additional coverage GRP policies, you may select 
any dollar amount of protection from 60 percent through 100 percent of 
the maximum protection per acre shown on the actuarial documents for the 
crop, practice, and type.
    (b) The dollar amount of protection per acre, multiplied by your net 
insured acreage, is your policy protection for each insured crop, 
practice, and type specified in the actuarial documents.
    (c) All yields are based on NASS determinations, and such 
determinations for the county will be conclusively presumed to be 
accurate.

                           5. Coverage Levels

    (a) For catastrophic risk protection GRP policies, the coverage 
level is shown on the actuarial documents for each insured crop, 
practice, and type. For additional coverage GRP policies, you may select 
any percentage of coverage shown on the actuarial documents for the 
crop, practice, and type.
    (b) Your coverage level multiplied by the expected county yield 
shown on the actuarial documents is your trigger yield. If the payment 
yield published by FCIC for the insured crop, practice, and type for the 
insured crop year falls below your trigger yield, you will receive an 
indemnity payment.
    (c) You may change the coverage level or amount of protection for 
each insured crop on or before the sales closing date. Changes must be 
in writing and received by us by the sales closing date.

                      6. Payment Calculation Factor

    Your payment calculation factor will be ((your trigger yield-payment 
yield) / your trigger yield) for the purposes of calculating an 
indemnity payment.

                     7. Report of Acreage and Share

    (a) You must report on our form all acreage for each insured crop in 
which you have a share (insurable and not insured) by practice and type 
specified in the actuarial documents in each county listed on your 
accepted application. This report must be submitted each year on or 
before the acreage reporting date for the insured crop contained in the 
actuarial documents. If you do not submit an acreage report by the 
acreage reporting date, we will determine your acreage and share or deny 
liability on the policy.
    (b) We will not insure any acreage of the insured crop planted after 
the acreage reporting date, unless otherwise provided in the Crop 
Provisions.
    (c) Your premium will be based on the greater of the acreage 
reported on the acreage report or the acreage determined by us to be 
accurate.
    (d) The payment of an indemnity will be based on your insurable 
acreage on the acreage reporting date.
    (e) If you misrepresent or omit any information, we will revise the 
premium or liability or both for each insured crop in the county, by 
type and practice, to the amount we determine to be correct.
    (f) You may insure only your share of the crop, which includes any 
share of your spouse and dependent children unless it is demonstrated to 
our satisfaction, prior to the sales closing date, that you and your 
spouse maintain completely separate farming operations and that each 
spouse is the operator of his or her own separate operation. Any 
commingling of any part of the operations will cause shares of you and 
your spouse to be combined.

                8. Administrative Fees and Annual Premium

    (a) If you obtain a catastrophic risk protection GRP policy, you 
will pay an administrative fee, unless otherwise specified in 7 CFR part 
400:
    (1) Of $100 per crop per county;
    (2) Payable to the insurance provider on the billing date for the 
crop.
    (b) If you obtain an additional coverage GRP policy, you will pay an 
administrative fee:
    (1) Of $30 per crop per county;
    (2) Payable to the insurance provider on the billing date for the 
crop.
    (c) Limited resource farmers as defined in 7 CFR 457.8 may apply for 
a waiver of administrative fees.
    (d) For additional coverage GRP policies, your premium is determined 
by multiplying your policy protection by the premium rate per hundred 
dollars of protection for your coverage level contained in the actuarial 
documents, by 0.01, and subtracting the applicable subsidy.
    (e) For catastrophic risk protection and additional coverage GRP 
policies, payment of an administrative fee will not be required if you 
file a bona fide zero acreage report on or before the acreage reporting 
date for the crop (if you falsely file a zero acreage report you may be 
subject to criminal and administrative sanctions).

[[Page 81]]

    (f) The annual premium is earned and payable at the time the insured 
crop is planted. For each insured crop, you will be billed for premium 
and the administrative fee by the billing date specified in the Special 
Provisions. Premium, administrative fee, and any other amount owed us is 
due on the billing date and interest will accrue if the premium, 
administrative fee, or any other amount owed is not received by us 
before the first day of the month following the premium billing date.
    (g) The premium, administrative fee, and any other amount due, plus 
any accrued interest, will be considered delinquent if it is not paid on 
or before the termination date specified in the Crop Provisions. This 
may affect your eligibility for benefits under other USDA programs. A 
debt for any crop insured with us under the authority of the Act will be 
deducted from any indemnity due you for this or any other crop insured 
with us.
    (h) Failure to pay the premium and any administrative fee due, plus 
any accrued interest and penalties, by the termination date will make 
you ineligible for any crop insurance under the Act for subsequent crop 
years until the sales closing date after the date the debt, including 
interest and penalties, is paid or satisfactory arrangements acceptable 
to us for such payment are made.

                          9. Written Agreements

    Terms of this policy which are specifically designated for the use 
of written agreements may be altered by written agreement in accordance 
with the following:
    (a) You must apply in writing for each written agreement no later 
than the sales closing date;
    (b) The application for written agreement must contain all variable 
terms of the contract between you and us that will be in effect if the 
written agreement is not approved;
    (c) If approved by us, the written agreement will include all 
variable terms of the contract, including, but not limited to, crop type 
or variety, the protection per acre, premium rate, and price election; 
and
    (d) Each written agreement will only be valid for one year. If the 
written agreement is not specifically renewed the following year, 
insurance coverage for subsequent crop years will be in accordance with 
the printed policy.

             10. Access to Insured Crop and Record Retention

    We may examine the insured crop and any records relating to the crop 
and this insurance at any location where such crop or such records may 
be found or maintained, as often as we reasonably require. Records 
relating to the planting of the insured crop and your net acres must be 
retained for three years after the end of the crop year or three years 
after the date of payment of the final indemnity, whichever is later. We 
may extend the record retention period beyond three years by notifying 
you of such extension in writing. Failure to maintain such records will, 
at our option, result in cancellation of the policy or a determination 
that no indemnity is due.

             11. Transfer of Coverage and Right to Indemnity

    If you transfer any part of your share during the crop year, you may 
transfer your coverage rights, if the transferee is eligible for crop 
insurance. We will not be liable for any more than the liability 
determined in accordance with your policy that existed before the 
transfer occurred. The transfer of coverage rights must be on our form 
and will not be effective until approved by us in writing. Both you and 
the transferee are jointly and severally liable for payment of the 
premium. The transferee has all rights and responsibilities under this 
policy consistent with the transferee's interest.

                       12. Assignment of Indemnity

    You may assign to another person your right to an indemnity for the 
crop year. The assignment must be on our form and will not be effective 
until approved in writing by us.

                           13. Other Insurance

    You may not obtain any other crop insurance issued under the 
authority of the Act on your share of the insured crop. If we determine 
that more than one policy on your share is intentional, you may be 
subject to the sanctions authorized under this policy, the Act, or any 
other applicable statute. If we determine that the violation was not 
intentional, the policy with the earliest date of application will be in 
force and all other policies will be void. Nothing in this paragraph 
prevents you from obtaining other insurance not issued under the Act.

                       14. Legal Action Against Us

    (a) You may not bring legal action against us unless you have 
complied with all of the policy provisions.
    (b) If you do take legal action against us, you must do so within 12 
months of the date of denial of a claim. Suit must be brought in 
accordance with the provisions of 7 U.S.C. 1508(j).
    (c) Your right to recover damages (compensatory, punitive, or 
other), attorney's fees, or other charges is limited or excluded by this 
contract or by Federal Regulations.
    [FCIC policy]

[[Page 82]]

            15. Restrictions, Limitations, and Amounts Due Us

    (a) We may restrict the amount of acreage we will insure to the 
amount allowed under any acreage limitation program established by USDA.
    (b) Violation of Federal statutes including, but not limited to, the 
Act; the controlled substance provisions of the Food Security Act of 
1985; the Food, Agriculture, Conservation, and Trade Act of 1990; and 
the Omnibus Budget Reconciliation Act of 1993, and any regulation 
promulgated thereunder, will result in cancellation, termination, or 
voidance of your crop insurance contract. We will recover any and all 
monies paid to you or received by you during your period of 
ineligibility, and your premium will be refunded, less an amount for 
expenses and handling not to exceed 20 percent of the premium paid or to 
be paid by you.
    (c) Our maximum liability under this policy will be limited to the 
policy protection specified in section 4 of this policy. Under no 
circumstances will we be liable for the payment of damages 
(compensatory, punitive, or other), attorney's fees, or other charges in 
connection with any claim for indemnity, whether we approve or 
disapprove such indemnity.
    (d) We will pay simple interest computed on the net indemnity 
ultimately found to be due by us or determined by a final judgment of a 
court of competent jurisdiction or a final administrative determination 
from, and including, the 61st day after the date we receive the NASS 
county yield estimates for the insured crop year. Interest will be paid 
only if the reason for our failure to timely pay is not due to your 
failure to provide information or other material necessary for the 
computation or payment of the indemnity. The interest rate will be that 
established by the Secretary of the Treasury under section 12 of the 
Contract Disputes Act of 1978 (41 U.S.C. 611 et seq.), and published in 
the Federal Register.
    (e) Any amount illegally or erroneously paid to you or that is owed 
to us but is delinquent may be recovered by us through offset by 
deducting it from any loan or payment due you under any Act of Congress 
or program administered by any United States Government Agency, or by 
other collection action.
    (f) Interest will accrue at the rate not to exceed 1.25 percent 
simple interest per calendar month, or any part thereof, on any unpaid 
premium or administrative fee balance. For the purpose of premium and 
administrative fee amounts due us, interest will begin to accrue on the 
first day of the month following the premium billing date specified in 
the Special Provisions.
    (g) For the purpose of any other amounts due us, such as repayment 
of indemnities found not to have been earned:
    (1) Interest will start to accrue on the date that notice is issued 
to you for the collection of the unearned amount;
    (2) Amounts found due under this paragraph will not be charged 
interest if payment is made in full within 30 days of issuance of the 
notice by us;
    (3) The amount will be considered delinquent if not paid within 30 
days of the date the notice is issued by us;
    (4) Penalties and interest will be charged in accordance with 31 
U.S.C. 3717 and 4 CFR part 102; and
    (5) The penalty for accounts more than 90 days delinquent is an 
additional 6 percent per annum.
    (h) Interest on any amount due us found to have been received by you 
because of fraud, misrepresentation, or presentation by you of a false 
claim will start on the date you received the amount with the additional 
6 percent penalty beginning on the 31st day after the notice of amount 
due is issued to you. This interest is in addition to any other amount 
found to be due under any other Federal criminal or civil statute.
    (i) If we determine that it is necessary to contract with a 
collection agency, refer the debt to governmental collection centers, 
the Department of Treasury Offset Program, or to employ an attorney to 
assist in collection, you agree to pay all of the expenses of 
collection.
    (j) All amounts paid by you will be applied first to expenses of 
collection if any, second to reduction of any penalties which may have 
been assessed, then to reduction of accrued interest, and finally, to 
reduction of the principal balance.
    [Reinsured policy]

            15. Restrictions, Limitations, and Amounts Due Us

    (a) We may restrict the amount of acreage we will insure to the 
amount allowed under any acreage limitation program established by USDA.
    (b) Violation of Federal statutes including, but not limited to, the 
Act; the controlled substance provisions of the Food Security Act of 
1985; the Food, Agriculture, Conservation, and Trade Act of 1990; and 
the Omnibus Budget Reconciliation Act of 1993, and any regulation 
promulgated thereunder, will result in cancellation, termination, or 
voidance of your crop insurance contract. We will recover any and all 
monies paid to you or received by you during your period of 
ineligibility, and your premium will be refunded, less a reasonable 
amount for expenses and handling not to exceed 20 percent of the premium 
paid or to be paid by you.
    (c) Our maximum liability under this policy will be limited to the 
policy protection

[[Page 83]]

specified in section 4 of this policy. Under no circumstances will we be 
liable for the payment of damages (compensatory, punitive, or other), 
attorney's fees, or other charges in connection with any claim for 
indemnity, whether we approve or disapprove such indemnity.
    (d) Interest will accrue at the rate not to exceed 1.25 percent 
simple interest per calendar month, or any part thereof, on any unpaid 
premium or administrative fee balance. For the purpose of premium and 
administrative fee amounts due us, interest will begin to accrue on the 
first day of the month following the premium billing date specified in 
the Special Provisions.
    (e) For the purpose of any amounts due us, such as repayment of 
indemnities found not to have been earned, interest will start to accrue 
on the date that notice is issued to you for the collection of the 
unearned amount. Amounts found due under this paragraph will not be 
charged interest if payment in full is made within 30 days of issuance 
of notice by us. The amount will be considered delinquent if not paid in 
full within 30 days of the date the notice is issued by us.
    (f) All amounts paid will be applied first to expenses of collection 
(see subsection (g) of this section) if any, second to reduction of 
accrued interest, and then to reduction of the principal balance.
    (g) If we determine that it is necessary to contract with a 
collection agency or to employ an attorney to assist in collection, you 
agree to pay all of the expenses of collection.
    (h) A portion of the amount paid to you to which you were not 
entitled may be collected through administrative offset from payments 
you receive from United States government agencies in accordance with 31 
U.S.C. chapter 37.
    [FCIC policy]

                           16. Determinations

    All determinations required by the policy will be made by us. If you 
disagree with our determinations, you may obtain reconsideration or you 
may appeal our determinations in accordance with 7 CFR part 11.
    [Reinsured policy]

                           16. Determinations

    (a) If you and we fail to agree on any factual determination, the 
disagreement will be resolved in accordance with the rules of the 
American Arbitration Association. Failure to agree with any factual 
determination made by FCIC must be resolved through the FCIC appeal 
provisions published at 7 CFR part 11.
    (b) No award determined by arbitration or appeal can exceed the 
amount of liability established or which should have been established 
under this policy.
    [Both policies]

                        17. Holidays and Weekends

    If any date specified in this program falls on Saturday, Sunday, or 
a legal Federal holiday, that date will be extended to the next business 
day.

            18. Life of Policy, Cancellation, and Termination

    (a) This is a continuous policy and will remain in effect for each 
crop year following the acceptance of the original application until 
canceled by you in accordance with the terms of the policy or terminated 
by operation of the terms of the policy or by us.
    (b) Your application for insurance must contain all the information 
required by us to insure the crop. Applications that do not contain all 
social security numbers and employer identification numbers, as 
applicable (except as stated herein), coverage level, price election, 
crop, type, variety, or class, plan of insurance, and any other material 
information required to insure the crop, are not acceptable. If a person 
with a substantial beneficial interest in the insured crop refuses to 
provide a social security number or employer identification number, the 
amount of coverage available under the policy will be reduced 
proportionately by that person's share of the crop.
    (c) After acceptance of the application, you may not cancel this 
policy for the initial crop year. Thereafter, the policy will continue 
in force for each succeeding crop year unless canceled or terminated as 
provided below.
    (d) Either you or we may cancel this policy after the initial crop 
year by providing written notice to the other on or before the 
cancellation date shown in the Crop Provisions.
    (e) If any amount due, including premium, is not paid on or before 
the termination date for the crop on which an amount is due:
    (1) For a policy with the unpaid premium, the policy will terminate 
effective on the termination date immediately subsequent to the billing 
date for the crop year;
    (2) For a policy with other amounts due, the policy will terminate 
effective on the termination date immediately after the account becomes 
delinquent;
    (3) Ineligibility will be effective as of the date that the policy 
was terminated for the crop for which you failed to pay an amount owed 
and for all other insured crops with coincidental termination dates;
    (4) All other policies that are issued by us under the authority of 
the Act will also terminate as of the next termination date contained in 
the applicable policy;
    (5) If you are ineligible, you may not obtain any crop insurance 
under the Act until payment is made, you execute an agreement to repay 
the debt and make the payments in accordance with the agreement, or you 
file a

[[Page 84]]

petition to have your debts discharged in bankruptcy;
    (6) If you execute an agreement to repay the debt and fail to timely 
make any scheduled payment, you will be ineligible for crop insurance 
effective on the date the payment was due until the debt is paid in full 
or you file a petition to discharge the debt in bankruptcy and 
subsequently obtain discharge of the amounts due. Dismissal of the 
bankruptcy petition before discharge will void all policies in effect 
retroactive to the date you were originally determined ineligible to 
participate;
    (7) Once the policy is terminated, the policy cannot be reinstated 
for the current crop year unless the termination was in error;
    (8) After you again become eligible for crop insurance, if you want 
to obtain coverage for your crops, you must reapply on or before the 
sales closing date for the crop (since applications for crop insurance 
cannot be accepted after the sales closing date, if you make any payment 
after the sales closing date, you cannot apply for insurance until the 
next crop year); and
    (9) If we deduct the amount due us from an indemnity, the date of 
payment for the purpose of this section will be the date you sign the 
properly executed claim for indemnity.
    (10) For example, if crop A, with a termination date of October 31, 
1997, and crop B, with a termination date of March 15, 1998, are insured 
and you do not pay the premium for crop A by the termination date, you 
are ineligible for crop insurance as of October 31, 1997, and crop A's 
policy is terminated on that date. Crop B's policy is terminated as of 
March 15, 1998. If you enter an agreement to repay the debt on April 25, 
1998, you can apply for insurance for crop A by the October 31, 1998, 
sales closing date and crop B by the March 15, 1999, sales closing date. 
If you fail to make a scheduled payment on November 1, 1998, you will be 
ineligible for crop insurance effective on November 1, 1998, and you 
will not be eligible unless the debt is paid in full or you file a 
petition to have the debt discharged in bankruptcy and subsequently 
receive discharge.
    (f) If you die, disappear, or are judicially declared incompetent, 
or if you are an entity other than an individual and such entity is 
dissolved, the policy will terminate as of the date of death, judicial 
declaration, or dissolution. If such event occurs after coverage begins 
for any crop year, the policy will continue in force through the crop 
year and terminate at the end of the insurance period and any indemnity 
will be paid to the person or persons determined to be beneficially 
entitled to the indemnity. The premium will be deducted from the 
indemnity or collected from the estate. Death of a partner in a 
partnership will dissolve the partnership unless the partnership 
agreement provides otherwise. If two or more persons having a joint 
interest are insured jointly, death of one of the persons will dissolve 
the joint entity.
    (g) We may terminate your policy if no premium is earned for 3 
consecutive years.
    (h) The cancellation and termination dates are contained in the Crop 
Provisions.

                          19. Contract Changes

    (a) We may change any terms and conditions of this policy from year 
to year.
    (b) Any changes in policy provisions, expected county yields, 
maximum amounts of protection, premium rates, and program dates will be 
provided by us to your local crop insurance provider not later than the 
contract change date contained in the Crop Provisions. You may view the 
documents or request copies from your local crop insurance provider.
    (c) You will be notified, in writing, of changes to the Basic 
Provisions, Crop Provisions, and Special Provisions of this policy not 
later than 30 days prior to the cancellation date for the insured crop. 
Acceptance of changes will be conclusively presumed in the absence of 
notice from you to change or cancel your insurance coverage.

             20. Eligibility for Other Farm Program Benefits

    To remain eligible for benefits under the Agriculture Marketing 
Transition Act, the conservation reserve program, or certain farm loans, 
you are required to obtain at least the catastrophic level of coverage 
for either GRP or any other plan of insurance that is available in the 
county, for all crops of economic significance, or execute a waiver of 
your rights to any emergency crop assistance on or before the sales 
closing date for the crop.

                 An Example To Demonstrate How GRP Works

    Producer A buys 90 percent coverage and selects $160 protection per 
acre. Producer B buys 75 percent coverage and selects $185 protection 
per acre. Both producers have 100 percent share and both plant 200 acres 
of a crop in the county. The expected county yield is 45 bushels per 
acre. The premium rate for 90 percent coverage is $6.14 per hundred 
dollars of protection and the premium rate for 75 percent coverage is 
$3.30 per hundred dollars of protection.
    A's trigger yield is 40.5 bushels per acre (90% x 45), and the total 
premium due is $1,965 ($160 x $6.14 x 200 acres x 0.01). Of that amount, 
FCIC pays $614 (200 acres x the maximum subsidy of $3.07 per acre). A's 
policy protection is $32,000 ($160 x 200 acres).
    B's trigger yield is 33.8 bushels per acre (75% of 45), and the 
total premium due is $1,221 ($185 x $3.30 x 200 acres x 0.01). Of that 
amount, FCIC pays $442 (200 acres x the subsidy amount of $2.21 per 
acre). B's policy protection is $37,000 ( $185 x 200 acres).


[[Page 85]]


Scenario 1 (likely)
    FCIC issues a payment yield of 46 bushels per acre. This is above 
both producers' trigger yields, so no indemnity payment is made, even if 
one or both have individual yields that are below the trigger yield.
Scenario 2 (less likely)
    FCIC issues a payment yield of 38 bushels per acre. A's payment 
calculation factor is 0.062 ((40.5 - 38) / 40.5). This number multiplied 
by the policy protection yields an indemnity payment of $1,984 (.062 x 
$32,000). B's trigger yield is less than the payment yield, so no 
indemnity payment is made.
Scenario 3 (least likely)
    FCIC issues a payment yield of 22 bushels per acre. A's payment 
calculation factor is 0.457 ((40.5 - 22) / 40.5). The payment is $14,624 
(0.457 x $32,000). B's payment calculation factor is 0.349 ((33.8 - 22) 
/ 33.8), and the final indemnity payment is $12,913 (0.349 x $37,000).

[64 FR 30219, June 7, 1999, as amended at 65 FR 40485, June 30, 2000]



Sec. 407.10  Group risk plan for barley.

    The provisions of the Group Risk Plan for Barley for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Combining or threshing the barley for grain.
    NASS yield. The yield calculated by dividing the NASS estimate of 
the barley production in the county, by the NASS estimate of the acres 
of barley in the county, as specified in the actuarial documents. The 
actuarial documents will specify whether harvested or planted acreage is 
used to calculate the yield used to establish the expected county yield 
and calculate indemnities.
    Planted acreage. Land in which the barley seed has been placed by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice. Land on which seed is initially 
spread onto the soil surface by any method and which subsequently is 
mechanically incorporated into the soil in a timely manner and at the 
proper depth, will also be considered planted.

                             2. Crop Insured

    The insured crop will be all barley:
    (a) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested as grain; and
    (d) Not planted into an established grass or legume, interplanted 
with another crop, or planted as a nurse crop, unless seeded at the 
normal rate and intended for harvest as grain.

                               3. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to the April 1 following 
the crop year.
    (c) We will issue any payment to you prior to the May 1 immediately 
following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Kit Carson, Lincoln, Elbert, El Paso,       September 30.........................  June 30.
 Pueblo, Las Animas Counties, Colorado and
 all Colorado Counties south and east
 thereof; all New Mexico counties except
 Taos County; Kansas; Missouri; Illinois;
 Indiana; Ohio; Pennsylvania; New York;
 Massachusetts; and all states south and
 east thereof.
Arizona; California; and Clark and Nye      October 31...........................  June 30.
 Counties, Nevada.
All Colorado counties except Kit Carson,    March 15.............................  November 30.
 Lincoln, Elbert, El Paso, Pueblo, and Las
 Animas Counties and all Colorado counties
 south and east thereof; all Nevada
 counties except Clark and Nye Counties;
 Taos County, New Mexico; and all other
 states except: Arizona, California, and
 (except) Kansas, Missouri, Illinois,
 Indiana, Ohio, Pennsylvania, New York,
 and Massachusetts and all States south
 and east thereof.
----------------------------------------------------------------------------------------------------------------


[[Page 86]]



Sec. 407.11  Group risk plan for corn.

    The provisions of the Group Risk Plan for Corn for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Combining or picking corn for grain, or severing the stalk 
from the land and chopping the stalk and ear for the purpose of 
livestock feed.
    NASS yield. The yield calculated by dividing the NASS estimate of 
the corn for grain production in the county, by the NASS estimate of the 
acres of corn for grain in the county, as specified in the actuarial 
documents. The actuarial documents will specify whether harvested or 
planted acreage is used to calculate the yield used to establish the 
expected county yield and calculate indemnities.
    Planted acreage. Land in which the corn seed has been placed by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice. Broadcast and subsequent 
mechanical incorporation of the corn seed is not allowed.

                             2. Crop Insured

    (a) The insured crop will be all field corn:
    (1) Grown on insurable acreage in the county listed in the accepted 
application;
    (2) Properly planted and reported by the acreage reporting date;
    (3) Planted with the intent to be harvested as grain, silage, or 
green chop; and
    (4) Not planted into an established grass or legume or interplanted 
with another crop.
    (b) Hybrid seed corn, popcorn, sweet corn, and other specialty corn 
may only be insured if a written agreement exists between you and us. 
Your request to insure such crop must be in writing and submitted to 
your agent not later than the sales closing date.

                               3. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to April 16 following 
the crop year.
    (c) We will issue any payment to you prior to the May 16 immediately 
following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,   January 15...........................  November 30.
 Wilson, Karnes, Goliad, Victoria, and
 Jackson Counties, Texas, and all Texas
 counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves,       February 15..........................  November 30.
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, and Cooke
 Counties, Texas, and all Texas Counties
 lying south and east thereof to and
 including Terrell, Crockett, Sutton,
 Kimble, Gillespie, Blanco, Comal,
 Guadalupe, Gonzales, De Witt, Lavaca,
 Colorado, Wharton, and Matagorda
 Counties, Texas.
Alabama; Arizona; Arkansas; California;     February 28..........................  November 30.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; South Carolina.
All other Texas counties and all other      March 15.............................  November 30.
 states.
----------------------------------------------------------------------------------------------------------------



Sec. 407.12   Group risk plan for cotton.

    The provisions of the Group Risk Plan for Cotton for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Removal of the seed cotton from the stalk.
    NASS yield. The yield calculated by dividing the NASS estimate of 
upland cotton production in the county, by the NASS estimate of the 
acres of upland cotton in the county, as specified in the actuarial 
documents. The actuarial documents will specify whether harvested or 
planted acreage is used to calculate the yield used to establish the 
expected county yield and calculate indemnities.
    Planted acreage. Land in which the cotton seed has been placed by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice. Broadcast and subsequent 
mechanical incorporation of the cotton seed is not allowed.

                             2. Crop Insured

    The insured crop will be all upland cotton:

[[Page 87]]

    (a) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested; and
    (d) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Colored cotton lint;
    (2) Planted into an established grass or legume;
    (3) Interplanted with another spring planted crop;
    (4) Grown on acreage in which a hay crop was harvested in the same 
calendar year unless the acreage is irrigated; or
    (5) Grown on acreage on which a small grain crop reached the heading 
stage in the same calendar year unless the acreage is irrigated or 
adequate measures are taken to terminate the small grain crop prior to 
heading and less than 50 percent of the small grain plants reach the 
heading stage.

                               3. Payment.

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to July 16 following the 
crop year.
    (c) We will issue any payment to you prior to the August 16 
immediately following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,   January 15...........................  November 30.
 Wilson, Karnes, Goliad, Victoria, and
 Jackson Counties, Texas, and all Texas
 counties lying south thereof.
Alabama; Arizona; Arkansas; California;     February 28..........................  November 30.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; South Carolina;
 El Paso, Hudspeth, Culberson, Reeves,
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, and Cooke
 Counties, Texas, and all Texas counties
 lying south and east thereof to and
 including Terrell, Crockett, Sutton,
 Kimble, Gillespie, Blanco, Comal,
 Guadalupe, Gonzales, De Witt, Lavaca,
 Colorado, Wharton, and Matagorda
 Counties, Texas.
All other Texas counties and all other      March 15.............................  November 30.
 States.
----------------------------------------------------------------------------------------------------------------



Sec. 407.13   Group risk plan for forage.

    The provisions of the Group Risk Plan for Forage for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Removal of the forage from the field, and rotational 
grazing.
    NASS yield. The yield calculated by dividing the NASS estimate of 
the production of hay in the county by the NASS estimate of the acres of 
hay in the county, as specified in the actuarial documents. The 
actuarial documents will specify whether the harvested or planted 
acreage is used to calculate the yield used to establish the expected 
county yield and calculate indemnities.
    Planted acreage. Land seeded to forage, by a planting method 
appropriate for forage, into a properly prepared seedbed.
    Rotational grazing. The defoliation of the insured forage by 
livestock, within a pasturing system whereby the forage field is 
subdivided into smaller parcels and livestock are moved from one area to 
another, allowing a period of grazing followed by a period for forage 
regrowth.

                             2. Crop Insured

    The insured crop will be the forage types shown on the Special 
Provisions:
    (a) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Intended for harvest; and
    (d) Not grown with another crop.

                          3. Insurable Acreage

    In addition to section 3 of the Basic Provisions of the Group Risk 
Plan Common Policy, acreage seeded to forage after July 1 of the 
previous crop year will not be insurable. Acreage physically located in 
another county not listed on the accepted application is not insured 
under this policy.

                               4. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to May 1 following the 
crop year.

[[Page 88]]

    (c) We will issue any payment to you prior to the May 31 immediately 
following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            5. Program Dates

    November 30 is the Cancellation and Termination Date for all states. 
The Contract Change Date is August 31 for all states.

                            6. Annual Premium

    In lieu of section 8(g) of the Basic Provisions of the Group Risk 
Plan Common Policy, the annual premium is earned and payable on the 
acreage reporting date. You will be billed for premium due on the date 
shown in the Special Provisions. The premium will be determined based on 
the rate shown on the actuarial documents.



Sec. 407.14  Group risk plan for peanuts.

    The provisions of the Group Risk Plan for Peanuts for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Combining or threshing the peanuts.
    NASS yield. The yield calculated by dividing the NASS estimate of 
peanut production in the county, by the NASS estimate of the acres of 
peanuts in the county, as specified in the actuarial documents. The 
actuarial documents will specify whether the harvested or planted 
acreage is used to calculate the yield used to establish the expected 
county yield and calculate indemnities.
    Planted acreage. Land in which the peanut seed has been placed by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice.

                             2. Crop Insured

    The insured crop will be all peanuts:
    (a) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested as peanuts; and
    (d) Not interplanted with an established grass or legume or 
interplanted with another crop.

                               3. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to June 16 following the 
crop year.
    (c) We will issue any payment to you prior to the July 16 
immediately following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak,   January 15...........................  November 30.
 McMullen, La Salle, and Dimmit Counties,
 Texas and all Texas Counties lying south
 thereof.
El Paso, Hudspeth, Culberson, Reeves,       February 28..........................  November 30.
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, Cooke
 Counties, Texas, and all Texas counties
 south and east thereof; and all other
 states except New Mexico, Oklahoma, and
 Virginia.
New Mexico; Oklahoma; Virginia; and all     March 15.............................  November 30.
 other Texas Counties.
----------------------------------------------------------------------------------------------------------------



Sec. 407.15  Group risk plan for sorghum.

    The provisions of the Group Risk Plan for Sorghum for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Combining or threshing the sorghum for grain, or severing 
the stalk from the land and chopping the stalk and head for the purpose 
of livestock feed.
    NASS yield. The yield calculated by dividing the NASS estimate of 
sorghum for grain production in the county, by the NASS estimate of the 
acres of sorghum for grain in the county, as specified in the actuarial 
documents. The actuarial documents will specify whether the harvested or 
planted acreage is used to calculate the yield used to establish the 
expected county yield and calculate indemnities.

[[Page 89]]

    Planted acreage. Land in which the sorghum seed has been placed by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice. Broadcast and subsequent 
mechanical incorporation of the sorghum seed is not allowed.

                             2. Crop Insured

    (a) The insured crop will be all sorghum:
    (1) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (2) Properly planted and reported by the acreage reporting date;
    (3) Planted with the intent to be harvested as grain or silage; and
    (4) Not interplanted with an established grass or legume or 
interplanted with another crop.
    (b) Hybrid sorghum seed may only be insured if a written agreement 
exists between you and us. Your request to insure such crop must be in 
writing and submitted to your agent not later than the sales closing 
date.

                               3. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to April 16 following 
the crop year.
    (c) We will issue any payment to you prior to the May 16 immediately 
following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                Cancellation and  termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,   January 15...........................  November 30.
 Wilson, Karnes, Goliad, Victoria, and
 Jackson Counties, Texas, and all Texas
 counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves,       February 15..........................  November 30.
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, and Cooke
 Counties, Texas, and all Texas counties
 south and east thereof to and including
 Terrell, Crockett, Sutton, Kimble,
 Gillespie, Blanco, Comal, Guadalupe,
 Gonzales, De Witt, Lavaca, Colorado,
 Wharton, and Matagorda Counties, Texas.
Alabama; Arizona; Arkansas; California;     February 28..........................  November 30.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; and South
 Carolina.
All other Texas counties and all other      March 15.............................  November 30.
 states.
----------------------------------------------------------------------------------------------------------------



Sec. 407.16  Group risk plan for soybean.

    The provisions of the Group Risk Plan for Soybeans for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Combining or threshing the soybeans.
    NASS yield. The yield calculated by dividing the NASS estimate of 
soybean production in the county, by the NASS estimate of the acres of 
soybeans in the county, as specified in the actuarial documents. The 
actuarial documents will specify whether the harvested or planted 
acreage is used to calculate the yield used to establish the expected 
county yield and calculate indemnities.
    Planted acreage. Land in which the soybean seed has been placed by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice. Land on which seed is initially 
spread onto the soil surface by any method and which subsequently is 
mechanically incorporated into the soil in a timely manner and at the 
proper depth, will also be considered planted.

                             2. Crop Insured

    The insured crop will be all soybeans:
    (a) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested as soybeans; and
    (d) Not planted into an established grass or legume or interplanted 
with another crop.

                               3. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to April 16 following 
the crop year.
    (c) We will issue any payment to you prior to the May 16 immediately 
following our determination of the payment yield.

[[Page 90]]

    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified on the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak,   February 15..........................  November 30.
 McMullen, La Salle, and Dimmit Counties,
 Texas and all Texas counties lying south
 thereof.
Alabama; Arizona; Arkansas; California;     February 28..........................  November 30.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; South Carolina;
 and El Paso, Hudspeth, Culberson, Reeves,
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, and Cooke
 Counties, Texas, and all Texas counties
 lying south and east thereof to and
 including Maverick, Zavala, Frio,
 Atascosa, Karnes, De Witt, Lavaca,
 Colorado, Wharton, and Matagorda
 Counties, Texas.
All other Texas counties and all other      March 15.............................  November.
 States.
All other Texas counties and all other      March 15.............................  November 30.
 states..
----------------------------------------------------------------------------------------------------------------



Sec. 407.17  Group risk plan for wheat.

    The provisions of the Group Risk Plan for Wheat for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Combining or threshing the wheat for grain.
    NASS yield. The yield calculated by dividing the NASS estimate of 
the wheat production in the county, by the NASS estimate of the acres of 
wheat in the county, as specified in the actuarial documents. The 
actuarial documents will specify whether the harvested or planted 
acreage is used to calculate the yield used to establish the expected 
county yield and calculate indemnities.
    Planted acreage. Land in which the wheat seed has been planted by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice. Land on which seed is initially 
spread onto the soil surface by any method and which subsequently is 
mechanically incorporated into the soil in a timely manner and at the 
proper depth, will also be considered planted.

                             2. Crop Insured

    The insured crop will be all wheat:
    (a) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested as grain; and
    (d) Not planted into an established grass or legume, interplanted 
with another crop, or planted as a nurse crop, unless seeded at the 
normal rate and intended for harvest as grain.

                               3. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to April 1 following the 
crop year.
    (c) We will issue any payment to you prior to the May 1 immediately 
following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

----------------------------------------------------------------------------------------------------------------
             State and county                Cancellation and  termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
All Colorado counties except Alamosa,       September 30.........................  June 30.
 Conejos, Costilla, Rio Grande, and
 Saguache; all Montana counties except
 Daniels and Sheridan Counties; all South
 Dakota counties except Corson, Walworth,
 Edmonds, Faulk, Spink, Beadle, Kingsbury,
 Miner, McCook, Turner, and Yankton
 Counties and all South Dakota counties
 east thereof; all Wyoming counties except
 Big Horn, Fremont, Hot Springs, Park, and
 Washakie Counties; and all other states
 except Alaska, Arizona, California,
 Maine, Minnesota, Nevada, New Hampshire,
 North Dakota, Utah, and Vermont..
Arizona; California; Nevada; and Utah.....  October 31...........................  June 30.

[[Page 91]]

 
Alaska; Alamosa, Conejos, Costilla, Rio     March 15.............................  November 30.
 Grande, and Saguache Counties, Colorado;
 Maine; Minnesota; Daniels and Sheridan
 Counties, Montana; New Hampshire; North
 Dakota; Corson, Walworth, Edmunds, Faulk,
 Spink, Beadle, Kingsbury, Miner, McCook,
 Turner, and Yankton Counties South
 Dakota, and all South Dakota counties
 east thereof; Vermont; and Big Horn,
 Fremont, Hot Springs, Park, and Washakie
 Counties, Wyoming..
----------------------------------------------------------------------------------------------------------------

                        PARTS 408-411 [RESERVED]



PART 412--PUBLIC INFORMATION--FREEDOM OF INFORMATION--Table of Contents




Sec.
412.1  General statement.
412.2  Public inspection and copying.
412.3  Index.
412.4  Requests for records.
412.5  Appeals.
412.6  Timing of responses to requests.

    Authority: 5 U.S.C. 552 and 7 U.S.C. 1506.

    Source: 62 FR 67694, Dec. 30, 1997, unless otherwise noted.



Sec. 412.1  General statement.

    This part is issued in accordance with the regulations of the 
Secretary of Agriculture published at 7 CFR 1.1-1.23, and appendix A, 
implementing the Freedom of Information Act (5 U.S.C. 552). The 
Secretary's regulations, as implemented by this part, and the Risk 
Management Agency (RMA) govern availability of records of the Federal 
Crop Insurance Corporation (FCIC) as administration of the crop 
insurance program for FCIC.



Sec. 412.2  Public inspection and copying.

    (a) Members of the public may request access to the information 
specified in Sec. 412.2(d) for inspection and copying.
    (b) To obtain access to specified information, the public should 
submit a written request, in accordance with 7 CFR 1.6, to the Appeals, 
Litigation and Legal Liaison Staff, Risk Management Agency, United 
States Department of Agriculture, 1400 Independence Avenue, SW, STOP 
0807, room 6618-S, Washington, DC 20250-0807, from 9:00 a.m.--4:00 pm., 
EDT Monday through Friday, except holidays.
    (c) When the information requested is not located at the office of 
the Appeals, Litigation and Legal Liaison Staff, the Appeals, Litigation 
and Legal Liaison Staff will direct the request to the appropriate 
office where the information can be obtained. The requester will be 
informed that the request has been forwarded to the appropriate office.
    (d) FCIC will make available for inspection and copying, unless 
otherwise exempt from publication under sections 552(a)(2)(C) and 
552(b):
    (1) Final opinions, including concurring and dissenting opinions and 
orders made in the adjudication of cases; and
    (2) Those statements of policy and interpretations that have been 
adopted by FCIC and RMA and are not published in the Federal Register; 
and
    (3) Administrative staff manuals and instructions to staff that 
affect a member of the public.



Sec. 412.3  Index.

    5 U.S.C. 552(a)(2) requires that each agency publish, or otherwise 
make available, a current index of all materials available for public 
inspection and copying. RMA and FCIC will maintain a current index 
providing identifying information for the public as to any material 
issued, adopted, or promulgated by the Agency since July 4, 1967, and 
required by section 552(a)(2). Pursuant to the Freedom of Information 
Act provisions, RMA and FCIC have determined that in view of the small 
number of public requests for such index, publication of such an index 
would be unnecessary and impracticable. Copies of the index will be 
available upon request in person or by mail at the address stated in 
Sec. 412.2(b).



Sec. 412.4  Requests for records.

    The Director of the Appeals, Litigation and Legal Liaison staff, RMA 
located at the above stated address, is

[[Page 92]]

the person authorized to receive Freedom of Information Act and to 
determine whether to grant or deny such requests in accordance with 7 
CFR 1.8.



Sec. 412.5  Appeals.

    Any person whose request under Sec. 412.4 is denied shall have the 
right to appeal such denial. This appeal shall be submitted in 
accordance with 7 CFR 1.13 and addressed to the Manager, Federal Crop 
Insurance Corporation, United States Department of Agriculture, 1400 
Independence Avenue, SW., STOP 0807, room 6618-S, Washington, DC 20250-
0807.



Sec. 412.6  Timing of responses to requests.

    (a) In general, FCIC will respond to requests according to their 
order of receipt.
    (b) Existing responsive documents or information may be maintained 
in RMA's field offices. Therefore, extra time may be necessary to search 
and collect the documents.

                        PARTS 413-456 [RESERVED]



PART 457--COMMON CROP INSURANCE REGULATIONS--Table of Contents




Sec.
457.1  Applicability.
457.2  Availability of Federal crop insurance.
457.3  Premium rates, production guarantees or amounts of insurance, 
          coverage levels, and prices at which indemnities shall be 
          computed.
457.4  OMB control numbers.
457.5  Creditors.
457.6  Good faith reliance on misrepresentation.
457.7  The contract.
457.8  The application and policy.
457.9  Appropriation contingency.
457.10-457.100  [Reserved]
457.101  Small grains crop insurance.
457.102  Wheat crop insurance winter coverage endorsement.
457.103  [Reserved]
457.104  Cotton crop insurance provisions.
457.105  Extra long staple cotton crop insurance provisions.
457.106  Texas citrus tree crop insurance provisions.
457.107  Florida citrus fruit crop insurance provisions.
457.108  Sunflower seed crop insurance provisions.
457.109  Sugar beet crop insurance provisions.
457.110  Fig crop insurance provisions.
457.111  Pear crop insurance provisions.
457.112  Hybrid sorghum seed crop insurance provisions.
457.113  Coarse grains crop insurance provisions.
457.114  Nursery crop insurance provisions.
457.115  Nursery frost, freeze, and cold damage exclusion option.
457.116  Sugarcane crop insurance provisions.
457.117  Forage production crop insurance provisions.
457.118  Malting barley crop insurance.
457.119  Texas citrus fruit crop insurance provisions.
457.120  [Reserved]
457.121  Arizona-California citrus crop insurance provisions.
457.122  Walnut crop insurance provisions.
457.123  Almond crop insurance provisions.
457.124  Raisin crop insurance provisions.
457.125  Safflower crop insurance provisions.
457.126  Popcorn crop insurance provisions.
457.127  [Reserved]
457.128  Guaranteed production plan of fresh market tomato crop 
          insurance provisions.
457.129  Fresh market sweet corn crop insurance provisions.
457.130  Madacamia tree crop insurance provisions.
457.131  Macadamia nut crop insurance provisions.
457.132  Cranberry crop insurance provisions.
457.133  Prune crop insurance provisions.
457.134  Peanut crop insurance provisions.
457.135  Onion crop insurance provisions.
457.136  Guaranteed tobacco crop insurance provisions.
457.137  Green pea crop insurance provisions.
457.138  Grape crop insurance provisions.
457.139  Fresh market tomato (dollar plan) crop insurance provisions.
457.140  Dry pea crop insurance provisions.
457.141  Rice crop insurance provisions.
457.142  Northern potato crop insurance provisions.
457.143  Northern potato crop insurance--quality endorsement.
457.144  Northern potato crop insurance--processing quality endorsement.
457.145  Potato crop insurance --certified seed endorsement.
457.146  Northern potato crop insurance--storage coverage endorsement.
457.147  Central and Southern potato crop insurance provisions.
457.148  Fresh market pepper crop insurance provisions.
457.149  Table grape crop insurance provisions.
457.150  Dry bean crop insurance provisions.
457.151  Forage seeding crop insurance provisions.

[[Page 93]]

457.152  Hybrid seed corn crop insurance provisions.
457.153  Peach crop insurance provisions.
457.154  Processing sweet corn crop insurance provisions.
457.155  Processing bean crop insurance provisions.
457.156  Quota tobacco crop insurance provisions.
457.157  Plum crop insurance provisions.
457.158  Apple crop insurance provisions.
457.159  Stonefruit crop insurance provisions.
457.160  Processing tomato crop insurance provisions.
457.161  Canola and rapeseed crop insurance provisions.
457.162  Nursery crop insurance provisions.
457.163  Nursery peak inventory endorsement.
457.165  Millet crop insurance provisions.

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

    Source: 56 FR 1351, Jan. 14, 1991, unless otherwise noted.



Sec. 457.1  Applicability.

    The provisions of this part are applicable only to crops for which a 
crop provision is published as a section to 7 CFR part 457 and then only 
for the crops and crop year designated by the application section.



Sec. 457.2  Availability of Federal crop insurance.

    (a) Insurance shall be offered under the provisions of this section 
on the insured crop in counties within the limits prescribed by and in 
accordance with the provisions of the Federal Crop Insurance Act, as 
amended (the Act). The crops and counties shall be designated by the 
Manager of the Corporation from those approved by the Board of Directors 
of the Corporation.
    (b) The insurance is offered through companies reinsured by the 
Federal Crop Insurance Corporation (FCIC) that offer contracts 
containing the same terms and conditions as the contract set out in this 
part. These contracts are clearly identified as being reinsured by FCIC. 
FCIC may offer the contract for the catastrophic level of coverage 
contained in this part and part 402 directly to the insured through 
local offices of the Department of Agriculture only if the Secretary 
determines that the availability of local agents is not adequate. Those 
contracts are specifically identified as being offered by FCIC.
    (c) Except as specified in the Crop Provisions, the Catastrophic 
Risk Protection Endorsement (part 402 of this chapter) and part 400, 
subpart T of this chapter, no person may have in force more than one 
contract on the same crop for the same crop year in the same county.
    (d) Except as specified in paragraph (c) of this section, if a 
person has more than one contract under the Act that provides coverage 
for the same loss on the same crop for the same crop year in the same 
county, all such contracts shall be voided for that crop year and the 
person will be liable for the premium on all contracts, unless the 
person can show to the satisfaction of the Corporation that the multiple 
contracts of insurance were inadvertent and without the fault of the 
person. If the multiple contracts of insurance are shown to be 
inadvertent and without the fault of the person, the contract with the 
earliest signature date on the application will be valid and all other 
contracts on that crop in the county for that crop year will be 
canceled. No liability for indemnity or premium will attach to the 
contracts so canceled.
    (e) The person must repay all amounts received in violation of this 
section with interest at the rate contained in the contract (see 
Sec. 457.8, paragraph 24).
    (f) An insured whose contract with the Corporation or with a company 
reinsured by the Corporation under the Act has been terminated because 
of violation of the terms of the contract is not eligible to obtain 
multiple peril crop insurance under the Act with the Corporation or with 
a company reinsured by the Corporation unless the insured can show that 
the default in the prior contract was cured prior to the sales closing 
date of the contract applied for or unless the insured can show that the 
termination was improper and should not result in subsequent 
ineligibility.
    (g) All applicants for insurance under the Act must advise the 
agent, in writing, at the time of application, of any previous 
applications for insurance or policies of insurance under the Act and

[[Page 94]]

the present status of any such applications or insurance.

[56 FR 1351, Jan. 14, 1991, as amended at 58 FR 58262, Nov. 1, 1993; 62 
FR 65154, Dec. 10, 1997; 63 FR 66712, Dec. 3, 1998]



Sec. 457.3  Premium rates, production guarantees or amounts of insurance, coverage levels, and prices at which indemnities shall be computed.

    (a) The Manager shall establish premium rates, production guarantees 
or amounts of insurance, coverage levels, and prices at which 
indemnities shall be computed for the insured crop which will be 
included in the actuarial table on file in the applicable agents' office 
for the county and which may be changed from year to year.
    (b) At the time the application for insurance is made, the applicant 
will elect an amount of insurance or a coverage level and price from 
among those contained in the actuarial table for the crop year.



Sec. 457.4  OMB control numbers.

    The information collection requirements contained in these 
regulations have been approved by the Office of Management and Budget 
(OMB) under the provisions of 44 U.S.C. chapter 35 and have been 
assigned OMB number 0563-0053.

[62 FR 65154, Dec. 10, 1997]



Sec. 457.5  Creditors.

    An interest of a person in an insured crop existing by virtue of a 
lien, mortgage, garnishment, levy, execution, bankruptcy, involuntary 
transfer or other similar interest shall not entitle the holder of the 
interest to any benefit under the contract.



Sec. 457.6  Good faith reliance on misrepresentation.

    Notwithstanding any other provision of the crop insurance contract, 
whenever:
    (a) A person entering into a contract of crop insurance under these 
regulations who, as a result of a misrepresentation or other erroneous 
action or advice by an agent or employee of the Corporation:
    (1) Is indebted to the Corporation for additional premiums; or
    (2) Has suffered a loss to a crop which is not insured or for which 
the insured is not entitled to an indemnity because of failure to comply 
with the terms of the insurance contract, but which the insured believed 
to be insured, or believed the terms of the insurance contract to have 
been complied with or waived; and
    (b) The Board of Directors of the Corporation, or the Manager in 
cases involving not more than $100,000.00, finds that:
    (1) An agent or employee of the Corporation did in fact make such 
misrepresentation or take other erroneous action or give erroneous 
advice;
    (2) Said insured relied thereon in good faith; and
    (3) To require the payment of the additional premiums or to deny 
such insured's entitlement to the indemnity would not be fair and 
equitable, such insured shall be granted relief the same as if otherwise 
entitled thereto. Requests for relief under this section must be 
submitted to the Corporation in writing. The Corporation reviewing 
officers must, upon application by the person claiming relief under this 
section, refer such application to the appropriate official of the 
Corporation for determination as to whether to grant relief under this 
section. Corporation reviewing officers do not have authority to grant 
relief under this section.
    (c) The reinsured companies may use arbitration panels established 
under contracts for reinsurance issued by them under the FCIC Act to 
grant relief under the same terms and conditions as contained in 
paragraphs (a) and (b) of this section or, may establish procedures to 
administratively handle relief in accordance with such terms and 
conditions.

[56 FR 1351, Jan. 14, 1991, as amended at 58 FR 58262, Nov. 1, 1993]



Sec. 457.7  The contract.

    The insurance contract shall become effective upon the acceptance by 
the Corporation or the reinsured company of a duly executed application 
for insurance on a form prescribed by the Corporation. The contract 
shall consist of the accepted Application, the Basic Provisions, the 
Crop Provisions, the

[[Page 95]]

Special Provisions, the county Actuarial Table, and any amendments or 
options thereto. Changes made in the contract shall not affect its 
continuity from year to year. No indemnity shall be paid unless the 
insured complies with all terms and conditions of the contract. The 
forms referred to in the contract are available at the offices of the 
crop insurance agent.



Sec. 457.8  The application and policy.

    (a) Application for insurance on a form prescribed by the 
Corporation, or approved by the Corporation, must be made by any person 
who wishes to participate in the program, to cover such person's share 
in the insured crop as landlord, owner-operator, crop ownership 
interest, or tenant. No other person's interest in the crop may be 
insured under an application unless that person's interest is clearly 
shown on the application and unless that other person's interest is 
insured in accordance with the procedures of the Corporation. The 
application must be submitted to the Corporation or the reinsured 
company through the crop insurance agent and must be submitted on or 
before the applicable sales closing date on file.
    (b) FCIC or the reinsured company may reject or discontinue the 
acceptance of applications in any country or of any individual 
application upon FCIC's determination that the insurance risk is 
excessive.

                        DEPARTMENT OF AGRICULTURE

                   FEDERAL CROP INSURANCE CORPORATION

                    [OR POLICY ISSUING COMPANY NAME]

                      Common Crop Insurance Policy

           (This is a continuous policy. Refer to section 2.)

                              FCIC Policies

    This is an insurance policy issued by the Federal Crop Insurance 
Corporation (FCIC), a United States government agency. The provisions of 
the policy are published in the Federal Register and in chapter IV of 
title 7 of the Code of Federal Regulations (CFR) under the Federal 
Register Act (44 U.S.C. 1501 et seq.), and may not be waived or varied 
in any way by the crop insurance agent or any other agent or employee of 
FCIC.
    Throughout this policy, ``you'' and ``your'' refer to the named 
insured shown on the accepted application and ``we,'' ``us,'' and 
``our'' refer to the Federal Crop Insurance Corporation. Unless the 
context indicates otherwise, use of the plural form of a word includes 
the singular and use of the singular form of the word includes the 
plural.

                           Reinsured Policies

    This insurance policy is reinsured by the Federal Crop Insurance 
Corporation (FCIC) under the provisions of the Federal Crop Insurance 
Act, as amended (7 U.S.C. 1501 et seq.) (Act). All provisions of the 
policy and rights and responsibilities of the parties are specifically 
subject to the Act. The provisions of the policy are published in the 
Federal Register and codified in chapter IV of title 7 of the Code of 
Federal Regulations (CFR) under the Federal Register Act (44 U.S.C. 1501 
et seq.), and may not be waived or varied in any way by the crop 
insurance agent or any other agent or employee of FCIC or the company. 
In the event we cannot pay your loss, your claim will be settled in 
accordance with the provisions of this policy and paid by FCIC. No state 
guarantee fund will be liable for your loss.
    Throughout this policy, ``you'' and ``your'' refer to the named 
insured shown on the accepted application and ``we,'' ``us,'' and 
``our'' refer to the insurance company providing insurance. Unless the 
context indicates otherwise, use of the plural form of a word includes 
the singular and use of the singular form of the word includes the 
plural.
    Agreement to insure. In return for the payment of the premium, and 
subject to all of the provisions of this policy, we agree with you to 
provide the insurance as stated in this policy. If a conflict exists 
among the policy provisions, the order of priority is as follows: (1) 
The Catastrophic Risk Protection Endorsement, as applicable; (2) the 
Special Provisions; (3) the Crop Provisions; and (4) these Basic 
Provisions (Sec. 457.8), with (1) controlling (2), etc.

[[Page 96]]

                          Terms and Conditions

                            Basic Provisions

                             1. Definitions

    Abandon. Failure to continue to care for the crop, providing care so 
insignificant as to provide no benefit to the crop, or failure to 
harvest in a timely manner, unless an insured cause of loss prevents you 
from properly caring for or harvesting the crop or causes damage to it 
to the extent that most producers of the crop on acreage with similar 
characteristics in the area would not normally further care for or 
harvest it.
    Acreage report. A report required by paragraph 6 of these Basic 
Provisions that contains, in addition to other required information, 
your report of your share of all acreage of an insured crop in the 
county, whether insurable or not insurable.
    Acreage reporting date. The date contained in the Special Provisions 
or as provided in section 6 by which you are required to submit your 
acreage report.
    Act. The Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
    Actuarial documents. The material for the crop year which is 
available for public inspection in your agent's office, and which shows 
the amounts of insurance or production guarantees, coverage levels, 
premium rates, practices, insurable acreage, and other related 
information regarding crop insurance in the county.
    Additional coverage. A level of coverage greater than catastrophic 
risk protection.
    Administrative fee. An amount you must pay for catastrophic risk 
protection, and additional coverage for each crop year as specified in 
section 7 and the Catastrophic Risk Protection Endorsement.
    Agricultural commodity. All insurable crops and other fruit, 
vegetable or nut crops produced for human or animal consumption.
    Another use, notice of. The written notice required when you wish to 
put acreage to another use (see section 14).
    Application. The form required to be completed by you and accepted 
by us before insurance coverage will commence. This form must be 
completed and filed in your agent's office not later than the sales 
closing date of the initial insurance year for each crop for which 
insurance coverage is requested. If cancellation or termination of 
insurance coverage occurs for any reason, including but not limited to 
indebtedness, suspension, debarment, disqualification, cancellation by 
you or us or violation of the controlled substance provisions of the 
Food Security Act of 1985, a new application must be filed for the crop. 
Insurance coverage will not be provided if you are ineligible under the 
contract or under any Federal statute or regulation.
    Approved yield. The actual production history (APH) yield determined 
in accordance with 7 CFR part 400, subpart G, including any adjustments 
elected under section 36.
    Assignment of indemnity. A transfer of policy rights, made on our 
form, and effective when approved by us. It is the arrangement whereby 
you assign your right to an indemnity payment to any party of your 
choice for the crop year.
    Basic unit. All insurable acreage of the insured crop in the county 
on the date coverage begins for the crop year:
    (1) In which you have 100 percent crop share; or
    (2) Which is owned by one person and operated by another person on a 
share basis. (Example: If, in addition to the land you own, you rent 
land from five landlords, three on a crop share basis and two on a cash 
basis, you would be entitled to four units; one for each crop share 
lease and one that combines the two cash leases and the land you own.) 
Land which would otherwise be one unit may, in certain instances, be 
divided according to guidelines contained in section 34 of these Basic 
Provisions and in the applicable Crop Provisions.
    Cancellation date. The calendar date specified in the Crop 
Provisions on which coverage for the crop will automatically renew 
unless canceled in writing by either you or us or terminated in 
accordance with the policy terms.
    Catastrophic risk protection. The minimum level of coverage offered 
by FCIC that is required before you may qualify for certain other USDA 
program benefits unless you execute a waiver of any eligibility for 
emergency crop loss assistance in connection with the crop.
    Catastrophic Risk Protection Endorsement. The part of the crop 
insurance policy that contains provisions of insurance that are specific 
to catastrophic risk protection.
    Claim for indemnity. A claim made on our form by you for damage or 
loss to an insured crop and submitted to us not later than 60 days after 
the end of the insurance period (see section 14).
    Consent. Approval in writing by us allowing you to take a specific 
action.
    Contract. (See ``policy'').
    Contract change date. The calendar date by which we make any policy 
changes available for inspection in the agent's office (see section 4).
    County. Any county, parish, or other political subdivision of a 
state shown on your accepted application, including acreage in a field 
that extends into an adjoining county if the county boundary is not 
readily discernible.
    Coverage. The insurance provided by this policy, against insured 
loss of production or value, by unit as shown on your summary of 
coverage.

[[Page 97]]

    Coverage begins, date. The calendar date insurance begins on the 
insured crop, as contained in the Crop Provisions, or the date planting 
begins on the unit (see section 11 of these Basic Provisions for 
specific provisions relating to prevented planting).
    Crop Provisions. The part of the policy that contains the specific 
provisions of insurance for each insured crop.
    Crop year. The period within which the insured crop is normally 
grown, regardless of whether or not it is actually grown, and designated 
by the calendar year in which the insured crop is normally harvested.
    Damage. Injury, deterioration, or loss of production of the insured 
crop due to insured or uninsured causes.
    Damage, notice of. A written notice required to be filed in your 
agent's office whenever you initially discover the insured crop has been 
damaged to the extent that a loss is probable (see section 14).
    Days. Calendar days.
    Deductible. The amount determined by subtracting the coverage level 
percentage you choose from 100 percent. For example, if you elected a 65 
percent coverage level, your deductible would be 35 percent (100% - 65% 
= 35%).
    Delinquent account. Any account you have with us in which premiums 
and interest on those premiums is not paid by the termination date 
specified in the Crop Provisions, or any other amounts due us, such as 
indemnities found not to have been earned, which are not paid within 30 
days of our mailing or other delivery of notification to you of the 
amount due.
    Earliest planting date. The earliest date established for planting 
the insured crop (see Special Provisions and section 13).
    End of insurance period, date of. The date upon which your crop 
insurance coverage ceases for the crop year (see Crop Provisions and 
section 11).
    Enterprise unit. All insurable acreage of the insured crop in the 
county in which you have a share on the date coverage begins for the 
crop year. An enterprise unit must consist of:
    (1) Two or more basic units of the same insured crop that are 
located in two or more separate sections, section equivalents, or FSA 
farm serial numbers; or
    (2) Two or more optional units of the same insured crop established 
by separate sections, section equivalents, or FSA farm serial numbers.
    Field. All acreage of tillable land within a natural or artificial 
boundary (e.g., roads, waterways, fences, etc.).
    Final planting date. The date contained in the Special Provisions 
for the insured crop by which the crop must initially be planted in 
order to be insured for the full production guarantee or amount of 
insurance per acre.
    FSA. The Farm Service Agency, an agency of the USDA, or a successor 
agency.
    FSA farm serial number. The number assigned to the farm by the local 
FSA office.
    Good farming practices. The cultural practices generally in use in 
the county for the crop to make normal progress toward maturity and 
produce at least the yield used to determine the production guarantee or 
amount of insurance, and are those recognized by the Cooperative State 
Research, Education, and Extension Service as compatible with agronomic 
and weather conditions in the county.
    Insured. The named person as shown on the application accepted by 
us. This term does not extend to any other person having a share or 
interest in the crop (for example, a partnership, landlord, or any other 
person) unless specifically indicated on the accepted application.
    Insured crop. The crop for which coverage is available under these 
Basic Provisions and the applicable Crop Provisions as shown on the 
application accepted by us.
    Interplanted. Acreage on which two or more crops are planted in a 
manner that does not permit separate agronomic maintenance or harvest of 
the insured crop.
    Irrigated practice. A method of producing a crop by which water is 
artificially applied during the growing season by appropriate systems 
and at the proper times, with the intention of providing the quantity of 
water needed to produce at least the yield used to establish the 
irrigated production guarantee or amount of insurance on the irrigated 
acreage planted to the insured crop.
    Late planted. Acreage initially planted to the insured crop after 
the final planting date.
    Late planting period. The period that begins the day after the final 
planting date for the insured crop and ends 25 days after the final 
planting date, unless otherwise specified in the Crop Provisions or 
Special Provisions.
    Limited resource farmer. A producer or operator of a farm:
    (a) With an annual gross income of $20,000 or less derived from all 
sources, including income from a spouse or other members of the 
household, for each of the prior two years; or
    (b) With less than 25 acres aggregated for all crops, where a 
majority of the producer's gross income is derived from such farm or 
farms, but the producer's gross income from farming operations does not 
exceed $20,000.
    Loss, notice of. The notice required to be given by you not later 
than 72 hours after certain occurrences or 15 days after the end of the 
insurance period, whichever is earlier (see section 14).
    Negligence. The failure to use such care as a reasonably prudent and 
careful person would use under similar circumstances.
    Non-contiguous. Any two or more tracts of land whose boundaries do 
not touch at any

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point, except that land separated only by a public or private right-of-
way, waterway, or an irrigation canal will be considered as contiguous.
    Person. An individual, partnership, association, corporation, 
estate, trust, or other legal entity, and wherever applicable, a State 
or a political subdivision or agency of a State. ``Person'' does not 
include the United States Government or any agency thereof.
    Planted acreage. Land in which seed, plants, or trees have been 
placed, appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice.
    Policy. The agreement between you and us consisting of the accepted 
application, these Basic Provisions, the Crop Provisions, the Special 
Provisions, other applicable endorsements or options, the actuarial 
documents for the insured crop, the Catastrophic Risk Protection 
Endorsement, if applicable, and the applicable regulations published in 
7 CFR chapter IV.
    Practical to replant. Our determination, after loss or damage to the 
insured crop, based on all factors, including, but not limited to 
moisture availability, marketing window, condition of the field, and 
time to crop maturity, that replanting the insured crop will allow the 
crop to attain maturity prior to the calendar date for the end of the 
insurance period. It will not be considered practical to replant after 
the end of the late planting period, or the final planting date if no 
late planting period is applicable, unless replanting is generally 
occurring in the area. Unavailability of seed or plants will not be 
considered a valid reason for failure to replant.
    Premium billing date. The earliest date upon which you will be 
billed for insurance coverage based on your acreage report. The premium 
billing date is contained in the Special Provisions.
    Prevented planting. Failure to plant the insured crop with proper 
equipment by the final planting date designated in the Special 
Provisions for the insured crop in the county. You may also be eligible 
for a prevented planting payment if you failed to plant the insured crop 
with the proper equipment within the late planting period. You must have 
been prevented from planting the insured crop due to an insured cause of 
loss that is general in the surrounding area and that prevents other 
producers from planting acreage with similar characteristics.
    Price election. The amounts contained in the Special Provisions or 
an addendum thereto, to be used for computing the value per pound, 
bushel, ton, carton, or other applicable unit of measure for the 
purposes of determining premium and indemnity under the policy.
    Production guarantee (per acre). The number of pounds, bushels, 
tons, cartons, or other applicable units of measure determined by 
multiplying the approved yield per acre by the coverage level percentage 
you elect.
    Production report. A written record showing your annual production 
and used by us to determine your yield for insurance purposes (see 
section 3). The report contains yield information for previous years, 
including planted acreage and harvested production. This report must be 
supported by written verifiable records from a warehouseman or buyer of 
the insured crop or by measurement of farm-stored production, or by 
other records of production approved by us on an individual case basis.
    Replanting. Performing the cultural practices necessary to prepare 
the land to replace the seed or plants of the damaged or destroyed 
insured crop and then replacing the seed or plants of the same crop in 
the insured acreage with the expectation of producing at least the yield 
used to determine the production guarantee.
    Representative sample. Portions of the insured crop that must remain 
in the field for examination and review by our loss adjuster when making 
a crop appraisal, as specified in the Crop Provisions. In certain 
instances we may allow you to harvest the crop and require only that 
samples of the crop residue be left in the field.
    Sales closing date. A date contained in the Special Provisions by 
which an application must be filed. The last date by which you may 
change your crop insurance coverage for a crop year.
    Section. (for the purposes of unit structure) A unit of measure 
under a rectangular survey system describing a tract of land usually one 
mile square and usually containing approximately 640 acres.
    Share. Your percentage of interest in the insured crop as an owner, 
operator, or tenant at the time insurance attaches. However, only for 
the purpose of determining the amount of indemnity, your share will not 
exceed your share at the earlier of the time of loss or the beginning of 
harvest.
    Special Provisions. The part of the policy that contains specific 
provisions of insurance for each insured crop that may vary by 
geographic area.
    State. The state shown on your accepted application.
    Substantial beneficial interest. An interest held by any person of 
at least 10 percent in the applicant or insured.
    Summary of coverage. Our statement to you, based upon your acreage 
report, specifying the insured crop and the guarantee or amount of 
insurance coverage provided by unit.
    Tenant. A person who rents land from another person for a share of 
the crop or a

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share of the proceeds of the crop (see the definition of ``share'' 
above).
    Termination date. The calendar date contained in the Crop Provisions 
upon which your insurance ceases to be in effect because of nonpayment 
of any amount due us under the policy, including premium.
    Timely planted. Planted on or before the final planting date 
designated in the Special Provisions for the insured crop in the county.
    USDA. United States Department of Agriculture.
    Void. When the policy is considered not to have existed for a crop 
year as a result of concealment, fraud or misrepresentation (see section 
27).
    Whole farm unit. All insurable acreage of the insured crops in the 
county in which you have a share on the date coverage begins for each 
crop for the crop year.
    Written agreement. A document that alters designated terms of a 
policy as authorized under these Basic Provisions, the Crop Provisions, 
or the Special Provisions for the insured crop (see section 18).

            2. Life of Policy, Cancellation, and Termination

    (a) This is a continuous policy and will remain in effect for each 
crop year following the acceptance of the original application until 
canceled by you in accordance with the terms of the policy or terminated 
by operation of the terms of the policy or by us.
    (b) Your application for insurance must contain all the information 
required by us to insure the crop. Applications that do not contain all 
social security numbers and employer identification numbers, as 
applicable, (except as stated herein) coverage level, price election, 
crop, type, variety, or class, plan of insurance, and any other material 
information required to insure the crop, are not acceptable. If a person 
with a substantial beneficial interest in the insured crop refuses to 
provide a social security number or employer identification number and 
that person is:
    (1) Not on the non-standard classification system list, the amount 
of coverage available under the policy will be reduced proportionately 
by that person's share of the crop; or
    (2) On the non-standard classification system list, the insurance 
will not be available to that person and any entity in which the person 
has a substantial beneficial interest.
    (c) After acceptance of the application, you may not cancel this 
policy for the initial crop year. Thereafter, the policy will continue 
in force for each succeeding crop year unless canceled or terminated as 
provided below.
    (d) Either you or we may cancel this policy after the initial crop 
year by providing written notice to the other on or before the 
cancellation date shown in the Crop Provisions.
    (e) If any amount due, including administrative fees or premium, is 
not paid or an acceptable arrangement for payment is not made on or 
before the termination date for the crop on which the amount is due, you 
will be determined to be ineligible to participate in any crop insurance 
program authorized under the Act in accordance with 7 CFR part 400, 
subpart U.
    (1) For a policy with unpaid administrative fees or premium, the 
policy will terminate effective on the termination date immediately 
subsequent to the billing date for the crop year;
    (2) For a policy with other amounts due, the policy will terminate 
effective on the termination date immediately after the account becomes 
delinquent;
    (3) Ineligibility will be effective as of the date that the policy 
was terminated for the crop for which you failed to pay an amount owed 
and for all other insured crops with coincidental termination dates;
    (4) All other policies that are issued by us under the authority of 
the Act will also terminate as of the next termination date contained in 
the applicable policy;
    (5) If you are ineligible, you may not obtain any crop insurance 
under the Act until payment is made, you execute an agreement to repay 
the debt and make the payments in accordance with the agreement, or you 
file a petition to have your debts discharged in bankruptcy;
    (6) If you execute an agreement to repay the debt and fail to timely 
make any scheduled payment, you will be ineligible for crop insurance 
effective on the date the payment was due until the debt is paid in full 
or you file a petition to discharge the debt in bankruptcy and 
subsequently obtain discharge of the amounts due. Dismissal of the 
bankruptcy petition before discharge will void all policies in effect 
retroactive to the date you were originally determined ineligible to 
participate;
    (7) Once the policy is terminated, the policy cannot be reinstated 
for the current crop year unless the termination was in error;
    (8) After you again become eligible for crop insurance, if you want 
to obtain coverage for your crops, you must reapply on or before the 
sales closing date for the crop (Since applications for crop insurance 
cannot be accepted after the sales closing date, if you make any payment 
after the sales closing date, you cannot apply for insurance until the 
next crop year); and
    (9) If we deduct the amount due us from an indemnity, the date of 
payment for the purpose of this section will be the date you sign the 
properly executed claim for indemnity.
    (10) For example, if crop A, with a termination date of October 31, 
1997, and crop B, with a termination date of March 15, 1998,

[[Page 100]]

are insured and you do not pay the premium for crop A by the termination 
date, you are ineligible for crop insurance as of October 31, 1997, and 
crop A's policy is terminated on that date. Crop B's policy is 
terminated as of March 15, 1998. If you enter an agreement to repay the 
debt on April 25, 1998, you can apply for insurance for crop A by the 
October 31, 1998, sales closing date and crop B by the March 15, 1999, 
sales closing date. If you fail to make a scheduled payment on November 
1, 1998, you will be ineligible for crop insurance effective on November 
1, 1998, and you will not be eligible unless the debt is paid in full or 
you file a petition to have the debt discharged in bankruptcy and 
subsequently receive discharge.
    (f) If you die, disappear, or are judicially declared incompetent, 
or if you are an entity other than an individual and such entity is 
dissolved, the policy will terminate as of the date of death, judicial 
declaration, or dissolution. If such event occurs after coverage begins 
for any crop year, the policy will continue in force through the crop 
year and terminate at the end of the insurance period and any indemnity 
will be paid to the person or persons determined to be beneficially 
entitled to the indemnity. The premium will be deducted from the 
indemnity or collected from the estate. Death of a partner in a 
partnership will dissolve the partnership unless the partnership 
agreement provides otherwise. If two or more persons having a joint 
interest are insured jointly, death of one of the persons will dissolve 
the joint entity.
    (g) We may terminate your policy if no premium is earned for 3 
consecutive years.
    (h) The cancellation and termination dates are contained in the Crop 
Provisions.
    (i) When obtaining catastrophic, or additional coverage, you must 
provide information regarding crop insurance coverage on any crop 
previously obtained at any other local FSA office or from an approved 
insurance provider, including the date such insurance was obtained and 
the amount of the administrative fee.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) For each crop year, the production guarantee or amount of 
insurance, coverage level, and price at which an indemnity will be 
determined for each unit will be those used to calculate your summary of 
coverage. The information necessary to determine those factors will be 
contained in the Special Provisions or in the actuarial documents.
    (b) You may select only one coverage level from among those offered 
by us for each insured crop. You may change the coverage level, price 
election, or amount of insurance for the following crop year by giving 
written notice to us not later than the sales closing date for the 
insured crop. Since the price election or amount of insurance may change 
each year, if you do not select a new price election or amount of 
insurance on or before the sales closing date, we will assign a price 
election or amount of insurance which bears the same relationship to the 
price election schedule as the price election or amount of insurance 
that was in effect for the preceding year. (For example: If you selected 
100 percent of the market price for the previous crop year and you do 
not select a new price election for the current crop year, we will 
assign 100 percent of the market price for the current crop year.)
    (c) You must report production to us for the previous crop year by 
the earlier of the acreage reporting date or 45 days after the 
cancellation date unless otherwise stated in the Special Provisions:
    (1) If you do not provide the required production report, we will 
assign a yield for the previous crop year. The yield assigned by us will 
not be more than 75 percent of the yield used by us to determine your 
coverage for the previous crop year. The production report or assigned 
yield will be used to compute your approved yield for the purpose of 
determining your coverage for the current crop year.
    (2) If you have filed a claim for any crop year, the documents 
signed by you which state the amount of production used to complete the 
claim for indemnity will be the production report for that year unless 
otherwise specified by FCIC.
    (3) Production and acreage for the prior crop year must be reported 
for each proposed optional unit by the production reporting date. If you 
do not provide the information stated above, the optional units will be 
combined into the basic unit.
    (d) We may revise your production guarantee for any unit, and revise 
any indemnity paid based on that production guarantee, if we find that 
your production report under paragraph (c) of this section:
    (1) Is not supported by written verifiable records in accordance 
with the definition of production report; or
    (2) Fails to accurately report actual production, acreage, or other 
material information.
    (e) In addition to the price election or amount of insurance 
available on the contract change date, we may provide an additional 
price election or amount of insurance no later than 15 days prior to the 
sales closing date. You must select the additional price election or 
amount of insurance on or before the sales closing date for the insured 
crop. These additional price elections or amounts of insurance will not 
be less than those available on the contract change date. If you elect 
the additional price election or amount of insurance any claim 
settlement and amount of premium will be based on this amount.

[[Page 101]]

    (f) You must obtain the same level of coverage (catastrophic risk 
protection, or additional) for all acreage of the crop in the county 
unless one of the following applies:
    (1) The applicable Crop Provisions allow you the option to 
separately insure individual crop types or varieties. In this case, each 
individual type or variety insured by you will be subject to separate 
administrative fees. For example, if two grape varieties in California 
are insured under the Catastrophic Risk Protection Endorsement and two 
varieties are insured under an additional coverage policy, a separate 
administrative fee will be charged for each of the four varieties. 
Although insurance may be elected by type or variety in these instances, 
failure to insure a type or variety that is of economic significance may 
result in the denial of other farm program benefits unless you execute a 
waiver of any eligibility for emergency crop loss assistance in 
connection with the crop.
    (2) If you have additional coverage for the crop in the county and 
the acreage has been designated as ``high risk'' by FCIC, you will be 
able to obtain a High Risk Land Exclusion Option for the high risk land 
under the additional coverage policy and insure the high risk acreage 
under a separate Catastrophic Risk Protection Endorsement, provided that 
the Catastrophic Risk Protection Endorsement is obtained from the same 
insurance provider from which the additional coverage was obtained.
    (g) Hail and fire coverage may be excluded from the covered causes 
of loss for a crop policy only if additional coverage is selected.
    (h) Any person may sign any document relative to crop insurance 
coverage on behalf of any other person covered by such a policy, 
provided that the person has a properly executed power of attorney or 
such other legally sufficient document authorizing such person to sign.

                           4. Contract Changes

    (a) We may change the terms of your coverage under this policy from 
year to year.
    (b) Any changes in policy provisions, price elections, amounts of 
insurance, premium rates, and program dates will be provided by us to 
your crop insurance agent not later than the contract change date 
contained in the Crop Provisions, except that price elections may be 
offered after the contract change date in accordance with section 3. You 
may view the documents or request copies from your crop insurance agent.
    (c) You will be notified, in writing, of changes to the Basic 
Provisions, Crop Provisions, and Special Provisions not later than 30 
days prior to the cancellation date for the insured crop. Acceptance of 
changes will be conclusively presumed in the absence of notice from you 
to change or cancel your insurance coverage.

                            5. Liberalization

    If we adopt any revision that broadens the coverage under this 
policy subsequent to the contract change date without additional 
premium, the broadened coverage will apply.

                          6. Report of Acreage

    (a) An annual acreage report must be submitted to us on our form for 
each insured crop in the county on or before the acreage reporting date 
contained in the Special Provisions, except as follows:
    (1) If you insure multiple crops with us that have final planting 
dates on or after August 15 but before December 31, you must submit an 
acreage report for all such crops on or before the latest applicable 
acreage reporting date for such crops; and
    (2) If you insure multiple crops with us that have final planting 
dates on or after December 31 but before August 15, you must submit an 
acreage report for all such crops on or before the latest applicable 
acreage reporting date for such crops.
    (3) Notwithstanding the provisions in sections 6(a) (1) and (2):
    (i) If the Special Provisions designate separate planting periods 
for a crop, you must submit an acreage report for each planting period 
on or before the acreage reporting date contained in the Special 
Provisions for the planting period; and
    (ii) If planting of the insured crop continues after the final 
planting date or you are prevented from planting during the late 
planting period, the acreage reporting date will be the later of:
    (A) The acreage reporting date contained in the Special Provisions;
    (B) The date determined in accordance with sections (a)(1) or (2); 
or
    (C) Five (5) days after the end of the late planting period for the 
insured crop, if applicable.
    (b) If you do not have a share in an insured crop in the county for 
the crop year, you must submit an acreage report, on or before the 
acreage reporting date, so indicating.
    (c) Your acreage report must include the following information, if 
applicable:
    (1) All acreage of the crop in the county (insurable and not 
insurable) in which you have a share;
    (2) Your share at the time coverage begins;
    (3) The practice;
    (4) The type; and
    (5) The date the insured crop was planted.
    (d) Because incorrect reporting on the acreage report may have the 
effect of changing your premium and any indemnity that may be due, you 
may not revise this report after the acreage reporting date without our 
consent.
    (e) We may elect to determine all premiums and indemnities based on 
the information you submit on the acreage report or

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upon the factual circumstances we determine to have existed, subject to 
the provisions contained in section 6(g).
    (f) If you do not submit an acreage report by the acreage reporting 
date, or if you fail to report all units, we may elect to determine by 
unit the insurable crop acreage, share, type and practice, or to deny 
liability on such units. If we deny liability for the unreported units, 
your share of any production from the unreported units will be 
allocated, for loss purposes only, as production to count to the 
reported units in proportion to the liability on each reported unit. 
However, such production will not be allocated to prevented planting 
acreage or otherwise affect any prevented planting payment.
    (g) If the information reported by you on the acreage report for 
share, acreage, practice, type or other material information is 
inconsistent with the information that is determined to actually exist 
for a unit and results in:
    (1) A lower liability than the actual liability determined, the 
production guarantee or amount of insurance on the unit will be reduced 
to an amount that is consistent with the reported information. In the 
event that insurable acreage is under-reported for any unit, all 
production or value from insurable acreage in that unit will be 
considered production or value to count in determining the indemnity; 
and
    (2) A higher liability than the actual liability determined, the 
information contained in the acreage report will be revised to be 
consistent with the correct information. If we discover that you have 
incorrectly reported any information on the acreage report for any crop 
year, you may be required to provide documentation in subsequent crop 
years that substantiates your report of acreage for those crop years, 
including, but not limited to, an acreage measurement service at your 
own expense.
    (h) Errors in reporting units may be corrected by us at the time of 
adjusting a loss to reduce our liability and to conform to applicable 
unit division guidelines.

                7. Annual Premium and Administrative Fees

    (a) The annual premium is earned and payable at the time coverage 
begins. You will be billed for premium due not earlier than the premium 
billing date specified in the Special Provisions. The premium due, plus 
any accrued interest, will be considered delinquent if it is not paid on 
or before the termination date specified in the Crop Provisions.
    (b) Any amount you owe us related to any crop insured with us under 
the authority of the Act will be deducted from any prevented planting 
payment or indemnity due you for any crop insured with us under the 
authority of the Act.
    (c) The annual premium amount is determined, as applicable, by 
either:
    (1) Multiplying the production guarantee per acre times the price 
election, times the premium rate, times the insured acreage, times your 
share at the time coverage begins, and times any premium adjustment 
percentages that may apply; or
    (2) Multiplying the amount of insurance per acre times the premium 
rate, times the insured acreage, times your share at the time coverage 
begins, and times any premium adjustment percentages that may apply.
    (d) The premium will be computed using the price election or amount 
of insurance you elect or that we assign in accordance with section 
3(b).
    (e) In addition to the premium charged:
    (1) You, unless otherwise authorized in 7 CFR part 400, must pay an 
administrative fee each crop year of $30 per crop per county for all 
levels of coverage in excess of catastrophic risk protection.
    (2) The administrative fee must be paid no later than the time that 
premium is due.
    (3) Payment of an administrative fee will not be required if you 
file a bona fide zero acreage report on or before the acreage reporting 
date for the crop. If you falsely file a zero acreage report you may be 
subject to criminal and administrative sanctions.
    (4) The administrative fee will be waived if you request it and you 
qualify as a limited resource farmer.
    (5)-(6) [Reserved]
    (7) Failure to pay the administrative fees when due may make you 
ineligible for certain other USDA benefits.

                             8. Insured Crop

    (a) The insured crop will be that shown on your accepted application 
and as specified in the Crop Provisions or Special Provisions and must 
be grown on insurable acreage.
    (b) A crop which will NOT be insured will include, but will not be 
limited to, any crop:
    (1) If the farming practices carried out are not in accordance with 
the farming practices for which the premium rates, production guarantees 
or amounts of insurance have been established, unless insurance is 
allowed by a written agreement;
    (2) Of a type, class or variety established as not adapted to the 
area or excluded by the policy provisions;
    (3) That is a volunteer crop;
    (4) That is a second crop following the same crop (insured or not 
insured) harvested in the same crop year unless specifically permitted 
by the Crop Provisions or the Special Provisions;
    (5) That is planted for the development or production of hybrid seed 
or for experimental purposes, unless permitted by the Crop Provisions or 
by written agreement to insure such crop; or
    (6) That is used solely for wildlife protection or management. If 
the lease states that

[[Page 103]]

specific acreage must remain unharvested, only that acreage is 
uninsurable. If the lease specifies that a percentage of the crop must 
be left unharvested, your share will be reduced by such percentage.

                          9. Insurable Acreage

    (a) Acreage planted to the insured crop in which you have a share is 
insurable except acreage:
    (1) That has not been planted and harvested within one of the 3 
previous crop years, unless:
    (i) Such acreage was not planted:
    (A) To comply with any other USDA program;
    (B) Because of crop rotation, (e.g., corn, soybean, alfalfa; and the 
alfalfa remained for 4 years before the acreage was planted to corn 
again);
    (C) Due to an insurable cause of loss that prevented planting; or
    (D) Because a perennial tree, vine, or bush crop was grown on the 
acreage;
    (ii) Such acreage was planted but was not harvested due to an 
insurable cause of loss; or
    (iii) The Crop Provisions or a written agreement specifically allow 
insurance for such acreage;
    (2) That has been strip-mined, unless otherwise approved by written 
agreement, or unless an agricultural commodity other than a cover, hay, 
or forage crop (except corn silage), has been harvested from the acreage 
for at least five crop years after the strip-mined land was reclaimed;
    (3) On which the insured crop is damaged and it is practical to 
replant the insured crop, but the insured crop is not replanted;
    (4) That is interplanted, unless allowed by the Crop Provisions;
    (5) That is otherwise restricted by the Crop Provisions or Special 
Provisions; or
    (6) That is planted in any manner other than as specified in the 
policy provisions for the crop unless a written agreement to such 
planting exists.
    (b) If insurance is provided for an irrigated practice, you must 
report as irrigated only that acreage for which you have adequate 
facilities and adequate water, or the reasonable expectation of 
receiving adequate water at the time coverage begins, to carry out a 
good irrigation practice. If you knew or had reason to know that your 
water may be reduced before coverage begins, no reasonable expectation 
exists.
    (c) Notwithstanding the provisions in section 8(b)(1), if acreage is 
irrigated and we do not provide a premium rate for an irrigated 
practice, you may either report and insure the irrigated acreage as 
``non-irrigated,'' or report the irrigated acreage as not insured.
    (d) We may restrict the amount of acreage that we will insure to the 
amount allowed under any acreage limitation program established by the 
United States Department of Agriculture if we notify you of that 
restriction prior to the sales closing date.

                           10. Share Insured.

    (a) Insurance will attach only to the share of the person completing 
the application and will not extend to any other person having a share 
in the crop unless the application clearly states that:
    (1) The insurance is requested for an entity such as a partnership 
or a joint venture; or
    (2) You as landlord will insure your tenant's share, or you as 
tenant will insure your landlord's share. In this event, you must 
provide evidence of the other party's approval (lease, power of 
attorney, etc.). Such evidence will be retained by us. You also must 
clearly set forth the percentage shares of each person on the acreage 
report.
    (b) We may consider any acreage or interest reported by or for your 
spouse, child or any member of your household to be included in your 
share.
    (c) Acreage rented for a percentage of the crop, or a lease 
containing provisions for both a minimum payment (such as a specified 
amount of cash, bushels, pounds, etc.,) and a crop share will be 
considered a crop share lease.
    (d) Acreage rented for cash, or a lease containing provisions for 
either a minimum payment or a crop share (such as a 50/50 share or 
$100.00 per acre, whichever is greater) will be considered a cash lease.

                          11. Insurance Period

    (a) Except for prevented planting coverage (see section 17), 
coverage begins on each unit or part of a unit at the later of:
    (1) The date we accept your application (For the purposes of this 
paragraph, the date of acceptance is the date that you submit a properly 
executed application in accordance with section 2);
    (2) The date the insured crop is planted; or
    (3) The calendar date contained in the Crop Provisions for the 
beginning of the insurance period.
    (b) Coverage ends at the earliest of:
    (1) Total destruction of the insured crop on the unit;
    (2) Harvest of the unit;
    (3) Final adjustment of a loss on a unit;
    (4) The calendar date contained in the Crop Provisions for the end 
of the insurance period;
    (5) Abandonment of the crop on the unit; or
    (6) As otherwise specified in the Crop Provisions.

                           12. Causes of Loss.

    The insurance provided is against only unavoidable loss of 
production directly caused by specific causes of loss contained in the

[[Page 104]]

Crop Provisions. All other causes of loss, including but not limited to 
the following, are NOT covered:
    (a) Negligence, mismanagement, or wrongdoing by you, any member of 
your family or household, your tenants, or employees;
    (b) Failure to follow recognized good farming practices for the 
insured crop;
    (c) Water contained by any governmental, public, or private dam or 
reservoir project;
    (d) Failure or breakdown of irrigation equipment or facilities; or
    (e) Failure to carry out a good irrigation practice for the insured 
crop, if applicable.

                         13. Replanting Payment.

    (a) If allowed by the Crop Provisions, a replanting payment may be 
made on an insured crop replanted after we have given consent and the 
acreage replanted is at least the lesser of 20 acres or 20 percent of 
the insured planted acreage for the unit (as determined on the final 
planting date or within the late planting period if a late planting 
period is applicable).
    (b) No replanting payment will be made on acreage:
    (1) On which our appraisal establishes that production will exceed 
the level set by the Crop Provisions;
    (2) Initially planted prior to the earliest planting date 
established by the Special Provisions; or
    (3) On which one replanting payment has already been allowed for the 
crop year.
    (c) The replanting payment per acre will be your actual cost for 
replanting, but will not exceed the amount determined in accordance with 
the Crop Provisions.
    (d) No replanting payment will be paid if we determine it is not 
practical to replant.

                14. Duties in the Event of Damage or Loss

                              Your Duties--

    (a) In case of damage to any insured crop you must:
    (1) Protect the crop from further damage by providing sufficient 
care;
    (2) Give us notice within 72 hours of your initial discovery of 
damage (but not later than 15 days after the end of the insurance 
period), by unit, for each insured crop (we may accept a notice of loss 
provided later than 72 hours after your initial discovery if we still 
have the ability to accurately adjust the loss);
    (3) Leave representative samples intact for each field of the 
damaged unit as may be required by the Crop Provisions; and
    (4) Cooperate with us in the investigation or settlement of the 
claim, and, as often as we reasonably require:
    (i) Show us the damaged crop;
    (ii) Allow us to remove samples of the insured crop; and
    (iii) Provide us with records and documents we request and permit us 
to make copies.
    (b) You must obtain consent from us before, and notify us after you:
    (1) Destroy any of the insured crop that is not harvested;
    (2) Put the insured crop to an alternative use;
    (3) Put the acreage to another use; or
    (4) Abandon any portion of the insured crop. We will not give 
consent for any of the actions in sections 14(b) (1) through (4) if it 
is practical to replant the crop or until we have made an appraisal of 
the potential production of the crop.
    (c) In addition to complying with all other notice requirements, you 
must submit a claim for indemnity declaring the amount of your loss not 
later than 60 days after the end of the insurance period. This claim 
must include all the information we require to settle the claim.
    (d) Upon our request, you must:
    (1) Provide a complete harvesting and marketing record of each 
insured crop by unit including separate records showing the same 
information for production from any acreage not insured; and
    (2) Submit to examination under oath.
    (e) You must establish the total production or value received for 
the insured crop on the unit, that any loss of production or value 
occurred during the insurance period, and that the loss of production or 
value was directly caused by one or more of the insured causes specified 
in the Crop Provisions.
    (f) All notices required in this section that must be received by us 
within 72 hours may be made by telephone or in person to your crop 
insurance agent but must be confirmed in writing within 15 days.

                              Our Duties--

    (a) If you have complied with all the policy provisions, we will pay 
your loss within 30 days after:
    (1) We reach agreement with you;
    (2) Completion of arbitration or appeal proceedings; or
    (3) The entry of a final judgment by a court of competent 
jurisdiction.
    (b) In the event we are unable to pay your loss within 30 days, we 
will give you notice of our intentions within the 30-day period.
    (c) We may defer the adjustment of a loss until the amount of loss 
can be accurately determined. We will not pay for additional damage 
resulting from your failure to provide sufficient care for the crop 
during the deferral period.
    (d) We recognize and apply the loss adjustment procedures 
established or approved by the Federal Crop Insurance Corporation.

[[Page 105]]

           15. Production Included in Determining Indemnities.

    (a) The total production to be counted for a unit will include all 
production determined in accordance with the policy.
    (b) The amount of production of any unharvested insured crop may be 
determined on the basis of our field appraisals conducted after the end 
of the insurance period.
    (c) If you elect to exclude hail and fire as insured causes of loss 
and the insured crop is damaged by hail or fire, appraisals will be made 
as described in the applicable Form FCI-78 ``Request To Exclude Hail and 
Fire'' or a form containing the same terms approved by the Federal Crop 
Insurance Corporation.
    (d) The amount of an indemnity that may be determined under the 
applicable provisions of your crop policy may be reduced by an amount, 
determined in accordance with the Crop Provisions or Special Provisions, 
to reflect out-of-pocket expenses that were not incurred by you as a 
result of not planting, caring for, or harvesting the crop. Indemnities 
paid for acreage prevented from being planted will be based on a reduced 
guarantee as provided for in the crop policy and will not be further 
reduced to reflect expenses not incurred.
    (e) Appraised production will be used to calculate your claim if you 
will not be harvesting the acreage. To determine your indemnity based on 
appraised production, you must agree to notify us if you harvest the 
crop and advise us of the production. If the acreage will be harvested, 
harvested production will be used to determine any indemnity due, unless 
otherwise specified in the policy.

                            16. Late Planting

    Unless limited by the Crop Provisions, insurance will be provided 
for acreage planted to the insured crop after the final planting date in 
accordance with the following:
    (a) The production guarantee or amount of insurance for each acre 
planted to the insured crop during the late planting period will be 
reduced by 1 percent per day for each day planted after the final 
planting date.
    (b) Acreage planted after the late planting period (or after the 
final planting date for crops that do not have a late planting period) 
may be insured as follows:
    (1) The production guarantee or amount of insurance for each acre 
planted as specified in this subsection will be determined by 
multiplying the production guarantee or amount of insurance that is 
provided for acreage of the insured crop that is timely planted by the 
prevented planting coverage level percentage you elected, or that is 
contained in the Crop Provisions if you did not elect a prevented 
planting coverage level percentage;
    (2) Planting on such acreage must have been prevented by the final 
planting date (or during the late planting period, if applicable) by an 
insurable cause occurring within the insurance period for prevented 
planting coverage; and
    (3) All production from acreage as specified in this section will be 
included as production to count for the unit.
    (c) The premium amount for insurable acreage specified in this 
section will be the same as that for timely planted acreage. If the 
amount of premium you are required to pay (gross premium less our 
subsidy) for such acreage exceeds the liability, coverage for those 
acres will not be provided (no premium will be due and no indemnity will 
be paid).
    (d) Any acreage on which an insured cause of loss is a material 
factor in preventing completion of planting, as specified in the 
definition of ``planted acreage'' (e.g., seed is broadcast on the soil 
surface but cannot be incorporated) will be considered as acreage 
planted after the final planting date and the production guarantee will 
be calculated in accordance with section 16(b)(1).

                         17. Prevented Planting

    (a) Unless limited by the policy provisions, a prevented planting 
payment may be made to you for eligible acreage if:
    (1) You were prevented from planting the insured crop by an insured 
cause that occurs:
    (i) On or after the sales closing date contained in the Special 
Provisions for the insured crop in the county for the crop year the 
application for insurance is accepted; or
    (ii) For any subsequent crop year, on or after the sales closing 
date for the previous crop year for the insured crop in the county, 
provided insurance has been in force continuously since that date. 
Cancellation for the purpose of transferring the policy to a different 
insurance provider for the subsequent crop year will not be considered a 
break in continuity for the purpose of the preceding sentence;
    (2) You include any acreage of the insured crop that was prevented 
from being planted on your acreage report; and
    (3) You did not plant the insured crop during or after the late 
planting period. If such acreage was planted to the insured crop during 
or after the late planting period, it is covered under the late planting 
provisions.
    (b) The actuarial documents may contain additional levels of 
prevented planting coverage that you may purchase for the insured crop:
    (1) Such purchase must be made on or before the sales closing date.
    (2) If you do not purchase one of those additional levels by the 
sales closing date, you will receive the prevented planting coverage 
specified in the Crop Provisions.

[[Page 106]]

    (3) If you have a Catastrophic Risk Protection Endorsement for any 
crop, the additional levels of prevented planting coverage will not be 
available for that crop.
    (4) You may not increase your elected or assigned prevented planting 
coverage level for any crop year if a cause of loss that will or could 
prevent planting is evident prior to the time you wish to change your 
prevented planting coverage level.
    (c) The premium amount for acreage that is prevented from being 
planted will be the same as that for timely planted acreage. If the 
amount of premium you are required to pay (gross premium less our 
subsidy) for acreage that is prevented from being planted exceeds the 
liability on such acreage, coverage for those acres will not be provided 
(no premium will be due and no indemnity will be paid for such acreage).
    (d) Drought or failure of the irrigation water supply will be 
considered to be an insurable cause of loss for the purposes of 
prevented planting only if on the final planting date (or within the 
late planting period if you elect to try to plant the crop):
    (1) For non-irrigated acreage, the area that is prevented from being 
planted has insufficient soil moisture for germination of seed and 
progress toward crop maturity due to a prolonged period of dry weather. 
Prolonged precipitation deficiencies must be verifiable using 
information collected by sources whose business it is to record and 
study the weather, including, but not limited to, local weather 
reporting stations of the National Weather Service; or
    (2) For irrigated acreage, there is not a reasonable probability of 
having adequate water to carry out an irrigated practice.
    (e) The maximum number of acres that may be eligible for a prevented 
planting payment for any crop will be determined as follows:
    (1) The total number of acres eligible for prevented planting 
coverage for all crops cannot exceed the number of acres of cropland in 
your farming operation for the crop year, unless you are eligible for 
prevented planting coverage on double cropped acreage in accordance with 
section 17(f) (4) or (5). The eligible acres for each insured crop will 
be determined in accordance with the following table.

------------------------------------------------------------------------
                                                     Eligible acres if,
                               Eligible acres if,   in any of the 4 most
                              in any of the 4 most   recent crop years,
                               recent crop years,   you have not planted
                              you have planted any     any crop in the
                               crop in the county     county for which
        Type of crop           for which prevented   prevented planting
                               planting insurance       insurance was
                                was available or      available or have
                                 have received a       not received a
                               prevented planting    prevented planting
                               insurance guarantee   insurance guarantee
------------------------------------------------------------------------
(i) The crop is not required  (A) The maximum       (B) The number of
 to be contracted with a       number of acres       acres specified on
 processor to be insured.      certified for APH     your intended
                               purposes or           acreage report
                               reported for          which is submitted
                               insurance for the     to us by the sales
                               crop in any one of    closing date for
                               the 4 most recent     all crops you
                               crop years (not       insure for the crop
                               including reported    year and that is
                               prevented planting    accepted by us. The
                               acreage that was      total number of
                               planted to a          acres listed may
                               substitute crop       not exceed the
                               other than an         number of acres of
                               approved cover        cropland in your
                               crop). The number     farming operation
                               of acres determined   at the time you
                               above for a crop      submit the intended
                               may be increased by   acreage report. The
                               multiplying it by     number of acres
                               the ratio of the      determined above
                               total cropland        for a crop may only
                               acres that you are    be increased by
                               farming this year     multiplying it by
                               (if greater) to the   the ratio of the
                               total cropland        total cropland
                               acres that you        acres that you are
                               farmed in the         farming this year
                               previous year,        (if greater) to the
                               provided that you     number of acres
                               submit proof to us    listed on your
                               that for the          intended acreage
                               current crop year     report, if you meet
                               you have purchased    the conditions
                               or leased             stated in section
                               additional land or    17(e)(1)(i)(A).
                               that acreage will
                               be released from
                               any USDA program
                               which prohibits
                               harvest of a crop.
                               Such acreage must
                               have been
                               purchased, leased,
                               or released from
                               the USDA program,
                               in time to plant it
                               for the current
                               crop year using
                               good farming
                               practices. No cause
                               of loss that will
                               or could prevent
                               planting may be
                               evident at the time
                               the acreage is
                               purchased, leased,
                               or released from
                               the USDA program.
(ii)The crop must be          (A) The number of     (B) The number of
 contracted with a processor   acres of the crop     acres of the crop
 to be insured.                specified in the      as determined in
                               processor contract,   section
                               if the contract       17(e)(1)(ii)(A).
                               specifies a number
                               of acres contracted
                               for the crop year;
                               or the result of
                               dividing the
                               quantity of
                               production stated
                               in the processor
                               contract by your
                               approved yield, if
                               the processor
                               contract specifies
                               a quantity of
                               production that
                               will be accepted.
                               (For the purposes
                               of establishing the
                               number of prevented
                               planting acres, any
                               reductions applied
                               to the transitional
                               yield for failure
                               to certify acreage
                               and production for
                               four prior years
                               will not be used.).
------------------------------------------------------------------------


[[Page 107]]

    (2) Any eligible acreage determined in accordance with the table 
contained in section 17(e)(1) will be reduced by subtracting the number 
of acres of the crop (insured and uninsured) that are timely and late 
planted, including acreage specified in section 16(b).
    (f) Regardless of the number of eligible acres determined in section 
17(e), prevented planting coverage will not be provided for any acreage:
    (1) That does not constitute at least 20 acres or 20 percent of the 
insurable crop acreage in the unit, whichever is less. Any prevented 
planting acreage within a field that contains planted acreage will be 
considered to be acreage of the same crop, type, and practice that is 
planted in the field unless the acreage that was prevented from being 
planted constitutes at least 20 acres or 20 percent of the total 
insurable acreage in the field and you produced both crops, crop types, 
or followed both practices in the same field in the same crop year 
within any of the 4 most recent crop years;
    (2) For which the actuarial documents do not designate a premium 
rate unless a written agreement designates such premium rate;
    (3) Used for conservation purposes or intended to be left unplanted 
under any program administered by the USDA;
    (4) On which the insured crop is prevented from being planted, if 
you or any other person receives a prevented planting payment for any 
crop for the same acreage in the same crop year (excluding share 
arrangements), unless you have coverage greater than the Catastrophic 
Risk Protection Plan of Insurance and have records of acreage and 
production that are used to determine your approved yield that show the 
acreage was double-cropped in each of the last 4 years in which the 
insured crop was grown on the acreage;
    (5) On which the insured crop is prevented from being planted, if 
any crop from which any benefit is derived under any program 
administered by the USDA is planted and fails, or if any crop is 
harvested, hayed or grazed on the same acreage in the same crop year 
(other than a cover crop which may be hayed or grazed after the final 
planting date for the insured crop), unless you have coverage greater 
than that applicable to the Catastrophic Risk Protection Plan of 
Insurance and have records of acreage and production that are used to 
determine your approved yield that show the acreage was double-cropped 
in each of the last 4 years in which the insured crop was grown on the 
acreage (If one of the crops being double-cropped is not insurable, 
other verifiable records of it being planted may be used);
    (6) Of a crop that is prevented from being planted if a cash lease 
payment is also received for use of the same acreage in the same crop 
year (not applicable if acreage is leased for haying or grazing only) 
(If you state that you will not be cash renting the acreage and claim a 
prevented planting payment on the acreage, you could be subject to civil 
and criminal sanctions if you cash rent the acreage and do not return 
the prevented planting payment for it);
    (7) For which planting history or conservation plans indicate that 
the acreage would have remained fallow for crop rotation purposes;
    (8) That exceeds the number of acres eligible for a prevented 
planting payment;
    (9) That exceeds the number of eligible acres physically available 
for planting;
    (10) For which you cannot provide proof that you had the inputs 
available to plant and produce a crop with the expectation of at least 
producing the yield used to determine the production guarantee or amount 
of insurance (Evidence that you have previously planted the crop on the 
unit will be considered adequate proof unless your planting practices or 
rotational requirements show that the acreage would have remained fallow 
or been planted to another crop);
    (11) Based on an irrigated practice production guarantee or amount 
of insurance unless adequate irrigation facilities were in place to 
carry out an irrigated practice on the acreage prior to the insured 
cause of loss that prevented you from planting. Acreage with an 
irrigated practice production guarantee will be limited to the number of 
acres allowed for that practice under sections 17(e) and (f); or
    (12) Based on a crop type that you did not plant, or did not receive 
a prevented planting insurance guarantee for, in at least one of the 
four most recent crop years. Types for which separate price elections, 
amounts of insurance, or production guarantees are available must be 
included in your APH database in at least one of the four most recent 
crop years, or crops that do not require yield certification (crops for 
which the insurance guarantee is not based on APH) must be reported on 
your acreage report in at least one of the four most recent crop years 
except as allowed in section 17(e)(1)(i)(B). We will limit prevented 
planting payments based on a specific crop type to the number of acres 
allowed for that crop type as specified in sections 17(e) and (f).
    (g) If you purchased an additional coverage policy for a crop, and 
you executed a High Risk Land Exclusion Option that separately insures 
acreage which has been designated as ``high-risk'' land by FCIC under a 
Catastrophic Risk Protection Endorsement for that crop, the maximum 
number of acres eligible for a prevented planting payment will be 
limited for each policy as specified in sections 17(e) and (f).
    (h) If you are prevented from planting a crop for which you do not 
have an adequate base of eligible prevented planting acreage,

[[Page 108]]

as determined in accordance with section 17(e)(1), your prevented 
planting production guarantee or amount of insurance, premium, and 
prevented planting payment will be based on the crops insured for the 
current crop year, for which you have remaining eligible prevented 
planting acreage. The crops used for this purpose will be those that 
result in a prevented planting payment most similar to the prevented 
planting payment that would have been made for the crop that was 
prevented from being planted.
    (1) For example, assume you were prevented from planting 200 acres 
of corn and have 100 acres eligible for a corn prevented planting 
guarantee that would result in a payment of $40 per acre. You also had 
50 acres of potato eligibility that would result in a $100 per acre 
payment, 90 acres of grain sorghum eligibility that would result in a 
$30 per acre payment, and 100 acres of soybean eligibility that would 
result in a $25 per acre payment. Your prevented planting coverage for 
the 200 acres would be based on 100 acres of corn ($40 per acre), 90 
acres of grain sorghum ($30 per acre), and 10 acres of soybeans ($25 per 
acre).
    (2) Prevented planting coverage will be allowed as specified in this 
section (17(h)) only if the crop that was prevented from being planted 
meets all policy provisions, except for having an adequate base of 
eligible prevented planting acreage. Payment may be made based on crops 
other than those that were prevented from being planted even though 
other policy provisions, including but not limited to, processor 
contract and rotation requirements, have not been met for the crop on 
which payment is being based.
    (i) The prevented planting payment for any eligible acreage within a 
unit will be determined by:
    (1) Multiplying the liability per acre for timely planted acreage of 
the insured crop (the amount of insurance per acre or the production 
guarantee per acre multiplied by the price election for the crop, or 
type if applicable) by the prevented planting coverage level percentage 
you elected, or that is contained in the Crop Provisions if you did not 
elect a prevented planting coverage level percentage;
    (2) Multiplying the result of section 17(i)(1) by the number of 
eligible prevented planting acres in the unit; and
    (3) Multiplying the result of section 17(i)(2) by your share.

                         18. Written Agreements

    Terms of this policy which are specifically designated for the use 
of written agreements may be altered by written agreement in accordance 
with the following:
    (a) You must apply in writing for each written agreement no later 
than the sales closing date, except as provided in section 18(e);
    (b) The application for a written agreement must contain all 
variable terms of the contract between you and us that will be in effect 
if the written agreement is not approved;
    (c) If approved, the written agreement will include all variable 
terms of the contract, including, but not limited to, crop type or 
variety, the guarantee, premium rate, and price election;
    (d) Each written agreement will only be valid for one crop year (If 
a written agreement is not specifically renewed the following year, 
insurance coverage for subsequent crop years will be in accordance with 
the printed policy); and
    (e) An application for a written agreement submitted after the sales 
closing date may be approved if you demonstrate your physical inability 
to apply prior to the sales closing date, or it is submitted in 
accordance with any regulation which may be promulgated under 7 CFR part 
400, and after inspection of the acreage by us, if required, it is 
determined that no loss has occurred and the crop is insurable in 
accordance with the policy and written agreement provisions.

                          19. Crops as Payment

    You must not abandon any crop to us. We will not accept any crop as 
compensation for payments due us.

                            For FCIC policies

                               20. Appeals

    All determinations required by the policy will be made by us. If you 
disagree with our determinations, you may obtain reconsideration of or 
appeal those determinations in accordance with appeal provisions 
published at 7 CFR part 11.

                         For reinsured policies

                             20. Arbitration

    (a) If you and we fail to agree on any factual determination, the 
disagreement will be resolved in accordance with the rules of the 
American Arbitration Association. Failure to agree with any factual 
determination made by FCIC must be resolved through the FCIC appeal 
provisions published at 7 CFR part 11.
    (b) No award determined by arbitration or appeal can exceed the 
amount of liability established or which should have been established 
under the policy.

      21. Access to Insured Crop and Records, and Record Retention

    (a) We reserve the right to examine the insured crop as often as we 
reasonably require.
    (b) For three years after the end of the crop year, you must retain, 
and provide upon

[[Page 109]]

our request, complete records of the harvesting, storage, shipment, 
sale, or other disposition of all the insured crop produced on each 
unit. This requirement also applies to the records used to establish the 
basis for the production report for each unit. You must also provide 
upon our request, separate records showing the same information for 
production from any acreage not insured. We may extend the record 
retention period beyond three years by notifying you of such extension 
in writing. Your failure to keep and maintain such records will, at our 
option, result in:
    (1) Cancellation of the policy;
    (2) Assignment of production to the units by us;
    (3) Combination of the optional units; or
    (4) A determination that no indemnity is due.
    (c) Any person designated by us will, at any time during the record 
retention period, have access:
    (1) To any records relating to this insurance at any location where 
such records may be found or maintained; and
    (2) To the farm.
    (d) By applying for insurance under the authority of the Act or by 
continuing insurance for which you previously applied, you authorize us, 
or any person acting for us, to obtain records relating to the insured 
crop from any person who may have custody of those records including, 
but not limited to, FSA offices, banks, warehouses, gins, cooperatives, 
marketing associations, and accountants. You must assist us in obtaining 
all records which we request from third parties.

                           22. Other Insurance

    (a) Other Like Insurance. You must not obtain any other crop 
insurance issued under the authority of the Act on your share of the 
insured crop. If we determine that more than one policy on your share is 
intentional, you may be subject to the sanctions authorized under this 
policy, the Act, or any other applicable statute. If we determine that 
the violation was not intentional, the policy with the earliest date of 
application will be in force and all other policies will be void. 
Nothing in this paragraph prevents you from obtaining other insurance 
not issued under the Act.
    (b) Other Insurance Against Fire. If you have other insurance, 
whether valid or not, against damage to the insured crop by fire during 
the insurance period, and you have not excluded coverage for fire from 
this policy, we will be liable for loss due to fire only for the smaller 
of:
    (1) The amount of indemnity determined pursuant to this policy 
without regard to such other insurance; or
    (2) The amount by which the loss from fire is determined to exceed 
the indemnity paid or payable under such other insurance.
    (c) For the purpose of subsection (b) of this section the amount of 
loss from fire will be the difference between the fair market value of 
the production of the insured crop on the unit involved before the fire 
and after the fire, as determined from appraisals made by us.

                   23. Conformity to Food Security Act

    Although your violation of a number of federal statutes, including 
the Act, may cause cancellation, termination, or voidance of your 
insurance contract, you should be specifically aware that your policy 
will be canceled if you are determined to be ineligible to receive 
benefits under the Act due to violation of the controlled substance 
provisions (title XVII) of the Food Security Act of 1985 (Pub. L. 99-
198) and the regulations promulgated under the Act by USDA. Your 
insurance policy will be canceled if you are determined, by the 
appropriate Agency, to be in violation of these provisions. We will 
recover any and all monies paid to you or received by you during your 
period of ineligibility, and your premium will be refunded, less a 
reasonable amount for expenses and handling not to exceed 20 percent of 
the premium paid or to be paid by you.

                            For FCIC policies

                           24. Amounts Due Us

    (a) Any amount illegally or erroneously paid to you or that is owed 
to us but is delinquent may be recovered by us through offset by 
deducting it from any loan or payment due you under any Act of Congress 
or program administered by any United States Government Agency, or by 
other collection action.
    (b) Interest will accrue at the rate of 1.25 percent simple interest 
per calendar month, or any part thereof, on any unpaid premium amount 
due us. With respect to any premiums owed, interest will start to accrue 
on the first day of the month following the premium billing date 
specified in the Special Provisions.
    (c) For the purpose of any other amounts due us, such as repayment 
of indemnities found not to have been earned:
    (1) Interest will start on the date that notice is issued to you for 
the collection of the unearned amount;
    (2) Amounts found due under this paragraph will not be charged 
interest if payment is made within 30 days of issuance of the notice by 
us;
    (3) The amount will be considered delinquent if not paid within 30 
days of the date the notice is issued by us;

[[Page 110]]

    (4) Penalties and interest will be charged in accordance with 31 
U.S.C. 3717 and 4 CFR part 102; and
    (5) The penalty for accounts more than 90 days delinquent is an 
additional 6 percent per annum.
    (d) Interest on any amount due us found to have been received by you 
because of fraud, misrepresentation or presentation by you of a false 
claim will start on the date you received the amount with the additional 
6 percent penalty beginning on the 31st day after the notice of amount 
due is issued to you. This interest is in addition to any other amount 
found to be due under any other federal criminal or civil statute.
    If we determine that it is necessary to contract with a collection 
agency, refer the debt to government collection centers, the Department 
of Treasury Offset Program, or to employ an attorney to assist in 
collection, you agree to pay all the expenses of collection.
    (f) All amounts paid will be applied first to expenses of collection 
if any, second to the reduction of any penalties which may have been 
assessed, then to reduction of accrued interest, and finally to 
reduction of the principal balance.

                         For reinsured policies

                           24. Amounts Due Us

    (a) Interest will accrue at the rate of 1.25 percent simple interest 
per calendar month, or any portion thereof, on any unpaid amount due us. 
For the purpose of premium amounts due us, the interest will start to 
accrue on the first day of the month following the premium billing date 
specified in the Special Provisions.
    (b) For the purpose of any other amounts due us, such as repayment 
of indemnities found not to have been earned, interest will start to 
accrue on the date that notice is issued to you for the collection of 
the unearned amount. Amounts found due under this paragraph will not be 
charged interest if payment is made within 30 days of issuance of the 
notice by us. The amount will be considered delinquent if not paid 
within 30 days of the date the notice is issued by us.
    (c) All amounts paid will be applied first to expenses of collection 
(see subsection (d) of this section) if any, second to the reduction of 
accrued interest, and then to the reduction of the principal balance.
    (d) If we determine that it is necessary to contract with a 
collection agency or to employ an attorney to assist in collection, you 
agree to pay all of the expenses of collection.
    (e) Amounts owed to us by you may be collected in part through 
administrative offset from payments you receive from United States 
government agencies in accordance with 31 U.S.C. chapter 37.

                       25. Legal Action Against Us

    (a) You may not bring legal action against us unless you have 
complied with all of the policy provisions.
    (b) If you do take legal action against us, you must do so within 12 
months of the date of denial of the claim. Suit must be brought in 
accordance with the provisions of 7 U.S.C. 1508(j).
    (c) Your right to recover damages (compensatory, punitive, or 
other), attorney's fees, or other charges is limited or excluded by this 
contract or by Federal Regulations.

                  26. Payment and Interest Limitations

    (a) Under no circumstances will we be liable for the payment of 
damages (compensatory, punitive, or other), attorney's fees, or other 
charges in connection with any claim for indemnity, whether we approve 
or disapprove such claim.
    (b) We will pay simple interest computed on the net indemnity 
ultimately found to be due by us or by a final judgment of a court of 
competent jurisdiction, from and including the 61st day after the date 
you sign, date, and submit to us the properly completed claim on our 
form. Interest will be paid only if the reason for our failure to timely 
pay is NOT due to your failure to provide information or other material 
necessary for the computation or payment of the indemnity. The interest 
rate will be that established by the Secretary of the Treasury under 
section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611) and 
published in the Federal Register semiannually on or about January 1 and 
July 1 of each year, and may vary with each publication.

               27. Concealment, Misrepresentation or Fraud

    (a) If you have falsely or fraudulently concealed the fact that you 
are ineligible to receive benefits under the Act or if you or anyone 
assisting you has intentionally concealed or misrepresented any material 
fact relating to this policy:
    (1) This policy will be voided; and
    (2) You may be subject to remedial sanctions in accordance with 7 
CFR part 400, subpart R.
    (b) Even though the policy is void, you may still be required to pay 
20 percent of the premium due under the policy to offset costs incurred 
by us in the service of this policy. If previously paid, the balance of 
the premium will be returned.
    (c) Voidance of this policy will result in you having to reimburse 
all indemnities paid for the crop year in which the voidance was 
effective.
    (d) Voidance will be effective on the first day of the insurance 
period for the crop year in which the act occurred and will not affect 
the policy for subsequent crop years unless a

[[Page 111]]

violation of this section also occurred in such crop years.

             28. Transfer of Coverage and Right to Indemnity

    If you transfer any part of your share during the crop year, you may 
transfer your coverage rights, if the transferee is eligible for crop 
insurance. We will not be liable for any more than the liability 
determined in accordance with your policy that existed before the 
transfer occurred. The transfer of coverage rights must be on our form 
and will not be effective until approved by us in writing. Both you and 
the transferee are jointly and severally liable for the payment of the 
premium and administrative fees. The transferee has all rights and 
responsibilities under this policy consistent with the transferee's 
interest.

                       29. Assignment of Indemnity

    You may assign to another party your right to an indemnity for the 
crop year. The assignment must be on our form and will not be effective 
until approved in writing by us. The assignee will have the right to 
submit all loss notices and forms as required by the policy. If you have 
suffered a loss from an insurable cause and fail to file a claim for 
indemnity within 60 days after the end of the insurance period, the 
assignee may submit the claim for indemnity not later than 15 days after 
the 60-day period has expired. We will honor the terms of the assignment 
only if we can accurately determine the amount of the claim. However, no 
action will lie against us for failure to do so.

          30. Subrogation (Recovery of Loss From a Third Party)

    Since you may be able to recover all or a part of your loss from 
someone other than us, you must do all you can to preserve this right. 
If we pay you for your loss, your right to recovery will, at our option, 
belong to us. If we recover more than we paid you plus our expenses, the 
excess will be paid to you.

              31. Applicability of State and Local Statutes

    If the provisions of this policy conflict with statutes of the State 
or locality in which this policy is issued, the policy provisions will 
prevail. State and local laws and regulations in conflict with federal 
statutes, this policy, and the applicable regulations do not apply to 
this policy.

                        32. Descriptive Headings

    The descriptive headings of the various policy provisions are 
formulated for convenience only and are not intended to affect the 
construction or meaning of any of the policy provisions.

                               33. Notices

    (a) All notices required to be given by you must be in writing and 
received by your crop insurance agent within the designated time unless 
otherwise provided by the notice requirement. Notices required to be 
given immediately may be by telephone or in person and confirmed in 
writing. Time of the notice will be determined by the time of our 
receipt of the written notice. If the date by which you are required to 
submit a report or notice falls on Saturday, Sunday, or a Federal 
holiday, or if your agent's office is, for any reason, not open for 
business on the date you are required to submit such notice or report, 
such notice or report must be submitted on the next business day.
    (b) All notices and communications required to be sent by us to you 
will be mailed to the address contained in your records located with 
your crop insurance agent. Notice sent to such address will be 
conclusively presumed to have been received by you. You should advise us 
immediately of any change of address.

                            34. Unit Division

    (a) You may elect an enterprise unit or a whole farm unit if the 
Special Provisions allow such unit structure, subject to the following:
    (1) You must make such election on or before the earliest sales 
closing date for the insured crops and report such unit structure to us 
in writing. Your unit selection will remain in effect from year to year 
unless you notify us in writing by the earliest sales closing date for 
the crop year for which you wish to change this election. These units 
may not be further divided except as specified herein;
    (2) For enterprise units:
    (i) You must report the acreage for each optional or basic unit on 
your acreage report that comprises the enterprise unit;
    (ii) These basic units or optional units that comprise the 
enterprise unit must each have insurable acreage of the same crop in the 
crop year insured;
    (iii) You must comply with all reporting requirements for the 
enterprise unit (You must maintain any required production records on a 
basic or optional unit basis if you wish to change your unit structure 
for any subsequent crop year);
    (iv) The qualifying basic units or optional units may not be 
combined into an enterprise unit on any basis other than as described 
herein;
    (v) If you do not comply with the reporting provisions for the 
enterprise unit, your yield for the enterprise unit will be determined 
in accordance with section 3(c)(1); and
    (vi) If you do not qualify for an enterprise unit when the acreage 
is reported, we will assign the basic unit structure.

[[Page 112]]

    (3) For a whole farm unit:
    (i) You must report on your acreage report the acreage for each 
optional or basic unit for each crop produced in the county that 
comprises the whole farm unit; and
    (ii) Although you may insure all of your crops under a whole farm 
unit, you will be required to pay separate applicable administrative 
fees for each crop included in the whole farm unit.
    (b) Unless limited by the Crop Provisions or Special Provisions, a 
basic unit as defined in section 1 of the Basic Provisions may be 
divided into optional units if, for each optional unit, you meet the 
following:
    (1) You must plant the crop in a manner that results in a clear and 
discernible break in the planting pattern at the boundaries of each 
optional unit;
    (2) All optional units you select for the crop year are identified 
on the acreage report for that crop year (Units will be determined when 
the acreage is reported but may be adjusted or combined to reflect the 
actual unit structure when adjusting a loss. No further unit division 
may be made after the acreage reporting date for any reason);
    (3) You have records, that are acceptable to us, of planted acreage 
and the production from each optional unit for at least the last crop 
year used to determine your production guarantee;
    (4) You have records of marketed or stored production from each 
optional unit maintained in such a manner that permits us to verify the 
production from each optional unit, or the production from each optional 
unit is kept separate until loss adjustment is completed by us; and
    (c) Each optional unit must meet one or more of the following, 
unless otherwise specified in the Crop Provisions or allowed by written 
agreement:
    (1) Optional units may be established if each optional unit is 
located in a separate section. In the absence of sections, we may 
consider parcels of land legally identified by other methods of measure 
such as Spanish grants, as the equivalents of sections for unit 
purposes. In areas which have not been surveyed using sections, section 
equivalents or in areas where boundaries are not readily discernible, 
each optional unit must be located in a separate FSA farm serial number; 
and
    (2) In addition to, or instead of, establishing optional units by 
section, section equivalent or FSA farm serial number, optional units 
may be based on irrigated and non-irrigated acreage. To qualify as 
separate irrigated and non-irrigated optional units, the non-irrigated 
acreage may not continue into the irrigated acreage in the same rows or 
planting pattern. The irrigated acreage may not extend beyond the point 
at which the irrigation system can deliver the quantity of water needed 
to produce the yield on which the guarantee is based, except the corners 
of a field in which a center-pivot irrigation system is used may be 
considered as irrigated acreage if the corners of a field in which a 
center-pivot irrigation system is used do not qualify as a separate non-
irrigated optional unit. In this case, production from both practices 
will be used to determine your approved yield.
    (d) Optional units are not available for crops insured under a 
Catastrophic Risk Protection Endorsement.
    (e) If you do not comply fully with the provisions in this section, 
we will combine all optional units that are not in compliance with these 
provisions into the basic unit from which they were formed. We will 
combine the optional units at any time we discover that you have failed 
to comply with these provisions. If failure to comply with these 
provisions is determined by us to be inadvertent, and the optional units 
are combined into a basic unit, that portion of the additional premium 
paid for the optional units that have been combined will be refunded to 
you for the units combined.
    35. Multiple Benefits
    (a) If you are eligible to receive an indemnity under anadditional 
coverage plan of insurance and are also eligible to receive benefits for 
the same loss under any other USDA program, you may receive benefits 
under both programs, unless specifically limited by the crop insurance 
contract or by law.
    (b) The total amount received from all such sources may not exceed 
the amount of your actual loss. The total amount of the actual loss is 
the difference between the fair market value of the insured commodity 
before and after the loss, based on your production records and the 
highest price election or amount of insurance available for the crop.
    (c) FSA will determine and pay the additional amount due you for any 
applicable USDA program after first considering the amount of any crop 
insurance indemnity.
    36. Substitution of Yields.
    You may elect to exclude actual yields used to calculate the APH 
yield that are less than 60 percent of the applicable transitional yield 
(T-yield), as defined in 7 CFR 400.52. Each excluded actual yield will 
be replaced with a yield equal to 60 percent of the applicable T-yield 
for the county. The replacement yields will be used in the same manner 
as actual yields for the purpose of calculating the APH yield. Premium 
rates for approved yields that are adjusted under this section will be 
based on the producer's yield prior to replacing the actual yields or 
such other

[[Page 113]]

basis as determined appropriate by FCIC.

[56 FR 1351, Jan. 14, 1991, as amended at 58 FR 58262, 58263, Nov. 1, 
1993; 59 FR 42751, Aug. 19, 1994; 62 FR 65154, Dec. 10, 1997; 63 FR 
40634, July 30, 1998; 63 FR 66712, Dec. 3, 1998; 64 FR 40742, July 28, 
1999; 65 FR 40485, June 30, 2000]



Sec. 457.9  Appropriation contingency.

    Notwithstanding the cancellation date stated in the policy, if there 
are insufficient funds appropriated by the Congress to deliver the crop 
insurance program, the policy will automatically terminate without 
liability.

[59 FR 45972, Sept. 6, 1994]



Sec. 457.10-457.100  [Reserved]



Sec. 457.101  Small grains crop insurance.

    The small grains crop insurance provisions for the 2003 and 
succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                      Small Grains Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Adequate stand--A population of live plants per unit of acreage 
which will produce at least the yield used to establish your production 
guarantee.
    Harvest--Combining or threshing the insured crop for grain or 
cutting for hay or silage on any acreage. A crop which is swathed prior 
to combining is not considered harvested.
    Initially planted--The first occurrence of planting the insured crop 
on insurable acreage for the crop year.
    Latest final planting date--
    (1) The final planting date for spring-planted acreage in all 
counties for which the Special Provisions designate a final planting 
date for spring-planted acreage only;
    (2) The final planting date for fall-planted acreage in all counties 
for which the Special Provisions designate a final planting date for 
fall-planted acreage only; or
    (3) The final planting date for spring-planted acreage in all 
counties for which the Special Provisions designate final planting dates 
for both spring-planted and fall-planted acreage.
    Local market price--The cash grain price per bushel for the U.S. No. 
2 grade of the insured crop offered by buyers in the area in which you 
normally market the insured crop. The local market price will reflect 
the maximum limits of quality deficiencies allowable for the U.S. No. 2 
grade of the insured crop. Factors not associated with grading under the 
Official United States Standards for Grain, including but not limited to 
protein, oil or moisture content, or milling quality will not be 
considered.
    Nurse crop (companion crop)--A crop planted into the same acreage as 
another crop, that is intended to be harvested separately, and which is 
planted to improve growing conditions for the crop with which it is 
grown.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, except for flax, land on which seed is initially 
spread onto the soil surface by any method and subsequently is 
mechanically incorporated into the soil in a timely manner and at the 
proper depth will be considered planted. Flax seed must initially be 
planted in rows to be considered planted, unless otherwise provided by 
the Special Provisions, actuarial documents, or by written agreement.
    Prevented planting--In lieu of the definition contained in the Basic 
Provisions, failure to plant the insured crop with proper equipment by 
the latest final planting date designated in the Special Provisions for 
the insured crop in the county or by the end of the late planting 
period. You must have been prevented from planting the insured crop due 
to an insured cause of loss that also prevented most producers from 
planting on acreage with similar characteristics in the surrounding 
area.
    Sales closing date--In lieu of the definition contained in the Basic 
Provisions, a date contained in the Special Provisions by which an 
application must be filed and by which you may change your crop 
insurance coverage for a crop year. If the Special Provisions provide a 
sales closing date for both winter and spring types of the insured crop 
and you plant any insurable acreage of the winter type, you may not 
change your crop insurance coverage after the sales closing date for the 
winter type.
    Small grains-- Wheat, barley, oats, rye, and flax.
    Swathed-- Severance of the stem and grain head from the ground 
without removal of the seed from the head and placing into a windrow.

                            2. Unit Division

    In addition to the requirements of section 34(b) of the Basic 
Provisions, for wheat only, in addition to, or instead of, establishing 
optional units by section, section equivalent or FSA farm serial number 
and by irrigated and non-irrigated practices, optional units may

[[Page 114]]

be established if each optional unit contains only initially planted 
winter wheat or only initially planted spring wheat. Optional units may 
be established in this manner only in counties having both winter and 
spring type final planting dates as designated in the Special 
Provisions.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements under section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for determining Indemnities) of 
the Basic Provisions (Sec. 457.8) you may select only one price election 
for each crop insured under this policy in the county.

                           4. Contract Changes

    The contract change date is December 31 preceding the cancellation 
date for counties with an April 15 cancellation date and June 30 
preceding the cancellation date for all other counties (see the 
provisions under section 4. (Contract changes) in the Basic Provisions 
Sec. 457.8).

                  5. Cancellation and Termination Dates

    The cancellation and termination dates are:

------------------------------------------------------------------------
   Crop, state and county       Cancellation date     Termination date
------------------------------------------------------------------------
Wheat:
    All Colorado counties     September 30          September 30.
     except Alamosa,
     Archuleta, Conejos,
     Costilla, Custer,
     Delta, Dolores, Eagle,
     Garfield, Grand, La
     Plata, Mesa, Moffat,
     Montezuma, Montrose,
     Ouray, Pitkin, Rio
     Blanco, Rio Grande,
     Routt, Saguache, and
     San Miguel Counties;
     all Iowa Counties
     except Plymouth,
     Cherokee, Buena Vista,
     Pocahontas, Humbolt,
     Wright, Franklin,
     Butler, Black Hawk,
     Buchanan, Delaware, and
     Dubuque Counties and
     all Iowa counties north
     thereof; all Wisconsin
     Counties except
     Trempealeau, Jackson,
     Wood, Portage, Waupaca,
     Outagamie, Brown, and
     Kewaunee Counties and
     all Wisconsin counties
     north and west thereof;
     and all other states
     except Alaska, Arizona,
     California,
     Connecticut, Idaho,
     Maine, Massachusetts,
     Minnesota, Montana,
     Nevada, New Hampshire,
     New York, North Dakota,
     Oregon, Rhode Island,
     South Dakota, Utah,
     Vermont, Washington,
     and Wyoming.
    Archuleta, Custer,        September 30          November 30.
     Delta, Dolores, Eagle,
     Garfield, Grand, La
     Plata, Mesa, Moffat,
     Montezuma, Montrose,
     Ouray, Pitkin, Rio
     Blanco, Routt, and San
     Miguel Counties,
     Colorado; Connecticut;
     Idaho; Plymouth,
     Cherokee, Buena Vista,
     Pocahontas, Humboldt,
     Wright, Franklin,
     Butler, Black Hawk,
     Buchanan, Delaware, and
     Dubuque Counties, Iowa,
     and all Iowa counties
     north thereof;
     Massachusetts; all
     Montana counties except
     Daniels, Roosevelt,
     Sheridan, and Valley
     Counties; New York;
     Oregon; Rhode Island;
     all South Dakota
     counties except
     Harding, Perkins,
     Corson, Walworth,
     Edmonds, Faulk, Spink,
     Beadle, Jerauld,
     Aurora, Douglas, and
     Bon Homme Counties and
     all South Dakota
     counties north and east
     thereof; Washington;
     and all Wyoming
     counties except Big
     Horn, Fremont, Hot
     Springs, Park, and
     Washakie Counties.
    Matanuska-Susitna         October 31            November 30.
     County, Alaska;
     Arizona; California;
     Nevada; and Utah.
    All Alaska Counties       April 15              April 15.
     except Matanuska-
     Susitna County;
     Alamosa, Conejos,
     Costilla, Rio Grande,
     and Saguache Counties,
     Colorado; Maine;
     Minnesota; Daniels,
     Roosevelt, Sheridan,
     and Valley Counties,
     Montana; New Hampshire;
     North Dakota; Harding,
     Perkins, Corson,
     Walworth, Edmunds,
     Faulk, Spink, Beadle,
     Jerauld, Aurora,
     Douglas, and Bon Homme
     Counties, South Dakota,
     and all South Dakota
     counties north and east
     thereof; Vermont;
     Trempealeau, Jackson,
     Wood, Portage, Waupaca,
     Outagamie, Brown, and
     Kewaunee Counties,
     Wisconsin, and all
     Wisconsin counties
     north and west thereof;
     Big Horn, Fremont, Hot
     Springs, Park, and
     Washakie Counties,
     Wyoming.
Barley:
    All New Mexico counties   September 30          September 30.
     except Taos County;
     Oklahoma, Missouri,
     Illinois, Indiana,
     Ohio, Pennsylvania, New
     Jersey, and all states
     south and east thereof.
    Kit Carson, Lincoln,      September 30          November 30.
     Elbert, El Paso,
     Pueblo, Las Animas
     Counties, Colorado and
     all Colorado Counties
     south and east thereof;
     Connecticut; Kansas;
     Massachusetts; and New
     York.
    Arizona; California; and  October 31            November 30.
     Clark and Nye Counties,
     Nevada.
    All Colorado counties     April 15              April 15.
     except Kit Carson,
     Lincoln, Elbert, El
     Paso, Pueblo, and Las
     Animas Counties and all
     Colorado counties south
     and east thereof; all
     Nevada counties except
     Clark and Nye Counties;
     Taos County, New
     Mexico; and all other
     states except: Arizona,
     California,
     Connecticut, Kansas,
     Massachusetts, New
     York; and (except)
     Oklahoma, Missouri,
     Illinois, Indiana,
     Ohio, Pennsylvania, and
     New Jersey and all
     states south and east
     thereof.

[[Page 115]]

 
Oats:
    Alabama; Arkansas;        September 30          September 30.
     Florida; Georgia;
     Louisiana; Mississippi;
     All New Mexico counties
     except Taos County;
     North Carolina;
     Oklahoma; South
     Carolina; Tennessee;
     Texas; and Patrick,
     Franklin, Pittsylvania,
     Campbell, Appomattox,
     Fluvanna, Buckingham,
     Louisa, Spotsylvania,
     Caroline, Essex, and
     Westmoreland Counties,
     Virginia, and all
     Virginia counties east
     thereof.
    Arizona; All California   October 31            October 31.
     counties except Del
     Norte, Humboldt,
     Lassen, Modoc, Plumas,
     Shasta, Siskiyou and
     Trinity Counties.
    Del Norte, Humbolt,       April 15              April 15.
     Lassen, Modoc, Plumas,
     Shasta, Siskiyou, and
     Trinity Counties,
     California; Taos
     County, New Mexico; all
     Virginia counties
     except Patrick,
     Franklin, Pittsylvania,
     Campbell, Attomattox,
     Fluvanna, Buckingham,
     Louisa, Spotsylvania,
     Caroline, Essex, and
     Westmoreland Counties
     and all Virginia
     counties east thereof;
     and all other except
     Alabama, Arizona,
     Arkansas, Florida,
     Georgia, Louisiana,
     Mississippi, North
     Carolina, Oklahoma,
     South Carolina,
     Tennessee, and Texas.
Rye:
    All states..............  September 30          September 30.
Flax:
    All states..............  April 15              April 15.
------------------------------------------------------------------------

                             6. Insured Crop

    (a) The crop insured will be each small grain you elect to insure, 
that is grown in the county on insurable acreage, and for which premium 
rates are provided by the actuarial documents:
    (1) In which you have a share;
    (2) That is planted for harvest as grain (a grain mixture in which 
barley or oats is the predominate grain may also be insured if allowed 
by the Barley or Oat Special Provisions, or if we agree in writing to 
insure such mixture. The crop insured will be the grain which is 
predominate in the mixture. The production from such mixture will be 
considered as the predominate grain on a weight basis);
    (3) That is not:
    (i) Interplanted with another crop except as allowed in paragraph 
6.(a)(2);
    (ii) Planted into an established grass or legume; or
    (iii) Planted as a nurse crop, unless planted as a nurse crop for 
new forage seeding, but only if seeded at a normal rate and intended for 
harvest as grain.
    (4) We may agree, in writing, to insure a crop prohibited under 
paragraph 6.(a)(3) if you so request. Your request to insure such crop 
must be in writing, and submitted to your agent not later than 15 days 
after the acreage reporting date.
    (b) If you anticipate destroying any acreage prior to harvest you:
    (1) May report all planted acreage when you report your acreage for 
the crop year and specify any acreage to be destroyed as uninsurable 
acreage. (By doing so, no coverage will be considered to have attached 
on the specified acreage and no premium will be due for such acreage. If 
you do not destroy such acreage, you will be subject to the under-
reporting provisions contained in section 6 of the Basic Provisions); or
    (2) If the actuarial documents provide a reduced premium rate for 
acreage destroyed by a date designated in the Special Provisions, you 
may report all planted acreage as insurable when you report your acreage 
for the crop year. Premium will be due on all the acreage. Your premium 
amount will be reduced by the amount shown on the Actuarial Documents 
for any acreage you destroy prior to a date designated in the Special 
Provisions if you do not claim an indemnity on such acreage. In 
accordance with subsection 14.(b) of the Basic Provisions (Sec. 457.8), 
you must obtain our consent before and give us notice after you destroy 
any of the insured crop so your acreage report can be revised to make 
you eligible for this reduction in premium.
    (c) In counties for which the Wheat Special Provisions designate 
both fall and spring final planting dates, you may elect a winter 
coverage endorsement for wheat. This endorsement provides two options 
for alternative coverage for wheat that is damaged between the fall 
final planting date and the spring final planting date. Coverage under 
the endorsement will be effective only if you designate the coverage 
option you elect by executing the endorsement by the sales closing date 
for winter wheat in the county.

                           7. Insurance Period

    In lieu of the requirements under section 11 (Insurance Period) of 
the Basic Provisions (Sec. 457.8), and subject to any provisions 
provided by the Wheat crop insurance winter coverage endorsement 
(Sec. 457.102) if you have elected such endorsement, the insurance 
period is as follows:
    (a) Insurance attaches on each unit or part thereof on the later of 
the date we accept your application or the date the insured crop is 
planted.

[[Page 116]]

    (1) For oats, rye and flax, the following limitations apply:
    (i) The acreage must be planted on or before the final planting date 
designated in the Special Provisions for the insured crop except as 
allowed in section 12 of these Crop Provisions and section 16 of the 
Basic Provisions.
    (ii) Any acreage of the insured crop damaged before the final 
planting date, to the extent that producers in the surrounding area 
would not normally further care for the crop, must be replanted unless 
we agree that it is not practical to replant.
    (2) For barley and wheat, the following limitations apply:
    (i) The acreage must be planted on or before the final planting date 
designated in the Special Provisions for the type (winter or spring) 
except as allowed in section 12 of these Crop Provisions and section 16 
of the Basic Provisions.
    (ii) Whenever the Special Provisions designate only a fall final 
planting date, any acreage of winter barley or wheat damaged before such 
final planting date, to the extent that growers in the area would 
normally not further care for the crop, must be replanted to a winter 
type of the insured crop unless we agree that replanting is not 
practical.
    (iii) Whenever the Special Provisions designate both fall and spring 
final planting dates, winter barley or wheat planted on or before the 
final planting date which is damaged:
    (A) Before the fall planting final planting date, to the extent that 
growers in the area would normally not further care for the crop, must 
be replanted to a winter type of the insured crop unless we agree that 
replanting is not practical.
    (B) On or after the fall final planting date, but before the spring 
final planting date, to the extent that growers in the area would 
normally not further care for the crop, must be replanted to an 
appropriate variety of the insured crop unless we agree that replanting 
is not practical.
    If you have elected coverage under one of the available wheat winter 
coverage options available in the county, the insurance period for wheat 
will be in accordance with the selected options.
    (iv) Whenever the Special Provisions designate a spring final 
planting date, any acreage of spring barley or wheat damaged before such 
final planting date, to the extent that growers in the area would 
normally not further care for the crop, must be replanted to a spring 
type of the insured crop unless we agree that replanting is not 
practical.
    (v) Whenever the Special Provisions designate only a spring final 
planting date, any acreage of fall planted barley or wheat is not 
insured unless you request such coverage and we agree in writing that 
the acreage has an adequate stand in the spring to produce the yield 
used to determine your production guarantee. Insurance will then attach 
to acreage having an adequate stand on the earlier of the spring final 
planting date or the date we agree to accept the acreage for insurance. 
If such fall planted acreage is not to be insured it must be recorded on 
the acreage report as an uninsured fall planted crop.
    (b) Insurance ends on each unit at the earliest of:
    (1) Total destruction of the insured crop on the unit;
    (2) Harvest of the unit;
    (3) Final adjustment of a loss on the unit;
    (4) September 25 following planting in Alaska, or October 31 of the 
calendar year in which the crop is normally harvested in all other 
states; or
    (5) Abandonment of the crop on the unit.

                            8. Causes of Loss

    In addition to the provisions under section 12 (Causes of Loss) of 
the Basic Provisions, any loss covered by this policy must occur within 
the insurance period.
    The specific causes of loss for small grains are:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage allowed because of insufficient or 
improper application of pest control measures;
    (d) Plant disease, but not damage allowed because of insufficient or 
improper application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply.

                         9. Replanting Payments

    (a) A replant payment for wheat only is allowed as follows:
    (1) You comply with all requirements regarding replanting payments 
contained under section 13 (Replanting Payment) of the Basic Provisions 
and in any winter coverage endorsement for which you are eligible and 
which you have elected;
    (2) The wheat must be damaged by an insurable cause of loss to the 
extent that the remaining stand will not produce at least 90 percent of 
the production guarantee for the acreage;
    (3) The acreage must have been initially planted to spring wheat in 
those counties with only a spring final planting date;
    (4) The damage must occur after the fall final planting date in 
those counties where both a fall and spring final planting date are 
designated;
    (5) Replanting must take place not later than 25 days after the 
spring final planting date; and
    (6) The replant wheat must be seeded at a rate that is normal for 
initially planted

[[Page 117]]

wheat (if new seed is planted at a reduced seeding rate into a partially 
damaged stand of wheat, the acreage will not be eligible for a 
replanting payment).
    (b) No replanting payment will be made for acreage initially planted 
to winter wheat in any county for which the Special Provisions contain 
only a fall final planting date.
    (c) In accordance with subsection 13.(c) of the Basic Provisions 
(Sec. 457.8), the maximum amount of the replanting payment per acre will 
be the lesser of 20 percent (20%) of the production guarantee or 3 
bushels, multiplied by your price election multiplied by your share.
    (d) When wheat is replanted using a practice that is uninsurable for 
an original planting, the liability for the unit will be reduced by the 
amount of the replanting payment. The premium amount will not be 
reduced.

                10. Duties in the Event of Damage or Loss

    In addition to your duties under section 14 of the Basic Provisions 
(Sec. 457.8), if you initially discover damage to any insured crop 
within 15 days of, or during harvest, you must leave representative 
samples of the unharvested crop for our inspection. The samples must be 
at least 10 feet wide and the entire length of each field in the unit, 
and must not be harvested or destroyed until the earlier of our 
inspection or 15 days after harvest of the balance of the unit is 
completed.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production that are acceptable to us 
for any:
    (1) Optional unit, we will combine all optional units for which 
acceptable records of production were not provided; or for any
    (2) Basic unit, we will allocate any commingled production to such 
units in proportion to our liability on the harvested acreage for each 
unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by the production guarantee;
    (2) Subtracting from this the total production to count;
    (3) Multiplying the remainder by your price election; and
    (4) Multiplying this result by your share.
    (c) The total production (bushels) to count from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) Which is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide records of production that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
subsection 11.(d));
    (iv) Potential production on insured acreage you want to put to 
another use or you wish to abandon and no longer care for, if you and we 
agree on the appraised amount of production. Upon such agreement, the 
insurance period for that acreage will end if you put the acreage to 
another use or abandon the crop. If:
    (A) Agreement on the appraised amount of production is not reached, 
you may elect to continue to care for the crop, or we will 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 the harvested production or appraisals from the 
samples at the time harvest should have occurred. If you do not leave 
the required samples intact, or you fail to provide sufficient care for 
the samples, our appraisal made prior to giving you 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, we will determine 
the amount of production to count for the acreage using the harvested 
production, or our reappraisal if additional damage occurs and the crop 
is not harvested.
    (2) All harvested production from the insurable acreage.
    (d) Mature wheat, barley, oat, and rye production may be adjusted 
for excess moisture and quality deficiencies. Flax production may be 
adjusted for quality deficiencies only.
    (1) Production will be reduced by .12 percent for each .1 percentage 
point of moisture in excess of:
    (i) 13.5 percent for wheat;
    (ii) 14.5 percent for barley;
    (iii) 14.0 percent for oats;
    (iv) With regard to deficiencies in quality (except test weight, 
which may be determined by our loss adjustor), the samples are analyzed 
by:
    (A) A grain grader licensed under the United States Grain Standards 
Act or the United States Warehouse Act;
    (B) A grain grader licensed under State law and employed by a 
warehouse operator who has a storage agreement with the Commodity Credit 
Corporation; or

[[Page 118]]

    (C) A grain grader not licensed under State law, but who is employed 
by a warehouse operator who has a commodity storage agreement with the 
Commodity Credit Corporation and is in compliance with State law 
regarding warehouses; and
    (v) With regard to substances or conditions injurious to human or 
animal health, the samples analyzed by a laboratory approved by us.
    We may obtain samples of the production to determine the moisture 
content.
    (2) Production will be eligible for quality adjustment if:
    (i) Deficiencies in quality, in accordance with the Official United 
States Standards for Grain, result in:
    (A) Wheat not meeting the grade requirements for U.S. No. 4 (grades 
U.S. No. 5 or worse) because of test weight, total damaged kernels 
(excluding heat damage), shrunken or broken kernels, or defects 
(excluding foreign material and heat damage), or grading garlicky, light 
smutty, smutty or ergoty;
    (B) Barley not meeting the grade requirements for U.S. No. 4 (grades 
U.S. No. 5 or worse) because of test weight, percentage of sound barley, 
damaged kernels, thin barley, or black barley, or grading smutty, 
garlicky, or ergoty;
    (C) Oats not meeting the grade requirements for U.S. No. 4 (grade 
U.S. sample grade) because of test weight or percentage of sound oats, 
or grading smutty, garlicky, or ergoty;
    (D) Rye not meeting the grade requirements for U.S. No. 3 (grades 
U.S. No. 4 or worse) because of test weight, percent damaged kernels or 
thin rye, or grading smutty, garlicky, or ergoty;
    (E) Flaxseed not meeting the grade requirements for U.S. No. 2 
(grades U.S. sample grade) due to damaged kernels; or
    (ii) Substances or conditions are present, including mycotoxins, 
that are identified by the Food and Drug Administration or other public 
health organizations of the United States as being injurious to human or 
animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these crop 
provisions;
    (ii) The deficiencies, substances, or conditions result in a net 
price for the damaged grain that is less than the local market price of 
U.S. No. 2 production;
    (iii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us or by 
a disinterested third party approved by us; and
    (iv) The samples are analyzed by a grain grader licensed under the 
authority of the United States Grain Standards Act or the United States 
Warehouse Act with regard to deficiencies in quality, or by a laboratory 
approved by us with regard to substances or conditions injurious to 
human or animal health. Test weight for quality adjustment purposes may 
be determined by one loss adjustor.
    (4) Production of small grains that is eligible for quality 
adjustment, as specified in paragraphs 11.(d) (2) and (3), will be 
reduced as follows:
    (i) The market price of the qualifying damaged production and the 
local market price will be the prices on the earlier of the date such 
quality adjusted production is sold or the date of final inspection for 
the unit. The price for the qualifying damaged production will be the 
market price for the local area to the extent feasible. Discounts used 
to establish the net price of the damaged production will be limited to 
those which are usual, customary, and reasonable. Any reduction in price 
due to the following factors will not be accepted:
    (A) Moisture content;
    (B) Damage due to uninsured causes; or
    (C) Drying, handling, processing, or any other costs associated with 
normal harvesting, handling, and marketing of the grain; except, if the 
price of the damaged production can be increased by conditioning, we may 
reduce the price of the production after it has been conditioned by the 
cost of conditioning but not lower than the value of the production 
before conditioning. We may obtain prices from any buyer of our choice. 
If we obtain prices from one or more buyers located outside your local 
market area, we will reduce such prices by the additional costs required 
to deliver the production to those buyers.
    (ii) The value of the damaged or conditioned production will be 
divided by the local market price to determine the quality adjustment 
factor.
    (iii) The number of bushels remaining after any reduction due to 
excessive moisture (the moisture-adjusted gross bushels (if 
appropriate)) of the damaged or conditioned production will then be 
multiplied by the quality adjustment factor to determine the net 
production to count.
    (e) Any production harvested from plants growing in the insured crop 
may be counted as production of the insured crop on a weight basis.

                            12. Late Planting

    A late planting period is not applicable to fall-planted wheat. Any 
winter wheat that is planted after the fall final planting date in 
counties for which the Special Provisions also contain a final planting 
date for spring wheat will not be insured. Any winter wheat that is 
planted after the fall final planting date in counties for which the 
Special Provisions contain only a fall final planting date

[[Page 119]]

will not be insured unless you were prevented from planting the winter 
wheat by the fall final planting date. Such acreage will be insurable, 
and the production guarantee and premium for the acreage will be 
determined in accordance with sections 16 (b) and (c) of the Basic 
Provisions.

                         13. Prevented Planting

    (a) In addition to the provisions contained in section 17 of the 
Basic Provisions, in counties for which the Special Provisions designate 
a spring final planting date, your prevented planting production 
guarantee will be based on your approved yield for spring-planted 
acreage of the insured crop.
    (b) Your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

[59 FR 9391, Feb. 28, 1994, as amended at 60 FR 62723, Dec. 7, 1995; 62 
FR 65164, Dec. 10, 1997; 67 FR 43526, June 28, 2002]



Sec. 457.102  Wheat crop insurance winter coverage endorsement.

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

            Wheat Crop Insurance Winter Coverage Endorsement

                   (This is a Continuous Endorsement)

    (a) In return for payment of the additional premium designated in 
the Actuarial Table, this endorsement is attached to and made part of 
your Small Grains Crop Provisions subject to the terms and conditions 
described herein.
    (b) This endorsement is available only in counties for which the 
Special Provisions designate both a fall final planting date and a 
spring final planting date.
    (c) This endorsement modifies the provisions of sections 7 and 11 of 
the Small Grains Crop Insurance policy (Sec. 457.101).
    (1) You must have a Small Grains Crop Insurance policy in force and 
elect to insure wheat under that policy.
    (2) You may select either Option A or Option B. Failure to select 
either Option A or Option B means that you have rejected both Options 
and this endorsement would be void.
    (3) Insurance Period. Coverage under this endorsement begins on the 
later of the date we accept your application for coverage or on the fall 
final planting date designated in the Special Provisions. Coverage ends 
on the spring final planting date designated in the Special Provisions.
    (4) The provisions under section 14 of the Common Crop Insurance 
Policy (Sec. 457.8) are amended to require that all notices of damage 
must be provided to us by the spring final planting date designated in 
the Special Provisions.

           Option A (30 Percent Coverage and Acreage Release)

    Whenever any winter wheat is damaged during the insurance period 
(see section 3, above), and at least 20 acres or 20 percent of the 
acreage in the unit, whichever is less, does not have an adequate stand 
to produce at least 90 percent of the production guarantee for the 
acreage, you may take any one of the following actions:
    (a) Destroy the remaining crop on such acreage. By doing so, you 
agree to accept an amount of production to count against the unit 
production guarantee equal to 70 percent of the production guarantee for 
the damaged acreage, or an appraisal determined in accordance with 
paragraph 11.(c)(1) of the Small Grains Crop Insurance Provisions 
(Sec. 457.101) if such an appraisal results in a greater amount of 
production. This amount will be considered production to count in 
determining any final indemnity on the unit and will be used to settle 
your claim as described in the provisions under section 11. (Settlement 
of Claim) of the Small Grains Crop Insurance Provisions (Sec. 457.101). 
You may use such acreage for any purpose, including planting and 
separately insuring any other crop. If you elect to utilize such acreage 
for the production of spring wheat, you must:
    (1) Plant the spring wheat in a manner which results in a clear and 
discernible break in the planting pattern at the boundary between it and 
any remaining winter wheat; and
    (2) Store or market the production from such acreage in a manner 
which permits us to verify the amount of spring wheat production 
separately from any winter wheat production.
    In the event you are unable to provide records of production that 
are acceptable to us, the spring wheat acreage will be considered to be 
a part of the original winter wheat unit. If you elected to insure the 
spring wheat acreage as a separate optional unit, any premium amount for 
such acreage will be considered earned and payable to us.
    (b) Continue to care for the damaged crop. By doing so, coverage 
will continue under the terms of the Common Crop Insurance Policy 
(Sec. 457.8), the Small Grains Crop Insurance Provisions (Sec. 457.101), 
and this Option.
    (c) Replant the acreage to an appropriate variety of wheat, if it is 
practical, and receive a replanting payment in accordance with the terms 
of section 9. (Replanting Payments) of the Small Grains Crop Provisions

[[Page 120]]

(Sec. 457.101). By doing so, coverage will continue under the terms of 
the Common Crop Insurance Policy (Sec. 457.8), the Small Grains Crop 
Insurance Provisions (Sec. 457.101), and this Option, and the production 
guarantee for winter wheat will remain in effect.

               Option B (With Full Winter Damage Coverage)

    Whenever any winter wheat is damaged during the insurance period and 
at least 20 acres or 20 percent of the acreage in the unit, whichever is 
less, does not have an adequate stand to produce at least 90 percent of 
the production guarantee for the acreage, you may, at your option, take 
one of the following actions:
    (a) Continue to care for the damaged crop. By doing so, coverage 
will continue under the terms of the Common Crop Insurance Policy 
(Sec. 457.8), the Small Grains Crop Insurance Provisions (Sec. 457.101), 
and this Option.
    (b) Replant the acreage to an appropriate variety of wheat, if it is 
practical, and receive a replanting payment in accordance with the terms 
of section 9. (Replanting Payments) of the Small Grains Crop Provisions 
(Sec. 457.101). By doing so, coverage will continue under the terms of 
the Common Crop Insurance Policy (Sec. 457.8), the Small Grains Crop 
Insurance Provisions (Sec. 457.101), and this Option, and the production 
guarantee for winter wheat will remain in effect.
    (c) Accept our appraisal of the crop on the damaged acreage as 
production to count against the production guarantee for the damaged 
acreage, destroy the remaining crop on such acreage, and be eligible for 
any indemnity due under the terms of the Common Crop Insurance Policy 
(Sec. 457.8) and the Small Grains Crop Provisions (Sec. 457.101). The 
appraisal will be considered production to count in determining any 
final indemnity on the unit and will be used to settle your claim as 
described in the provisions of section 11. (Settlement of Claim) of the 
Small Grains Crop Insurance Provisions (Sec. 457.101). You may use such 
acreage for any purpose, including planting and separately insuring any 
other crop. If you elect to utilize such acreage for the production of 
spring wheat, you must:
    (1) Plant the spring wheat in a manner which results in a clear and 
discernable break in the planting pattern at the boundary between it and 
any remaining winter wheat; and
    (2) Store or market the production from such acreage in a manner 
which permits us to verify the amount of spring wheat production 
separately from any winter wheat production.
    In the event you are unable to provide records of production that 
are acceptable to us, the spring wheat acreage will be considered to be 
a part of the original winter wheat unit. If you elected to insure the 
spring wheat acreage as a separate optional unit, any premium amount for 
such acreage will be considered earned and payable to us.

[59 FR 9397, Feb. 28, 1994]



Sec. 457.103  [Reserved]



Sec. 457.104  Cotton crop insurance provisions.

    The cotton crop insurance provisions for the 1998 and succeeding 
crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                         Cotton Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Cotton--Varieties identified as American Upland Cotton.
    Growth area--A geographic area designated by the Secretary of 
Agriculture for the purpose of reporting cotton prices.
    Harvest--The removal of the seed cotton from the open cotton boll, 
or the severance of the open cotton boll from the stalk by either manual 
or mechanical means.
    Mature cotton--Cotton that can be harvested either manually or 
mechanically.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, cotton must be planted in rows, unless otherwise 
provided by the Special Provisions, actuarial documents, or by written 
agreement. The yield conversion factor normally applied to non-irrigated 
skip-row cotton acreage will not be used if the land between the rows of 
cotton is planted to any other spring planted crop.
    Production guarantee--The number of pounds determined by multiplying 
the approved yield per acre by any applicable yield conversion factor 
for non-irrigated skip-row planting patterns, and multiplying the result 
by the coverage level percentage you elect.
    Skip-row--A planting pattern that:
    (1) Consists of alternating rows of cotton and fallow land or land 
planted to another crop the previous fall; and
    (2) Qualifies as a skip-row planting pattern as defined by the Farm 
Service Agency (FSA) or a successor agency.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels,

[[Page 121]]

and Prices for Determining Indemnities) of the Basic Provisions 
(Sec. 457.8), you may select only one price election for all cotton in 
the county insured under this policy.

                           3. Contract Changes

    The contract change date is November 30 (December 17 for the 1998 
crop year only) preceding the cancellation date (see the provisions of 
section 4 (Contract Changes) of the Basic Provisions).

                  4. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

------------------------------------------------------------------------
                                                    Cancellation and
               State and county                     termination dates
------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,       January 15.
 Wilson, Karnes, Goliad, Victoria, and Jackson
 Counties, Texas, and all Texas counties lying
 south thereof.
Alabama; Arizona; Arkansas; California;         February 28.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; South Carolina; El
 Paso, Hudspeth, Culberson, Reeves, Loving,
 Winkler, Ector, Upton, Reagon, Sterling,
 Coke, Tom Green, Concho, McCulloch, San Saba,
 Mills, Hamilton, Bosque, Johnson, Tarrant,
 Wise, and Cooke Counties, Texas, and all
 Texas counties lying south and east thereof
 to and including Terrell, Crocket, Sutton,
 Kimble, Gillespie, Blanco, Comal, Guadalupe,
 Gonzales, De Witt, Lavaca, Colorado, Wharton,
 Matagorda Counties, Texas..
All other Texas counties and all other States.  March 15.
------------------------------------------------------------------------

                             5. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the cotton lint, in the 
county for which premium rates are provided by the actuarial documents:
    (a) In which you have a share; and
    (b) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Colored cotton lint;
    (2) Planted into an established grass or legume;
    (3) Interplanted with another spring planted crop;
    (4) Grown on acreage from which a hay crop was harvested in the same 
calendar year unless the acreage is irrigated; or
    (5) Grown on acreage on which a small grain crop reached the heading 
stage in the same calendar year unless the acreage is irrigated or 
adequate measures are taken to terminate the small grain crop prior to 
heading and less than fifty percent (50%) of the small grain plants 
reach the heading stage.

                          6. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8):
    (a) The acreage insured will be only the land occupied by the rows 
of cotton when a skip row planting pattern is utilized; and
    (b) Any acreage of the insured crop damaged before the final 
planting date, to the extent that a majority of the producers in the 
area would not normally further care for the crop, must be replanted 
unless we agree that it is not practical to replant.

                           7. Insurance Period

    (a) In lieu of section 11(b)(2) of the Basic Provisions, insurance 
will end upon the removal of the cotton from the field.
    (b) In accordance with the provisions under section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the calendar date for the 
end of the insurance period is the date immediately following planting 
as follows:
    (1) September 30 in Val Verde, Edwards, Kerr, Kendall, Bexar, 
Wilson, Karnes, Goliad, Victoria, and Jackson Counties, Texas, and all 
Texas counties lying south thereof;
    (2) January 31 in Arizona, California, New Mexico, Oklahoma, and all 
other Texas counties; and
    (3) December 31 in all other states.

                            8. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss which occur within the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control meaures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if applicable, due to an 
unavoidable cause of loss occurring within the insurance period.

                9. Duties in the Event of Damage or Loss

    (a) In addition to your duties under section 14 (Duties in the Event 
of Damage or Loss) of

[[Page 122]]

the Basic Provisions (Sec. 457.8), in the event of damage or loss:
    (1) The cotton stalks must remain intact for our inspection; and
    (2) If you initially discover damage to the insured crop within 15 
days of harvest, or during harvest, you must leave representative 
samples of the unharvested crop in the field for our inspection. The 
samples must be at least 10 feet wide and extend the entire length of 
each field in the unit.
    (b) The stalks must not be destroyed, and required samples must not 
be harvested, until the earlier of our inspection or 15 days after 
harvest of the balance of the unit is completed and written notice of 
probable loss given to us.

                         10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production:
    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by the production guarantee;
    (2) Subtracting from this the total production to count;
    (3) Multiplying the remainder by your price election; and
    (4) Multiplying this result by your share.
    (c) The total production (pounds) to count from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage;
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes;
    (D) For which you fail to provide records of production that are 
acceptable to us; or
    (E) On which the cotton stalks are destroyed, in violation of 
section 9;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production of white 
cotton may be adjusted for quality deficiencies in accordance with 
subsection 10(d)); and
    (iv) Potential production on insured acreage you want to put to 
another use or you wish to abandon or no longer care for, if you and we 
agree on the appraised amount of production. Upon such agreement, the 
insurance period for that acreage will end if you put the acreage to 
another use or abandon the crop. If agreement on the appraised amount of 
production is not reached:
    (A) If 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 the harvested production of appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If 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, including 
any mature cotton retrieved from the ground.
    (d) Mature white cotton may be adjusted for quality when production 
has been damaged by insured causes. Such production to count will be 
reduced if the price quotation for cotton of like quality (price 
quotation ``A'') for the applicable growth area is less than seventy-
five percent (75%) of price quotation ``B.'' Price quotation ``B'' is 
defined as the price quotation for the applicable growth area for cotton 
of the color and leaf grade, staple length, and micronaire reading 
designated in the Special Provisions for this purpose. Price quotations 
``A'' and ``B'' will be the price quotations contained in the Daily Spot 
Cotton Quotations published by the USDA Agricultural Marketing Service 
on the date the last bale from the unit is classed. If the date the last 
bale classed is not available, the price quotations will be determined 
on the date the last bale from the unit is delivered to the warehouse, 
as shown on the producer's account summary obtained from the gin. If 
eligible for adjustment, the amount of production to be counted will be 
determined by multiplying the number of pounds of such production by the 
factor derived from dividing price quotation ``A'' by seventy-five 
percent (75%) of price quotation ``B.''
    (e) Colored cotton lint will not be eligible for quality adjustment.

                         11. Prevented Planting

    (a) In addition to the provisions contained in section 17 of the 
Basic Provisions, your prevented planting production guarantee will be 
based on your approved yield without adjustment for skip-row planting 
patterns.
    (b) Your prevented planting coverage will be 50 percent of your 
production guarantee

[[Page 123]]

for timely planted acreage. If you have limited or additional levels of 
coverage, as specified in 7 CFR part 400, subpart T, and pay an 
additional premium, you may increase your prevented planting coverage to 
a level specified in the actuarial documents.

[59 FR 49154, Sept. 27, 1994, as amended at 60 FR 62725, Dec. 7, 1995; 
62 FR 7134, Feb. 18, 1997; 62 FR 63633, Dec. 2, 1997; 62 FR 65164, Dec. 
10, 1997; 63 FR 55497, Oct. 16, 1998; 63 FR 66717, Dec. 3, 1998]



Sec. 457.105  Extra long staple cotton crop insurance provisions.

    The extra long staple cotton crop insurance provisions for the 1998 
and succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                       ELS Cotton Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement; (2) the Special Provisions; (3) these Crop Provisions; (4) 
the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Cotton--Varieties identified as Extra Long Staple (ELS) cotton and 
American Upland (AUP) cotton if ELS cotton is destroyed by an insured 
cause and acreage is replanted to AUP cotton.
    ELS cotton--Extra Long Staple cotton (also called Pima cotton, 
American-Egyptian cotton, and American Pima cotton).
    Harvest--The removal of the seed cotton from the open cotton boll, 
or the severance of the open cotton boll from the stalk by either manual 
or mechanical means.
    Mature ELS cotton--ELS cotton that can be harvested either manually 
or mechanically.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, cotton must be planted in rows, unless otherwise 
provided by the Special Provisions, actuarial documents, or by written 
agreement. The yield conversion factor normally applied to non-irrigated 
skip-row cotton acreage will not be used if the land between the rows of 
cotton is planted to any other spring planted crop.
    Production guarantee-- The number of pounds determined by 
multiplying the approved yield per acre by any applicable yield 
conversion factor for non-irrigated skip-row planting patterns, and 
multiplying the result by the coverage level percentage you elect.
    Replanting-- Performing the cultural practices necessary to replace 
the ELS cotton seed, and replacing the seed with either ELS or AUP 
cotton seed in the insured acreage with the expectation of growing a 
successful crop.
    Skip-row-- A planting pattern that:
    (1) Consists of alternating rows of cotton and fallow land or land 
planted to another crop the previous fall; and
    (2) Qualifies as a skip-row planting pattern as defined by the Farm 
Service Agency (FSA) or a successor agency.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8) you may select only one price election for all 
the cotton in the county insured under this policy.

                           3. Contract Changes

    The contract change date is November 30 (December 17 for the 1998 
crop year only) preceding the cancellation date (see the provisions of 
section 4 (Contract Changes) of the Basic Provisions).

                  4. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

------------------------------------------------------------------------
                                            Cancellation and termination
                  States                                dates
------------------------------------------------------------------------
New Mexico................................  March 15.
All other States..........................  Feb. 28.
------------------------------------------------------------------------

                             5. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the cotton lint in the county 
for which premium rates are provided by the actuarial documents:
    (a) In which you have a share; and
    (b) That is not (unless allowed by the Special Provisions or by a 
written agreement):
    (1) Planted into an established grass or legume;
    (2) Interplanted with another spring planted crop;
    (3) Grown on acreage from which a hay crop was harvested in the same 
calendar year unless the acreage is irrigated; or
    (4) Grown on acreage on which a small grain crop reached the heading 
stage in the same calendar year unless the acreage is irrigated or 
adequate measures are taken to terminate the small grain crop prior to 
heading and less than fifty percent (50%) of the small grain plants 
reach the heading stage.

                          6. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8):

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    (a) The acreage insured will be only the land occupied by the rows 
of cotton when a skip row planting pattern is utilized; and
    (b) Any acreage of the insured crop damaged before the final 
planting date, to the extent that a majority of producers in the area 
would not be replanted unless we agree that it is not practical to 
replant.

                           7. Insurance Period

    (a) In lieu of section 11(b)(b)(2) of the Basic Provisions, 
insurance will end upon the removal of the cotton from the field.
    (b) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the calendar date for the 
end of the insurance period is January 31 immediately following 
planting.

                            8. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss which occur within the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of irrigation water supply, if applicable, due to an 
unavoidable cause of loss occurring within the insurance period.

                9. Duties in the Event of Damage or Loss

    (a) In addition to your duties under section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), in the event of 
damage or loss:
    (1) You must give us notice if you intend to replant any acreage 
originally planted to ELS cotton to AUP cotton;
    (2) The cotton stalks must remain intact for our inspection; and
    (3) If you initially discover damage to any insured crop within 15 
days of harvest, or during harvest, you must leave representative 
samples of the unharvested crop for our inspection. The samples must be 
at least 10 feet wide and extend the entire length of the field in the 
unit.
    (b) The stalks must not be destroyed, and required samples must not 
be harvested, until the earlier of our inspection or 15 days after 
harvest of the balance of the unit is completed and written notice of 
probable loss is given to us.

                         10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production:
    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by the production guarantee;
    (2) Subtracting from this the total production to count;
    (3) Multiplying the remainder by your price election; and
    (4) Multiplying this result by your share.
    (c) The total production (pounds) to count from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes;
    (D) For which you fail to provide records of production that are 
acceptable to us; or
    (E) On which the cotton stalks are destroyed in violation of section 
9;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies in accordance with subsection:
    (A) 10(d) and (e) if it is mature ELS cotton; or
    (B) 10(f) if it is AUP cotton insured under these crop provisions); 
and
    (iv) Potential production on insured acreage you want to put to 
another use or you wish to abandon or no longer care for, if you and we 
agree on the appraised amount of production. Upon such agreement the 
insurance period for that acreage will end if you put the acreage to 
another use or abandon the crop. If agreement on the appraised amount of 
production is not reached:
    (A) If 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 the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provided sufficient 
care for the samples,

[[Page 125]]

our appraisal made prior to giving you consent to put the acreage to 
another use will be used to determine the amount of production to 
count.); or
    (B) If 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, including 
any mature cotton retrieved from the ground.
    (d) Mature ELS cotton production may be adjusted for quality when 
production has been damaged by insured causes. Such production to count 
will be reduced if the price quotation for ELS cotton of like quality 
(price quotation ``A'') for the applicable growth area is less than 75 
percent of price quotation ``B.'' Price quotation ``B'' is defined as 
the price quotation for the applicable growth area for ELS cotton of the 
grade, staple length, and micronaire reading designated in the Special 
Provisions for this purpose. Price quotations ``A'' and ``B'' will be 
the price quotations contained in the Daily Spot Cotton Quotations 
published by the USDA Agricultural Marketing Service on the date the 
last bale from the unit is classed. If the date the last bale is classed 
is not available, the price quotations will be determined when the last 
bale from the unit is delivered to the warehouse, as shown on the 
producers account summary obtained from the gin. If eligible for quality 
adjustment, the amount of production to be counted will be determined by 
multiplying the number of pounds of such production by the factor 
derived from dividing price quotation ``A'' by 75 percent of price 
quotation ``B.''
    (e) For ELS cotton to be eligible for quality adjustment as shown in 
subsection 10(d), ginning must have been completed at a gin using roller 
equipment.
    (f) Any AUP cotton harvested or appraised from the acreage 
originally planted to ELS cotton in the same growing season will be 
reduced by the factor obtained by dividing the price per pound of the 
AUP cotton by the price quotation for the ELS cotton of the grade, 
staple length, and micronaire reading designated in the Special 
Provisions for this purpose. The prices used for the AUP and ELS cotton 
will be the price quotations contained in the Daily Spot Cotton 
Quotations published by the USDA Agricultural Marketing Service on the 
date the last bale from the unit is classed. If the date the last bale 
is classed is not available, the price quotations will be determined 
when the last bale from the unit is delivered to the warehouse, as shown 
on the producer's account summary obtained from the gin. If either price 
quotation is unavailable for the dates stated above, the price 
quotations for the nearest prior date for which price quotations for 
both the AUP and ELS cotton are available will be used. If prices are 
not yet available for the insured crop year, the previous season's 
average prices will be used.

                            11. Late Planting

    A late planting period is not applicable to ELS cotton. Any ELS 
cotton that is planted after the final planting date will not be insured 
unless you were prevented from planting it by the final planting date. 
Such acreage will be insurable, and the production guarantee and premium 
for the acreage will be determined in accordance with section 16 of the 
Basic Provisions.

                         12. Prevented Planting

    (a) In addition to the provisions contained in section 17 of the 
Basic Provisions, your prevented planting production guarantee will be 
based on your approved yield without adjustment for skip-row planting 
patterns.
    (b) Your prevented planting coverage will be 50 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

[59 FR 49169, Sept. 27, 1994, as amended at 60 FR 62726, Dec. 7, 1995; 
62 FR 6704, Feb. 13, 1997; 62 FR 63633, Dec. 2, 1997; 62 FR 65165, Dec. 
10, 1997; 63 FR 55497, Oct. 16, 1998; 63 FR 66717, Dec. 3, 1998]



Sec. 457.106  Texas citrus tree crop insurance provisions.

    The Texas Citrus Tree Crop Insurance Provisions for the 1999 and 
succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured policies

(Appropriate title for insurance provider)
    Both FCIC and Reinsured Policies

                    Texas Citrus Tree Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Bud union--The location on the tree trunk where a bud from one tree 
variety is grafted onto root stock of another variety.
    Crop--Specific groups of citrus fruit trees as listed in the Special 
Provisions.
    Crop year--For the 1998 crop year only, a period of time that begins 
on June 1, 1997,

[[Page 126]]

and ends on November 20, 1998. For all other crop years, a period of 
time that begins on November 21 of the calendar year prior to the year 
the trees normally bloom, and ends on November 20 of the following 
calendar year. The crop year is designated by the year in which the 
insurance period ends.
    Dehorning--Cutting all scaffold limbs to a length not longer than 
\1/4\ the height of the tree before such cutting.
    Destroyed--Trees damaged to the extent that removal is necessary.
    Excess precipitation--An amount of precipitation sufficient to 
directly damage the tree.
    Excess wind--A natural movement of air that has sustained speeds in 
excess of 58 miles per hour recorded at the U.S. Weather Service 
reporting station nearest to the crop at the time of crop damage.
    Freeze--The formation of ice in the cells of the trees caused by low 
air temperatures.
    Good farming practices--The cultural practices generally in use in 
the county for the trees to have normal growth and vigor and recognized 
by the Cooperative State Research, Education, and Extension Service as 
compatible with agronomic and weather conditions in the county.
    Interplanted--Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Irrigated practice--A method by which the normal growth and vigor of 
the insured trees is maintained by artificially applying adequate 
quantities of water during the growing season using the appropriate 
irrigation systems at the proper times.
    Root stock--A root or a piece of a root of one tree variety onto 
which a bud from another tree variety is grafted.
    Scaffold limbs--Major limbs attached directly to the trunk.
    Set out--Transplanting the tree into the grove.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by each citrus crop 
designated in the Special Provisions.
    (b) Sections 34(a) (1), (3), and (4) of the Basic Provisions are not 
applicable.
    (c) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.
    (d)Instead of establishing optional units by section, section 
equivalent, or FSA farm serial number optional units may be established 
if each optional unit is located on non-contiguous land.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In lieu of the requirement of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8), that prohibits you from selecting more than one 
coverage level for each insured crop, you may select a different 
coverage level for each crop designated in the Special Provisions that 
you elect to insure.
    (b) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8):
    (1) If you insure trees within a crop which are either of a 
different variety or are planted at a different population density, the 
per acre amount of insurance for each variety or population density for 
the crop must bear the same relationship to the maximum amount of 
insurance available for each variety and population density of the crop 
as specified in the Actuarial documents. For example, if you elect 100 
percent of the maximum amount of insurance for a variety within a 
population density for the crop, you must select 100 percent of the 
maximum amount of insurance for that variety for all population 
densities for the crop. The amount of insurance for each variety and 
population density must be multiplied by any applicable factor contained 
in section 3(b)(2).
    (2) The amount of insurance per acre will be the product obtained by 
multiplying the reference maximum dollar amount of insurance that is 
shown in the actuarial documents for the applicable population density 
by the percentage for the level of coverage you select and by:
    (i) Thirty-three percent (0.33) for the year of set out, the year 
following dehorning, or the year following grafting of a set out tree. 
(Insurance will be limited to this amount until trees that are set out 
are one year of age or older on the first day of the crop year);
    (ii) Sixty percent (0.60) for the first growing season after being 
set out, the second year following dehorning, or the second year 
following grafting of a set out tree;
    (iii) Eighty percent (0.80) for the second growing season after 
being set out, the third year following dehorning, or the third year 
following grafting of a set out tree; or
    (iv) Ninety percent (0.90) for the third growing season after being 
set out, the fourth year following dehorning, or the fourth year 
following grafting of a set out tree.
    (3) The amount of insurance per acre for each population density, or 
factor as appropriate, will be multiplied by the applicable number of 
insured acres. These results will then be added together to determine 
the amount of insurance for the unit.
    (4) The amount of insurance will be reduced proportionately for any 
unit on which the stand is less than 90 percent, based on the original 
planting pattern. For example, if the amount of insurance you selected 
is

[[Page 127]]

$2,000 and the remaining stand is 85 percent of the original stand, the 
amount of insurance on which the premium and any indemnity will be based 
is $1,700 ($2,000 multiplied by 0.85).
    (5) If any insurable acreage of trees is set out after the first day 
of the crop year, and you elect to insure such acreage during that crop 
year, you must report the acreage, practice, crop, number of trees, date 
set out is completed, and your share to us within 72 hours after set out 
is completed for the unit.
    (6) Production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8), are not applicable.
    (7) You must report, by the sales closing date contained in the 
Special Provisions, by type if applicable:
    (i) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the amount of insurance, and the number of 
affected acres;
    (ii) The number of trees on insurable and uninsurable acreage;
    (iii) The date of original set out and the planting pattern;
    (iv) The date of replacement or dehorning, if more than 10 percent 
of the trees on any unit have been replaced or dehorned in the previous 
5 years; and
    (v) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed:
    (A) The age of the interplanted crop, and type if applicable;
    (B) The planting pattern; and
    (C) Any other information that we request in order to establish your 
amount of insurance.
    We will reduce the amount of insurance as necessary, based on our 
estimate of the effect of interplanting a perennial crop; removal of 
trees; damage; change in practices and any other circumstance on the 
potential of the insured crop. If you fail to notify us of any 
circumstance that may reduce the potential for the insured crop, we will 
reduce your amount of insurance as necessary at any time we become aware 
of the circumstance.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 preceding 
the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are November 20.

                            6. Annual Premium

    In addition to the provisions of section 5 (Annual Premium) of the 
Basic Provisions (Sec. 457.8), for the 1998 crop year, the premium 
amount otherwise payable for the 1998 crop year will be increased by 46 
percent as a result of the additional six months of coverage for that 
crop year.

                             7. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all of each citrus 
tree crop designated in the Special Provisions in the county for which a 
premium rate is provided by the actuarial documents and that you elect 
to insure:
    (1) In which you have an ownership share;
    (2) That is adapted to the area;
    (3) That is set out for the purpose of growing fruit to be harvested 
for the commercial production of fresh fruit or for juice;
    (4) That is irrigated; and
    (5) That have the potential to produce at least 70 percent of the 
county average yield for the crop and age, unless a written agreement is 
approved to insure the trees with lesser potential.
    (b) In addition to section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), we do not insure any citrus trees:
    (1) During the crop year the application for insurance is filed, 
unless we inspect the acreage and consider it acceptable; or
    (2) That have been grafted onto existing root stock or nursery stock 
within the one-year period prior to the date insurance attaches.
    (c) We may exclude from insurance or limit the amount of insurance 
on any acreage that was not insured the previous year.

                          8. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, citrus trees interplanted with another 
perennial crop are insurable, unless we inspect the acreage and 
determine that it does not meet the requirements contained in your 
policy.

                           9. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8):
    (a) The insurance period is as follows:
    (1) For the 1998 crop year only, coverage will begin on June 1, 
1997, and will end on November 20, 1998.
    (2) For all subsequent crop years, coverage begins on November 21 of 
the calendar year prior to the year the insured crop normally

[[Page 128]]

blooms, except that for the year of application, if your application is 
received after November 11 but prior to November 21, insurance will 
attach on the 10th day after your properly completed application is 
received in our local office, unless we inspect the acreage during the 
10 day period and determine that it does not meet the requirements for 
insurability contained in your policy. You must provide any information 
that we require for the crop or to determine the condition of the grove.
    (3) The calendar date for the end of the insurance period for each 
crop year is November 20.
    (b) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (c) If you relinquish your insurable share on any insurable acreage 
of citrus trees on or before the acreage reporting date for the crop 
year, insurance will not be considered to have attached to and no 
premium or indemnity will be due for such acreage for that crop year 
unless:
    (1) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (2) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (3) The transferee is eligible for crop insurance.

                           10. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur within the insurance period:
    (a) Excess precipitation;
    (b) Excess wind;
    (c) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the grove;
    (d) Freeze;
    (e) Hail;
    (f) Tornado; or
    (g) Failure of the irrigation water supply if caused by an insured 
peril or drought that occurs during the insurance period.

                11. Duties In The Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), in case of 
damage or probable loss, if you intend to claim an indemnity on any 
unit, you must allow us to inspect all insured acreage before pruning, 
dehorning, or removal of any damaged trees.

                         12. Settlement of Claim

    (a) In the event of damage covered by this policy, we will settle 
your claim on a unit basis by:
    (1) Determining the actual percent of damage for the unit in 
accordance with sections 12 (b), (c), and (d);
    (2) Subtracting your deductible from the percent of damage for the 
unit (this result must be greater than zero to receive an indemnity);
    (3) Dividing the result of section 12(a)(2) by your coverage level 
percentage;
    (4) Multiplying the result of section 12(a)(3) by the amount of 
insurance per acre determined in accordance with section 3(b)(2);
    (5) Multiplying the result of section 12(a)(4) by the number of 
insured acres; and
    (6) Multiplying the result of section 12(a)(5) by your share.
    (b) The percent of damage for any tree will be determined as 
follows:
    (1) For damage occurring during the year of set out (trees that have 
not been set out for at least one year at the time insurance attaches):
    (i) One-hundred percent (100%) whenever there is no live wood above 
the bud union;
    (ii) Ninety percent (90%) whenever there is less than 12 inches of 
live wood above the bud union; or
    (iii) The tree will be considered undamaged whenever there is more 
than 12 inches of live wood above the bud union; or
    (2) For damage occurring in any year following the year of set out:
    (i) The percentage of damage will be determined by dividing the 
number of scaffold limbs damaged in an area from the trunk to a length 
equal to one-fourth (\1/4\) the height of the tree, by the total number 
of scaffold limbs before damage occurred. Whenever this percentage 
exceeds 80 percent, the tree will be considered as 100 percent damaged.
    (ii) The percent of damage for the unit will be determined by 
computing the average of the determinations made for the individual 
trees. If this percent of damage exceeds 80 percent, the unit will be 
considered 100 percent damaged.
    (c) The percent of damage on the unit will be reduced by the 
percentage of damage due to uninsured causes.

                     13. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 4117, Jan. 29, 1997, as amended at 62 FR 65166, Dec. 10, 1997; 63 
FR 55779, Oct. 19, 1998]

[[Page 129]]



Sec. 457.107  Florida citrus fruit crop insurance provisions.

    The Florida citrus fruit crop insurance provisions for the 1999 and 
succeeding crop years are as follows:

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                  Florida Citrus Fruit Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Amount of insurance (acre). The dollar amount determined by 
multiplying the Reference Maximum Dollar Amount shown on the actuarial 
documents for the citrus fruit times the coverage level you elect, times 
your share.
    Box. A standard field box as prescribed in the State of Florida 
Citrus Fruit Laws.
    Citrus fruit type. Any of the following:
    (1) Type I--Early and mid-season oranges;
    (2) Type II--Late oranges juice;
    (3) Type III--Grapefruit for which freeze damage will be adjusted on 
a juice basis;
    (4) Type IV--Navel Oranges, Tangelos and Tangerines;
    (5) Type V--Murcott Honey Oranges (also known as Honey Tangerines) 
and Temple Oranges;
    (6) Type VI--Lemons and Limes; and
    (7) Type VII--Grapefruit for which freeze damage will be adjusted on 
a fresh fruit basis, and late oranges fresh.
    Freeze. The formation of ice in the cells of the fruit caused by low 
air temperatures.
    Good farming practices. The cultural practices generally in use in 
the county for the crop to make normal progress toward maturity and 
produce the expected yield for the type and age of citrus fruit, and are 
those recognized by the Cooperative State Research, Education, and 
Extension Service as compatible with agronomic and weather conditions in 
the county.
    Harvest. The severance of mature citrus fruit from the tree by 
pulling, picking, or any other means, or collecting the marketable fruit 
from the ground.
    Hurricane. A windstorm classified by the U.S. Weather Service as a 
hurricane.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Potential production. Citrus fruit that would have been produced had 
damage not occurred, including citrus fruit that:
    (1) Was harvested before damage occurred;
    (2) Remained on the tree after damage occurred; and
    (3) Was lost from either an insured or uninsured cause;
    But not including citrus fruit that:
    (1) Was lost before insurance attached for any crop year;
    (2) Was lost by normal dropping; or
    (3) Any tangerines that normally would not meet the 210 pack size (2 
and 4/16 inch minimum diameter) under United States Standards by the end 
of the insurance period for tangerines.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by each citrus crop 
designated in the Special Provisions.
    (b) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.
    (c)Instead of establishing optional units by section, section 
equivalent, or FSA farm serial number, optional units may be established 
if each optional unit is located on non-contiguous land.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one coverage level for each Florida citrus 
fruit type shown in section 1 of these crop provisions or designated in 
the Special Provisions, that you elect to insure. If different amounts 
of insurance are available for citrus fruit within a type, you must 
select the same coverage level for each citrus fruit. For example, if 
you choose the 75 percent coverage level for a specific citrus fruit 
within a type, you must also choose the 75 percent coverage level for 
all other citrus fruit within that type.
    (b) In lieu of the production reporting date contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8), potential production 
for each unit will be determined during loss adjustment.
    (c) By the sales closing date contained in the Special Provisions, 
for the first year of insurance for acreage interplanted with another 
citrus fruit crop, and anytime the planting pattern of such acreage is 
changed, you must report the following:
    (1) The age of the interplanted trees and type if applicable;
    (2) The planting pattern; and
    (3) Any other information we request in order to establish your 
amount of insurance.
    (d) We will reduce acreage or the amount of insurance or both, as 
necessary, based on

[[Page 130]]

our estimate of the effect of the interplanted citrus fruit trees on the 
insured citrus fruit crop. If you fail to notify us of any circumstance 
that may reduce the acreage or amount of insurance, we will reduce the 
acreage or amount of insurance or both as necessary any time we become 
aware of the circumstance.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is March 15 preceding 
the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation date 
is April 30 preceding the crop year. The termination date is April 30 of 
the crop year.

                             6. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all acreage of each 
citrus fruit type that you elect to insure, in which you have a share, 
that is grown in the county shown on the application, and for which a 
premium rate is quoted in the actuarial documents.
    (b) In addition to the citrus fruit not insurable in section 8 
(Insured Crop) of the Basic Provisions (Sec. 457.8), we do not insure 
any citrus fruit:
    (1) That cannot be expected to mature each crop year within the 
normal maturity period for the type;
    (2) Produced by trees that have not reached the fifth growing season 
after being set out, unless otherwise provided in the Special Provisions 
or by a written agreement to insure such citrus fruit;
    (3) Of ``Meyer Lemons'' and oranges commonly known as ``Sour 
Oranges'' or ``Clementines''; or
    (4) Of the Robinson tangerine variety, for any crop year in which 
you have elected to exclude such tangerines from insurance. (You must 
elect this exclusion prior to the crop year for which the exclusion is 
to be effective, except that for the first crop year you must elect this 
exclusion by the later of April 30 or the time you submit the 
application for insurance.)
    (c) Upon our approval, prior to the date insurance attaches, you may 
elect to insure or exclude from insurance any insurable acreage that has 
a potential production of less than 100 boxes per acre. If you:
    (1) Elect to insure such acreage, we will consider the potential 
production to be 100 boxes per acre when determining the amount of loss; 
or
    (2) Elect to exclude such acreage, we will disregard the acreage for 
all purposes related to this contract.
    (d) In addition to the provisions in section 6 (Report of Acreage) 
of the Basic Provisions (Sec. 457.8), if you fail to notify us of your 
election to insure or exclude acreage, and the potential production from 
such acreage is 100 or more boxes per acre, we will determine the 
percent of damage on all of the insurable acreage for the unit, but will 
not allow the percent of damage for the unit to be increased by 
including such acreage.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, citrus fruit interplanted with another 
citrus fruit crop is insurable unless we inspect the acreage and 
determine that it does not meet the requirements contained in your 
policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on May 1 of each crop year, except that for the 
year of application if your application is received by us after April 
21, but prior to May 1, insurance will attach on the 10th day after your 
properly completed application, acreage, and production reports are 
received in our local office, unless we inspect the acreage during the 
10 day period and determine that it does not meet the requirements for 
insurability contained in your policy. You must provide any information 
that we require for the crop to determine the condition of the grove to 
be insured.
    (2) The calendar date for the end of the insurance period for each 
crop year is:
    (i) January 31 for tangerines and navel oranges;
    (ii) April 30 for lemons, limes, tangelos, early and mid-season 
oranges; and
    (iii) June 30 for late oranges, grapefruit, Temple, and Murcott 
Honey Oranges.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins, but on or before the acreage reporting date of any crop 
year, and if after inspection we consider the acreage acceptable, then 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of citrus fruit on or before the acreage reporting date of any crop 
year, insurance will not be considered to have attached to, no premium 
will be due

[[Page 131]]

and no indemnity paid for, such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur within the insurance period:
    (1) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the grove;
    (2) Freeze;
    (3) Hail;
    (4) Hurricane; or
    (5) Tornado.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Any damage to the blossoms or trees; or
    (2) Inability to market the citrus fruit 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. 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 units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Calculating the amount of insurance for the unit by multiplying 
the number of acres by the respective dollar amount of insurance per 
acre for the citrus fruit and multiplying that result by your share;
    (2) Calculating the average percent of damage to the respective 
citrus fruit, rounded to the nearest tenth of a percent (0.1%). The 
percent of damage will be the ratio of the number of boxes of citrus 
fruit considered damaged from an insured cause divided by the undamaged 
potential production. Citrus fruit will be considered undamaged 
potential production if it is:
    (i) Marketed or could be marketed as fresh fruit;
    (ii) Harvested prior to inspection by us; or
    (iii) Harvested within 7 days after a freeze;
    (3) Subtracting the coverage level percentage from 100 percent;
    (i) Subtracting this result from the result of section (10)(b)(2); 
and
    (ii) If the result section (10)(b)(3)(i) is positive, dividing this 
result by the coverage level percentage;
    (4) Multiplying the result of section (10)(b)(3)(ii) by the amount 
of insurance for the unit for the respective citrus fruit.
    (For example, if the average percent of damage is 70 percent and the 
coverage level is 75 percent (the deductible is 25 percent), the amount 
payable is 60 percent times the amount of insurance (70% damage - 25 % 
level deductible) = 45% (45% / 75%) 60% adjusted damage times the amount 
of insurance); and
    (5) Totaling all such results of section (10)(b)(4) to determine the 
amount payable for the unit.
    (c) Citrus fruit of Types IV, V, and VII that are seriously damaged 
by freeze, as determined by a fresh-fruit cut of a representative sample 
of fruit in the unit in accordance with the applicable provisions of the 
State of Florida Citrus Fruit laws, and that are not or could not be 
marketed as fresh fruit, will be considered damaged to the following 
extent:
    (1) If less than 16 percent of the fruit in a sample shows serious 
freeze damage, the fruit will be considered undamaged; or
    (2) If 16 percent or more of the fruit in a sample shows serious 
freeze damage, the fruit will be considered 50 percent damaged, except 
that:
    (i) For tangerines of Type IV, damage in excess of 50 percent will 
be the actual percent of damaged fruit; and
    (ii) Citrus of Types IV (except tangerines), V, and VII, if it is 
determined that the juice loss in the fruit exceeds 50 percent, such 
percent will be considered the percent of damage.
    (d) Notwithstanding the provisions of section 10(c) of these crop 
provisions as to citrus fruit of Types IV, V, and VII, in any unit that 
is mechanically separated using the specific-gravity (floatation) method 
into undamaged and freeze-damaged fruit, the amount of damage will be 
the actual percent of freeze-damaged fruit not to exceed 50 percent and 
will not be affected by subsequent fresh-fruit marketing. However, the 
50 percent limitation on mechanically-separated, freeze-damaged fruit 
will not apply to tangerines of citrus fruit Type IV.
    (e) Any citrus fruit of Types I, II, III, and VI damaged by freeze, 
but that can be processed into products for human consumption, will be 
considered as marketable for juice. The percent of damage will be 
determined by

[[Page 132]]

relating the juice content of the damaged fruit to:
    (1) The average juice content of the fruit produced on the unit for 
the three previous crop years based on your records, if they are 
acceptable to us; or
    (2) The following juice content, if acceptable records are not 
furnished:
    (i) Type I--52 pounds of juice per box
    (ii) Type II--54 pounds of juice per box
    (iii) Type III--45 pounds of juice per box
    (iv) Type VI--43 pounds of juice per box
    (f) Any citrus fruit on the ground that is not collected and 
marketed will be considered as 100 percent damaged if the damage was due 
to an insured cause.
    (g) Any citrus fruit that is unmarketable either as fresh fruit or 
as juice because it is immature, unwholesome, decomposed, adulterated, 
or otherwise unfit for human consumption due to an insured cause will be 
considered as 100 percent damaged.
    (h) Citrus fruit of Types IV, V, and VII that are unmarketable as 
fresh fruit due to serious damage from hail as defined in the applicable 
United States Standards for Grades of Florida fruit will be considered 
totally lost.

                     11. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[61 FR 69002, Dec. 31, 1996, as amended at 62 FR 65166, Dec. 10, 1997]



Sec. 457.108  Sunflower seed crop insurance provisions.

    The sunflower seed crop insurance provisions for the 2003 and 
succeeding crop years are as follows:

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                     Sunflower Seed Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Harvest--Combining or threshing the sunflowers for seed.
     Local market price--The cash seed price per pound for oil type 
sunflower seed grading U.S. No. 2, or non-oil type sunflower seed with a 
test weight of at least 22 pounds per bushel and less than five percent 
(5%) kernel damage, offered by buyers in the area in which you normally 
market the sunflower seed. The local market price for oil type sunflower 
seed will reflect the maximum limits of quality deficiencies allowable 
for the U.S. No. 2 grade of sunflower seed. Factors not associated with 
grading of sunflower seed under the Official United States Standards for 
Grain including, but not limited to, oil or moisture content will not be 
considered.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, sunflower seed must initially be planted ini rows far 
enough apart to permit mechanical cultivation, unless otherwise provided 
by the Special Provisions, actuarial documents, or by written agreement.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8), you may select only one price election for all 
the sunflower seed in the county insured under this policy. 
Notwithstanding the preceding sentence, if the Special Provisions 
provide different price elections by type, you may select one price 
election for each sunflower seed type designated in the Special 
Provisions.

                           3. Contract Changes

    The contract change date is November 30 (December 17 for the 1998 
crop year only) preceding the cancellation date (see the provisions of 
Section 4 (Contract Changes) of the Basic Provisions).

                  4. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions (Sec. 457.8), 
the cancellation and termination dates are March 15.

                             5. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the oil and non-oil type 
sunflower seed in the county for which a premium rate is provided by the 
actuarial documents:
    (a) In which you have a share;
    (b) That is planted for harvest as sunflower seed; and
    (c) That is not (unless a written agreement allows otherwise):
    (1) Interplanted with another crop; or
    (2) Planted into an established grass or legume.

                          6. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8):
    (a) We will not insure any acreage which does not meet the rotation 
requirements shown in the Special Provisions; and
    (b) Any acreage of the insured crop damaged before the final 
planting date, to the extent that a majority of producers in the area 
would not normally further care for the crop,

[[Page 133]]

must be replanted unless we agree that it is not practical to replant.

                           7. Insurance Period

    In accordance with the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8), the calendar date for the end of 
the insurance period is November 30, immediately following planting.

                            8. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss which occur within the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) If applicable, failure of the irrigation water supply due to an 
unavoidable cause of loss occurring after the beginning of planting.

                         9. Replanting Payments

    (a) In accordance with section 13 of the Basic Provisions, a 
replanting payment for sunflower seed is allowed if the sunflowers are 
damaged by an insurable cause of loss to the extent that the remaining 
stand will not produce at least ninety percent of the production 
guarantee for the acreage and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of twenty percent (20%) of the production guarantee or 175 
(pounds of seed), multiplied by your price election, multiplied by your 
insured share or the share determined in accordance with section 9(c), 
if applicable.
    (c) When more than one person insures the same crop on a share 
basis, a replanting payment based on the total shares insured by us may 
be made to the insured person who incurs the total cost of replanting. 
Payment will be made in this manner only if an agreement exists between 
the insured persons which:
    (1) Requires one person to incur the entire cost of replanting; or
    (2) Gives the right to all replanting payments to one person.
    (d) When sunflower seed is replanted using a practice that is 
uninsurable as an original planting, the liability for the unit will be 
reduced by the amount of the replanting payment which is attributable to 
your share. The premium amount will not be reduced.

                10. Duties in the Event of Damage or Loss

    In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the 
representative samples of the unharvested crop must be at least 10 feet 
wide and extend the entire length of each field in the unit. The samples 
must not be harvested or destroyed until the earlier of our inspection 
or 15 days after harvest of the balance of the unit is completed.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production:
    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage of each type of sunflower seed 
by the production guarantee for the applicable type;
    (2) Multiplying each result by the price election for the applicable 
type;
    (3) Adding these values;
    (4) Multiplying the production to count of each type of sunflower 
seed by the price election for that type;
    (5) Adding these dollar values;
    (6) Subtracting the result of step (5) from the result of step (3); 
and
    (7) Multiplying the result by your share.
    (c) The total production (pounds) to count from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide records of production that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
subsection 11(d)); and
    (iv) Potential production on insured acreage you want to put to 
another use or you wish to abandon and no longer care for, if you and we 
agree on the appraised amount of production. Upon such agreement, the 
insurance period for that acreage will end if you put the acreage to 
another use or abandon the crop. If agreement on the appraised amount of 
production is not reached:

[[Page 134]]

    (A) If 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 the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count.); or
    (B) If 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.
    (d) Mature sunflower seed production may be adjusted for excess 
moisture and quality deficiencies. If moisture adjustment is applicable, 
it will be made prior to any adjustment for quality.
    (1) Production will be reduced by 0.12 percent for each 0.1 
percentage point of moisture in excess of ten percent (10%). We may 
obtain samples of the production to determine the moisture content.
    (2) Production will be eligible for quality adjustment if:
    (i) Deficiencies in quality result in:
    (A) Oil type sunflower seed not meeting the grade requirements for 
U.S. No. 2 (grades U.S. sample grade) because of test weight, kernel 
damage (excluding heat damage), or a musty, sour or commercially 
objectionable foreign odor; or
    (B) Non-oil type sunflower seed having a test weight below 22 pounds 
per bushel or kernel damage (excluding heat damage) in excess of five 
percent (5%) or a musty, sour or commercially objectionable foreign 
odor; or
    (ii) Substances or conditions are present that are identified by the 
Food and Drug Administration or other public health organizations of the 
United States as being injurious to human or animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions, resulted from a 
cause of loss against which insurance is provided under these crop 
provisions and within the insurance period ;
    (ii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us or by 
a disinterested third party approved by us;
    (iii) With regard to deficiencies in quality (except test weight, 
which may be determined by our loss adjustor), the samples are analyzed 
by:
    (A) A grain grader licensed under the United States Grain Standards 
Act or the United States Warehouse Act;
    (B) A grain grader licensed under State law and employed by a 
warehouse operator who has a storage agreement with the Commodity Credit 
Corporation; or
    (C) A grain grader not licensed under State law, but who is employed 
by a warehouse operator who has a commodity storage agreement with the 
Commodity Credit Corporation and is in compliance with State law 
regarding warehouses; and
    (iv) With regard to substances or conditions injurious to human or 
animal health, the samples are analyzed by a laboratory approved by us.
    (4) Sunflower seed production that is eligible for quality 
adjustment, as specified in paragraphs 11(d) (2) and (3), will be 
reduced:
    (i) In accordance with quality adjustment factor provisions 
contained in the Special Provisions; or
    (ii) As follows, if quality adjustment factor provisions are not 
contained in the Special Provisions:
    (A) The market price of the qualifying damaged production and the 
local market price will be determined on the earlier of the date such 
quality adjusted production is sold or the date of final inspection for 
the unit. The price for the qualifying damaged production will be the 
market price for the local area to the extent feasible. Discounts used 
to establish the net price of the damaged production will be limited to 
those which are usual, customary, and reasonable. The price will not be 
reduced for:
    (1) Moisture content;
    (2) Damage due to uninsured causes; or
    (3) Drying, handling, processing, or any other costs associated with 
normal harvesting, handling, and marketing of the sunflower seed; 
except, if the price of the damaged production can be increased by 
conditioning, we may reduce the price of the production after it has 
been conditioned by the cost of conditioning but not lower than the 
value of the production before conditioning. (We may obtain prices from 
any buyer of our choice. If we obtain prices from one or more buyers 
located outside your local market area, we will reduce such prices by 
the additional costs required to deliver the sunflower seed to those 
buyers.);
    (B) The value of the damaged or conditioned production will be 
divided by the local market price to determine the quality adjustment 
factor; and
    (C) The number of pounds remaining after any reduction due to 
excessive moisture (the

[[Page 135]]

moisture-adjusted gross pounds (if appropriate)) of the damaged or 
conditioned production will then be multiplied by the quality adjustment 
factor to determine the net production to count.
    (e) Any production harvested from plants growing in the insured crop 
may be counted as production of the insured crop on a weight basis.

                         12. Prevented Planting

    Your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase you prevented 
planting coverage to a level specified in the actuarial documents.

[59 FR 67136, Dec. 29, 1994, as amended at 60 FR 62727, Dec. 7, 1995; 62 
FR 63633, Dec. 2, 1997; 62 FR 65166, Dec. 10, 1997; 67 FR 55690, Aug. 
30, 2002]



Sec. 457.109  Sugar Beet Crop Insurance Provisions.

    The Sugar Beet Crop Insurance Provisions for the 1998 and succeeding 
crop years in countries with a contract change date of November 30, and 
for the 1999 and succeeding crop years in countries with a contract 
change date of April 30, are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured policies

(Appropriate title for insurance provider)
    Both FCIC and Reinsured Policies

                       Sugar Beet Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Crop year. In Imperial, Lassen, Modoc, Shasta and Siskiyou counties, 
California and all other States, the period within which the sugar beets 
are normally grown, which is designated by the calendar year in which 
the sugar beets are normally harvested. In all other California 
counties, the period from planting until the applicable date for the end 
of the insurance period which is designated by:
    (a) The calendar year in which planted if planted on or before July 
15; or
    (b) The following calendar year if planted after July 15.
    Harvest. Topping and lifting of sugar beets in the field.
    Initially planted. The first occurrence that land is considered as 
planted acreage for the crop year.
    Local market price. The price per pound for raw sugar offered by 
buyers in the area in which you normally market the sugar beets.
    Planted acreage.--In addition to the definition contained in the 
Basic Provisions, sugar beets must initially be planted in rows, unless 
otherwise provided by the Special Provisions, actuarial documents, or by 
written agreement.
    Practical to replant. In lieu of the definition of ``Practical to 
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8), 
practical to replant is defined as our determination, after loss or 
damage to the insured crop, based on factors, including but not limited 
to moisture availability, condition of the field, time to crop maturity, 
and marketing window, that replanting the insured crop will allow the 
crop to attain maturity prior to the calendar date for the end of the 
insurance period. It will not be considered practical to replant if 
production from the replanted acreage cannot be delivered under the 
terms of the processor contract, or 30 days after the initial planting 
date for all counties where a late planting period is not applicable, 
unless replanting is generally occurring in the area.
    Processor. Any business enterprise regularly engaged in processing 
sugar beets for sugar that possesses all licenses and permits for 
processing sugar beets required by the State in which it operates, and 
that possesses facilities, or has contractual access to such facilities, 
with enough equipment to accept and process the contracted sugar beets 
within a reasonable amount of time after harvest.
    Production guarantee (per acre):
    (a) First stage production guarantee--The final stage production 
guarantee multiplied by 60 percent.
    (b) Final stage production guarantee--The number of tons determined 
by multiplying the approved yield per acre by the coverage level 
percentage you elect.
    Raw sugar. Sugar that has not been extracted from the sugar beet.
    Standardized ton. A ton of sugar beets containing the percentage of 
raw sugar specified in the Special Provisions.
    Sugar beet processor contract. A written contract between the 
producer and the processor, containing at a minimum:
    (1) The producer's commitment to plant and grow sugar beets, and to 
deliver the sugar beet production to the processor;
    (2) The processor's commitment to purchase the production stated in 
the contract; and

[[Page 136]]

    (3) A price or formula for a price based on third party data that 
will be paid to the producer for the production stated in the contract.
    Thinning. The process of removing, either by machine or hand, a 
portion of the sugar beet plants to attain a desired plant population.
    Ton. Two thousand (2,000) pounds avoirdupois.

                            2. Unit Division

    In addition to the requirements of section 34 of the Basic 
Provisions, basic units may be divided into optional units only if you 
have a sugar beet processor contract that requires the processor to 
accept all production from a number of acres specified in the sugar beet 
processor contract. Acreage insured to fulfil a a sugar beet contract 
which provides that the processor will accept a designated amount of 
production or a combination of acreage and production will not be 
eligible for optional units.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8), you may select only one price 
election for all the sugar beets in the county insured under this 
policy.
    (b) The production guarantees are progressive by stages, and 
increase at specified intervals to the final stage. The stages are:
    (1) First stage, with a guarantee of 60 percent (60%) of the final 
stage production guarantee, extends from planting until:
    (i) July 1 in Lassen, Modoc, Shasta and Siskiyou counties, 
California and all other States except Arizona; and
    (ii) The earlier of thinning or 90 days after planting in Arizona 
and all other California counties.
    (2) Final stage, with a guarantee of 100 percent (100%) of the final 
stage production guarantee, applies to all insured sugar beets that 
complete the first stage.
    (c) The production guarantee will be expressed in standardized tons.
    (d) Any acreage of sugar beets damaged in the first stage to the 
extent that growers in the area would not normally further care for the 
sugar beets will be deemed to have been destroyed, even though you may 
continue to care for it. The production guarantee for such acreage will 
not exceed the first stage production guarantee.

                           4. Contract Changes

    In accordance with the provisions of section 4 (Contract Changes) of 
the Basic Provisions, the contract change date is April 30 preceding the 
cancellation date for counties with a July 15 or August 31 cancellation 
date and November 30 (December 17 for the 1998 crop year only) preceding 
the cancellation date for all other counties.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

 
------------------------------------------------------------------------
                                                             Termination
       State and County              Cancellation date           date
------------------------------------------------------------------------
Arizona; and Imperial County,  August 31...................  August 31.
 California.
All California counties,       July 15.....................  November
 except Imperial, Lassen,                                       30.
 Modoc, Shasta and Siskiyou.
All Other States, and Lassen,  March 15....................  March 15.
 Modoc, Shasta and Siskiyou
 Counties, California.
------------------------------------------------------------------------

                            6. Annual Premium

    In lieu of the premium computation method contained in section 7 
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual 
premium amount is computed by multiplying the final stage production 
guarantee by the price election, the premium rate, the insured acreage, 
your share at the time of planting, and any applicable premium 
adjustment factors contained in the Actuarial Table.

                             7. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the sugar beets in 
the county for which a premium rate is provided by the actuarial 
documents:
    (1) In which you have a share;
    (2) That are planted for harvest as sugar beets;
    (3) That are grown under a sugar beet processor contract executed 
before the acreage reporting date and are not excluded from the 
processor contract at any time during the crop year; and
    (4) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop;
    (ii) Planted into an established grass or legume; or
    (iii) Planted prior to submitting a properly completed application.
    (b) Sugar beet growers who are also processors may establish an 
insurable interest if they meet the following requirements:
    (1) The processor must meet the definition of a ``processor'' in 
section 1 of these crop provisions and have a valid insurable interest 
in the sugar beet crop;

[[Page 137]]

    (2) The Board of Directors or officers of the processor must have 
duly promulgated a resolution that sets forth essentially the same terms 
as a sugar beet processor contract. Such resolution will be considered a 
sugar beet processing contract under the terms of the sugar beet crop 
insurance policy;
    (3) The sales records of the processor showing the amount of sugar 
produced the previous year must be supplied to us to confirm the 
processor has produced and sold sugar in the past; and
    (4) Our inspection of the processing facilities determines that they 
conform to the definition of processor contained in section 1 of these 
crop provisions.

                          8. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8):
    (a) We will not insure any acreage planted to sugar beets:
    (1) The preceding crop year, unless otherwise specified in the 
Special Provisions for the county;
    (2) In any crop year following the discovery of rhizomania on the 
acreage, unless allowed by the Special Provisions or by written 
agreement; or
    (3) That does not meet the rotation requirements shown in the 
Special Provisions;
    (b) Any acreage of the insured crop damaged before the final 
planting date, (or within 30 days of initial planting for those counties 
without a final planting date) to the extent that growers in the area 
would normally not further care for the crop, must be replanted unless 
we agree that replanting is not practical.

                           9. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the calendar date for the 
end of the insurance period is:
    (1) July 15 in Arizona and in Imperial County, California;
    (2) The last day of the 12th month after the insured crop was 
initially planted in all California counties except Imperial, Lassen, 
Modoc, Shasta and Siskiyou;
    (3) October 31 in Lassen, Modoc, Shasta and Siskiyou Counties, 
California, and in Klamath County, Oregon;
    (4) November 25 in Ohio;
    (5) December 31 in New Mexico and Texas; and
    (6) November 15 in all other States and counties.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8), regarding the end of the insurance 
period, the insurance period ends for all units when the production 
delivered to the processor equals the amount of production stated in the 
sugar beet processor contract.

                           10. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur within the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.

                         11. Replanting Payments

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if the crop is 
damaged by an insurable cause of loss to the extent that the remaining 
stand will not produce at least 90 percent (90%) of the final stage 
production guarantee for the acreage and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of 10 percent (10%) of the final stage production guarantee 
or one ton, multiplied by your price election, multiplied by your 
insured share.
    (c) When sugar beets are replanted using a practice that is 
uninsurable for an original planting, our liability on the unit will be 
reduced by the amount of the replanting payment. The premium amount will 
not be reduced.

                12. Duties In The Event of Damage or Loss

    In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8):
    (a) Representative samples of the unharvested crop must be at least 
10 feet wide and extend the entire length of each field in the unit. The 
samples must not be harvested or destroyed until the earlier of our 
inspection or 15 days after harvest of the balance of the unit is 
completed; and
    (b) You must provide a copy of your sugar beet processor contract or 
corporate resolution if you are the processor.

                         13. 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:

[[Page 138]]

    (1) For any optional unit, we will combine all optional units for 
which acceptable production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Subtracting the total production to count from the result in 
paragraph (b)(1);
    (3) Multiplying the result of paragraph (b)(2) by your price 
election; and
    (4) Multiplying the result of paragraph (b)(3) by your share.
    (c) The total production to count (in standardized tons) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records that 
are acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (unharvested production that is 
appraised prior to the earliest delivery date that the processor accepts 
harvested production will not be eligible for a conversion to 
standardized tons in accordance with section 13 (d) and (e));
    (iv) Only appraised production in excess of the difference between 
the first and final stage production guarantee for acreage that does not 
qualify for the final stage guarantee will be counted, except that all 
production from acreage subject to section 13(c)(1) (i) and (ii) will be 
counted; and
    (v) 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 if you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If 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 the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If 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.
    (d) Harvested production or unharvested production that is appraised 
after the earliest delivery date that the processor accepts harvested 
production and that meets the minimum acceptable standards contained in 
the sugar beet processor contract or corporate resolution will be 
converted to standardized tons by:
    (1) Dividing the average percentage of raw sugar in such sugar beets 
by the raw sugar content percentage shown in the Special Provisions; and
    (2) Multiplying the result (rounded to three places) by the number 
of tons of such sugar beets.
    The average percentage of raw sugar will be determined from tests 
performed by the processor at the time of delivery. If individual tests 
of raw sugar content are not made at the time of delivery, the average 
percent of raw sugar may be based on the results of previous tests 
performed by the processor during the crop year if it is determined that 
such results are representative of the total production. If not 
representative, the average percent of raw sugar will equal the raw 
sugar content percent shown in the Special Provisions.
    (e) Harvested production or unharvested production that is appraised 
after the earliest delivery date that the processor accepts harvested 
production and that does not meet the minimum acceptable standards 
contained in the sugar beet processor contract due to an insured peril 
will be converted to standardized tons by:
    (1) Dividing the gross dollar value of all of the damaged sugar 
beets on the unit (including the value of cooperative stock, patronage 
refunds, etc.) by the local market price per pound on the earlier of the 
date such production is sold or the date of final inspection for the 
unit;
    (2) Dividing that result by 2,000; and
    (3) Dividing that result by the county average raw sugar factor 
contained in the Special Provisions for this purpose.
    For example, assume that the total dollar value of the damaged sugar 
beets is $6,000.00; the local market price is $0.10; and the county 
average raw sugar factor is 0.15. The amount of production to count 
would be calculated as follows: (($6,000.00 / $0.10) / 2,000) / 0.15 = 
200 tons.

[[Page 139]]

                     14. Late and Prevented Planting

    The late planting provisions contained in section 16 of the Basic 
Provisions are not applicable in California counties with a July 15, 
cancellation date.

                         15. Prevented Planting

    (a) The prevented planting provision contained in sectino 17 of the 
Basic Provisions are not applicable in Califronia counties with a July 
15, cancellation date.
    (b) Except in those counties indicated in section 15(a), your 
prevented planting coverage will be 45 percent of your production 
guarantee for timely planted acreage. If you have limited or additional 
levels of coverage, as specified in 7 CFR part 400, subpart T, and pay 
an additional premium, you may increase your prevented planting coverage 
to a level specified in the actuarial documents.

[61 FR 58775, Nov. 19, 1996, as amended at 62 FR 63633, Dec. 2, 1997; 62 
FR 65167, Dec. 10, 1997]



Sec. 457.110  Fig crop insurance provisions.

    The Fig Crop Insurance Provisions for the 2001 and succeeding crop 
years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Fig Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Harvest--The picking of the figs from the trees or ground by hand or 
machine for the purpose of removal from the orchard.
    Interplanted--Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Manufacturing grade production-- Production that meets the minimum 
grade standards and is defined as ``manufacturing grade'' by the 
Marketing Order for Dried Figs, as amended, which is in effect on the 
date insurance attaches.
    Marketable figs-- Figs that grade manufacturing grade or better in 
accordance with the Marketing Order for Dried Figs, as amended, which is 
in effect on the date insurance attaches.
    Substandard production-- Production that does not meet minimum grade 
standards and is defined as ``substandard'' by the Marketing Order for 
Dried Figs, as amended, which is in effect on the date insurance 
attaches.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by each fig type designated 
in the Special Provisions.
    (b) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may be 
established only if each optional unit is located on non-contiguous 
land, unless otherwise allowed by written agreement.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements under section 3 of the Basic 
Provisions, you may select only one price election for each fig type 
designated in the Special Provisions and insured in the county under 
this policy.
    (b) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election if a 
cause of loss that could or would reduce the yield of the insured crop 
has occurred prior to the time you request the increase.
    (c) You must report, by the production reporting date designated in 
section 3 of the Basic Provisions, by type if applicable:
    (1) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern;
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed, the age of the crop that is interplanted with the figs, and 
type if applicable, and the planting pattern; and
    (5) Any other information that we request in order to establish your 
approved yield. We will reduce the yield used to establish your 
production guarantee as necessary, based on our estimate of the effect 
of the following: Interplanted perennial crop; removal of trees; damage; 
change in practices and any other circumstance on the yield potential of 
the insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time we become aware of the circumstance.

[[Page 140]]

                           4. Contract Changes

    The contract change date is October 31 preceding the cancellation 
date (see the provisions under section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8)).

                  5. Cancellation and Termination Dates

    The cancellation and termination dates are February 28.

                          6. Report of Acreage

    By applying for fig crop insurance, you authorize us to have access 
to and to determine or verify your production and acreage from records 
maintained by the California Fig Advisory Board and the fig packer.

                             7. Insured Crop

    The crop insured will be all the commercially grown dried figs that 
are grown in the county on insurable acreage, and for which a premium 
rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are grown for harvest as dried figs;
    (c) That are irrigated;
    (d) That have reached the seventh growing season after being set 
out; and
    (e) For which acceptable production records for at least the 
previous crop year are provided;
    (f) That are not figs:
    (1) Grown on acreage with less than 90 percent of a stand based on 
the original planting pattern unless we agree, in writing, to insure 
such figs;
    (2) Which we inspect and consider not acceptable;
    (3) Grown for the crop year the application is filed unless 
inspected and accepted by us; or
    (4) Grown on acreage acquired for the crop year unless such acreage 
has been inspected and accepted by us.

                          8. Insurable Acreage

    In lieu of the provisions in section 9 of the Basic Provisions, that 
prohibit insurance attaching to a crop planted with another crop, figs 
interplanted with another perennial crop are insurable unless we inspect 
the acreage and determine that it does not meet the requirements 
contained in your policy.

                           9. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) Coverage begins on March 1, except that for the year of 
application, if your application is received after February 19 but prior 
to March 1, insurance will attach on the 10th day after your properly 
completed application is received in our local office, unless we inspect 
the acreage during the 10 day period and determine that it does not meet 
insurability requirements. You must provide any information that we 
require for the crop or to determine the condition of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is October 31 or the date harvest of the figs (by type) should 
have started on any acreage that will not be harvested (Exceptions, if 
any, for specific counties or varieties or varietal group are contained 
in the Special Provisions).
    (b) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that 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.
    (c) If your fig policy is canceled or terminated for any crop year, 
in accordance with the terms of the policy, after insurance attached for 
that crop year but on or before the cancellation and termination dates 
whichever is later, insurance will not be considered to have attached 
for that crop year and no premium, administrative fee, or indemnity will 
be due for such crop year.

                           10. Causes of Loss

    (a) In addition to the provisions under section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), any loss covered by this policy 
must occur within the insurance period. The specific causes of loss for 
figs are:
    (1) Adverse weather conditions;
    (2) Earthquake;
    (3) Fire;
    (4) Volcanic eruption;
    (5) Wildlife; or
    (6) Failure of the irrigation water supply.
    (b) In addition to the causes of loss not insured against contained 
in section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), we 
will not insure against:
    (1) Any loss of production due to fire, where weeds and other forms 
of undergrowth have not been controlled or tree pruning debris has not 
been removed from the grove; or
    (2) The inability to market the fruit as a direct result of 
quarantine, boycott, or refusal of any entity to accept production.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production that are acceptable to us 
for any:
    (1) Optional unit, we will combine all optional units for which 
acceptable records of production were not provided; or

[[Page 141]]

    (2) Basic unit, we will allocate any commingled production to such 
units in proportion to our liability on the harvested acreage for each 
unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by the production guarantee;
    (2) Subtracting from this the total production to count;
    (3) Multiplying the remainder by your price election; and
    (4) Multiplying this result by your share.
    (c) The total production (pounds) to count from all insurable 
acreage on the unit will include all harvested and appraised marketable 
figs.
    (1) Figs, which due to insurable causes, grade manufacturing grade 
will be adjusted by:
    (i) Dividing the value per pound of the manufacturing grade 
production by the highest price election available for the insured type; 
and
    (ii) Multiplying the result (not to exceed 1) by the number of 
pounds of such manufacturing grade production.
    (2) Figs, which due to insurable causes, grade substandard and are 
delivered to the substandard pool will not be considered production to 
count, provided all the insured's substandard production is inspected by 
us and we give written consent to such delivery prior to delivery. If we 
do not give written consent prior to the delivery to the substandard 
pool, all production will be counted as undamaged marketable production. 
Substandard production for which we give written consent to you prior to 
delivery to the substandard pool, which is not delivered to the 
substandard pool, and is sold by you, will be considered production to 
count and adjusted as follows:
    (i) Dividing the value per pound received for such substandard 
production by the highest price election available for the insured type; 
and
    (ii) Multiplying the result (not to exceed 1) by the number of 
pounds of such substandard production.
    (3) Appraised production to be counted will include:
    (i) Potential production lost due to uninsured causes and failure to 
follow recognized good fig farming practices;
    (ii) Not less than the production guarantee for the figs on any 
acreage:
    (A) That is abandoned without our consent;
    (B) Damaged solely by uninsured causes;
    (c) If the figs are destroyed by you without our consent; or
    (D) For which you fail to provide records of production that are 
acceptable to us;
    (iii) Unharvested production which would be marketable if harvested; 
and
    (iv) Potential production on insured acreage that you want to 
abandon and no longer care for if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end if you abandon the crop. If agreement on the appraised 
amount of production is not reached:
    (A) We may require you to continue to care for the crop so that a 
subsequent appraisal may be made or the crop harvested to determine 
actual production. You must notify us within three days of the date 
harvest should have started if the crop is not harvested; or
    (B) You may elect to continue to care for the crop. We will 
determine the amount of production to count for the acreage using the 
harvested production or our reappraisal if the crop is not harvested.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[59 FR 9615, Mar. 1, 1994, as amended at 62 FR 65167, Dec. 10, 1997; 65 
FR 47836, Aug. 4, 2000]



Sec. 457.111  Pear crop insurance provisions.

    The Pear Crop Insurance Provisions for the 2001 and succeeding crop 
years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and Reinsured Policies

                          Pear Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper, or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Harvest. The picking of mature pears from the trees or the 
collecting of marketable pears from the ground.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Marketable. Pear production acceptable for processing or other human 
consumption even

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if failing to meet any U.S. or applicable state grading standard.
    Ton. Two thousand (2,000) pounds avoirdupois.
    Varietal group. Types of pears with similar characteristics that are 
grouped for insurance purposes as specified in the Special Provisions.

                            2. Unit Division

    (a) Provisions in the Basic Provision that allow optional units by 
irrigated and non-irrigated practices are not applicable.
    (b) Instead of establishing optional units by section, section 
equivalents, or FSA farm serial number optional units may be established 
if each optional unit is located on non-contiguous.
    (c) In addition to, or instead of, establishing optional units by 
section, section equivalents, FSA farm serial number, or on non-
contiguous land, optional units may be established by varietal group 
when provided for in the Special Provisions. The requirements of section 
34(a)(1) of the Basic Provisions are not applicable for this method of 
unit division.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election for all the pears in the 
county insured under this policy unless the Special Provisions provide 
different price elections by varietal group, in which case you may 
select one price election for each varietal group designated in the 
Special Provisions. The price elections you choose for each varietal 
group must have the same percentage relationship to the maximum price 
offered by us for each varietal group. For example, if you choose one 
hundred percent (100%) of the maximum price election for one varietal 
group, you must also choose one hundred percent (100%) of the maximum 
price election for all other varietal groups.
    (b) You must report, by the production reporting date designated in 
section 3 (Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities) of the Basic Provisions (Sec. 457.8), by 
varietal group:
    (1) Any damage, removal of trees, change in practices or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and any time the planting pattern of such 
acreage is changed:
    (i) The age of the interplanted crop, and type if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield. We will reduce the yield used to establish your 
production guarantee as necessary, based on our estimate of the effect 
of the following: interplanted perennial crop; removal of trees; damage; 
change in practices or any other circumstance on the yield potential of 
the insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time that we become aware of the 
circumstance.
    (c) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election if a 
cause of loss that could or would reduce the yield of the insured crop 
has occurred prior to the time that you request the increase.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is October 31 
preceding the cancellation date for states with a January 31 
cancellation date and August 31 preceding the cancellation date for all 
other states.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

------------------------------------------------------------------------
                                           Cancellation and termination
                 States                               dates
------------------------------------------------------------------------
California.............................  January 31.
All other states.......................  November 20.
------------------------------------------------------------------------

                             6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the pears in the county for 
which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are of varieties adapted to the area;
    (c) That are grown on trees that have produced an average of at 
least five (5) tons of pears per acre in at least one of the four 
previous crop years unless the Special Provisions or a written agreement 
establishes a lower production level; and
    (d) That are grown in an orchard that, if inspected, is considered 
acceptable by us.

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                          7. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, pears interplanted with another 
perennial crop are insurable unless we inspect the acreage and determine 
that it does not meet the requirements contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins:
    (i) In California, on February 1 of each crop year, except that for 
the year of application, if your application is received after January 
22 but prior to February 1, insurance will attach on the 10th day after 
your properly completed application is received in our local office, 
unless we inspect the acreage during the 10 day period and determine 
that it does not meet insurability requirements. You must provide any 
information that we require for the crop or to determine the condition 
of the orchard; or
    (ii) In all other states, on November 21 of each crop year, except 
that for the year of application, if your application is received after 
November 11 but prior to November 21, insurance will attach on the 10th 
day after your properly completed application is received in our local 
office, unless we inspect the acreage during the 10 day period and 
determine that it does not meet insurability requirements. You must 
provide any information that we require for the crop or to determine the 
condition of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is:
    (i) September 15 for Bartlett (green and red) and Star Crimson 
(Crimson Red) varietal groups; or
    (ii) October 15 for all other varietal groups.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable interest on any insurable 
acreage of pears on or before the acreage reporting date of any crop 
year, insurance will not be considered to have attached to, and no 
premium will be due, and no indemnity paid, for such acreage for that 
crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.
    (c) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that 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.
    (d) If your pear policy is canceled or terminated for any crop year, 
in accordance with the terms of the policy, after insurance attached for 
that crop year but on or before the cancellation and termination dates 
whichever is later, insurance will not be considered to have attached 
for that crop year and no premium, administrative fee, or indemnity will 
be due for such crop year.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur within the insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the orchard;
    (3) Earthquake;
    (4) Volcanic eruption; or
    (5) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available.
    (2) Failure of the fruit to color properly; or
    (3) Inability to market the pears 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

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of

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the Basic Provisions (Sec. 457.8), the following will apply:
    (a) You must notify us within 3 days of the date harvest should have 
started if the crop will not be harvested.
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing. We will conduct an appraisal 
that will be used to determine your production to count for production 
that is sold by direct marketing. If damage occurs after this appraisal, 
we will conduct an additional appraisal. These appraisals, and any 
acceptable records provided by you, will be used to determine your 
production to count. Failure to give timely notice that production will 
be sold by direct marketing will result in an appraised amount of 
production to count of not less than the production guarantee per acre 
if such failure results in our inability to make the required appraisal.
    (c) If you intend to claim an indemnity on any unit, you must notify 
us at least 15 days prior to the beginning of harvest if you previously 
gave notice in accordance with section 14 of the Basic Provisions 
(Sec. 457.8), so that we may inspect the damaged production. You must 
not sell or dispose of the damaged crop until after we have given you 
written consent to do so. If you fail to meet the requirements of this 
section, and such failure results in our inability to inspect the 
damaged production, all such production will be considered undamaged and 
included as production to count.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide 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 covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each varietal group if 
applicable, by its respective production guarantee;
    (2) Multiplying the results of section 11(b)(1) by the respective 
price election for each varietal group, if applicable;
    (3) Totaling the results of section 11(b)(2);
    (4) Multiplying the total production to be counted of each varietal 
group, if applicable, by the respective price election;
    (5) Totaling the results of section 11(b)(4);
    (6) Subtracting this 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.
    (c) The total production to count (in tons) 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 sold by direct marketing if you fail to meet the 
requirements contained in section 10;
    (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 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count; and
    (2) For all states except California, all harvested and appraised 
marketable pear production from the insurable acreage.
    (3) For California, all harvested and appraised production that:
    (i) Meets the standards for first grade canning as defined by the 
California Pear Advisory Board or for U.S. Number 1 as defined by the 
United States Standards for Grades of Summer and Fall Pears, or Pears 
for Processing, or for U.S. Extra Number 1 or U.S. Number 1 as defined 
by the United States Standards for Grades of Winter Pears;
    (ii) Is accepted by a processor for canning or packing; or
    (iii) Is marketable for any purpose. However, if the pears are 
damaged by an insured cause, the production to count will be reduced by 
the greater of the following amounts:
    (A) The excess over ten percent (10%) of pears that are size 180 or 
smaller for varieties other than Forelle, Seckel or Winter Nelis; or
    (B) The result of dividing the value per ton of such pears by the 
highest price election for the insured varietal group, subtracting this 
result from 1.000, and multiplying this difference (if positive) by the 
number of tons of such pears.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

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                 13. Pear Quality Adjustment Endorsement

    (a) This endorsement applies to any crop year: Provided,
    (1) The insured pears are located in a State other than California 
and the actuarial documents designate a premium rate for this 
endorsement;
    (2) You have not elected to insure your pears under the Catastrophic 
Risk Protection (CAT) Endorsement;
    (3) You elected it on your application or other form approved by us, 
and did so on or before the sales closing date for the initial crop year 
for which you wish it to be effective. By doing so, you agreed to pay 
the additional premium designated in the actuarial documents for this 
optional coverage; and
    (4) You or we did not cancel it in writing on or before the 
cancellation date. Your election of CAT coverage for any crop year after 
this endorsement is effective will be considered as notice of 
cancellation by you.
    (b) If the pear production is damaged by hail and if eleven percent 
(11%) or more of the harvested and appraised production does not grade 
at least U.S. No. 2 in accordance with applicable United States 
Standards for Grades of Summer and Fall Pears, United States Standards 
for Grades of Winter Pears, or United States Standards for Grades of 
Pears for Processing, as applicable, due solely to hail, the amount of 
production to count will be reduced as follows:
    (1) By two percent (2%) for each full one percent (1%) in excess of 
ten percent (10%), when eleven percent (11%) through sixty percent (60%) 
of the pears fail the grade standard; or
    (2) By one hundred percent (100%) when more than sixty percent (60%) 
of the pears fail the grade standard.
    The difference between the reduced production determined in section 
13(b) and the total production will be considered as cull production.
    (c) Pears that are knocked to the ground by wind or that are frozen 
and cannot be packed or marketed as fresh pears will be considered one 
hundred percent (100%) cull production.
    (d) Marketable production that grades less than U.S. No. 2 due to 
causes not covered by this endorsement will not be reduced.
    (e) Fifteen percent (15%) of all production considered as cull 
production in accordance with section 13 (b) and (c) will be production 
to count.

[61 FR 57580, Nov. 7, 1996; 62 FR 2007, Jan. 15, 1997; 62 FR 65167, Dec. 
10, 1997; 65 FR 47837, Aug. 4, 2000]



Sec. 457.112  Hybrid sorghum seed crop insurance provisions.

    The Hybrid Sorghum Seed Crop Insurance Provisions for the 1998 and 
succeeding crop years are as follows:
    FCIC policies:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and Reinsured Policies

                   Hybrid Sorghum Seed Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows:
    (1) The Catastrophic Risk Protection Endorsement, if applicable; (2) 
the Special Provisions; (3) these Crop Provisions; and (4) the Basic 
Provisions, (Sec. 457.8) with (1) controlling (2), etc.

                             1. Definitions

    Adjusted yield. An amount determined by multiplying the county yield 
by the coverage level factor.
    Amount of insurance per acre. A dollar amount determined by 
multiplying the adjusted yield by the price election you select and 
subtracting any minimum guaranteed payment, not to exceed the total 
compensation specified in the hybrid sorghum seed processor contract. If 
your hybrid sorghum seed processor contract contains a minimum 
guaranteed payment that is stated in bushels, we will convert that value 
to dollars by multiplying it by the price election you selected.
    Approved yield. In lieu of the definition contained in the Basic 
Provisions, an amount FCIC determines to be representative of the yield 
that the female parent plants are expected to produce when grown under a 
specific production practice. FCIC will establish the approved yield 
based upon records provided by the seed company and other information it 
deems appropriate.
    Bushel. Fifty-six pounds avoirdupois of the insured crop.
    Certified seed test. A warm germination test performed on clean seed 
according to specifications of the ``Rules for Testing Seeds'' of the 
Association of Official Seed Analysts.
    Commercial hybrid sorghum seed. The offspring produced by crossing a 
male and female parent plant, each having a different genetic character. 
This offspring is the product intended for use by an agricultural 
producer to produce a commercial field sorghum crop for grain or forage.

[[Page 146]]

    County yield. An amount contained in the actuarial documents that is 
established by FCIC to represent the yield that a producer of hybrid 
sorghum seed would be expected to produce if the acreage had been 
planted to commercial field sorghum.
    Coverage level factor. A factor contained in the Special Provisions 
to adjust the county yield for commercial field sorghum to reflect the 
higher value of hybrid sorghum seed.
    Dollar value per bushel. An amount that determines the value of any 
seed production to count. It is determined by dividing the amount of 
insurance per acre by the result of multiplying the approved yield by 
the coverage level percentage, expressed as a decimal.
    Female parent plants. Sorghum plants that are grown for the purpose 
of producing commercial hybrid sorghum seed and are male sterile.
    Field run. Commercial hybrid sorghum seed production before it has 
been processed or screened.
    Good farming practices. In addition to the definition contained in 
the Basic Provisions, good farming practices include those practices 
required by the hybrid sorghum seed processor contract.
    Harvest. Combining, threshing or picking of the female parent plants 
to obtain commercial hybrid sorghum seed.
    Hybrid sorghum seed processor contract. An agreement executed in 
writing between the hybrid sorghum seed crop producer and a seed company 
containing, at a minimum:
    (a) The producer's promise to plant and grow male and female parent 
plants, and to deliver all commercial hybrid sorghum seed produced from 
such plants to the seed company;
    (b) The seed company's promise to purchase the commercial hybrid 
sorghum seed produced by the producer; and
    (c) Either a fixed price per unit of measure (bushels, 
hundredweight, etc.) of the commercial hybrid sorghum seed or a formula 
to determine the value of such seed. Any formula for establishing the 
value must be based on data provided by a public third party that 
establishes or provides pricing information to the general public, based 
on prices paid in the open market (e.g., commodity futures exchanges), 
to be acceptable for the purpose of this policy.
    Inadequate germination. Germination of less than 80 percent of the 
commercial hybrid sorghum seed as determined by using a certified seed 
test.
    Insurable interest. Your share of the financial loss that occurs in 
the event seed production is damaged by a cause of loss specified in 
section 10.
    Local market price. The cash price offered by buyers for any 
production from the female parent plants that is not considered 
commercial hybrid sorghum seed under the terms of this policy.
    Male parent plants. Sorghum plants grown for the purpose of 
pollinating female parent plants.
    Minimum guaranteed payment. A minimum amount (usually stated in 
dollars or bushels) specified in your hybrid sorghum seed processor 
contract that will be paid or credited to you by the seed company 
regardless of the quantity of seed produced.
    Non-seed production. Production that does not qualify as seed 
production because of inadequate germination.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, the insured crop must be planted in rows wide enough 
to permit mechanical cultivation, unless provided by the Special 
Provisions or by written agreement.
    Planting pattern. The arrangement of the rows of the male and female 
parent plants in a field. An example of a planting pattern is four 
consecutive rows of female parent plants followed by two consecutive 
rows of male parent plants.
    Practical to replant. In addition to the definition contained in the 
Basic Provisions, practical to replant applies to either the female or 
male parent plant. It will not be considered practical to replant unless 
production from the replanted acreage can be delivered under the terms 
of the hybrid sorghum seed processor contract, or the seed company 
agrees that it will accept the production from the replanted acreage.
    Prevented planting. In addition to the definition contained in the 
Basic Provisions, prevented planting applies to the female and male 
parent plants. The male parent plants must be planted in accordance with 
the requirements of the hybrid sorghum seed processor contract to be 
considered planted.
    Sample. For the purpose of the certified seed test, at least 3 
pounds of randomly selected field run sorghum seed for each type or 
variety of commercial hybrid sorghum seed grown on the unit.
    Seed company. A business enterprise that possesses all licenses for 
marketing commercial hybrid sorghum seed required by the state in which 
it is domiciled or operates, and which possesses facilities with enough 
storage and drying capacity to accept and process the insured crop 
within a reasonable amount of time after harvest. If the seed company is 
the insured, it must also be a corporation.
    Seed production. All seed produced by female parent plants with a 
germination rate of at least 80 percent as determined by a certified 
seed test.
    Type. Grain sorghum, forage sorghum, or sorghum sudan parent plants.
    Variety. The name, number or code assigned to a specific genetic 
cross by the seed

[[Page 147]]

company or the Special Provisions for the insured crop in the county.

                            2. Unit Division

    (a) For any processor contract that stipulates the amount of 
production to be delivered:
    (1) In lieu of the definition of ``basic unit'' contained in the 
Basic Provisions, a basic unit will consist of all acreage planted to 
the insured crop in the county that will be used to fulfill a hybrid 
sorghum seed processor contract;
    (2) There will be no more than one basic unit for all production 
contracted with each processor contract;
    (3) In accordance with section 12, all production from any basic 
unit in excess of the amount under contract will be included as 
production to count if such production is applied to any other basic 
unit for which the contracted amount has not been fulfilled; and
    (4) Optional units will not be established.
    (b) For any processor contract that stipulates a number of acres to 
be planted, the provisions in the Basic Provisions that allow optional 
units by irrigated and non-irrigated practices are not applicable.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 of the Basic 
Provisions, you may select only one price election for all the hybrid 
sorghum seed in the county insured under this policy unless the Special 
Provisions provide different price elections by type or variety, in 
which case you may elect one price election for each hybrid sorghum seed 
type or variety designated in the Special Provisions. The price election 
you choose for each type or variety must have the same percentage 
relationship to the maximum price offered by us for each type or 
variety. For example, if you choose 100 percent of the maximum price 
election for one specific type or variety, you must also choose 100 
percent of the maximum price election for all other types or varieties.
    (b) The production reporting requirements contained in section 3 of 
the Basic Provisions are not applicable to this contract.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 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 March 15.

                          6. Report of Acreage

    In addition to the requirements of section 6 of the Basic 
Provisions, you must:
    (a) Report by type and variety, the location and insurable acreage 
of the insured crop;
    (b) Report any acreage that is uninsured, including that portion of 
the total acreage occupied by male parent plants; and
    (c) Certify that you have a hybrid sorghum seed processor contract 
and report the amount, if any, of any minimum guaranteed payment.

                             7. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the female parent plants in the county for which a 
premium rate is provided by the actuarial documents:
    (1) In which you have a share;
    (2) That are grown under a hybrid sorghum seed processor contract 
executed before the acreage reporting date;
    (3) That are planted for harvest as commercial hybrid sorghum seed 
in accordance with the requirements of the hybrid sorghum seed processor 
contract and the production management practices of the seed company; 
and
    (4) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Planted with a mixture of female and male parent seed in the 
same row;
    (ii) Planted for any purpose other than for commercial hybrid 
sorghum seed;
    (iii) Interplanted with another crop; or
    (iv) Planted into an established grass or legume.
    (b) An instrument in the form of a ``lease'' under which you retain 
control of the acreage on which the insured crop is grown and that 
provides for delivery of the crop under substantially the same terms as 
a hybrid sorghum seed processor contract will be treated as a contract 
under which you have an insurable interest in the crop.
    (c) A commercial hybrid sorghum seed producer who is also a 
commercial hybrid sorghum seed company may be able to insure the hybrid 
sorghum seed crop if the following requirements are met:
    (1) The seed company has an insurable interest in the hybrid sorghum 
seed crop;
    (2) Prior to the sales closing date, the Board of Directors of the 
seed company has executed and adopted a corporate resolution containing 
the same terms as an acceptable hybrid sorghum seed processor contract. 
This corporate resolution will be considered a contract under the terms 
of this policy;
    (3) Sales records for at least the previous years' seed production 
must be provided to confirm that the seed company has produced and sold 
seed. If such records are not available, the crop may be insured under 
the

[[Page 148]]

Coarse Grains Crop Provisions with a written agreement; and
    (4) Our inspection reveals that the storage and drying facilities 
satisfy the definition of a seed company.
    (d) Any of the insured crop that is under contract with different 
seed companies may be insured under separate policies with different 
insurance providers provided all acreage of the insured crop in the 
county is insured. If you elect to insure the insured crop with 
different insurance providers, you agree to pay separate administrative 
fees for each insurance policy.

                          8. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions, 
we will not insure any acreage of the insured crop:
    (a) Planted and occupied exclusively by male parent plants;
    (b) Not in compliance with the rotation requirements contained in 
the Special Provisions or, if applicable, required by the hybrid sorghum 
seed processor contract; or
    (c) If either the female or male parent plants are damaged before 
the final planting date and we determine that insured crop is practical 
to replant but it is not replanted.

                           9. Insurance Period

    (a) In addition to the provisions of section 11 of the Basic 
Provisions, insurance attaches upon completion of planting of:
    (1) The female parent plant seed on or before the final planting 
date designated in the Special Provisions, except as allowed in section 
16 of the Basic Provisions; and
    (2) The male parent plant seed.
    (b) In accordance with the provisions of section 11 of the Basic 
Provisions, the calendar date for the end of the insurance period is the 
November 30 immediately following planting.

                           10. 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, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if due to a cause of 
loss contained in section 10(a) (1) through (7) that occurs during the 
insurance period.
    (b) In addition to the causes of loss excluded by section 12 of the 
Basic Provisions, we will not insure against any loss of production due 
to:
    (1) The use of unadapted, incompatible, or genetically deficient 
male or female parent plant seed;
    (2) Frost or freeze after the date set by the Special Provisions;
    (3) Failure to follow the requirements stated in the hybrid sorghum 
seed processor contract and production management practices of the seed 
company;
    (4) Inadequate germination, even if resulting from an insured cause 
of loss, unless you have provided adequate notice as required by section 
11(b)(1); or
    (5) Failure to plant the male parent plant seed at a time or in a 
manner sufficient to assure adequate pollination of the female parent 
plants, unless you are prevented from planting the male parent plant 
seed by an insured cause of loss.

                11. 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 of at least one 
complete planting pattern of the male and female parent plant rows that 
extend the entire length of each field in the unit. If you are going to 
destroy any acreage of the insured crop that will not be harvested, the 
samples must not be destroyed until after our inspection.
    (b) In addition to the requirements of section 14 of the Basic 
Provisions:
    (1) You must give us notice of probable loss at least 15 days before 
the beginning of harvest if you anticipate inadequate germination on any 
unit; and
    (2) You must provide a completed copy of your hybrid sorghum seed 
processor contract unless we have determined it has already been 
provided by the seed company, and the seed company certifies that such 
contract is used for all its producers without any waivers or 
amendments.

                         12. 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 units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) You will not receive an indemnity payment on a unit if the seed 
company refuses to provide us with records we require to determine the 
dollar value per bushel of production for each variety.

[[Page 149]]

    (c) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by its respective amount of 
insurance per acre, by type and variety if applicable;
    (2) Totaling the results of section 12(c)(1) if there are more than 
one type or variety;
    (3) Multiplying the total seed production to count (see section 
12(d)) for each type and variety of commercial hybrid sorghum seed by 
the applicable dollar value per bushel for that type or variety;
    (4) Multiplying the total non-seed production to count (see section 
12(e)) for each type and variety by the applicable local market price 
determined on the earlier of the date the non-seed production is sold or 
the date of final inspection;
    (5) Totaling the results of sections 12(c)(3) and 12(c)(4) by type 
and variety;
    (6) Subtracting the result of section 12(c)(5) from the result of 
section 12(c)(1) if there is only one type or variety, or subtracting 
the result of 12(c)(5) from the result of section 12(c)(2) if there are 
more than one type or variety; and
    (7) Multiplying the result of section 12(c)(6) by your share.
For example:
    You have a 100 percent share in 50 acres insured for the development 
of type ``A'' hybrid sorghum seed in the unit, with an amount of 
insurance per acre guarantee of $361 (county yield of 170 bushels times 
a coverage level factor of .867 for the 65 percent coverage level, times 
a price election of $2.45 per bushel, minus the minimum guaranteed 
payment of zero). Your seed production was 1,400 bushels and the dollar 
value per bushel was $3.47. Your non-seed production was 100 bushels 
with a local market value of $2.00 per bushel. Your indemnity would be 
calculated as follows:
    (1) 50 acres x $361 = $18,050 amount of insurance guarantee;
    (3) 1,400 bushels x $3.47 = $4,858 value of seed production;
    (4) 100 bushels of non-seed x $2.00 = $200 of non-seed production;
    (5) $4,858 + $200 = $5,058;
    (6) $18,050 - $5,058 = $12,992; and
    (7) $12,992 x 100 percent share = $12,992 indemnity payment.
    You also have a 100 percent share in 50 acres insured for the 
development of type ``B'' hybrid sorghum seed in the unit, with an 
amount of insurance per acre guarantee of $340 (county yield of 160 
bushels times a coverage level factor of .867 for the 65 percent 
coverage level, times a price election of $2.45 per bushel, minus the 
minimum guaranteed payment of zero). You harvested 1,200 bushels and the 
dollar value per bushel for the harvested amount was $4.63. You also 
harvested 200 bushels of non-seed with a market value of $2.00 per 
bushel. Your indemnity would be calculated as follows:
    (1) 50 acres x $361 = $18,050 amount of insurance guarantee for type 
``A'' and 50 acres x $340 = $17,000 amount of insurance guarantee for 
type ``B'';
    (2) $18,050 + $17,000 = $35,050 amount of insurance guarantee;
    (3) 1,400 bushels x $3.47 = $4,858 value of seed production for type 
``A'' and 1,200 bushels x $4.63 = $5,556 value of seed production for 
type ``B'';
    (4) 100 bushels of non-seedx$2.00 = $200 of non-seed production for 
type ``A'' and 200 bushels of non-seed x $2.00 = $400 of non-seed 
production for type ``B''
    (5) $4,858 + $200 + $5,556 + $400 = $11,014 value of production to 
count;
    (6) $35,050 - $11,014 = $24,036; and
    (7) $24,036 x 100 percent share = $24,036 indemnity payment.
    (d) Production to be counted as seed production will include:
    (1) All appraised production as follows:
    (i) Not less than the amount of insurance per acre for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Mature unharvested production with a germination rate of at 
least 80 percent of the commercial hybrid sorghum seed as determined by 
a certified seed test. Any such production may be adjusted in accordance 
with section 12(f);
    (iv) Immature appraised production;
    (v) 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:
    (A) If 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 the 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 appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or

[[Page 150]]

    (B) If 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) Harvested production that you deliver as commercial hybrid 
sorghum seed to the seed company stated in your hybrid sorghum seed 
processor contract, regardless of quality, unless the production has 
inadequate germination.
    (e) Production to be counted as non-seed production will include all 
harvested or mature appraised production that does not qualify as seed 
production to count as specified in section 12(d). Any such production 
may be adjusted in accordance with section 12(f).
    (f) For the purpose of determining the quantity of mature 
production:
    (1) Commercial hybrid sorghum seed production will be:
    (i) Increased 0.12 percent for each 0.1 percentage point of moisture 
below 13.0 percent; or
    (ii) Decreased 0.12 percent for each 0.1 percentage point of 
moisture in excess of 13.0 percent.
    (2) When records of commercial hybrid sorghum seed production 
provided by the seed company have been adjusted to a basis of 13.0 
percent moisture and 56 pound avoirdupois bushels, section 12(f)(1) 
above will not apply to harvested production. In such cases, records of 
the seed company will be used to determine the amount of production to 
count, provided that the moisture and weight of such production are 
calculated on the same basis as that used to determine the approved 
yield.

                         13. Prevented Planting

    Your prevented planting coverage will be 60 percent of your amount 
of insurance for timely planted acreage. If you have limited or 
additional levels of coverage as specified in 7 CFR part 400, subpart T, 
and pay an additional premium, you may increase your prevented planting 
coverage to a level specified in the actuarial documents.

[62 FR 65318, Dec. 12, 1997]



Sec. 457.113  Coarse grains crop insurance provisions.

    The coarse grains crop insurance provisions for the 2003 and 
succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                      Coarse Grains Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Coarse grains-- Corn, grain sorghum, and soybeans.
    Grain sorghum-- The crop defined as sorghum under the United States 
Grain Standards Act.
    Harvest-- Combining, threshing, or picking the insured crop for 
grain, or cutting for hay, silage, or fodder.
    Local market price-- The cash grain price per bushel for the U.S. 
No. 2 yellow corn, U.S. No. 2 grain sorghum, or U.S. No. 1 soybeans, 
offered by buyers in the area in which you normally market the insured 
crop. The local market price will reflect the maximum limits of quality 
deficiencies allowable for the U.S. No. 2 grade for yellow corn and 
grain sorghum, or U.S. No. 1 grade for soybeans. Factors not associated 
with grading under the Official United States Standards for Grain, 
including but not limited to protein and oil, will not be considered.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, coarse grains must initially be planted in rows (corn 
must be planted in rows far enough apart to permit mechanical 
cultivation), unless otherwise provided by the Special Provisions, 
actuarial documents, or by written agreement.
    Production guarantee(per acre)--In lieu of the definition contained 
in the Basic Provisions, the number of bushels (tons for corn insured a 
silage) determined by multiplying the approved actual production history 
(APH) yield per acre, calculated in accordance with 7 CFR part 400, 
subpart G, by the coverage level percentage you elect.
    Silage-- A product that results from severing the plant from the 
land and chopping it for the purpose of livestock feed.
    Ton-- Two thousand (2000) pounds avoirdupois.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8) you may select:
    (1) For grain sorghum and soybeans, only one price election for each 
crop in the county insured under this policy; and
    (2) For corn, only one price election for all the corn in the county 
insured as grain under this policy, and only one price election for all 
the corn in the county insured as silage under this policy. The price 
elections you choose for grain and silage must have the same percentage 
relationship to the maximum price election offered by us for grain

[[Page 151]]

and silage. For example, if you choose one hundred percent (100%) of the 
maximum grain price election and you also insure corn on a silage basis, 
you must choose one hundred percent (100%) of the maximum silage price 
election.
    (b) For corn only, if you harvest the crop in a manner other than 
the manner you reported (for example, you reported grain but harvested 
as silage) and you did not select a price election for the type 
harvested, we will assign a price election for the type harvested that 
bears the same percentage relationship to the maximum price election you 
selected for the type reported (for example, if you selected a grain 
price election in the amount of eighty percent (80%) of the maximum 
price election for grain and you did not select a silage price election, 
we will assign a silage price election in the amount of eighty percent 
(80%) of the maximum price election for silage specified in the Special 
Provisions if you harvest for silage). This assigned price election will 
be used only to determine the dollar value of production to count for 
indemnity purposes and will not be used to determine the amount of 
insurance or premium.

                           3. Contract Changes

    The contract change date is November 30 (December 17 for the 1998 
crop year only) preceding the cancellation date (see the provisions of 
Section 4 (Contract Changes) of the Basic Provisions).

                  4. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions (Sec. 457.8), 
the cancellation and termination dates are:

------------------------------------------------------------------------
                                                    Cancellation and
               State and county                     termination dates
------------------------------------------------------------------------
(a) For corn and grain sorghum:
  Val Verde, Edwards, Kerr, Kendall, Bexar,     January 15.
   Wilson, Karnes, Goliad, Victoria, and
   Jackson Counties, Texas, and all Texas
   counties lying south thereof.
  El Paso, Hudspeth, Culberson, Reeves,         February 15.
   Loving, Winkler, Ector, Upton, Reagan,
   Sterling, Coke, Tom Green, Concho,
   McCulloch, San Saba, Mills, Hamilton,
   Bosque, Johnson, Tarrant, Wise, Cooke
   Counties, Texas, and all Texas counties
   lying south and east thereof to and
   including Terrell, Crockett, Sutton,
   Kimble, Gillespie, Blanco, Comal,
   Guadalupe, Gonzales, De Witt, Lavaca,
   Colorado, Wharton, and Matagorda Counties,
   Texas.
  Alabama; Arizona; Arkansas; California;       February 28.
   Florida; Georgia; Louisiana; Mississippi;
   Nevada; North Carolina; and South Carolina.
  All other Texas counties and all other        March 15.
   states.
(b) For soybeans:
  Jackson, Victoria, Goliad, Bee, Live Oak,     February 15.
   McMullen, LaSalle, and Dimmit Counties,
   Texas and all Texas counties lying south
   thereof.
  Alabama; Arizona; Arkansas; California;       February 28.
   Florida; Georgia; Louisiana; Mississippi;
   Nevada; North Carolina; and South Carolina;
   and El Paso, Hudspeth, Culberson, Reeves,
   Loving, Winkler, Ector, Upton, Reagan,
   Sterling, Coke, Tom Green, Concho,
   McCulloch, San Saba, Mills, Hamilton,
   Bosque, Johnson, Tarrant, Wise, Cooke
   Counties, Texas, and all Texas counties
   lying south and east thereof to and
   including Maverick, Zavala, Frio, Atascosa,
   Karnes, De Witt, Lavaca, Colorado, Wharton,
   and Matagorda Counties, Texas.
  All other Texas counties and all other        March 15.
   states.
------------------------------------------------------------------------

                             5. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be each coarse grain crop 
you elect to insure for which premium rates are provided by the 
actuarial documents:
    (1) In which you have a share;
    (2) That is adapted to the area based on days to maturity and is 
compatible with agronomic and weather conditions in the area; and
    (3) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop except as allowed in paragraph 
5(b)(1); or
    (ii) Planted into an established grass or legume.
    (b) For corn only, in addition to the provisions of subsection 5(a), 
the corn crop insured will be all corn that is:
    (1) Planted for harvest either as grain or as silage (see subsection 
5(c)). A mixture of corn and sorghum (grain or forage-type) will be 
insured as corn silage if the sorghum does not constitute more than 
twenty percent (20%) of the plants;
    (2) Yellow dent or white corn, including mixed yellow and white, 
waxy or high-lysine corn, and excluding:
    (i) High-amylose, high-oil, high-protein, flint, flour, Indian, or 
blue corn, or a variety genetically adapted to provide forage for 
wildlife or any other open pollinated corn, unless a written agreement 
allows insurance of such excluded crops.
    (ii) A variety of corn adapted for silage use only when the corn is 
reported for insurance as grain.
    (c) For corn only, if the actuarial documents for the county provide 
a premium rate for:

[[Page 152]]

    (1) Both grain and silage, all insurable acreage will be insured as 
the type or types reported by you on or before the acreage reporting 
date;
    (2) Grain but not silage, all insurable acreage will be insured as 
grain unless a written agreement allows insurance on all or a portion of 
the insurable acreage as silage; or
    (3) Silage but not grain, all insurable corn acreage will be insured 
as silage unless a written agreement allows insurance on all or a 
portion of the insurable acreage as grain.
    (d) For grain sorghum only, in addition to the provisions of 
subsection 5(a), the grain sorghum crop insured will be all of the grain 
sorghum in the county:
    (1) That is planted for harvest as grain;
    (2) That is a combine-type hybrid grain sorghum (grown from hybrid 
seed); and
    (3) That is not a dual-purpose type of grain sorghum (a type used 
for both grain and forage), unless a written agreement allows insurance 
of such grain sorghum.
    (e) For soybeans only, in addition to the provisions of subsection 
5(a), the soybean crop insured will be all of the soybeans in the county 
that are planted for harvest as beans.

                          6. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions, 
any acreage of the insured crop damaged before the final planting date, 
to the extent that a majority of producers in the area would not 
normally further care for the crop, must be replanted unless we agreee 
that it is not practical to replant.

                           7. Insurance Period

    In accordance with the provisions under section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the calendar date for the 
end of the insurance period is the date immediately following planting 
as follows:

(a) For corn insured as grain:
  (1) Val Verde, Edwards, Kerr, Kendall,        September 30.
   Bexar, Wilson, Karnes, Goliad, Victoria,
   and Jackson Counties, Texas, and all Texas
   counties lying south thereof.
  (2) Clark, Cowlitz, Grays Harbor, Island,     October 31.
   Jefferson, King, Kitsap, Lewis, Pierce,
   Skagit, Snohomish, Thurston, Wahkiakum, and
   Whatcom Counties, Washington.
  (3) All other counties and states...........  December 10.
(b) For corn insured as silage:
  All states..................................  September 30.
(c) For grain sorghum:
  (1) Val Verde, Edwards, Kerr, Kendall,        September 30.
   Bexar, Wilson, Karnes, Goliad, Victoria,
   and Jackson Counties, Texas, and all Texas
   counties lying south thereof.
  (2) All other Texas counties and all other    December 10.
   states.
(d) For soybeans: All states..................  December 10.
 

                            8. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss which occur within the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if applicable, due to an 
unavoidable cause of loss occurring within the insurance period.

                         9. Replanting Payments

    (a) In accordance with section 13 of the Basic Provisions, 
replanting payments for coarse grains are allowed if the coarse grains 
are damaged by an insurable cause of loss to the extent that the 
remaining stand will not produce at least 90 percent of the production 
guarantee for the acreage and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of twenty percent (20%) of the production guarantee or the 
number of bushels (tons for corn insured as silage) set out herein, 
multiplied by your price election multiplied by your insured share or 
the share determined under 9(c), if applicable. The number of bushels or 
tons are 8 bushels for corn grain; 1 ton for corn silage; 7 bushels for 
grain sorghum; and 3 bushels for soybeans.
    (c) When more than one person insures the same crop on a share 
basis, a replanting payment based on the total shares insured by us may 
be made to the insured person who incurs the total cost of replanting. 
Payment will be made in this manner only if an agreement exists between 
the insured persons which:
    (1) Requires one person to incur the entire cost of replanting; or
    (2) Gives the right to all replanting payments to one person.

[[Page 153]]

    (d) When the insured crop is replanted using a practice that is 
uninsurable as an original planting, the liability for the unit will be 
reduced by the amount of the replanting payment which is attributable to 
your share. The premium amount will not be reduced.

                10. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), if you 
initially discover damage to any insured crop within 15 days of or 
during harvest, you must leave representative samples of the unharvested 
crop for our inspection. The samples must be at least 10 feet wide and 
extend the entire length of each field in the unit, and must not be 
harvested or destroyed until the earlier of our inspection or 15 days 
after harvest of the balance of the unit is completed.
    (b) For any corn unit that has separate dates for the end of the 
insurance period (grain and silage):
    (1) In lieu of paragraph 14.(a)(2) of the Basic Provisions 
(Sec. 457.8), if damage occurs:
    (i) Before the earliest end of insurance period date (grain or 
silage), you must give us notice within 72 hours of your initial 
discovery of damage (but not later than 15 days after that earliest end 
of insurance period date); or
    (ii) If damage does not occur before the earliest end of insurance 
period date (grain or silage), but occurs before the latest end of 
insurance period date (grain or silage), you must give notice within 72 
hours of your initial discovery of damage (but not later than 15 days 
after that latest end of insurance period date).
    (2) In lieu of subsection 14.(c) of the Basic Provisions 
(Sec. 457.8), in addition to complying with all other notice 
requirements, you must submit a claim for indemnity declaring the amount 
of your loss not later than 60 days after the latest date for the end of 
insurance period for the unit. This claim must include all the 
information we require to settle the claim.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production:
    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit:
    (1) For grain sorghum and soybeans by:
    (i) Multiplying the insured acreage by the production guarantee;
    (ii) Subtracting from this the total production to count;
    (iii) Multiplying the remainder by your price election; and
    (iv) Multiplying this result by your share.
    (2) For corn by:
    (i) Multiplying the insured acreage of each type (grain/silage) by 
the production guarantee for the applicable type;
    (ii) Multiplying each result by the price election for the 
applicable type;
    (iii) Adding these values;
    (iv) Multiplying the production to count of each type (see 
subsection 11(d)) by the price election for that type (see the 
provisions under section 2 (Insurance Guarantees, Coverage Levels, and 
Prices for Determining Indemnities));
    (v) Adding these dollar values;
    (vi) Subtracting the result of step (v) from the result of step 
(iii); and
    (vii) Multiplying the result by your share.
    (c) The total production in bushels (tons for corn silage) (see 
subsection 11(d)) to count from all insurable acreage on the unit will 
include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide records of production that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
subsection 11(e)); and
    (iv) Potential production on insured acreage you want to put to 
another use or you wish to abandon and no longer care for, if you and we 
agree on the appraised amount of production. Upon such agreement the 
insurance period for that acreage will end if you put the acreage to 
another use or abandon the crop. If agreement on the appraised amount of 
production is not reached:
    (A) If 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 the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will

[[Page 154]]

be used to determine the amount of production to count); or
    (B) If 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.
    (d) The production to count for corn will be in bushels for grain 
and in tons for silage as follows:
    (1) For harvested acreage, according to the method of harvest; and
    (2) For unharvested acreage, according to the information contained 
on your acreage report;

except as otherwise provided in paragraph 11(c)(1).
    (e) Mature coarse grain production (excluding corn insured or 
harvested as silage) may be adjusted for excess moisture and quality 
deficiencies. If moisture adjustment is applicable it will be made prior 
to any adjustment for quality. Corn insured or harvested as silage will 
be adjusted for excess moisture and quality only as specified in 
subsection 11(f).
    (1) Production will be reduced by 0.12 percent for each 0.1 
percentage point of moisture in excess of:
    (i) Fifteen percent (15%) for corn (If moisture exceeds 30 percent 
(30%), production will be reduced 0.2 percent for each 0.1 percentage 
point above 30 percent (30%));
    (ii) Fourteen percent (14%) for grain sorghum; and
    (iii) Thirteen percent (13%) for soybeans.
    We may obtain samples of the production to determine the moisture 
content.
    (2) Production will be eligible for quality adjustment if:
    (i) Deficiencies in quality, in accordance with the Official United 
States Standards for Grain, result in:
    (A) Corn not meeting the grade requirements for U.S. No. 4 (grades 
U.S. No. 5 or worse) because of test weight or kernel damage (excluding 
heat damage) or having a musty, sour, or commercially objectionable 
foreign odor;
    (B) Grain sorghum not meeting the grade requirements for U.S. No. 4 
(grades U.S. Sample grade) because of test weight or kernel damage 
(excluding heat damage) or having a musty, sour, or commercially 
objectionable foreign odor (except smut odor), or meets the special 
grade requirements for smutty grain sorghum; or
    (C) Soybeans not meeting the grade requirements for U.S. No. 4 
(grades U.S. Sample grade) because of test weight or kernel damage 
(excluding heat damage) or having a musty, sour, or commercially 
objectionable foreign odor (except garlic odor), or which meet the 
special grade requirements for garlicky soybeans; or
    (ii) Substances or conditions are present that are identified by the 
Food and Drug Administration or other public health organizations of the 
United States as being injurious to human or animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these crop 
provisions;
    (ii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us or by 
a disinterested third party approved by us;
    (iii) With regard to deficiencies in quality (except test weight, 
which may be determined by our loss adjuster), the samples are analyzed 
by:
    (A) A grain grader licensed under the United States Grain Standards 
Act or the United States Warehouse Act;
    (B) A grain grader licensed under State law and employed by a 
warehouse operator who has a storage agreement with the Commodity Credit 
Corporation; or
    (C) A grain grader not licensed under State law, but who is employed 
by a warehouse operator who has a commodity storage agreement with the 
Commodity Credit Corporation and is in compliance with State law 
regarding warehouses; and
    (iv) With regard to substances or conditions injurious to human or 
animal health, the samples are analyzed by a laboratory approved by us.
    (4) Coarse grain production that is eligible for quality adjustment, 
as specified in paragraphs 11.(e) (2) and (3), will be reduced by the 
quality adjustment factor contained in the Special Provisions.
    (f) For corn insured or harvested as silage:
    (1) Whenever our appraisal of grain content is less than 4.5 bushels 
of grain per ton of silage, the silage production will be reduced by 1 
percentage point for each 0.1(1/10) of a bushel less than 4.5 bushels 
per ton (If we cannot make a grain appraisal before harvest and you do 
not leave a representative unharvested sample, in accordance with the 
policy no reduction for grain-deficient silage will be made.); and
    (2) If the normal silage harvesting period has ended, or for any 
acreage harvested as silage or appraised as silage after September 30 of 
the crop year we may increase the silage production to count to 65 
percent (65%) moisture equivalent to reflect the normal moisture content 
of silage harvested during the normal silage harvesting period.
    (g) Any production harvested from plants growing in the insured crop 
may be counted as production of the insured crop on a weight basis.

[[Page 155]]

                         12. Prevented Planting

    Your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted aceage. if you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

[59 FR 49161, Sept. 27, 1994; 59 FR 60063, Nov. 22, 1994, as amended at 
60 FR 62728, 62729, Dec. 7, 1995; 62 FR 63633, Dec. 2, 1997; 62 FR 
65168, Dec. 10, 1997; 67 FR 55690, Aug. 30, 2002]



Sec. 457.114  Nursery crop insurance provisions.

    The Nursery Crop Insurance Provisions for the 1999 crop year only 
are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                         Nursery Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Amount of insurance--The result of multiplying the highest monthly 
market value reported on the nursery plant inventory summary (including 
inventory reported by you and accepted by us on a revised nursery plant 
inventory summary) by .9, multiplied by the percentage for the coverage 
level you elect.
    Brownout--A reduction in electric power that affects the unit.
    Crop year--The 12 month period beginning October 1 and extending 
through September 30 of the next calendar year, designated by the year 
in which it ends. (The 1996 crop year begins October 1, 1995, and ends 
September 30, 1996).
    Crop year loss deductible--The value calculated by multiplying the 
highest monthly market value reported on the nursery plant inventory 
summary by .9 and subtracting from this product the amount of insurance.
    Field market value A--Ninety percent (90%) of the wholesale market 
value for the insured plants in the unit immediately prior to the 
occurrence of the loss.
    Field market value B--Ninety percent (90%) of the wholesale market 
value remaining for the insurable plants in the unit immediately 
following the occurrence of the loss as determined by our appraisal 
conducted as soon as reasonably possible after the loss is reported.
    Irrigated practice--In lieu of the definition contained in the Basic 
Provisions, a method of producing a crop by which water is artificially 
applied during the growing season by appropriate systems and at the 
proper times, with the intention of providing the quanity of water 
needed to maintain the amount of insurance on the nursery plant 
inventory.
    Largest dimension--The distance measured at the top of the standard 
nursery container from one side directly across to the opposite at the 
widest point.
    Monthly loss deductible--The smaller of: (1) The highest monthly 
market value reported on the nursery plant inventory summary multiplied 
by .9; or (2) field market value A; multiplied by the number derived by 
subtracting the coverage level percent from one hundred percent (100%), 
not to exceed the crop year loss deductible.
    Monthly market value--The dollar amount determined by multiplying 
the quantity of each insurable plant by its wholesale market value for 
that month, less the maximum discount (stated in dollar terms) granted 
to any buyer, and totalling the resulting values for all insurable 
plants in the unit.
    Nursery--A business enterprise that produces ornamental plants in 
standard nursery containers for the wholesale market.
    Nursery eligible plant listing--A listing contained in the Actuarial 
Table that specifies the plants eligible for insurance and any mandatory 
or recommended storage required for such plants in each hardiness zone 
defined by the United States Department of Agriculture.
    Nursery plant inventory summary--A report that specifies the 
numbers, growing locations, and wholesale prices of plants included in 
the nursery inventory.
    Standard nursery containers--Rigid containers not less than three 
(3) inches across the largest dimension at the top of the container, and 
which are appropriate in size and with proper drainage holes for the 
plant contained. Grow bags, trays, cellpacks, and burlap are not 
standard nursery containers under these crop provisions.
    Stock plants--Plants used for reproduction, for growing cuttings, 
for air layering or for propagating.
    Wholesale market value--The total dollar valuation of the insurable 
plants actually contained within the unit at any time. The values used 
will be based on your wholesale price list if properly supported by your 
records, less the maximum discount (stated in dollar terms) granted to 
any buyer.

                            2. Unit Division

    In lieu of the definition of ``basic unit'' and section 34 of the 
Basic Provisions, a unit consists of all growing locations in the county 
within a five mile radius of the named insured locations designated on 
your nursery

[[Page 156]]

plant inventory summary. Any growing location more than five miles from 
any other growing location, but within the county, may be designated as 
a separate basic unit or be included in the closest unit listed on your 
nursery plant inventory summary.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    The production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8) are not applicable to 
the Nursery Crop Provisions.

                           4. Contract Changes

    The contract change date is June 30 preceding the crop year (see the 
provisions of section 4 (Contract Changes) of the Basic Provisions 
(Sec. 457.8)).

                  5. Cancellation and Termination Dates

    In accordance with section 2 ( Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are September 30 preceding the crop year.

                   6. Nursery Plant Inventory Summary

    (a) Section 6 (Report of Acreage) of the Basic Provisions 
(Sec. 457.8) is not applicable to the Nursery Crop Provisions.
    (b) You must submit a nursery plant inventory summary to us on or 
before September 30 preceding the crop year.
    (c) The nursery plant inventory summary is a projection of the 
expected inventory for the following 12 months. This summary must 
include, by unit and by month for each type of plant in the inventory, 
the:
    (1) Container sizes, as measured at the largest dimension at the top 
of the container;
    (2) Number of plants;
    (3) Wholesale price for each month of the crop year; and
    (4) Your share.
    If your inventory usually changes within a specific month, report 
the largest inventory that you expect to have for that month.
    (d) Your annual nursery plant inventory summary will be used to 
determine your premium and the amount of insurance for each unit. If you 
do not submit the summary by the reporting date, we may elect to 
determine the nursery plant inventory for each unit or we may deny 
liability on any unit. Errors in reporting units may be corrected by us 
at the time of loss adjustment.
    (e) Your wholesale price list may be examined to determine whether 
the prices listed are reasonable. If the prices are determined to be 
unreasonable, the previous acceptable wholesale price list will be used 
or we may establish the wholesale price for each type of plant.
    (f) With our consent, you may revise your reported nursery plant 
inventory summary to correct or change the value of the insurable 
inventory if the amount of the revision is at least ten percent (10%) of 
the highest monthly market value reported on the nursery plant inventory 
summary or $25,000, whichever is smaller, or if a new plant species is 
being added that was not originally reported on your nursery plant 
inventory summary or was approved by written agreement. If you wish to 
revise the nursery plant inventory summary, you must notify us in 
writing at least 14 days before a change in inventory value. We must 
inspect and accept the nursery before insurance attaches on any proposed 
increase in inventory if:
    (1) The storage facilities have changed in any way since our 
previous inspection; or
    (2) The revision includes plants that have specific over-wintering 
storage requirements and that were not previously reported on your 
nursery plant inventory summary.
    (g) You may not revise your nursery plant inventory summary after 
the sales closing date to add plants not listed on the Nursery Eligible 
Plant Listing unless a request for a written agreement to add such 
plants has been submitted by the sales closing date.
    (h) Insurable plants that are not reported on your nursery plant 
inventory summary will not be insured, but the value of such plants 
after a loss will be included as production to count. Such unreported 
inventory may reduce the amount of any indemnity payable to you.
    (i) You must designate separately any plant inventory that is not 
insurable.

                            7. Annual Premium

    We will determine your premium as follows:
    (a) The annual premium for each unit will be calculated by:
    (1) Determing the total value of each plant type and container size 
designated on your nursery plant inventory summary for each month by 
multiplying the number of plants by the price for that type and 
container size shown on your accepted wholesale price list for that 
month, less the maximum discount (stated in dollar terms) granted to any 
buyer, and totalling the resulting values for each separate 
classification shown on the actuarial table;
    (2) Adding the total values of all plant types and container sizes 
(determined in (1) above) for each month separately to determine the 
monthly market values. Then compare the resulting twelve (12) monthly 
market values to determine the highest monthly market value for the crop 
year;
    (3) Taking the total value of each plant type and container size 
obtained in (1) above for the month having the highest monthly

[[Page 157]]

market value for the crop year (determined in (2) above) for each 
classification specified in the actuarial table and multiplying these 
values by .9, then multiplying the results by the percentage coverage 
level you have elected;
    (4) Multiplying each product obtained in (3) above by the 
appropriate premium rate listed on the actuarial table;
    (5) Adding the products obtained in (4) above; and
    (6) Multiplying the total obtained in (5) above by your share.
    (b) The annual premium will be earned in full when insurance 
attaches. It is due and payable as follows:
    (1) Forty percent (40%) on the later of September 30 preceding each 
crop year or the date we accept the inventory for insurance;
    (2) Thirty percent (30%) on January 1 of the crop year; and
    (3) Thirty percent (30%) on April 1 of the crop year.
    (c) Additional premium earned from an increase in the nursery plant 
inventory summary is due and payable when the revised nursery plant 
inventory summary is approved by us.
    (d) Premium will not be reduced due to a decrease in the nursery 
plant inventory summary, unless such decrease results from the deletion 
of uninsurable inventory from the summary that was erroneously reported 
as insurable.

                            8. Insured Plants

    In lieu of the provisions of section 8 (Insured Crop) and section 9 
(Insurable Acreage) of the Basic Provisions (Sec. 457.8), the insured 
nursery plant inventory will be all nursery plants in the county 
reported by you or determined by us for which an application is 
accepted, a premium rate is provided by the actuarial documents, and 
that:
    (a) Are grown under an irrigated practice for which you have 
adequate facilities and water at the time coverage begins in order to 
carry out a good irrigation practice;
    (b) Are classified as woody, herbaceous, or foliage landscape 
plants;
    (c) Do not include plants that produce edible berries, fruits, or 
nuts;
    (d) Are grown in standard nursery containers;
    (e) Are grown in an appropriate growing medium;
    (f) Are inspected by us and determined to be acceptable;
    (g) Are listed on the Nursery Eligible Plant Listing unless a 
written agreement provides otherwise;
    (h) Are not stock plants;
    (i) Are grown in accordance with the production practices for which 
premium rates have been established; and
    (j) Meet the ``mandatory'' or ``recommended'' storage requirements, 
unless you have applied for and received the Frost/ Freeze, and Cold 
Damage Exclusion Option for those nursery plants.

                           9. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8), coverage begins on each unit or part of a 
unit the later of October 1 or the date we accept the inventory for 
insurance, provided you have complied with the terms of paragraph 
7.(b)(1). Coverage will not attach for plant inventory added due to a 
revised nursery plant inventory summary until any additional premium is 
paid in full. Insurance ends for each unit at the earliest of:
    (a) The date all plant inventory within the unit is sold or 
otherwise removed unless that inventory is replaced and additional 
earned premium is paid (If a portion of the plants are sold or otherwise 
removed from inventory, and are not replaced, insurance only ends on 
that part of the unit.);
    (b) The date of final adjustment of a loss on the unit when the 
total indemnities paid for the unit equal the amount of insurance for 
that unit; or
    (c) September 30 of the crop year.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided for 
unavoidable damage caused only by the following causes of loss which 
occur within the insurance period:
    (1) Adverse weather conditions;
    (2) Fire, except as specified in (b)(4);
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption;
    (8) Failure of the irrigation water supply, due to an unavoidable 
cause of loss occurring within the insurance period; or
    (9) Frost or freeze if there is a failure or breakdown of frost/
freeze protection equipment or facilities and the failure or breakdown 
is directly caused by an insurable cause of loss, provided the insured 
nursery plants are damaged by freezing temperatures within 72 hours 
after the failure of such equipment or facilities and you establish that 
repair or replacement was not possible between the time of failure or 
breakdown and the time the freezing temperatures occurred.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we do not insure against 
any loss caused by:

[[Page 158]]

    (1) Brownout;
    (2) Failure of the power supply unless such failure is due to an 
insurable cause of loss;
    (3) The inability to market the nursery plants as a direct result of 
quarantine, boycott, or refusal of a buyer to accept production;
    (4) Fire, where weeds and other forms of undergrowth in the vicinity 
of the building and on your property have not been controlled; or
    (5) Collapse or failure of buildings or structures.

                11. Duties in the Event of Damage or Loss

    In addition to your duties contained under section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), you must:
    (a) Obtain our written consent prior to:
    (1) Destroying, selling or otherwise disposing of any plant 
inventory that is damaged; or
    (2) Changing or discontinuing your normal growing practices with 
respect to care and maintenance of the insured plant inventory.
    (b) Upon our request, provide complete copies of your nursery plant 
inventory wholesale price list for the 12 month period immediately 
preceding the loss and your marketing records including plant shipping 
invoices for the same period.
    (c) Submit a claim for indemnity to us on our form, not later than 
60 days after the earliest of:
    (1) The date of your loss; or
    (2) The end of the insurance period.

                         12. Settlement of Claim

    (a) The indemnity will be the amount calculated by us for each unit 
as follows:
    (1) Subtracting field market value B from the lesser of:
    (i) Field market value A; or
    (ii) The highest monthly market value for the unit reported on the 
nursery plant inventory summary multiplied by .9;
    (2) Subtracting the monthly loss deductible (not to exceed the 
remaining crop year loss deductible) from the product obtained in (1) 
above; and
    (3) Multiplying the result by your share.
    (b) Individual insured losses occurring on the same unit during the 
crop year may be accumulated if each loss is reported and valued by us 
to satisfy the crop year loss deductible. Paragraph 12.(a)(2) will not 
apply to any subsequent individual loss determinations when the total 
amount of accumulated monthly loss deductibles is equal to or greater 
than the crop year loss deductible. Total indemnities for a unit will 
not exceed the amount of insurance for the unit.
    (c) The value of any insured plant inventory may be determined on 
the basis of our appraisals conducted after the end of the insurance 
period.

                     13. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[60 FR 31378, June 15, 1995, as amended at 62 FR 65169, Dec. 10, 1997; 
63 FR 50975, Sept. 24, 1998]



Sec. 457.115  Nursery frost, freeze, and cold damage exclusion option.

    This is not a continuous option. Application for this option must be 
made on or before the sales closing date for each crop year this Option 
is to be in effect (see exception in item 2 below).

Insured's Name__________________________________________________________

Address_________________________________________________________________

Contract Number_________________________________________________________

Identification Number___________________________________________________

SSN/EIN_________________________________________________________________

Tax I.D.________________________________________________________________

Crop Year_______________________________________________________________

Unit Number_____________________________________________________________

Hardiness Zone__________________________________________________________

    For the crop year designated above, the Nursery Crop Provisions 
(Sec. 457.114) are amended in accordance with the following terms and 
conditions:
    1. You must have the Common Crop Insurance Policy Basic Provisions 
and Nursery Crop Provisions in force.
    2. This option must be submitted to us on or before the final date 
for accepting applications for the crop year in which you wish to insure 
your nursery plant inventory under this option. If the provisions of 
paragraph 6.(f)(2) of the Nursery Crop Provisions apply, we may accept 
this option after the sales closing date, or we may allow additional 
plants to be added to this option after such date.
    3. Executing this option does not reduce the premium rate for 
nursery crop insurance.
    4. All provisions of the Basic Provisions (Sec. 457.8) and Nursery 
Crop Provisions (Sec. 457.114) not in conflict with this option are 
applicable.
    5. Upon execution of this option, the following plant varieties will 
not have frost, freeze, or cold damage coverage on this unit because the 
mandatory (Risk Group A) or recommended (Risk Group B) over-wintering 
requirements will not be met.

------------------------------------------------------------------------
                                                        Over-wintering
          Scientific name              Common name    requirements to be
                                                           excluded
------------------------------------------------------------------------
                                     ...............  ..................
                                     ...............  ..................
                                     ...............  ..................
                                     ...............  ..................

[[Page 159]]

 
                                     ...............  ..................
------------------------------------------------------------------------

Insured's Signature

________________________________________________________________________

Date____________________________________________________________________

Insurance Company Representative's Signature and Code Number

________________________________________________________________________

Date____________________________________________________________________


[60 FR 31380, June 15, 1995]



Sec. 457.116  Sugarcane crop insurance provisions.

    The Sugarcane Crop Insurance Provisions for the 2004 and succeeding 
crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                        Sugarcane Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Crop year--The period within which the insured sugarcane is normally 
grown and designated by the calendar year in which the harvest of 
sugarcane normally begins in the county.
    Harvest--Cutting and removing the mature sugarcane from the field.
    Irrigated practice--A method of producing a crop by which water is 
artificially applied during the growing season by appropriate systems 
and at the proper times, with the intention of providing the quantity of 
water needed to produce at least the yield used to establish the 
irrigated production guarantee on the irrigated acreage planted to the 
insured crop.
    Local market price--The price per pound for raw sugar offered by 
buyers in the area in which you normally market the sugarcane.
    Plant cane--The insured crop which grows from seed planted for the 
crop year.
    Stubble cane--The insured crop which grows from the stubble of 
sugarcane that was harvested the previous crop year.
    Sugarcane. The grass, Saccharum officinarum, that is grown to 
produce sugar.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8), you may select only one price 
election for all the sugarcane in the county insured under this policy.
    (b) Instead of reporting your sugarcane production for the previous 
crop year as required by subsection 3.(c) of the Basic Provisions 
(Sec. 457.8), there is a lag period of one year and you are required to 
report production from two crop years previously, e.g., 1994 crop year 
production must be reported by the required date for the 1996 crop year.

                          3. Contract Changes.

    In accordance with section 4 of the Basic Provisions (Sec. 457.8), 
the contract change date is June 30 preceding the cancellation date.

                  4. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions (Sec. 457.8), 
the cancellation and termination dates are September 30.

                            5. Insured Crop.

    (a) In accordance with section 8 of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the sugarcane in the county 
for which a premium rate is provided by the actuarial documents:
    (1) In which you have a share;
    (2) That is grown for processing for sugar or for seed; and
    (3) That is not interplanted with another crop, unless allowed by a 
written agreement.
    (b) In addition to the crop listed as not insured in section 8(b) of 
the Basic Provisions (Sec. 457.8), we will not insure any sugarcane:
    (1) That was damaged the previous crop year to the extent the 
sugarcane is unable to produce the yield used to establish the 
production guarantee for the unit for the current crop year; or
    (2) That exceeds the age limitations (by variety, if applicable) 
contained in the Special Provisions , unless we agree in writing to 
insure such acreage. An agreement in writing will not be provided 
unless, after an appraisal, we determine that the crop is able to 
produce at least the yield used to establish the production guarantee 
for the unit for the current crop year.

                          6. Insurable Acreage.

    Section 9(a)(3) of the Basic Provisions (Sec. 457.8), is not 
applicable to the Sugarcane Crop Insurance Provisions.

                          7. Insurance Period.

    (a) In addition to the provisions of section 11 of the Basic 
Provisions (Sec. 457.8), insurance attaches:

[[Page 160]]

    (1) On the later of the day we accept your application or at the 
time of planting for plant cane;
    (2) On the first day following harvest of the previous crop for 
stubble cane except as contained in sections 7(a)(3) and (4);
    (3) On the later of April 15 or 30 days following harvest of the 
previous crop for stubble cane damaged during the previous crop year in 
all states (except Louisiana); and
    (4) On the later of April 30 or 30 days following harvest of the 
previous crop for stubble cane damaged during the previous crop year in 
Louisiana.
    (b) In accordance with the provisions of section 11 of the Basic 
Provisions (Sec. 457.8), the calendar date for the end of the insurance 
period is:
    (1) January 31 in Louisiana; and
    (2) April 30 in all other states.

                            8. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur within the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if applicable, due to an 
unavoidable cause of loss occurring within the insurance period.

 9. Duties in the Event of Damage or Loss or Cutting the Sugarcane for 
                                  Seed

    (a) In addition to your duties under section 14 of the Basic 
Provisions (Sec. 457.8), in the event of damage or loss:
    (1) All sugarcane stubble must remain intact for our inspection; and
    (2) You must give us notice at least 15 days before you begin 
cutting any sugarcane for seed. Your notice must include the unit number 
and the number of acres you intend to harvest as seed. Failure to give 
us timely notice will cause the acreage cut for seed to be considered as 
put to another use without consent. The production to count for such 
acreage will not be less than the production guarantee.
    (3) You must request an appraisal if any time during the crop year 
sugarcane acreage cut for seed will not produce at least the production 
guarantee so we can determine the production to count. If you do not 
request an appraisal, the production to count for such acreage will be 
the production guarantee.
    (b) In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), if you 
initially discover damage to any insured crop within 15 days of, or 
during harvest, you must leave representative samples of the unharvested 
crop for our inspection. The representative samples of the unharvested 
crop must be at least 10 feet wide and extend the entire length of each 
field in the unit. The stubble must not be destroyed and the required 
samples must not be harvested until the earlier of our inspection or 15 
days after harvest of the balance of the unit is completed.

                         10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production:
    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by the production guarantee;
    (2) Subtracting from this the total production to count;
    (3) Multiplying the remainder by your price election; and
    (4) Multiplying this result by your share.
    Example 1: Assume you have a 100 percent share in a unit of 100 
acres of sugarcane, an approved yield of 6,000 pounds of raw sugar per 
acre, a coverage election of 65 percent, and a price election of $0.12 a 
pound. The production guarantee would be 3,900 pounds of raw sugar per 
acre (6,000 x 65%). Further assume that you are only able to harvest 
200,000 pounds of raw sugar because the unit was damaged by an insurable 
cause of loss. Your indemnity would be calculated as follows:
    (1) 100 acres x 3,900 pound production guarantee = 390,000 pound 
production guarantee;
    (2) 390,000 pound production guarantee-200,000 pounds harvested 
production = 190,000 pound production loss;
    (3) 190,000 pound production loss x $0.12 price election = $22,800 
loss; and
    (4) $22,800 loss x 100 percent share = $22,800 indemnity payment.
    Example 2: Assume the same set of facts. Also, assume that you cut 
20 acres of this unit for seed without giving notice that you were 
cutting this acreage for seed and that you are only able to harvest 
200,000 pounds from the remaining 80 acres. Your indemnity would be 
calculated as follows:
    (1) 100 acres x 3,900 pound production guarantee = 390,000 pound 
production guarantee;

[[Page 161]]

    (2) 390,000 pound production guarantee-278,000 (200,000 pounds 
harvested production + 78,000 pounds production for putting acreage to 
another use without consent, (20 acres x 3,900 pound production 
guarantee per acre)) = 112,000 pound production loss;
    (3) 112,000 pound production loss x $0.12 price election = $13,440 
loss; and
    (4) $13,440 loss x 100 percent share = $13,440 indemnity payment.
    (c) The total production (pounds of sugar) to count from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes;
    (D) For which you fail to provide records of production that are 
acceptable to us; or
    (E) On which the sugarcane stubble is destroyed within 15 days after 
harvest is completed without our consent;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production;
    (iv) Potential production on insured acreage harvested for seed (see 
section 9(a)(3));
    (v) Potential production on insured acreage you want to put to 
another use or you wish to abandon and no longer care for, if you and we 
agree on the appraised amount of production. Upon such agreement, the 
insurance period for that acreage will end if you put the acreage to 
another use or abandon the crop. If agreement on the appraised amount of 
production is not reached:
    (A) If 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 the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count.); or
    (B) If 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 insurable acreage. Final records 
of sugar production will be used to determine the amount of production 
to count. Preliminary mill estimates will not be used.
    (d) Harvested sugarcane may be adjusted for low quality if it is 
damaged by one or more freezes occurring within the insurance period to 
the extent that it cannot be processed for sugar by the boiling house 
operation. The amount of production to count for such sugarcane will be 
determined by dividing the dollar value of the damaged production by the 
local market price per pound for raw sugar. The prices used for this 
adjustment will be determined on the earlier of the date such quality-
adjusted production is sold or the date of final inspection for the 
unit.

                     11. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[60 FR 25602, May 12, 1995, as amended at 62 FR 65169, Dec. 10, 1997; 67 
FR 46095, July 12, 2002; 67 FR 52841, Aug. 14, 2002]



Sec. 457.117  Forage production crop insurance provisions.

    The Forage Production Crop Insurance Provisions for the 2001 and 
succeeding crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and Reinsured Policies

               Forage Production Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Adequate stand--A population of live forage plants that equals or 
exceeds the minimum required number of plants per square foot as shown 
in the Special Provisions.
    Air-dry forage--Forage that has dried in windrows by natural means 
to less than 13 percent moisture before being put into stacks or bales.
    Crop year--The period from the date insurance attaches until harvest 
is normally completed, which is designated by the calendar year in which 
the majority of the forage is normally harvested.
    Cutting. The severance of the forage plant from its roots.
    Direct marketing. Sale of the forage crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
shipper, buyer, or broker. An example of direct marketing is selling 
directly to other producers.

[[Page 162]]

    Fall planted. A forage crop seeded after June 30.
    Forage--Planted perennial alfalfa, perennial red clover, perennial 
grasses, or a mixture thereof, or other species as shown in the 
Actuarial Documents.
    Harvest--Removal of forage from the windrow or field. Grazing will 
not be considered harvested.
    Spring planted. A forage crop seeded before July 1.
    Ton--Two thousand (2,000) pounds avoirdupois.
    Windrow. Forage that is cut and placed in a row.
    Year of establishment--The period between seeding and when the 
forage crop has developed an adequate stand. Insurance during the year 
of establishment may be available under the forage seeding policy. 
Insurance under this policy does not attach until after the year of 
establishment. The year of establishment is determined by the date of 
seeding. The year of establishment for spring planted forage is 
designated by the calendar year in which seeding occurred. The year of 
establishment for fall planted forage is designated by the calendar year 
after the year in which the crop was planted.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
         overage Levels, and Prices for Determining Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may only select one price election for all the forage 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 forage 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 a specific type, you must also choose 100 percent of the 
maximum price election for all other types.
    (b) You must report the total production harvested from insurable 
acreage for all cuttings for each unit by the production reporting date.
    (c) Separate guarantees will be determined by forage type, as 
applicable.

                           3. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is June 30 preceding 
the cancellation date.

                 4. Cancellation and Termination Dates.

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
                  State                    Cancellation/termination date
------------------------------------------------------------------------
California, Nevada and Utah..............  October 31;
All other states.........................  September 30.
------------------------------------------------------------------------

                          5. Report of Acreage.

    In lieu of the provisions of section 6(a) of the Basic Provisions, a 
report of all insured acreage of forage production must be submitted on 
or before each forage production acreage reporting date specified in the 
Special Provisions.

                             6. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the forage in the county for which a premium rate is 
provided by the actuarial documents:
    (1) In which you have a share; and
    (2) That is grown during one or more years after the year of 
establishment.
    (b) In addition to the crop listed as not insured in section 8 
(Insured Crop) of the Basic Provisions (Sec. 457.8), we will not insure 
any forage that:
    (1) Does not have an adequate stand at the beginning of the 
insurance period;
    (2) Is grown with a non-forage crop; or
    (3) Exceeds the age limitations for forage stands contained in the 
Special Provisions.

                           7. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8):
    (a) Insurance attaches on acreage with an adequate stand on the 
following dates:
    (1) For the calendar year following the year of seeding for:
    (i) Spring planted forage in Lassen, Modoc, Mono, Shasta and 
Siskiyou Counties California, Colorado, Idaho, Nebraska, Nevada, Oregon, 
Utah and Washington--April 15;
    (ii) Spring planted forage in Iowa, Minnesota, Montana, New 
Hampshire, New York, North Dakota, Pennsylvania, Wisconsin, Wyoming and 
all other states--May 22;
    (iii) Fall planted forage in Lassen, Modoc, Mono, Shasta and 
Siskiyou Counties California, and all other states--October 16;
    (iv) Fall planted forage in all California counties except Lassen, 
Modoc, Mono, Shasta, and Siskiyou--December 1.
    (2) For the calendar year of seeding for spring planted acreage in 
all California counties except Lassen, Modoc, Mono, Shasta and Siskiyou-
-December 1.

[[Page 163]]

    (3) For calendar years subsequent to the calendar year following the 
year of seeding for:
    (i) Lassen, Modoc, Mono, Shasta and Siskiyou California counties, 
and all other states--October 16;
    (ii) All California counties except Lassen, Modoc, Mono, Shasta and 
Siskiyou--December 1.
    (b) Insurance ends at the earliest of:
    (1) Total destruction of the forage crop;
    (2) Removal from the windrow or the field for each cutting;
    (3) Final adjustment of a loss;
    (4) The date grazing commences on the forage crop;
    (5) Abandonment of the forage crop; or
    (6) The following dates of the crop year:
    (i) For Lassen, Modoc, Mono, Shasta, and Siskiyou Counties 
California and all other states--October 15;
    (ii) For all California counties except Lassen, Modoc, Mono, Shasta 
and Siskiyou--November 30.
    (c) In order to obtain year-round coverage for a calendar year, you 
must purchase the Forage Production Winter Coverage Endorsement 
(Sec. 457.127).

                            8. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss specifically excluded in 
section 12 of the Basic Provisions, we will not insure against damage of 
loss of production that occurs after removal from the windrow.

                9. Duties in the event of Damage or Loss.

    In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
    (a) You must notify us within 3 days of the date harvest should have 
started if the insured crop will not be harvested;
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing unless you have records 
verifying that the forage was direct marketed. Failure to give timely 
notice that production will be sold by direct marketing will result in 
an appraised amount of production to count of not less than the 
production guarantee per acre if such failure results in our inability 
to make the required appraisal;
    (c) If you intend to claim an indemnity on any unit, you must notify 
us at least 15 days prior to the beginning of harvest if you previously 
gave notice in accordance with section 14 of the Basic Provisions so 
that we may inspect the damaged production. You must not destroy the 
damaged crop until after we have given you written consent to do so. If 
you fail to meet the requirements of this section, and such failure 
results in our inability to inspect the damaged production, all such 
production will be considered undamaged and will be included as 
production to count; and
    (d) You must notify us at least 5 days before grazing of insured 
forage begins so we can conduct an appraisal to determine production to 
count. Failure to give timely notice that the acreage will be grazed 
will result in an appraised amount of production to count of not less 
than the production guarantee per acre.

                         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 units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each type, by its respective 
production guarantee;
    (2) Multiplying each result in section 11(b)(1) by the respective 
price election you selected;
    (3) Totaling the results of each crop type in section 11(b)(2);
    (4) Multiplying the total production to be counted of each type, if 
applicable, (see section 11(c)) by the respective price election you 
selected;
    (5) Totaling the results of each crop type in section 11(b)(4);
    (6) Subtracting the result in section 11(b)(5) from the result in 
section 11(b)(3); and
    (7) Multiplying the result in section 11(b)(6) by your share.

                                Example 1

    Assume you have a 100 percent share in 100 acres of type A forage in 
the unit, with a guarantee of 3.0 tons per acre and a price

[[Page 164]]

election of $65.00 per ton. Due to adverse weather you were only able to 
harvest 50.0 tons. Your indemnity would be calculated as follows:
    1. 100 acres type A x 3 tons = 300 ton guarantee;
    2 & 3. 300 tons x $65 price election = $19,500 total value 
guarantee;
    4 & 5. 50 tons production to count x $65 price election = $3,250 
total value of production to count;
    6. $19,500 value guarantee--$3,250 = $16,250 loss; and
    7. $16,250 x 100 percent share = $16,250 indemnity payment.

                                Example 2

    Assume you also have a 100 percent share in 100 acres of type B 
forage in the same unit, with a guarantee of 1.0 ton per acre and a 
price election of $50.00 per ton. Due to adverse weather you were only 
able to harvest 5.0 tons. Your total indemnity for forage production for 
both types A and B in the same unit would be calculated as follows:
    1. 100 acres x 3 tons = 300 ton guarantee for type A; and 100 acres 
x 1 ton = 100 ton guarantee for type B;
    2. 300 ton guarantee x $65 price election = $19,500 total value of 
the guarantee for type A; and 100 ton guarantee x $50 price election = 
$5,000 total value of the guarantee for type B;
    3. $19,500 + $5,000 = $24,500 total value of the guarantee;
    4. 50 tons x $65 price election = $3,250 total value of production 
to count for type A; and 5 tons x $50 price election = $250 total value 
of production to count for type B;
    5. $3,250 + $250 = $ 3,500 total value of production to count for 
types A and B;
    6. $24,500--$3,500 = $21,000 loss; and
    7. $21,000 loss x 100 percent share = $21,000 indemnity payment.
    (c) The total production to count (in tons) 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) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production;
    (iv) Potential production on insured acreage that you intend to 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:
    (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 the 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 appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (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.
    (d) When forage is harvested as other than air-dry forage, the 
production to count will be adjusted to the equivalent of air-dry 
forage.
    (e) Any harvested production from plants growing in the forage will 
be counted as forage on a weight basis.
    (f) In addition to the provisions of section 15 (Production Included 
in Determining Indemnities) of the Basic Provisions (Sec. 457.8), we may 
determine the amount of production of any unharvested forage on the 
basis of our field appraisals conducted after the normal time for each 
cutting for the area.

                     11. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 14285, Mar. 26, 1997, as amended at 62 FR 65169, Dec. 10, 1997; 
65 FR 3783, Jan. 25, 2000; 65 FR 11457, Mar. 3, 2000]



Sec. 457.118  Malting barley crop insurance.

    The malting barley crop insurance provisions for the 1996 and 
succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

Small Grains Crop Insurance Malting Barley Price and Quality Endorsement

(This is a continuous endorsement. Refer to section 2 of the Common Crop 
Insurance Policy.)
    In return for your payment of premium for the coverage contained 
herein, this endorsement will be attached to and made part of the Common 
Crop Insurance Policy (Sec. 457.8) and Small Grains Crop Provisions 
(Sec. 457.101),

[[Page 165]]

subject to the terms and conditions described herein.
    1. You must have the Common Crop Insurance Policy (Sec. 457.8) and 
the Small Grains Crop Insurance Provisions (Sec. 457.101) in force to 
elect to insure malting barley under this endorsement.
    2. You must select either Option A or Option B on or before the 
sales closing date. Failure to select either Option A or Option B, or if 
you elect Option B but fail to have a malting barley contract in effect 
by the acreage reporting date, will result in no coverage under this 
endorsement for the applicable crop year. If you elect coverage under 
Option A, and subsequently enter into a malting barley contract, your 
coverage will continue under the terms of Option A. Your selection 
(Option A or B) will continue from year to year unless you cancel or 
change your selection on or before the sales closing date.
    3. You must select either an additional value price election or a 
percentage of the maximum additional value price election on or before 
the sales closing date. The percentage of the maximum additional value 
price election you select does not have to be the same as that selected 
under the Small Grains Crop Provisions for feed barley. In the event 
that you choose a percentage of the maximum additional value price 
election, we will multiply that percentage by the maximum additional 
value price election specified in Option A or B to determine the 
additional value price election that pertains to your contract.
    4. The additional premium amount for this coverage will be 
determined by multiplying your malting barley production guarantee per 
acre by your selected additional value price election, times the premium 
rate stated in the Actuarial Table, times the acreage planted to 
approved malting barley varieties, times your share at the time coverage 
begins.
    5. In addition to the reporting requirements contained in section 6 
of the Common Crop Insurance Policy (Sec. 457.8), you must provide the 
information required by the Option you select.
    6. In lieu of the provisions regarding units and unit division in 
the Common Crop Insurance Policy (Sec. 457.8) and the Small Grains Crop 
Provisions (Sec. 457.101), all barley acreage in the county that is 
planted to malting varieties that is insurable under the Small Grains 
Crop Provisions for feed barley and your selected Option must be insured 
under this endorsement and will be considered as one unit regardless of 
whether such acreage is owned, rented for cash, or rented for a share of 
the crop. The producer's shares in the malting barley acreage to be 
insured under this endorsement must be designated on the acreage report.
    7. In lieu of the provisions in the Common Crop Insurance Policy 
(Sec. 457.8) that requires us to pay your loss within 30 days after we 
reach agreement with you, whenever any production fails one or more of 
the quality criteria specified herein, the claim may not be settled 
until the earlier of:
    (a) The date you sell, feed, donate, or otherwise utilize such 
production for any purpose; or
    (b) May 31 of the calendar year immediately following the calendar 
year in which the insured malting barley is normally harvested.
    If the production meets all quality criteria contained herein or 
grades U.S. No. 4 or lower in accordance with the grades and grade 
requirements for the subclasses Six-rowed and Two-rowed barley, and for 
the class Barley in accordance with the Official United States Standards 
for Grain, the claim will be settled within 30 days in accordance with 
the Common Crop Insurance Policy (Sec. 457.8).
    8. This endorsement does not provide additional prevented planting 
coverage. Such coverage is only provided in accordance with the 
provisions of the Small Grain Crop Provisions for feed barley.
    9. Production from all acreage insured under this endorsement and 
any production of feed barley varieties must not be commingled prior to 
our making all determinations necessary for the purposes of this 
insurance. Failure to keep production separate may result in denial of 
your claim for indemnity.
    10. Definitions:
    (a) APH. Actual production history as determined in accordance with 
7 CFR part 400, subpart G.
    (b) Approved malting variety. A variety of barley specified as such 
in the Special Provisions.
    (c) Brewery. A facility where malt beverages are commercially 
produced for human consumption.
    (d) Contracted production. A quantity of barley the producer agrees 
to grow and deliver, and the buyer agrees to accept, under the terms of 
the malting barley contract.
    (e) Licensed grain grader. A person authorized by the U.S. 
Department of Agriculture to inspect and grade barley under the U.S. 
Standards for malt barley.
    (f) Malting barley contract. An agreement in writing between the 
producer and a brewery or a business enterprise that produces or sells 
malt or processed mash to a brewery, or a business enterprise owned by 
such brewery or business, that contains the amount of contracted 
production, the purchase price, or a method to determine such price, and 
other such terms that establish the obligations of each party to the 
agreement.

[[Page 166]]

    (g) Objective test. A determination made by a qualified person using 
standardized equipment that is widely used in the malting industry, and 
following a procedure approved by the American Society of Brewing 
Chemists when determining percent germination or protein content; 
grading performed by following a procedure approved by the Federal Grain 
Inspection Service when determining quality factors other than percent 
germination or protein content; or by the Food and Drug Administration 
when determining concentrations of mycotoxins or other substances or 
conditions that are identified as being injurious to human or animal 
health.
    (h) Subjective test. A determination made by a person using 
olfactory, visual, touch or feel, masticatory, or other senses unless 
performed by a licensed grain grader; or that uses non-standardized 
equipment; or that does not follow a procedure approved by the American 
Society of Brewing Chemists, the Federal Grain Inspection Service, or 
the Food and Drug Administration.
    (i) Unit. All insurable acreage of approved malting varieties in the 
county on the date coverage begins for the crop year.

 Option A--(Available for Producers of Production Contracted After the 
   Sales Closing Date, Non-Contracted Production, or a Combination of 
                Contracted and Non-Contracted Production)

    This option provides coverage for malting barley production and 
quality losses at a price per bushel greater than that offered under the 
Small Grains Crop Provisions.
    1. To be eligible for coverage under this option, you must provide 
us acceptable records of your sales of malting barley and the number of 
acres planted to malting varieties for at least the four crop years in 
your APH database prior to the crop year immediately preceding the 
current crop year. For example, to determine your production guarantee 
for the 1996 crop year, records must be provided for the 1991 through 
the 1994 crop years, if malting barley varieties were planted in each of 
those crop years. Failure to provide acceptable records or reports as 
required herein will make you ineligible for coverage under this 
endorsement. You must provide these records to us no later than the 
production reporting date specified in the Common Crop Insurance Policy 
(Sec. 457.8).
    2. Your malting barley production guarantee per acre will be the 
lesser of:
    (a) The production guarantee for feed barley for acreage planted to 
approved malting varieties calculated in accordance with the Small 
Grains Crop Provisions and APH regulations; or
    (b) A production guarantee calculated in accordance with APH 
procedures using the malting barley sales and acreage records provided 
by you.
    3. The additional value price per bushel elected cannot exceed the 
maximum price designated in the Special Provisions.
    4. The amount of production to count against your malting barley 
production guarantee will be determined as follows:
    (a) Production to count will include all:
    (1) Appraised production determined in accordance with sections 
11(c)(1) (i) and (ii) of the Small Grains Crop Provisions;
    (2) Harvested production and potential unharvested production that 
meets, or would meet if properly handled;
    (i) Tolerances established by the Food and Drug Administration or 
other public health organization of the United States for substances or 
conditions, including mycotoxins, that are identified as being injurious 
to human health; and
    (ii) The following quality standards, as applicable:

------------------------------------------------------------------------
                                   Six-rowed malting   Two-rowed malting
                                   barley (percent)    barley (percent)
------------------------------------------------------------------------
Protein (dry basis).............  14.0 maximum......  14.0 maximum
Plump kernels...................  65.0 minimum......  75.0 minimum
Thin kernels....................  10.0 maximum......  10.0 maximum
Germination.....................  95.0 minimum......  95.0 minimum
Blight damaged..................  4.0 maximum.......  4.0 maximum
Injured by mold.................  5.0 maximum.......  5.0 maximum
Mold damaged....................  0.4 maximum.......  0.4 maximum
Sprout damaged..................  1.0 maximum.......  1.0 maximum
Injured by frost................  5.0 maximum.......  5.0 maximum
Frost damaged...................  0.4 maximum.......  0.4 maximum
------------------------------------------------------------------------

    (3) Harvested production that does not meet the quality standards 
contained in section 4(a)(2) of this Option, but is accepted by a buyer 
for malting purposes. For such production, the production to count may 
be reduced or the price used to settle the claim may be adjusted in 
accordance with sections 4 (b), (c), and (d) of this Option.
    (b) The quantity of production that initially fails any quality 
standard contained in section 4(a)(2), but is sold as malting barley 
(except production included in section 4(c)), may be reduced as 
described in this subsection, provided the failure of such production to 
meet these standards is due to insurable causes. The production to count 
of production sold under section 4(a)(3) will be determined by:
    (1) Adding the maximum barley price election under the Small Grains 
Crop Provisions and the maximum additional value price;
    (2) Dividing the price per bushel received for the damaged 
production by the result of paragraph (1); and
    (3) Multiplying the result of paragraph (2) (not to exceed 1.000) by 
the number of bushels of damaged production.
    (c) The production to count for production that initially fails any 
quality standard contained in section 4 (a)(2), sold as malting barley, 
but is conditioned before the sale will not be reduced under section 
4(b). Such production will be considered separately from

[[Page 167]]

all other production to count. (See section 5(d).)
    (d) The additional value price election per bushel used to determine 
the value of the production to count for production that initially fails 
any quality standard contained in section 4(a)(2), but is sold as 
malting barley, may be reduced by the cost incurred for any conditioning 
required to improve the quality of production so that it is marketable 
as malting barley, provided the failure of such production to meet these 
standards is due to insurable causes.
    (e) No reduction in the production to count or the additional value 
price election will be allowed for moisture content, damage due to 
uninsured causes; costs or reduced value associated with drying, 
handling, processing, or quality factors other than those contained in 
section 4(a)(2) of this Option; or any other costs associated with 
normal handling and marketing of malting barely.
    (f) All grade and quality determinations must be based on the 
results of objective tests. No indemnity will be paid for any loss 
established by subjective tests. We may obtain one or more samples of 
the insured crop and have tests performed at an official grain 
inspection location established under the U.S. Grain Standards Act or 
laboratory of our choice to verify the results of any test. In the event 
of a conflict in the test results, our results will determine the amount 
of production to count.
    5. In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (a) Multiplying the insured acreage times your malting barley 
production guarantee per acre;
    (b) Multiplying the result in subsection (a) of this section times 
your additional value price election per bushel;
    (c) Multiplying the number of bushels of production to count 
determined in accordance with sections 4(a) and (b) of this Option times 
your elected additional value price per bushel;
    (d) Multiplying the production to count determined under section 
4(c) of this Option times the additional value price per bushel 
determined in section 4(d) of the Option;
    (e) Adding the results of subsections (c) and (d) of this section;
    (f) Subtracting the result of subsection (e) of this section from 
the result in subsection (b); and
    (g) Multiplying the result of subsection (f) of this section times 
your share.
    6. For example, assume you insure two units of barley under the 
Small Grains Crop Provisions in which you have a 100% share and that are 
planted to approved malting varieties. Assume the following:
    (a) Each unit contains 40 acres;
    (b) You have sold an average of 20 bushels per acre of malting 
barley for each of the last 6 years;
    (c) You have selected the 70 percent coverage level;
    (d) Your production guarantee under the Small Grains Crop Provisions 
and the APH regulations for feed barley is 30 bushels per acre;
    (e) Your total production from all units under the Small Grains Crop 
Provisions is 1,000 bushels, all of which fails to meet the quality 
standards specified by this Option. Two hundred bushels are sold for 
malting purposes after conditioning. Conditioning costs are $0.05 per 
bushel; and
    (f) Your additional value price election is $0.40 per bushel.
    Your malting barley production guarantee is 1120.0 bushels (the 
lesser of 20 or 30x70 percent coverage level x80 acres). The value of 
your production guarantee is $448.00 (1120 bushels x$0.40 per bushel). 
Your production to count is 200 bushels. The value of your production to 
count is $70.00 (200 bushels x$0.35 ($0.40--$0.05)). Your indemnity for 
the malting barley unit is $378.00 (($448.00--$70.00) x100 percent 
share). Any remaining loss is paid under the Small Grains Crop 
Provisions for feed barley.

    Option B--(Available for Producers of Contracted Production Only)

    This option provides coverage for malting barley production and 
quality losses at a price per bushel greater than that offered under the 
Small Grains Crop Provisions provided you have a malting barley 
contract.
    1. If you elect this option you must provide us a copy of your 
malting barley contract on or before the acreage reporting date. All 
terms and conditions of the contract, including the contract price or 
futures contract premium price, must be specified in the contract and be 
effective on or before the acreage reporting date. If you fail to timely 
provide the contract, or any terms are omitted, we may elect to 
determine the relevant information necessary for insurance under this 
Option (B), or deny liability. Only contracted production or acreage is 
covered by this Option (B).
    2. Your malting barley guarantee per acre will be the lesser of:
    (a) The production guarantee for feed barley for acreage planted to 
approved malting barley varieties calculated in accordance with the 
Small Grains Crop Provisions and APH regulations; or
    (b) The number of bushels obtained by:
    (1) Dividing the number of bushels of contracted production by the 
number of acres planted to approved malting varieties in the current 
crop year; and
    (2) Multiplying the result by the percentage for the coverage level 
you elected under the Small Grains Crop Provisions.
    3. The additional value price election per bushel will be the lesser 
of, as applicable:

[[Page 168]]

    (a) The guaranteed sale price per bushel established in the malting 
barley contract (without regard to discounts or incentives that may 
apply) minus the maximum price election for feed barley; or
    (b) The premium price per bushel (without regard to discounts or 
incentives) if the sale price is based on a future market price as 
specified in the malting barley contract.
    Under no circumstances will the additional value price election per 
bushel exceed $2.00 per bushel.
    4. The amount of production to count against your malting barley 
production guarantee will be determined as follows:
    (a) Production to count will include all:
    (1) Appraised production determined in accordance with sections 
11(c)(1) (i) and (ii) of the Small Grains Crop Provisions;
    (2) Harvested production and potential unharvested production that 
meets, or would meet if properly handled, the minimum acceptance 
standards contained in the malting barley contract for protein, plump 
kernels, thin kernels, germination, blight damage, mold injury or 
damage, sprout damage, frost injury or damage, and mycotoxins or other 
substances or conditions identified by the Food and Drug Administration 
or other public health organization of the United States as being 
injurious to human health, or the following quality standards as 
applicable:

------------------------------------------------------------------------
                                   Six-rowed malting   Two-rowed malting
                                        barley              barley
                                 ---------------------------------------
                                       (percent)           (percent)
------------------------------------------------------------------------
Protein (dry basis).............  14.0 maximum......  14.0 maximum
Plump kernels...................  65.0 minimum......  75.0 minimum
Thin kernels....................  10.0 maximum......  10.0 maximum
Germination.....................  95.0 minimum......  95.0 minimum
Blight damaged..................  4.0 maximum.......  4.0 maximum
Injured by mold.................  5.0 maximum.......  5.0 maximum
Mold damaged....................  0.4 maximum.......  0.4 maximum
Sprout damaged..................  1.0 maximum.......  1.0 maximum
Injured by frost................  5.0 maximum.......  5.0 maximum
Frost damaged...................  0.4 maximum.......  0.4 maximum
------------------------------------------------------------------------

    (3) Harvested production that does not meet the quality standards 
contained in section 4(a)(2) of this Option, but is accepted by a buyer 
for malting purposes. For such production, the production to count may 
be reduced or the price used to settle the claim may be adjusted in 
accordance with sections 4 (b), (c), and (d) of this Option.
    (b) The quantity of production that initially fails any quality 
standard contained in section 4(a)(2), but is sold as malting barley 
(except production included in section 4(c)), may be reduced as 
described in this subsection, provided the failure of such production to 
meet these standards is due to insurable causes. The production to count 
of production sold under section 4(a)(3) will be determined by:
    (1) Adding the maximum barley price election under the Small Grains 
Crop Provisions and the maximum additional value price;
    (2) Dividing the price per bushel received for the damaged 
production by the result of paragraph (1); and
    (3i) Multiplying the result of paragraph (2) (not to exceed 1.000) 
by the number of bushels of damaged production.
    (c) The production to count for production that initially fails any 
quality standard contained in section 4(a)(2), sold as malting barley, 
but is conditioned before the sale will not be reduced under section 
4(b). Such production will be considered separately from all other 
production to count. (See section 5(d).)
    (d) The additional value price election per bushel used to determine 
the value of the production to count for production that initially fails 
any quality standard contained in section 4(a)(2), but is sold as 
malting barley, may be reduced by the cost incurred for any conditioning 
required to improve the quality of production so that it is marketable 
as malting barley, provided the failure of such production to meet these 
standards is due to insurable causes.
    (e) No reduction in the production to count or the additional value 
price election will be allowed for moisture content, damage due to 
uninsured causes; costs or reduced value associated with drying, 
handling, processing, or quality factors other than those contained in 
section 4(a)(2) of this Option; or any other costs associated with 
normal handling and marketing of malting barely.
    (f) All grade and quality determinations must be based on the 
results of objective tests. No indemnity will be paid for any loss 
established by subjective tests. We may obtain one or more samples of 
the insured crop and have tests performed at an official grain 
inspection location established under the U.S. Grain Standards Act or 
laboratory of our choice to verify the results of any test. In the event 
of a conflict in the test results, our results will determine the amount 
of production to count.
    5. In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (a) Multiplying the insured acreage times your malting barley 
production guarantee per acre;
    (b) Multiplying the result in subsection (a) of this section times 
your additional value price election per bushel;
    (c) Multiplying the number of bushels of production to count 
determined in accordance with sections 4 (a) and (b) of this Option 
times your elected additional value price per bushel;
    (d) Multiplying the production to count determined under section 
4(c) of this Option times the additional value price per bushel 
determined in section 4(d) of the Option;

[[Page 169]]

    (e) Adding the results of subsections (c) and (d) of this section;
    (f) Subtracting the result of subsection (e) of this section from 
the result in subsection (b); and
    (g) Multiplying the result of subsection (f) of this section times 
your share.
    6. For example, assume you insure two units of barley under the 
Small Grains Crop Provisions in which you have a 100% share and that are 
planted to approved malting varieties. Assume the following:
    (a) Each unit contains 40 acres;
    (b) You have a contract for the sale of 2500 bushels of malting 
barley;
    (c) You have selected the 70 percent coverage level;
    (d) Your production guarantee under the Small Grains Crop Provisions 
and the APH regulations for feed barley is 35 bushels per acre;
    (e) Your total production from all units under the Small Grains Crop 
Provisions is 1,000 bushels, all of which fails to meet the quality 
standards specified by this Option. Two hundred bushels are sold for 
malting purposes after conditioning. Conditioning cost $0.05 per bushel; 
and
    (f) Your additional value price election is $0.60 per bushel.
    Your malting barley production guarantee is 1750.0 bushels (the 
lesser of 35 or 21.875 (2500 contracted bushels /80 acresx70 percent 
coverage)x80 acres). The value of your production guarantee is $1050.00 
(1750 bushelsx$0.60 per bushel). Your production to count is 200 
bushels. The value of your production to count is $110.00 (200 
bushelsx$0.55 ($0.60--$0.05)). Your indemnity for the malting barley 
unit is $940.00 (($1050.00-$110.00)x100 percent share). Any remaining 
loss is paid under the Small Grains Crop Provisions for feed barley.

[61 FR 8855, Mar. 6, 1996; 61 FR 27245, May 31, 1996]



Sec. 457.119  Texas citrus fruit crop insurance provisions.

    The Texas citrus fruit crop insurance provisions for the 2000 and 
succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                   Texas Citrus Fruit Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Crop. Specific groups of citrus fruit as listed in the Special 
Provisions.
    Crop year. The period beginning with the date insurance attaches to 
the citrus crop and extending through the normal harvest time. It is 
designated by the calendar year following the year in which the bloom is 
normally set.
    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper, or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Excess rain. An amount of precipitation that damages the crop.
    Excess wind. A natural movement of air that has sustained speeds 
exceeding 58 miles per hour recorded at the U. S. Weather Service 
reporting station operating nearest to the grove at the time of damage.
    Freeze. The formation of ice in the cells of the tree, its blossoms, 
or its fruit caused by low air temperatures.
    Harvest. The severance of mature citrus fruit from the tree by 
pulling, picking, or any other means, or by collecting marketable fruit 
from the ground.
    Hedged. A process of trimming the sides of the citrus trees for 
better or more fruitful growth of the citrus fruit.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Local market price. The applicable citrus price per ton offered by 
buyers in the area in which you normally market the insured crop.
    Production guarantee (per acre):
    (a) First stage production guarantee. The second stage production 
guarantee multiplied by forty percent (40%).
    (b) Second stage production guarantee. The quantity of citrus (in 
tons) determined by multiplying the yield determined in accordance with 
section 3 by the coverage level percentage you elect.
    Ton. Two thousand (2,000) pounds avoirdupois.
    Topped. A process of trimming the uppermost portion of the citrus 
trees for better and more fruitful growth of the citrus fruit.
    Varieties. Subclasses of crops as listed in the Special Provisions.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by each citrus crop 
designated in the Special Provisions.

[[Page 170]]

    (b) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.
    (c) Instead of establishing optional units by section, section 
equivalent, or FSA farm serial number, optional unit is located on non-
contiguous land.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election and coverage level for 
each citrus fruit crop designated in the Special Provisions that you 
elect to insure. The price election you choose for each crop need not 
bear the same percentage relationship to the maximum price offered by us 
for each crop. For example, if you choose one hundred percent (100%) of 
the maximum price election for early oranges, you may choose seventy-
five percent (75%) of the maximum price election for late oranges. 
However, if separate price elections are available by variety within 
each crop, the price elections you choose within the crop must have the 
same percentage relationship to the maximum price offered by us for each 
variety within the crop.
    (b) The production guarantee per acre is progressive by stage and 
increases at specific intervals to the final stage production guarantee. 
The stages and production guarantees per acre are:
    (1) The first stage extends from the date insurance attaches through 
April 30 of the calendar year of normal bloom. The production guarantee 
will be forty percent (40%) of the yield calculated in section 3(e) 
multiplied by your coverage level.
    (2) The second or final stage extends from May 1 of the calendar 
year of normal bloom until the end of the insurance period. The 
production guarantee will be the yield calculated in section 3(e) 
multiplied by your coverage level.
    (c) Any acreage of citrus damaged in the first stage to the extent 
that the majority of producers in the area would not further maintain it 
will be limited to the first stage production guarantee even though you 
may continue to maintain it.
    (d) In addition to the reported production, each crop year you must 
report by type:
    (1) The number of trees damaged, topped, hedged, pruned or removed; 
any change in practices or any other circumstance that may reduce the 
expected yield below the yield upon which the insurance guarantee is 
based; and the number of affected acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed:
    (i) The age of the interplanted crop, and type if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of the following: 
interplanted perennial crop; removal, topping, hedging, or pruning of 
trees; damage; change in practices and any other circumstance on the 
yield potential of the insured crop. If you fail to notify us of any 
circumstance that may reduce your yields from previous levels, we will 
reduce your production guarantee as necessary at any time we become 
aware of the circumstance.
    (e) The yield used to compute your production guarantee will be 
determined in accordance with Actual Production History (APH) 
regulations, 7 CFR part 400, subpart G, and applicable policy provisions 
unless damage or changes to the grove or trees, require establishment of 
the yield by another method. In the event of such damage or changes, the 
yield will be based on our appraisal of the potential of the insured 
acreage for the crop year.
    (f) Instead of reporting your citrus production for the previous 
crop year, as required by section 3 of the Basic Provisions 
(Sec. 457.8), there is a one year lag period. Each crop year you must 
report your production from two crop years ago, e.g., on the 1998 crop 
year production report, you will provide your 1996 crop year production.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 preceding 
the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are November 20.

                            6. Annual Premium

    In lieu of the premium computation method in section 7 (Annual 
Premium) of the Basic Provisions (Sec. 457.8), the annual premium amount 
is computed by multiplying the second stage production guarantee per 
acre by the price election, the premium rate, the insured acreage, your 
share at the time coverage begins, and by any applicable premium 
adjustment percentages contained in the Special Provisions.

[[Page 171]]

                             7. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the acreage in the county of 
each citrus crop designated in the Special Provisions that you elect to 
insure and for which a premium rate is provided by the actuarial 
documents:
    (a) In which you have a share;
    (b) That are adapted to the area;
    (c) That are irrigated;
    (d) That has produced an average yield of at least three tons per 
acre the previous year, or we have appraised the yield potential of at 
least three tons per acre;
    (e) That is grown in a grove that, if inspected, is considered 
acceptable by us; and
    (f) That is not sold by direct marketing, unless allowed by the 
Special Provisions or by written agreement.

                          8. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, citrus interplanted with another 
perennial crop is insurable unless we inspect the acreage and determine 
it does not meet the requirements contained in your policy.

                           9. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on November 21 of each crop year, except that 
for the year of application, if your application is received after 
November 11 but prior to November 21, insurance will attach on the 10th 
day after your properly completed application is received in our local 
office, unless we inspect the acreage during the 10 day period and 
determine that it does not meet insurability requirements. You must 
provide any information that we require for the crop or to determine the 
condition of the grove.
    (2) The calendar date for the end of the insurance period for each 
crop year is the second May 31st of the crop year.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins, but on or before the acreage reporting date for the 
crop year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of citrus on or before the acreage reporting date for the crop year, 
insurance will not be considered to have attached to, and no premium 
will be due, and no indemnity paid for such acreage for that crop year 
unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur within the insurance period:
    (1) Excess rain;
    (2) Excess wind;
    (3) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the grove;
    (4) Freeze;
    (5) Hail;
    (6) Tornado;
    (7) Wildlife; or
    (8) Failure of the irrigation water supply if caused by an insured 
peril or drought that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Disease or insect infestation, unless a cause of loss specified 
in section 10(a):
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available;
    (2) Inability to market the citrus 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.

                11. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following 
will apply:
    (a) If the Special Provisions permit or a written agreement 
authorizing direct marketing exists, you must notify us at least 15 days 
before any production from any unit will be sold by direct marketing. We 
will conduct an appraisal that will be used to determine your production 
to count for production that is sold by direct marketing. If damage 
occurs after this appraisal, we will conduct an additional appraisal. 
These appraisals, and any acceptable records provided by

[[Page 172]]

you, will be used to determine your production to count. Failure to give 
timely notice that production will be sold by direct marketing will 
result in an appraised amount of production to count of not less than 
the production guarantee per acre if such failure results in our 
inability to make the required appraisal.
    (b) If you intend to claim an indemnity on any unit, you must notify 
us before beginning to harvest any damaged production so we may have an 
opportunity to inspect it. You must not sell or dispose of the damaged 
crop until after we have given you written consent to do so. If you fail 
to meet the requirements of this section all such production will be 
considered undamaged and included as production to count.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide 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 covered by this policy, we will 
settle your claim on a unit basis by:
    (1) Multiplying the insured acreage for each crop, or variety if 
applicable, by its respective production guarantee (see sections 1 and 
3);
    (2) Multiplying the results of section 12(b)(1) by the respective 
price election for each crop or variety, if applicable;
    (3) Totaling the results of section 12(b)(2);
    (4) Multiplying the total production to count of each variety, if 
applicable (see section 12(c)) by the respective price election;
    (5) Totaling the results of section 12(b)(4);
    (6) Subtracting this result of section 12(b)(5) from the result of 
section 12(b)(3); and
    (7) Multiplying the result of section 12(b)(6) by your share.
    (c) The total production to count (in tons) 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) For which you fail to provide acceptable production records;
    (C) That is damaged solely by uninsured causes; or
    (D) From which production is sold by direct marketing, if direct 
marketing is specifically permitted by the Special Provisions or a 
written agreement, and you fail to meet the requirements contained in 
section 11;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage you intend to abandon 
or no longer care for, if you and we agree on the appraised amount of 
production. Upon such agreement, the insurance period for that acreage 
will end. If you do not agree with our appraisal, we may defer the claim 
only if you agree to continue to care for the crop. We will then make 
another appraisal when you notify us of further damage or that harvest 
is general in the area unless you harvested the crop, in which case we 
will use the harvested production. If you do not continue to care for 
the crop, our appraisal made prior to deferring the claim will be used 
to determine the production to count; and
    (2) All harvested production from the insurable acreage.
    (d) Any citrus fruit that is not marketed as fresh fruit and, due to 
insurable causes, does not contain 120 or more gallons of juice per ton, 
will be adjusted by:
    (1) Dividing the gallons of juice per ton obtained from the damaged 
citrus by 120; and
    (2) Multiplying the result by the number of tons of such citrus.
    If individual records of juice content are not available, an average 
juice content from the nearest juice plant will be used, if available. 
If not available, a field appraisal will be made to determine the 
average juice content.
    (e) Where the actuarial documents provide, and you elect, the fresh 
fruit option, citrus fruit that is not marketable as fresh fruit due to 
insurable causes will be adjusted by:
    (1) Dividing the value per ton of the damaged citrus by the price of 
undamaged citrus fruit; and
    (2) Multiplying the result by the number of tons of such citrus 
fruit. The applicable price for undamaged citrus fruit will be the local 
market price the week before damage occurred.
    (f) Any production will be considered marketed or marketable as 
fresh fruit unless, due solely to insured causes, such production was 
not marketed as fresh fruit.
    (g) In the absence of acceptable records of disposition of harvested 
citrus fruit, the disposition and amount of production to count for the 
unit will be the guarantee on the unit.
    (h) Any citrus fruit on the ground that is not harvested will be 
considered totally lost if damaged by an insured cause.

                     13. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[61 FR 41300, Aug. 8, 1996; 61 FR 57583, Nov. 7, 1996, as amended at 62 
FR 65169, Dec. 10, 1997]

[[Page 173]]



Sec. 457.120  [Reserved]



Sec. 457.121  Arizona-California citrus crop insurance provisions.

    The Arizona-California citrus crop insurance provisions for the 2000 
and succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                Arizona-California Citrus Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Carton. The standard container for marketing the fresh packed citrus 
fruit crop as shown below. In the absence of marketing records on a 
carton basis, production will be converted to cartons on the basis of 
the following average net pounds of packed fruit in a standard packed 
carton.

------------------------------------------------------------------------
            Container size                    Fruit crop         Pounds
------------------------------------------------------------------------
Container 58................  Navel oranges, Valencia        38
                                        oranges & Sweet
                                        oranges.
Container 58................  Lemons.................        40
Container 59................  Grapefruit.............        32
Container 63................  Tangerines (including          25
                                        Tangelos) & Mandarin
                                        oranges.
------------------------------------------------------------------------

    Crop. Citrus fruit as listed in the Special Provisions.
    Crop year. The period beginning with the date insurance attaches to 
the citrus crop and extending through normal harvest time. It is 
designated by the calendar year following the year in which the bloom is 
normally set.
    Dehorning. Cutting of any scaffold limb to a length that is not 
greater than one-fourth (\1/4\) the height of the tree before cutting.
    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Harvest. The severance of mature citrus from the tree by pulling, 
picking, or any other means, or by collecting marketable fruit from the 
ground.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Scaffold limb. A major limb attached directly to the trunk.
    Set out. Transplanting a tree into the grove.
    Variety. Subclass of crop as listed in the Special Provisions.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will also be divided into additional basic units by each citrus crop 
designated in the Special Provisions.
    (b) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may be 
established only if each optional unit is located on non-contiguous 
land, unless otherwise allowed by written agreement.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8), you may select only one price 
election and coverage level for each citrus fruit crop designated in the 
Special Provisions that you elect to insure. The price election you 
choose for each crop need not bear the same percentage relationship to 
the maximum price offered by us for each crop. For example, if you 
choose one hundred percent (100%) of the maximum price election for 
sweet oranges, you may choose seventy-five percent (75%) of the maximum 
price election for grapefruit. However, if separate price elections are 
available by variety within each crop, the price elections you choose 
for each variety must have the same percentage relationship to the 
maximum price offered by us for each variety within the crop.
    (b) In lieu of reporting your citrus production of marketable fresh 
fruit for the previous crop year, as required by section 3 of the Basic 
Provisions (Sec. 457.8), there is a lag period of one year. Each crop 
year, you must report your production from two crop years ago, e.g., on 
the 1998 crop year production report, you will provide your 1996 crop 
year production.
    (c) In addition, you must report, by the production reporting date 
designated in section 3 (Insurance Guarantees, Coverage Levels, and 
Prices for Determining Indemnities) of the Basic Provisions 
(Sec. 457.8), by type, if applicable:
    (1) The number of trees damaged, dehorned or removed; any change in 
practices or any other circumstance that may reduce the expected yield 
below the yield upon which the insurance guarantee is based; and the 
number of affected acres;

[[Page 174]]

    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed:
    (i) The age of the interplanted crop, and type, if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of the following: 
interplanted perennial crop; damage; dehorning; removal of trees; change 
in practices and any other circumstance on the yield potential of the 
insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time we become aware of the circumstance.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 preceding 
the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are November 20.

                             6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the acreage in the county of 
each citrus crop designated in the Special Provisions that you elect to 
insure and for which a premium rate is provided by the actuarial 
documents:
    (a) In which you have a share;
    (b) That is adapted to the area;
    (c) That is irrigated;
    (d) That is grown in a grove that, if inspected, is considered 
acceptable by us;
    (e) That is not sold by direct marketing, unless allowed by the 
Special Provisions or by written agreement; and
    (f) That has reached at least the sixth growing season after being 
set out. However, we may agree to insure acreage that has not reached 
this age if we inspect and approve a written agreement to insure such 
acreage.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, citrus interplanted with another 
perennial crop is insurable unless we inspect the acreage and determine 
it does not meet the requirements contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on November 21 of each crop year, except that 
for the year of application, if your application is received after 
November 11 but prior to November 21, insurance will attach on the 10th 
day after your properly completed application is received in our local 
office unless we inspect the acreage during the 10 day period and 
determine that it does not meet insurability requirements. You must 
provide any information that we require for the crop or to determine the 
condition of the grove.
    (2) The calendar date for the end of the insurance period for each 
crop year is:
    (i) August 31 for Navel oranges and Southern California lemons;
    (ii) November 20 for Valencia oranges; and
    (iii) July 31 for all other citrus crops.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins, but on or before the acreage reporting date for the 
crop year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of citrus on or before the acreage reporting date for the crop year, 
insurance will not be considered to have attached to and no premium will 
be due, and no indemnity paid, for such acreage for that crop year 
unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the grove;
    (3) Wildlife;
    (4) Earthquake;

[[Page 175]]

    (5) Volcanic eruption; or
    (6) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Disease or insect infestation, unless adverse weather 
conditions:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available;
    (2) Inability to market the citrus 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

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following 
will apply:
    (a) If the Special Provisions permit or a written agreement 
authorizing direct marketing exists, you must notify us at least 15 days 
before any production from any unit will be sold by direct marketing. We 
will conduct an appraisal that will be used to determine your production 
to count for production that is sold by direct marketing. If damage 
occurs after this appraisal, we will conduct an additional appraisal. 
These appraisals, and any acceptable records provided by you, will be 
used to determine your production to count. Failure to give timely 
notice that production will be sold by direct marketing will result in 
an appraised amount of production to count of not less than the 
production guarantee per acre if such failure results in our inability 
to make the required appraisal.
    (b) If you intend to claim an indemnity on any unit, you must notify 
us before beginning to harvest any damaged production so that we may 
have an opportunity to inspect it. You must not sell or dispose of the 
damaged crop until after we have given you written consent to do so. If 
you fail to meet the requirements of this section, all such production 
will be considered undamaged and included as production to count.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide 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 covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each crop, or variety if 
applicable, by its respective production guarantee;
    (2) Multiplying the results of section 11(b)(1) by the respective 
price election for each crop, or variety, if applicable;
    (3) Totaling the results of section 11(b)(2);
    (4) Multiplying the total production to be counted of each variety, 
if applicable (see section 11(c)), by the respective price election;
    (5) Totaling the results of section 11(b)(4);
    (6) Subtracting this 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;
    (c) The total production to count (in cartons) 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) For which you fail to provide acceptable production records;
    (C) That is damaged solely by uninsured causes; or
    (D) From which production is sold by direct marketing, if direct 
marketing is specifically permitted by the Special Provisions or a 
written agreement, and you fail to meet the requirements contained in 
section 10;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production determined to be marketable as fresh 
packed fruit; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count;
    (2) All harvested production marketed as fresh packed fruit from the 
insurable acreage; and
    (3) All citrus that was disposed of or sold without an inspection or 
written consent.
    (d) Any production will be considered marketed or marketable as 
fresh packed fruit unless, due solely to insured causes, such

[[Page 176]]

production was not marketed or marketable as fresh packed fruit.
    (e) Citrus that cannot be marketed as fresh packed fruit due to 
insurable causes will not be considered production to count.
    (f) If we determine that frost protection equipment was not properly 
utilized or not properly reported, the indemnity for the unit will be 
reduced by the percentage of premium reduction allowed for frost 
protection equipment. You must, at our request, provide us records 
showing the start-stop times by date for each period the frost 
protection equipment was used.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[61 FR 44147, Aug. 28, 1996, as amended at 62 FR 65170, Dec. 10, 1997]



Sec. 457.122  Walnut crop insurance provisions.

    The Walnut Crop Insurance Provisions for the 2001 and succeeding 
crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and reinsured policies:

                         Walnut Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Harvest--Removal of the walnuts from the orchard.
    Interplanted--Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Net delivered weight--Delivered weight (pounds) of dry, hulled, in-
shell walnuts, excluding foreign material.
    Pound--A unit of weight equal to 16 ounces avoirdupois.
    Production guarantee (per acre)--The number of pounds (whole in-
shell walnuts), determined by multiplying the approved APH yield per 
acre by the coverage level percentage you elect.

                            2. Unit Division

    Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may be 
established only if each optional unit is located on non-contiguous 
land, unless otherwise allowed by written agreement.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic Provisions 
(Sec. 457.8):
    (a) You may select only one price election for all the walnuts in 
the county insured under this policy unless the Special Provisions 
provide different price elections by variety or varietal group, in which 
case you may select one price election for each walnut variety or 
varietal group designated in the Special Provisions. The price elections 
you choose for each variety or varietal group must have the same 
percentage relationship to the maximum price offered by us for each 
variety or varietal group. For example, if you choose 100 percent of the 
maximum price election for a specific variety or varietal group, you 
must also choose 100 percent of the maximum price election for all other 
varieties or varietal groups.
    (b) You must report, by the production reporting date designated in 
section 3 of the Basic Provisions (Sec. 457.8), by variety or varietal 
group if applicable:
    (1) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern;
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed, the age of the crop that is interplanted with the walnuts, 
and type if applicable, and the planting pattern; and
    (5) Any other information that we request in order to establish your 
approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of the following: 
interplanted perennial crop; removal of trees; damage; change in 
practices and any other circumstance on the yield potential of the 
insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time we become aware of the circumstances.
    (c) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election if a 
cause of loss that could or would reduce the yield of the insured crop 
has occurred

[[Page 177]]

prior to the time that you request the increase.
    4. Contract Changes
    In accordance with section 4 of the Basic Provisions, the contract 
change dates are October 31 for California and August 31 preceding the 
cancellation date for all other states.
    5. Cancellation and Termination Dates
    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are January 31 for California and 
November 20 for all other states.

                             6. Insured Crop

    In accordance with section 8 of the Basic Provisions (Sec. 457.8), 
the crop insured will be all the commercially grown English Walnuts 
(excluding black walnuts) in the county for which a premium rate is 
provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are grown on tree varieties that:
    (1) Were commercially available when the trees were set out;
    (2) Are adapted to the area; and
    (3) Are grown on a root stock that is adapted to the area;
    (c) That are grown in an orchard that, if inspected, are considered 
acceptable by us;
    (d) On acreage where at least 90 percent of the trees have reached 
at least the ninth growing season after being set out, unless we agree 
in writing to insure trees not meeting this requirement; and
    (e) That are in a unit that consists of at least five acres, unless 
we agree in writing to insure a smaller unit.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 of the Basic Provisions 
(Sec. 457.8), that prohibit insurance attaching to a crop planted with 
another crop, walnuts interplanted with another perennial crop are 
insurable unless we inspect the acreage and determine that it does not 
meet the requirements contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) Coverage begins on February 1 in California and November 21 in 
all other states of each crop year, except that for the year of 
application, if your application is received after January 22 but prior 
to February 1 in California or after November 11 but prior to November 
21 in all states, insurance will attach on the 10th day after your 
properly completed application is received in our local office, unless 
we inspect the acreage during the 10 day period and determine that it 
does not meet insurability requirements. You must provide any 
information that we require for the crop or to determine the condition 
of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is November 15 (Exceptions, if any, for specific counties or 
varieties or varietal group are contained in the Special Provisions).
    (3) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that 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.
    (4) If your walnut policy is canceled or terminated for any crop 
year, in accordance with the terms of the policy, after insurance 
attached for that crop year but on or before the cancellation and 
termination dates whichever is later, insurance will not be considered 
to have attached for that crop year and no premium, administrative fee, 
or indemnity will be due for such crop year.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period. Acreage 
acquired after the acreage reporting date will not be insured.
    (2) If you relinquish your insurable share on any insurable acreage 
of walnuts on or before the acreage reporting date for the crop year, 
insurance will not be considered to have attached to, and no premium or 
indemnity will be due for such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions (Sec. 457.8), insurance is provided only against the 
following causes of loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and undergrowth have not been controlled or 
pruning debris has not been removed from the orchard;

[[Page 178]]

    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against any damage or loss of production due to the inability to market 
the walnuts for any reason other than actual physical damage to the 
walnuts 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 addition to the requirements of section 14 of the Basic 
Provisions, if you intend to claim an indemnity on any unit:
    (1) You must notify us prior to the beginning of harvest so that we 
may inspect the damaged production;
    (2) You must give notice when knowledge is obtained of any mold 
damage or 15 days prior to harvest so that we may inspect the mold 
damaged production; and
    (3) You must not sell or dispose of the damaged crop until we have 
given you written consent to do so.
    (b) If you fail to meet the requirements of this section, all such 
production will be considered undamaged and included as production to 
count.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by the respective production 
guarantee;
    (2) Multiplying each result in section 11(b)(1) by the respective 
price election for each variety or varietal group;
    (3) Totaling the results in section 11(b)(2);
    (4) Multiplying the total production to be counted of each variety 
or varietal group, if applicable, (see section 11(c)) by the respective 
price election;
    (5) Totaling the results in section 11(b)(4);
    (6) Subtracting the result in section 11(b)(5) from the result in 
section 11(b)(3); and
    (7) Multiplying the result in section 11(b)(6) by your share.
    For example:
    You have a 100 percent share in 100 acres of walnuts in the unit, 
with a guarantee of 2,500 pounds per acre and a price election of $0.61 
per pound. You are only able to harvest 200,000 pounds. Your indemnity 
would be calculated as follows:
    (1) 100 acres x 2,500 pounds = 250,000 pound insurance guarantee;
    (2 & 3) 250,000 pounds x $0.61 price election = $152,500 total value 
of insurance guarantee;
    (4 & 5) 200,000 pounds production to count x $0.61 price election = 
$122,000 total value of production to count;
    (6) $152,500 total value guarantee--$122,000 total value of 
production to count = $30,500 loss; and
    (7) $30,500 x 100 percent share = $30,500 indemnity payment.
    (c) The total production to count (whole in-shell 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 damaged solely by uninsured causes; or
    (C) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count; and
    (2) All harvested production from the insurable acreage.
    (d) Mature walnut production damaged due to an insurable cause of 
loss which occurs within the insurance period may be adjusted for 
quality based on an inspection by the Dried Fruit Association or during 
our loss adjustment process. Walnut production that has mold damage 
greater than 8 percent,

[[Page 179]]

based on the net delivered weight, will be reduced by the quality 
adjustment factors contained in the Special Provisions. Walnut 
production that exceeds 30 percent mold damage and will not be sold, the 
production to count will be zero.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 20091, Apr. 25, 1997, as amended at 62 FR 65170, Dec. 10, 1997; 
65 FR 47837, Aug. 4, 2000]



Sec. 457.123  Almond crop insurance provisions.

    The Almond Crop Insurance Provisions for the 2001 and succeeding 
crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and Reinsured Policies

                         Almond Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Harvest. The removal of mature almonds from the orchard.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Meat pounds. The total pounds of almond meats (whole, chipped and 
broken, and in-shell meats). In-shell almonds will be converted to meat 
pounds in accordance with FCIC approved procedures.
    Production guarantee (per acre). The quantity of almonds (total meat 
pounds per acre) determined by multiplying the approved actual 
production history (APH) yield per acre by the coverage level percentage 
you elect.
    Set out. Transplanting the tree into the orchard.

                            2. Unit Division

    Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may be 
established only if each optional unit is located on non-contiguous 
land, unless otherwise allowed by written agreement.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic Provisions 
(Sec. 457.8):
    (a) You may select only one price election for all the almonds 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 almond 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 (Sec. 457.8), by type if applicable:
    (1) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting patterns;
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed, the age of the crop that is interplanted with the almonds, 
and type if applicable, and the planting pattern; and
    (5) Any other information that we request in order to establish your 
approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of the following: 
interplanted perennial crop; removal of trees; damage; change in 
practices and any other circumstance on the yield potential of the 
insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time we become aware of the circumstance.
    (c) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election if a 
cause of loss that would or could reduce the yield of the insured crop 
has occurred prior to the time that you request the increase.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions (Sec. 457.8), 
the contract change date is August 31 preceding the cancellation date.

[[Page 180]]

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions (Sec. 457.8), 
the cancellation and termination dates are December 31.

                             6. Insured Crop

    In accordance with section 8 of the Basic Provisions (Sec. 457.8), 
the crop insured will be all the almonds in the county for which a 
premium rate is provided by the actuarial documents:
    (a) In which you have a share unless allowed otherwise by section 
8(b);
    (b) That are grown for harvest as almonds;
    (c) That are irrigated;
    (d) That are grown in an orchard that, if inspected, is considered 
acceptable to us; and
    (e) On acreage where at least 90 percent of the trees have reached 
at least the seventh growing season after set out, unless we agree in 
writing to insure trees not meeting this requirement.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 of the Basic Provisions 
(Sec. 457.8), that prohibit insurance attaching to a crop planted with 
another crop, almonds interplanted with another perennial crop are 
insurable unless we inspect the acreage and determine that it does not 
meet the requirements contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions (Sec. 457.8):
    (1) Coverage begins on January 1 of each crop year, except that for 
the year of application, if your application is received after December 
21, but prior to January 1, insurance will attach on the 10th day after 
your properly completed application is received in our local office 
unless we inspect the acreage during the 10 day period and determine 
that it does not meet insurability requirements. You must provide any 
information that we require for the crop or to determine the condition 
of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is November 30.
    (3) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that 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.
    (4) If your almond policy is canceled or terminated for any crop 
year, in accordance with the terms of the policy, after insurance 
attached for that crop year but on or before the cancellation and 
termination dates whichever is later, insurance will not be considered 
to have attached for that crop year and no premium, administrative fee, 
or indemnity will be due for such crop year.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period. Acreage 
acquired after the acreage reporting date will not be insured.
    (2) If you relinquish your insurable share on any insurable acreage 
of almonds on or before the acreage reporting date for the crop year, 
insurance will not be considered to have attached to, and no premium or 
indemnity will be due for such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions (Sec. 457.8), insurance is provided only against the 
following causes of loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and undergrowth have not been controlled or 
pruning debris has not been removed from the orchard;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Earthquake;
    (6) Volcanic eruption;
    (7) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period; or
    (8) Wildlife, unless control measures have not been taken.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to the inability to market the 
almonds for any reason other than actual physical damage to the almonds 
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.

[[Page 181]]

                10. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 of the Basic 
Provisions (Sec. 457.8), if you intend to claim an indemnity on any 
unit, you must notify us prior to the beginning of harvest so that we 
may inspect the damaged production. You must not sell or dispose of the 
damaged crop until after we have given you written consent to do so. If 
you fail to meet the requirements of this section, all such production 
will be considered undamaged and included as production to count.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (l) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying each result in section 11(b)(1) by the respective 
price election for the type;
    (3) Totaling the results in section 11(b)(2);
    (4) Multiplying the total production to be counted of each type, if 
applicable, (see subsection 11(c)) by the respective price election;
    (5) Totaling the results in section 11(b)(4);
    (6) Subtracting the result in section 11(b)(5) from the result in 
section 11(b)(3); and
    (7) Multiplying the result in section 11(b)(6) by your share.
    For example:
    You have a 100 percent share in 100 acres of almonds in the unit, 
with a guarantee of 1,200 pounds per acre and a price election of $1.70 
per pound. You are only able to harvest 100,000 pounds. Your indemnity 
would be calculated as follows:
    (1) 100 acres x 1,200 pounds = 120,000 pound insurance guarantee;
    (2 & 3) 120,000 pounds x $1.70 price election = $204,000 total value 
of insurance guarantee;
    (4 & 5) 100,000 pounds production to count x $1.70 price election = 
$170,000 total value of production to count;
    (6) $204,000 total of value guarantee--$170,000 total value of 
production to count = $34,000 loss; and
    (7) $34,000 x 100 percent share = $34,000 indemnity payment.
    (c) The total production to count, specified in meat 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 damaged solely by uninsured causes; or
    (C) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count; and
    (2) All harvested meat pounds, including meat pounds damaged due to 
uninsured causes of loss.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 25108, May 8, 1997, as amended at 62 FR 65170, Dec. 10, 1997; 65 
FR 47838, Aug. 4, 2000]



Sec. 457.124  Raisin crop insurance provisions.

    The raisin crop insurance provisions for the 1998 and succeeding 
crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and Reinsured Policies

                         Raisin Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Crop year--In lieu of the definition of ``Crop year'' contained in 
section 1 of the Basic Provisions (Sec. 457.8), the calendar year

[[Page 182]]

in which the raisins are placed on trays for drying.
    Delivered ton--A ton of raisins delivered to a packer, processor, 
buyer or a reconditioner, before any adjustment for U. S. Grade B and 
better maturity standards, and after adjustments for moisture over 16 
percent and substandard raisins over 5 percent.
    RAC--The Raisin Administrative Committee, which operates under an 
order of the United States Department of Agriculture (USDA).
    Raisins--The sun-dried fruit of varieties of grapes designated 
insurable by the actuarial documents. These grapes will be considered 
raisins for the purpose of this policy when laid on trays in the 
vineyard to dry.
    Reference maximum dollar amount--The value per ton established by 
FCIC and shown in the actuarial documents.
    Substandard--Raisins that fail to meet the requirements of U.S. 
Grade C, or layer (cluster) raisins with seeds that fail to meet the 
requirements of U.S. Grade B.
    Table grapes--Grapes grown for commercial sale as fresh fruit on 
acreage where appropriate cultural practices were followed.
    Ton--Two thousand (2,000) pounds avoirdupois.
    Tonnage report--A report used to annually report, by unit, all the 
tons of raisins produced in the county in which you have a share.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by grape variety.
    (b) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may be 
established only if each optional unit is located on non-contiguous 
land, unless otherwise allowed by written agreement.

            3. Amounts of Insurance and Production Reporting

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one coverage level percentage for all the 
raisins in the county insured under this policy.
    (b) The amount of insurance for the unit will be determined by 
multiplying the insured tonnage by the reference maximum dollar amount, 
by the coverage level percentage you elect, and by your share.
    (c) Insured tonnage is determined as follows:
    (1) For units not damaged by rain--The delivered tons; or
    (2) For units damaged by rain--By adding the delivered tons to any 
verified loss of production due to rain damage. When production from a 
portion of the acreage within a unit is removed from the vineyard and 
production from the remaining acreage is lost in the vineyard, the 
amount of production lost in the vineyard will be determined based on 
the number of tons of raisins produced on the acreage from which 
production was removed. When no production has been removed from the 
vineyard, the amount of production lost in the vineyard will be 
determined based on an appraisal.
    (3) Insured tonnage will be adjusted as follows:
    (i) The insured tonnage will be reduced 0.12 percent for each 0.10 
percent of moisture in excess of 16.0 percent. For example, 10.0 tons of 
raisins containing 18.0 percent moisture will be reduced to 9.760 tons 
of raisins;
    (ii) Insured tonnage used for dry edible fruit will be reduced by 
0.10 percent for each 0.10 percent of substandard raisins in excess of 
5.0 percent; and
    (iii) When raisins contain moisture in excess of 24.3 percent at the 
time of delivery and are released for a use other than dry edible fruit 
(e.g. distillery material), they will be considered to contain 24.3 
percent moisture.
    (4) If any raisins are delivered, the moisture content will be 
determined at the time of delivery.
    (d) Section 3(c) of the Basic Provisions is not applicable to this 
crop.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is April 30 preceding 
the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are July 31.

                  6. Acreage Report and Tonnage Report

    In lieu of the provisions contained in section 6 of the Basic 
Provisions (Sec. 457.8):
    (a) You must report by unit, and on our form, the acreage on which 
you intend to produce raisins for the crop year. This acreage report 
must be submitted to us on or before the sales closing date, and contain 
the following information:
    (1) All acreage of the crop (insurable and not insurable) in which 
you will have a share;
    (2) Your anticipated share at the time coverage will begin;
    (3) The variety; and
    (4) The location of each vineyard.

[[Page 183]]

    (b) Acreage of the crop acquired after the acreage was reported, may 
be included on the acreage report if we agree to accept the additional 
acreage. Such additional acreage will not be added to the acreage report 
after you first place raisins from the additional acreage on trays for 
drying. Failure to report any acreage in which you have a share will 
result in denial of liability. If you elect not to produce raisins on 
any part of the acreage included on your acreage report, you must notify 
us in writing on or before September 21, and provide any records we may 
require to verify that raisins were not produced on that acreage.
    (c) If you fail to file an acreage report in a timely manner, or if 
the information reported is incorrect, we may deny liability on any 
unit.
    (d) In addition to the acreage report, you must annually submit a 
tonnage report, on our form, which includes by unit the number of 
delivered tons of raisins, and, if damage has occurred, the amount of 
any tonnage we determined was lost due to rain damage in the vineyard 
for each unit designated in the acreage report.
    (e) The tonnage report must be submitted to us as soon as the 
information is available, but not later than March 1 of the year 
following the crop year. Indemnities may be determined on the basis of 
information you submitted on this report. If you do not submit this 
report by the reporting date, we may, at our option, either determine 
the insured tonnage and share by unit or we may deny liability on any 
unit. This report may be revised only upon our approval. Errors in 
reporting units may be corrected by us at any time we discover the 
error.

                            7. Annual Premium

    In lieu of the premium computation method contained in section 7 
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual 
premium amount is determined by multiplying the amount of insurance for 
the unit at the time insurance attaches by the premium rate and then 
multiplying that result by any applicable premium adjustment factors 
that may apply.

                             8. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the raisins in the 
county of grape varieties for which a premium rate is provided by the 
actuarial documents and in which you have a share.
    (b) In addition to the raisins not insurable under section 8 
(Insured Crop) of the Basic Provisions (Sec. 457.8), we do not insure 
any raisins:
    (1) Laid on trays after September 8 in vineyards with north-south 
rows in Merced or Stanislaus Counties, or after September 20 in all 
other counties;
    (2) From table grape strippings; or
    (3) From vines that received manual, mechanical, or chemical 
treatment to produce table grape sizing.

                           9. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8), insurance attaches on each unit at the 
time the raisins are placed on trays for drying and ends the earlier of:
    (a) October 20;
    (b) The date the raisins are removed from the trays;
    (c) The date the raisins are removed from the vineyard;
    (d) Total destruction of all raisins on a unit;
    (e) Final adjustment of a loss on a unit; or
    (f) Abandonment of the raisins.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only against 
unavoidable loss of production resulting from rain that occurs during 
the insurance period and while the raisins are on trays or in rolls in 
the vineyard for drying.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to inability to market the 
raisins 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 a person to accept production.

               11. Reconditioning Requirements and Payment

    (a) We may require you to recondition a representative sample of not 
more than 10 tons of damaged raisins to determine if they meet standards 
established by the RAC once reconditioned. If such standards are met, we 
may require you to recondition all the damaged production. If we 
determine that it is possible to recondition any damaged production and, 
if you do not do so, we will value the damaged production at the 
reference maximum dollar amount, except if your damaged production 
undergoes a USDA inspection and is stored by your packer with other 
producer's production to be reconditioned at a later date. If we agree, 
in writing, that it is not practical to recondition the damaged 
production, we will determine the number of tons meeting RAC standards 
that could be obtained if the production were reconditioned.

[[Page 184]]

    (b) If the representative sample of raisins that we require you to 
recondition does not meet RAC standards for marketable raisins after 
reconditioning, the reconditioning payment will be the actual cost you 
incur to recondition the sample, not to exceed an amount that is 
reasonable and customary for such reconditioning, regardless of the 
coverage level selected.
    (c) A reconditioning payment, based on the actual (unadjusted) 
weight of the raisins, will be made if:
    (1) Insured raisin production:
    (i) Is damaged by rain within the insurance period;
    (ii) Is reconditioned by washing with water and then drying;
    (iii) Is insured at a coverage level greater than that applicable to 
the catastrophic risk protection plan of insurance; and either
    (2) The damaged production undergoes an inspection by USDA and is 
found to contain mold, embedded sand, or other rain-caused contamination 
determined by micro-analysis in excess of standards established by the 
RAC, or is found to contain moisture in excess of 18 percent; or
    (3) We give you consent to recondition the damaged production.
    (d) Your request for consent to any wash-and-dry reconditioning must 
identify the acreage on which the production to be reconditioned was 
damaged in order to be eligible for a reconditioning payment.
    (e) The reconditioning payment for raisins that meet RAC standards 
for marketable raisins after reconditioning will be the lesser of your 
actual cost for reconditioning or the amount determined by:
    (1) Multiplying the greater of $125.00 or the reconditioning dollar 
amount per ton contained in the Special Provisions by your coverage 
level;
    (2) Multiplying the result of section 11(e)(1) by the actual number 
of tons of raisins (unadjusted weight) that are wash-and-dry 
reconditioned; and
    (3) Multiplying the result of section 11(e)(2) by your share.
    (f) Only one reconditioning payment will be made for any lot of 
raisins damaged during the crop year. Multiple reconditioning payments 
for the same production will not be made.

                12. Duties In The Event of Damage or Loss

    (a) In addition to the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the 
following will apply:
    (1) If you intend to claim an indemnity on any unit, you must give 
us notice within 72 hours of the time the rain fell on the raisins. We 
may reject any claim for indemnity if such notice is later. You must 
provide us the following information when you give us this notice:
    (i) The grape variety;
    (ii) The location of the vineyard and number of acres; and
    (iii) The number of vines from which the raisins were harvested.
    (2) We will not pay any indemnity unless you:
    (i) Authorize us in writing to obtain all relevant records from any 
raisin packer, raisin reconditioner, the RAC, or any other person who 
may have such records. If you fail to meet the requirements of this 
subsection, all insured production will be considered undamaged and 
valued at the reference maximum dollar value.
    (ii) Upon our request, provide us with records of previous years'' 
production and acreage. This information may be used to establish the 
amount of insured tonnage when insurable damage results in discarded 
production.
    (b) In lieu of the provisions in section 14 (Duties in the Event of 
Damage or Loss) of the Basic Provisions (Sec. 457.8) that require you to 
submit a claim for indemnity not later than 60 days after the end of the 
insurance period, any claim for indemnity must be submitted to us not 
later than March 31 following the date for the end of the insurance 
period.

                         13. 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 acreage from which 
raisins were removed for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured tonnage of raisins by the reference 
maximum dollar amount and your coverage level percentage;
    (2) Subtracting from the total in section 13(b)(1) the total value 
of all insured damaged and undamaged raisins; and
    (3) Multiplying the result of section 13(b)(2) by your share.
    (c) For the purpose of determining the amount of indemnity, your 
share will not exceed the lesser of your share at the time insurance 
attaches or at the time of loss.
    (d) Undamaged raisins or raisins damaged solely by uninsured causes 
will be valued at the reference maximum dollar amount.
    (e) Raisins damaged partially by rain and partially by uninsured 
causes will be valued at the highest prices obtainable, adjusted for any 
reduction in value due to uninsured causes.

[[Page 185]]

    (f) Raisins that are damaged by rain, but that are reconditioned and 
meet RAC standards for raisins, will be valued at the reference maximum 
dollar amount.
    (g) The value to count for any raisins produced on the unit that are 
damaged by rain and not removed from the vineyard will be the larger of 
the appraised salvage value or $35.00 per ton, except that any raisins 
that are damaged and discarded from trays or are lost from trays 
scattered in the vineyard as part of normal handling will not be 
considered to have any value. You must box and deliver any raisins that 
can be removed from the vineyard.
    (h) At our sole option, we may acquire all the rights and title to 
your share of any raisins damaged by rain. In such event, the raisins 
will be valued at zero in determining the amount of loss and we will 
have the right of ingress and egress to the extent necessary to take 
possession, care for, and remove such raisins.
    (i) Raisins destroyed, put to another use without our consent, or 
abandoned will be valued at the reference maximum dollar amount.

                     14. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 12070, Mar. 14, 1997, as amended at 62 FR 65170, Dec. 10, 1997]



Sec. 457.125  Safflower crop insurance provisions.

    The safflower crop insurance provisions for the 2003 and succeeding 
crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and reinsured policies:

                   Safflower Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Harvest. Collecting the safflower seed by combining or threshing.
    Local market price. The cash price per pound for undamaged safflower 
(test weight of 35 pounds per bushel or higher and seed damage less than 
25 percent) offered by buyers.
    Nurse crop (companion crop). A crop planted into the same acreage as 
another crop, that is intended to be harvested separately, and which is 
planted to improve growing conditions for the crop with which it is 
grown.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, safflowers must initially be planted in rows, unless 
otherwise provided by the Special Provisions, actuarial documents, or by 
written agreement.
    Pound. Sixteen ounces avoirdupois.
    Value per pound. The cash price per pound for damaged safflower 
(test weight below 35 pounds per bushel, seed damage in excess of 25 
percent, or both).

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8), you may select only one price election for all 
the safflower 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 safflower 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.

                           3. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 preceding 
the cancellation date for California, and December 31 preceding the 
cancellation date for all other states.

                  4. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

------------------------------------------------------------------------
                                           Cancellation and termination
                 State                                dates
------------------------------------------------------------------------
California.............................  December 31.
All other states.......................  March 15.
------------------------------------------------------------------------

                             5. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all safflower in the county for 
which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;

[[Page 186]]

    (b) That is planted for harvest as safflower seed;
    (c) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Interplanted with another crop; or
    (2) Planted into an established grass or legume.

                          6. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8), we will not insure:
    (a) Safflower planted on land on which safflower, sunflower seed, 
any variety of dry beans, soybeans, mustard, rapeseed, or lentils were 
grown the preceding crop year, unless other rotation requirements are 
specified in the Special Provisions or we agree in writing to insure 
such acreage; or
    (b) Any acreage of safflower damaged before the final planting date, 
to the extent that the majority of producers in the area would normally 
not further care for the crop, unless the crop is replanted or we agree 
that it is not practical to replant.

                           7. Insurance Period

    In accordance with the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8), the calendar date for the end of 
the insurance period is October 31 immediately following planting.

                            8. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur during the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife, unless proper measures to control wildlife have not 
been taken;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if caused by an insured 
cause of loss that occurs during the insurance period.

                          9. Replanting Payment

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if the crop is 
damaged by an insurable cause of loss to the extent that the remaining 
stand will not produce at least 90 percent of the production guarantee 
for the acreage and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of 20 percent of the production guarantee or 160 pounds, 
multiplied by your price election, multiplied by your insured share.
    (c) When safflower is replanted using a practice that is uninsurable 
as an original planting, the liability on the unit will be reduced by 
the amount of the replanting payment. The premium amount will not be 
reduced.

                10. Duties In The Event of Damage or Loss

    In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the 
representative samples of the unharvested crop must be at least 10 feet 
wide and extend the entire length of each field in the unit. The samples 
must not be harvested or destroyed until the earlier of our inspection 
or 15 days after harvest of the balance of the unit is completed.

                         11. 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 the unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying each result in section 11(b)(1) by the respective 
price election;
    (3) Totaling the results in section 11(b)(2);
    (4) Multiplying the total production to be counted of each type if 
applicable, (see section 11(c)) by the respective price election;
    (5) Totaling the results in section 11(b)(4);
    (6) Subtracting the results from the total in section 11(b)(5) from 
the results in section 11(b)(3); and
    (7) Multiplying the result in section 11(b)(6) by your share.
    (c) The total 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 the acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for

[[Page 187]]

quality deficiencies and excess moisture in accordance with section 
11(d)); 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:
    (A) If 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 the 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 appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If 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.
    (d) Mature safflower may be adjusted for excess moisture and quality 
deficiencies. If moisture adjustment is applicable, it will be made 
prior to any adjustment for quality.
    (1) Production will be reduced by 0.12 percent for each 0.1 
percentage point of moisture in excess of 8 percent. We may obtain 
samples of the production to determine the moisture content.
    (2) Production will be eligible for quality adjustment if such 
production:
    (i) Has a test weight below 35 pounds per bushel;
    (ii) Has seed damage in excess of 25 percent; or
    (iii) Contains substances or conditions that are identified by the 
Food and Drug Administration or other public health organizations of the 
United States as being injurious to human or animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these crop 
provisions and that occurred within the insurance period;
    (ii) The deficiencies, substances, or conditions result in a value 
per pound that is less than the local market price;
    (iii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us or by 
a disinterested third party approved by us;
    (iv) With regard to deficiencies in quality (except test weight, 
which may be determined by our loss adjuster), the samples are analyzed 
by:
    (A) A grader licensed under the United States Agricultural Marketing 
Act or the United States Warehouse Act;
    (B) A grader licensed under State law and employed by a warehouse 
operator who has a storage agreement with the Commodity Credit 
Corporation; or
    (C) A grader not licensed under State law, but who is employed by a 
warehouse operator who has a commodity storage agreement with the 
Commodity Credit Corporation and is in compliance with State law 
regarding warehouses; and
    (v) With regard to substances or conditions injurious to human or 
animal health, the samples are analyzed by a laboratory approved by us.
    (4) Safflower production that is eligible for quality adjustment, as 
specified in sections 11(d) (2) and (3), will be reduced as follows:
    (i) In accordance with the quality adjustment factors contained in 
the Special Provisions; or
    (ii) If quality adjustment factors are not contained in the Special 
Provisions:
    (A) By determining the value per pound and the local market price on 
the earlier of the date such quality adjusted production is sold or the 
date of final inspection for the unit. Discounts used to establish the 
value per pound will be limited to those which are usual, customary, and 
reasonable. The value per pound will not be reduced for:
    (1) Moisture content;
    (2) Damage due to uninsured causes; or
    (3) Drying, handling, processing, or any other costs associated with 
normal harvesting, handling, and marketing of safflower. We may obtain 
values per pound from any buyer of our choice. If we obtain values per 
pound from one or more buyers located outside your local market area, we 
will reduce such values per pound by the additional costs required to 
deliver the production to those buyers.
    (B) Divide the value per pound by the local market price to 
determine the quality adjustment factor; and
    (C) Multiply the adjustment factor by the number of pounds of the 
damaged production remaining after any reduction due to excessive 
moisture to determine the net production to count.
    (e) Any production harvested from other plants growing in the 
insured crop may be counted as production of the insured crop on a 
weight basis.

                         12. Prevented Planting

    Your prevented planing coverage will be 60 percent of your 
production guarantee for

[[Page 188]]

timely planted acreage. If you have limited or aditional levels of 
coverage, as specified in 7 CFR part 400, subpart T, and pay an 
additional premium, you may increase your prevented planting coverage to 
a level specified in the actuarial documents.

[62 FR 42649, Aug. 8, 1997, as amended at 62 FR 65171, Dec. 10, 1997; 67 
FR 55690, Aug. 30, 2002]



Sec. 457.126  Popcorn cop isurance povisions.

    The Popcorn Crop Insurance Provisions for the 1999 and succeeding 
crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and reinsured policies:

                    Popcorn Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Base contract price. The price stipulated on the contract executed 
between you and the processor before any adjustments for quality.
    Harvest. Removing the grain or ear from the stalk either by hand or 
by machine.
    Merchantable popcorn. Popcorn that meets the provisions of the 
processor contract.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, popcorn must initially be planted in rows far enough 
apart to permit mechanical cultivation, unless otherwise provided by the 
Special Provisions, actuarial documents, or by written agreement.
    Pound. Sixteen (16) ounces avoirdupois.
    Practical to replant. In addition to the definition contained in the 
Basic Provisions, it will not be considered practical to replant unless 
production from the replanted acreage can be delivered under the terms 
of the popcorn processor contract, or the processor agrees in writing 
that it will accept the production from the replanted acreage.
    Processor. Any business enterprise regularly engaged in processing 
popcorn that possesses all licenses, permits or approved inspections for 
processing popcorn required by the state in which it operates, and that 
possesses facilities, or has contractual access to such facilities, with 
enough equipment to accept and process the contracted popcorn within a 
reasonable amount of time after harvest.
    Processor contract. A written agreement between the producer and a 
processor, containing at a minimum:
    (a) The producer's commitment to plant and grow popcorn, and to 
deliver the popcorn production to the processor;
    (b) The processor's commitment to purchase all the production stated 
in the processor contract;
    (c) A date, if specified on the processor's contract, by which the 
crop must be harvested to be accepted; and
    (d) A base contract price.
Multiple contracts with the same processor, each of which stipulates a 
specific amount of production to be delivered under the terms of the 
processor contact, will be considered as a single processor contract.

                            2. Unit Division

    (a) For processor contracts that stipulate the amount of production 
to be delivered:
    (1) In lieu of the definition contained in the Basic Provisions, a 
basic unit will consist of all the acreage planted to the insured crop 
in the county that will be used to fulfill contracts with each 
processor;
    (i) There will be no more than one basic unit for all production 
contracted with each processor contract;
    (ii) In accordance with section 13 of these Crop Provisions, all 
production from any basic unit in excess of the amount under contract 
will be included as production to count if such production is applied to 
any other basic unit for which the contracted amount has not been 
fulfilled; and
    (2) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable.
    (b) For any processor contract that stipulates only the number of 
acres to be planted, the provisions contained in section 34 of the Basic 
Provisions will apply.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions, you may select only one price election for all the popcorn 
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 popcorn 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,

[[Page 189]]

you must also choose 100 percent of the maximum price election for all 
other types.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 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:

------------------------------------------------------------------------
                                            Cancellation and termination
             State and county                          dates
------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,  January 15.
 Wilson, Karnes, Goliad, Victoria, and
 Jackson counties Texas, and all Texas
 counties lying south thereof.
All other Texas counties and all other     March 15.
 states.
------------------------------------------------------------------------

                          6. Report of Acreage

    In addition to the provisions of section 6 of the Basic Provisions, 
you must provide a copy of all processor contracts to us on or before 
the acreage reporting date.

                             7. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the popcorn in the county for which a premium rate 
is provided by the actuarial documents:
    (1) In which you have a share;
    (2) That is planted for harvest as popcorn;
    (3) That is grown under, and in accordance with the requirements of, 
a processor contract executed on or before the acreage reporting date 
and is not excluded from the processor contract at any time during the 
crop year; and
    (4) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop; or
    (ii) Planted into an established grass or legume.
    (b) You will be considered to have a share in the insured crop if, 
under the processor contract, you retain control of the acreage on which 
the popcorn is grown, you have a risk of loss, and the processor 
contract provides for delivery of popcorn under specified conditions and 
at a stipulated base contract price.
    (c) A popcorn producer who is also a processor may be able to 
establish an insurable interest if the following requirements are met:
    (1) The producer must comply with these Crop Provisions;
    (2) The Board of Directors or officers of the processor must, prior 
to the sales closing date, execute and adopt a resolution that contains 
the same terms as an acceptable processor contract. Such resolution will 
be considered a processor contract under this policy; and
    (3) Our inspection reveals that the processing facilities comply 
with the definition of a processor contained in these Crop Provisions.

                          8. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions, 
any acreage of the insured crop damaged before the final planting date, 
to the extent that the majority of producers in the area would normally 
not further care for the crop, must be replanted unless we agree that it 
is not practical to replant.

                           9. Insurance Period

    In lieu of the provisions contained in section 11 of the Basic 
Provisions, regarding the end of the insurance period, insurance ceases 
on each unit or part of a unit at the earliest of:
    (a) The date the popcorn:
    (1) Was destroyed;
    (2) Should have been harvested but was not harvested;
    (3) Was abandoned; or
    (4) Was harvested;
    (b) When the processor contract stipulates a specific amount of 
production to be delivered, the date the production accepted by the 
processor equals the contracted amount of production;
    (c) Final adjustment of a loss; or
    (d) December 10 immediately following planting.

                           10. 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, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if caused by a cause of 
loss specified in sections 10(a)(1) through (7) that occurs during the 
insurance period.
    (b) In addition to the causes of loss excluded by section 12 of the 
Basic Provisions, we do not insure against any loss of production due 
to:

[[Page 190]]

    (1) Damage resulting from frost or freeze after the date designated 
in the Special Provisions; or
    (2) Failure to follow the requirements contained in the processor 
contract.

                         11. Replanting Payment

    (a) In accordance with section 13 of the Basic Provisions, a 
replanting payment is allowed if the crop is damaged by an insurable 
cause of loss to the extent that the remaining stand will not produce at 
least 90 percent of the production guarantee for the acreage and it is 
practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of 20 percent of the production guarantee or 150 pounds, 
multiplied by your price election, multiplied by your insured share.
    (c) When popcorn is replanted using a practice that is uninsurable 
as an original planting, our liability for the unit will be reduced by 
the amount of the replanting payment. The premium amount will not be 
reduced.

                12. Duties in the Event of Damage or Loss

    In accordance with the requirements of section 14 of the Basic 
Provisions, the representative samples of the unharvested crop must be 
at least 10 feet wide and extend the entire length of each field in the 
unit. The samples must not be destroyed until the earlier of our 
inspection or 15 days after harvest of the balance of the unit is 
completed.
    13. Settlement of Claim
    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide 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 covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each type, if applicable, by 
its respective production guarantee;
    (2) Multiplying the result of section 13(b)(1) by the respective 
price election for each type, if applicable;
    (3) Totaling the results of section 13(b)(2) if there is more than 
one type;
    (4) Multiplying the total production to count (see section 13(c)), 
of each type if applicable, by its respective price election;
    (5) Totaling the results of section 13(b)(4) if there is more than 
one type;
    (6) Subtracting the result of section 13(b)(4) from the result in 
section 13(b)(2) if there is only one type or subtracting the result of 
section 13(b)(5) from the result of section 13(b)(3) if there is more 
than one type; and
    (7) Multiplying the result of section 13(b)(6) by your share.

 
 
 
For example:
You have a 100 percent share in 100 acres of Type A popcorn in the unit,
 with a guarantee of 2,500 pounds per acre and a price election of $.12
 per pound. You are only able to harvest 150,000 pounds. Your indemnity
 would be calculated as follows:
1....................  100 acres x 2,500 pounds = 250,000 pound
                        guarantee;
2....................  250,00 pounds x $.12 price election = $30,000
                        value of guarantee;
4....................  150,000 pounds production to count x $.12 price
                        election = $18,000 value of production to count;
6....................  $30,000-$18,000 = $12,000 loss; and
7....................  $12,000 x 100 percent share = $12,000 indemnity
                        payment.
You also have a 100 percent share in 150 acres of type B popcorn in the
 same unit, with a guarantee of 2,250 pounds per acre and a price
 election of $.10 per pound. You are only able to harvest 70,000 pounds.
 Your total indemnity for both popcorn types A and B would be calculated
 as follows:
1....................  100 acres x 2,500 pounds = 250,000 guarantee for
                        type A and 150 acres x 2,250 pounds = 337,500
                        pound guarantee for type B;
2....................  250,000 pound guarantee x $.12 price election =
                        $30,000 value of guarantee for type A and
                        337,500 pound guarantee x $.10 price election =
                        $33,750 value guarantee for type B;
3....................  $30,000 + $33,750 = $63,750 total value
                        guarantee;
4....................  150,000 pounds x $.12 price election = $18,000
                        value of production to count for type A and
                       70,000 pounds x $.10 price election = $7,000
                        value of production to count for type B;
5....................  $18,000 + $7,000 = $25,000 total value of
                        production to count;
6....................  $63,750-$25,000 = $38,750 loss; and
7....................  $38,750 x 100 percent = $38,750 indemnity
                        payment.
 


[[Page 191]]

    (c) The total 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 for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide production records;
    (ii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
section 13(d));
    (iii) 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:
    (A) If 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 the 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 appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If 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;
    (2) All harvested production from the insurable acreage in the unit;
    (3) All harvested and appraised production lost or damaged by 
uninsured causes; and
    (4) For processor contracts that stipulate the amount of production 
to be delivered, all harvested popcorn production from any other 
insurable unit that has been used to fulfill your processor contract 
applicable to this unit.
    (5) Any production from yellow or white dent corn will be counted as 
popcorn on a weight basis and any production harvested from plants 
growing in the insured crop may be counted as popcorn production on a 
weight basis.
    (6) Any ear production for which we cannot determine a shelling 
factor will be considered to have an 80 percent shelling factor.
    (d) Mature popcorn may be adjusted for excess moisture and quality 
deficiencies. If moisture adjustment is applicable, it will be made 
prior to any adjustment for quality.
    (1) Production will be reduced by 0.12 percent for each 0.1 
percentage point for moisture in excess of 15 percent. We may obtain 
samples of the production to determine the moisture content.
    (2) Popcorn production will be eligible for quality adjustment if, 
due to an insurable cause of loss that occurs within the insurance 
period, it is not merchantable popcorn and is rejected by the processor. 
The production will be adjusted by:
    (i) Dividing the value per pound of the damaged popcorn by the base 
contract price per pound for undamaged popcorn; and
    (ii) Multiplying the result by the number of pounds of such popcorn.

                            14. Late Planting

    Late planting provisions in the Basic Provisions are applicable for 
popcorn if you provide written approval from the processor by the 
acreage reporting date that it will accept the production from the late 
planted acres when it is expected to be ready for harvest.

                         15. Prevented Planting

    Your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

[63 FR 33838, June 22, 1998]



Sec. 457.127  [Reserved]



Sec. 457.128  Guaranteed production plan of fresh market tomato crop insurance provisions.

    The Guaranteed Production Plan of Fresh Market Tomato Crop Insurance
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and reinsured policies:

    Guarantee Production Plan of Fresh Market Tomato Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

[[Page 192]]

                             1. Definitions

    Acre--Forty-three thousand five hundred sixty (43,560) square feet 
of land when row widths do not exceed six feet, or if row widths exceed 
six feet, the land area on which at least 7,260 linear feet of rows are 
planted.
    Carton--A container that contains 25 pounds of fresh tomatoes unless 
otherwise provided in the Special Provisions.
    Direct marketing--Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    First fruit set--The date when 30 percent of the plants on the unit 
have produced fruit that has reached a minimum size of one inch in 
diameter.
    Harvest--Picking of marketable tomatoes.
    Mature green tomato--A tomato that:
    (a) Has a heightened gloss due to a waxy skin that cannot be torn by 
scraping;
    (b) Has a well-formed jelly-like substance in the locules;
    (c) Has seeds that are sufficiently hard so they are pushed aside 
and not cut by a sharp knife in slicing; and
    (d) Shows no red color.
    Planting--Transplanting the tomato plants into the field.
    Planting period--The time period designated in the Special 
Provisions during which the tomatoes must be planted to be insured as 
either spring-or fall-planted tomatoes.
    Plant stand--The number of live plants per acre before any damage 
occurs.
    Potential production--The number of cartons per acre of mature green 
or ripe tomatoes that the tomato plants would have produced by the end 
of the insurance period:
    (a) With a classification size of 6x7 (2-8/32 inch minimum diameter) 
or larger for all types except cherry, roma, or plum; or
    (b) Meeting the criteria specified in the Special Provisions for 
cherry, roma, or plum types.
    Practical to replant--In lieu of the definition of ``Practical to 
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8), 
practical to replant is defined as our determination, after loss or 
damage to the insured crop, based on factors, including but not limited 
to moisture availability, condition of the field, time to crop maturity, 
and marketing windows that replanting the insured crop will allow the 
crop to attain maturity prior to the calendar date for the end of the 
insurance period. In counties that do not have both spring and fall 
planting periods, it will not be considered practical to replant after 
the final planting date unless replanting is generally occurring in the 
area. In counties that have spring and fall planting periods, it will 
not be considered practical to replant after the final planting date for 
the planting period in which the crop was initially planted.
    Ripe tomato--A tomato that meets the definition of a mature green 
tomato, except the tomato shows some red color and can still be packed 
for fresh market under the agreement or contract with the packer.
    Row width--The distance in feet from the center of one row of plants 
to the center of an adjacent row.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by planting period, if 
separate planting periods are provided for in the Special Provisions.
    (b) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election for all the tomatoes 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 tomato type designated in the Special 
Provisions. The price election 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) The production guarantees per acre are progressive by stages and 
increase at specified intervals to the final stage production guarantee. 
The stages and production guarantees are as follows:
    (1) For California:

------------------------------------------------------------------------
                            Percent of
                              stage 3
                              (final
           Stage              stage)             Length of time
                            production
                             guarantee
------------------------------------------------------------------------
1.........................         50   From planting until first fruit
                                         set.
2.........................         70   From first fruit set until
                                         harvested.
3.........................        100   Harvested acreage.
------------------------------------------------------------------------

    (2) For all other states, except California:

[[Page 193]]



------------------------------------------------------------------------
                            Percent of
                              stage 4
                              (final
           Stage              stage)             Length of time
                            production
                             guarantee
------------------------------------------------------------------------
                  1.......         50   From planting until qualifying
                                         for stage 2.
2.........................         75   From the earlier of stakes
                                         driven, one tie and pruning, or
                                         30 days after planting until
                                         qualifying for stage 3.
3.........................         90   From the earlier of the end of
                                         stage 2 or 60 days after
                                         planting until qualifying for
                                         stage 4.
4.........................        100   From the earlier of 75 days
                                         after planting or the beginning
                                         of harvest.
------------------------------------------------------------------------

    (c) Any acreage of tomatoes damaged to the extent that producers in 
the area generally would not further care for the tomatoes will be 
deemed to have been destroyed even though you continue to care for the 
tomatoes. The production guarantee for such acreage will be the 
guarantee for the stage in which such damage occurs.
    (d) Any production guarantees for cherry, roma, or plum type 
tomatoes will be specified in the Special Provisions.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is September 30 
preceding the cancellation date for counties with a January 15 
cancellation date and December 31 preceding the cancellation date for 
all other counties.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

                      Cancellation and Termination
------------------------------------------------------------------------
                 State                                Dates
------------------------------------------------------------------------
California, Florida, Georgia, and South  January 15.
 Carolina.
All other states.......................  March 15.
------------------------------------------------------------------------

                          6. Report of Acreage

    (a) In addition to the provisions of section 6 (Report of Acreage) 
of the Basic Provisions (Sec. 457.8), you must report the row width.
    (b) If spring and fall planting periods are allowed in the Special 
Provisions you must report all the information required by section 6 
(Report of Acreage) of the Basic Provisions (Sec. 457.8) and these Crop 
Provisions by the acreage reporting date for each planting period.

                            7. Annual Premium

    In lieu of provisions contained in the Basic Provisions 
(Sec. 457.8), for determining premium amounts, the annual premium is 
determined by multiplying the final stage production guarantee by the 
price election, by the premium rate, by the insured acreage, by your 
share at the time coverage begins, and by any applicable premium 
adjustment factor contained in the Special Provisions.

                             8. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the tomatoes in the county 
for which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are transplanted tomatoes that have been planted for 
harvest as fresh market tomatoes;
    (c) That are planted within the spring or fall planting periods, as 
applicable, specified in the Special Provisions;
    (d) That, on or before the acreage reporting date, are subject to 
any agreement in writing (packing contract) executed between you and a 
packer, whereby the packer agrees to accept and pack the production 
specified in the agreement, unless you control a packing facility or an 
exception exists in the Special Provisions; and
    (e) That are not (unless allowed by the Special Provisions):
    (1) Grown for direct marketing;
    (2) Interplanted with another crop;
    (3) Planted into an established grass or legume; or
    (4) Cherry, roma, or plum type tomatoes.

                          9. Insurable Acreage

    (a) In addition to the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8):
    (1) Any acreage of the insured crop damaged before the final 
planting date, to the extent that the majority of growers in the area 
would normally not further care for the crop, must be replanted unless 
we agree that it is not practical to replant. Unavailability of plants 
will not be considered a valid reason for failure to replant.
    (2) We do not insure any acreage of tomatoes:
    (i) Grown by any person if the person had not previously:
    (A) Grown fresh market tomatoes for commercial sales; or
    (B) Participated in the management of a fresh market tomato farming 
operation, in at least one of the three previous years.
    (ii) That does not meet the rotation requirements contained in the 
Special Provisions;
    (iii) On which tomatoes, peppers, eggplants, or tobacco have been 
grown within

[[Page 194]]

the previous two years unless the soil was fumigated or nematicide was 
applied before planting the tomatoes, except that this limitation does 
not apply to a first planting in Pennsylvania or if otherwise specified 
in the Special Provisions; or
    (b) In lieu of the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8), that prohibit insurance from 
attaching if a crop has not been planted and harvested in at least one 
of the three previous calendar years, we will insure newly cleared land 
or former pasture land planted to fresh market tomatoes.

                          10. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8):
    (a) Coverage begins on each unit or part of a unit on the later of 
the date you submit your application or when the tomatoes are planted.
    (b) Coverage will end on any insured acreage at the earliest of:
    (1) Total destruction of the tomatoes;
    (2) Discontinuance of harvest;
    (3) The date harvest should have started on any acreage that was not 
harvested;
    (4) 120 days after the date of transplanting or replanting;
    (5) Completion of harvest;
    (6) Final adjustment of a loss; or
    (7) October 15 of the crop year in Delaware, Maryland, New Jersey, 
North Carolina, and Virginia; October 31 of the crop year in California; 
November 10 of the crop year in Florida, Georgia, and South Carolina; 
and September 20 of the crop year in all other States.

                           11. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production that occurs or becomes evident 
after the tomatoes have been harvested.

                         12. Replanting Payment

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if the crop is 
damaged by an insurable cause of loss and the acreage to be replanted 
has sustained a loss in excess of 50 percent of the plant stand.
    (b) The maximum amount of the replanting payment per acre will be:
    (1) Seventy (70) cartons multiplied by your price election, 
multiplied by your insured share for all insured tomatoes except cherry, 
roma or plum types; and
    (2) As specified in the Special Provisions for cherry, roma, or plum 
types.
    (c) In lieu of the provisions contained in section 13 (Replanting 
Payment) of the Basic Provisions (Sec. 457.8) that permit only one 
replanting payment each crop year, when both spring and fall planting 
periods are contained in the Special Provisions, you may be eligible for 
one replanting payment for acreage planted during each planting period 
within the crop year.

                         13. 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 units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each type, if applicable, by 
its respective production guarantee for the stage in which the damage 
occurred;
    (2) Multiplying the results of section 13(b)(1) by the respective 
price election for each type, if applicable;
    (3) Totaling the results of section 13(b)(2);
    (4) Multiplying the total production to be counted of each type, if 
applicable, (see section 13(c)) by the respective price election;
    (5) Totaling the results of section 13(b)(4);
    (6) Subtracting this result of section 13(b)(5) from the results in 
section 13(b)(3); and
    (7) Multiplying the result of section 13(b)(6) by your share.
    (c) The total production to count (in cartons) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;

[[Page 195]]

    (B) 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) Potential production lost due to uninsured causes;
    (iii) Unharvested production of mature green and ripe tomatoes 
remaining after harvest has ended:
    (A) With a classification size of 6 x 7 (2\8/32\ inch minimum 
diameter) or larger and that would grade eighty-five percent (85%) or 
better U.S. No. 1 for types other than cherry, roma, or plum; or
    (B) That grade in accordance with the requirements specified in the 
Special Provisions for cherry, roma or plum types.
    (iv) Potential production on unharvested acreage and potential 
production on acreage when final harvest has not been completed;
    (v) 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:
    (A) If 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 the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If 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:
    (i) That is marketed, regardless of grade; and
    (ii) That is unmarketed and:
    (A) That grades eighty-five percent (85%) or better U.S. No. 1 with 
a classification size of 6x7 (2-8/32 inch minimum diameter) or larger 
for all types except cherry, roma, or plum; or
    (B) That grade in accordance with the requirements specified in the 
Special Provisions for cherry, roma, or plum types.
    (d) Only that amount of appraised production that exceeds the 
difference between the final stage guarantee and the stage guarantee 
applicable to the acreage will be production to count.

                     14. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 23631, May 1, 1997; 62 FR 33539, June 20, 1997, as amended at 62 
FR 65171, Dec. 10, 1997; 63 FR 36157, July 2, 1998; 63 FR 50753, Sept. 
23, 1998]



Sec. 457.129  Fresh market sweet corn crop insurance provisions.

    The fresh market sweet corn crop insurance provisions for the 1999 
and succeeding crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and Reinsured Policies

                 Fresh Market Sweet Corn Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Container--The unit for measurement of the insured crop as specified 
in the Special Provisions.
    Crop year--In lieu of the definition of ``crop year'' contained in 
section 1 (Definitions) of the Basic Provisions (Sec. 457.8), crop year 
is a period of time that begins on the first day of the earliest 
planting period for fall planted sweet corn and continues through the 
last day of the insurance period for spring planted sweet corn. The crop 
year is designated by the calendar year in which spring planted sweet 
corn is harvested.
    Direct marketing--Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Excess rain--An amount of precipitation sufficient to directly 
damage the crop.
    Excess wind--Wind speed strong enough to prevent adequate 
pollination or cause lodging of stalks and prevent a normal harvest.

[[Page 196]]

    Freeze--The formation of ice in the cells of the plant or its fruit, 
caused by low air temperatures.
    Harvest--The picking of sweet corn on the unit.
    Marketable sweet corn--Sweet corn that meets the standards for 
grading U.S. No. 1 or better and will withstand normal handling and 
shipping.
    Plant stand--The number of live plants per acre prior to the 
occurrence of an insurable cause of loss.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, for each planting period, sweet corn seed must be 
planted in rows far enough apart to permit mechanical cultivation, 
unless otherwise provided by the Special Provisions, actuarial 
documents, or by written agreement.
    Planting period--The period of time designated in the actuarial 
documents in which fresh market sweet corn must be planted to be 
considered fall, winter, or spring-planted sweet corn.
    Potential production--The number of containers of sweet corn that 
the sweet corn plants will or would have produced per acre by the end of 
the insurance period, assuming normal growing conditions and practices.
    Practical to replant--In lieu of the definition of ``Practical to 
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8), 
practical to replant is defined as our determination, after loss or 
damage to the insured crop, based on factors, including but not limited 
to moisture availability, condition of the field, marketing windows, and 
time to crop maturity, that replanting to the insured crop will allow 
the crop to attain maturity prior to the calendar date for the end of 
the insurance period (inability to obtain seed will not be considered 
when determining if it is practical to replant).
    Sweet corn--A type of corn with kernels containing a high percentage 
of sugar that is adapted for human consumption as a vegetable.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will also be divided into additional basic units by planting period.
    (b) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.

              3. Amounts of Insurance and Production Stages

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8), you may select only one coverage 
level (and the corresponding amount of insurance designated in the 
actuarial documents for the applicable planting period and practice) for 
all the sweet corn in the county insured under this policy.
    (b) The amount of insurance you choose for each planting period and 
practice must have the same percentage relationship to the maximum price 
offered by us for each planting period and practice. For example, if you 
choose 100 percent of the maximum amount of insurance for a specific 
planting period and practice, you must also choose 100 percent of the 
maximum amount of insurance for all other planting periods and 
practices.
    (c) The production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8), do not apply to fresh 
market sweet corn.
    (d) The amounts of insurance are progressive by stages as follows:

------------------------------------------------------------------------
                       Percent of
                       the amount
                           of
        Stage          insurance               Length of time
                        per acre
                        that you
                        selected
------------------------------------------------------------------------
 1..................           65  From planting through the beginning
                                    of tasseling (which is when the
                                    tassel becomes visible above the
                                    whorl).
Final...............          100  From tasseling until the acreage is
                                    harvested.
------------------------------------------------------------------------

    (e) Any acreage of sweet corn damaged in the first stage to the 
extent that the majority of producers in the area would not normally 
further care for it, will be deemed to have been destroyed. The 
indemnity payable for such acreage will be based on the stage the plants 
had achieved when the damage occurred.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date shown below is the 
date preceding the cancellation date:

[[Page 197]]



------------------------------------------------------------------------
             State and county                           Date
------------------------------------------------------------------------
All Florida counties; and all Georgia      April 30.
 counties for which the Special
 Provisions designate a fall planting
 period.
All Georgia counties for which the         November 30.
 Special Provisions do not designate a
 fall planting period; and all other
 States.
------------------------------------------------------------------------

                  5. Cancellation and Termination dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

------------------------------------------------------------------------
                                           Cancellation and termination
            State and county                           Dates
------------------------------------------------------------------------
Florida; Atkinson, Baker, Berrien,        July 31.
 Brantley, Camden, Colquitt, Cook,
 Early, Mitchell, and Ware Counties
 Georgia and all counties south thereof
 for which the Special Provisions
 designate a fall planting period.
Alabama; South Carolina; and all Georgia  February 15.
 Counties for which the Special
 Provisions do not designate a fall
 planting period.
All other States........................  March 15.
------------------------------------------------------------------------

                          6. Report of Acreage

    In addition to the requirements of section 6 (Report of Acreage) of 
the Basic Provisions (Sec. 457.8), you must report on or before the 
acreage reporting date contained in the Special Provisions for each 
planting period, all the acreage of sweet corn in the county insured 
under this policy in which you have a share.

                            7. Annual Premium

    In lieu of the premium amount determinations contained in section 7 
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual 
premium amount for each cultural practice (e.g., fall-planted irrigated) 
is determined by multiplying the final stage amount of insurance per 
acre by the premium rate for the cultural practice as established in the 
Actuarial Table, by the insured acreage, by your share at the time 
coverage begins, and by any applicable premium adjustment factors 
contained in the actuarial documents.

                             8. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the sweet corn in the county 
for which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That is:
    (1) Planted to be harvested and sold as fresh market sweet corn;
    (2) Planted within the planting periods designated in the actuarial 
documents;
    (3) Grown under an irrigated practice, unless otherwise provided in 
the Special Provisions;
    (4) Grown by a person who in at least one of the three previous crop 
years:
    (i) Grew sweet corn for commercial sale; or
    (ii) Participated in managing a sweet corn farming operation;
    (c) That is not:
    (1) Interplanted with another crop;
    (2) Planted into an established grass or legume; or
    (3) Grown for direct marketing.

                          9. Insurable Acreage

    (a) In lieu of the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8), that prohibit insurance attaching if 
a crop has not been planted in at least one of the three previous crop 
years, we will insure newly cleared land or former pasture land planted 
to fresh market sweet corn.
    (b) In addition to the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8):
    (1) You must replant any acreage of sweet corn damaged during the 
planting period in which initial planting took place whenever less than 
75 percent of the plant stand remains: and
    (i) It is practical to replant: and
    (ii) If, at the time the crop was damaged, the final day of the 
planting period has not passed.
    (2) Whenever sweet corn initially is planted during the fall or 
winter planting periods and the condition specified in section 
9(b)(1)(ii) is not satisfied, you may elect:
    (i) To replant such acreage and collect any replant payment due as 
specified in section 12. The initial planting period coverage will 
continue for such replanted acreage.
    (ii) Not to replant such acreage and receive an indemnity based on 
the stage of growth the plants had attained at the time of damage. 
However, such an election will result in the acreage being uninsurable 
in the subsequent planting period.

                          10. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8), coverage begins on each unit or part of a 
unit the later of the date we accept your application, or when the sweet 
corn is planted in each planting period. Coverage ends at the earliest 
of:
    (a) Total destruction of the sweet corn on the unit;
    (b) Abandonment of the sweet corn on the unit;
    (c) The date harvest should have started on the unit on any acreage 
which will not be harvested;
    (d) Final adjustment of a loss on the unit;
    (e) Final harvest; or

[[Page 198]]

    (f) 100 days after the date of planting or replanting.

                           11. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur during the insurance period:
    (1) Excess rain;
    (2) Excess wind;
    (3) Fire;
    (4) Freeze;
    (5) Hail;
    (6) Tornado; or
    (7) Failure of the irrigation water supply, if caused by an insured 
cause of loss that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against any loss of production due to:
    (1) Disease or insect infestation, unless no effective control 
measure exists for such disease or insect infestation; or
    (2) Failure to market the sweet corn, unless such failure is due to 
actual physical damage caused by an insured cause of loss that occurs 
during the insurance period.

                         12. Replanting Payments

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if, due to an 
insured cause of loss, more than 25 percent of the plant stand will not 
produce sweet corn and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of your actual cost of replanting or the result obtained by 
multiplying the per acre replanting payment amount contained in the 
Special Provisions by your insured share.
    (c) In lieu of the provisions contained in section 13 (Replanting 
Payment) of the Basic Provisions (Sec. 457.8), limiting a replanting 
payment to one each crop year, only one replanting payment will be made 
for acreage planted during each planting period within the crop year.

                13. Duties In The Event of Damage or Loss

    In addition to the requirements contained in section 14 (Duties In 
The Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), if 
you intend to claim an indemnity on any unit you also must give us 
notice not later than 72 hours after the earliest of:
    (a) The time you discontinue harvest of any acreage on the unit;
    (b) The date harvest normally would start if any acreage on the unit 
will not be harvested; or
    (c) The calendar date for the end of the insurance period.

                         14. 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 covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage in each stage by the amount of 
insurance per acre for the final stage;
    (2) Multiplying each result in section 14(b)(1) by the percentage 
for the applicable stage (see section 3(d));
    (3) Total the results of section 14(b)(2);
    (4) Subtracting either of the following values from the result of 
section 14(b)(3):
    (i) For other than catastrophic risk protection coverage, the total 
value of production to be counted (see section 14(c)); or
    (ii) For catastrophic risk protection coverage, the result of 
multiplying the total value of production to be counted (see section 
14(c)) times:
    (A) Sixty percent for the 1998 crop year; or
    (B) Fifty-five percent for 1999 and subsequent crop years; and
    (5) Multiplying the result of section 14(b)(4) by your share.
    (c) The total value of production to count from all insurable 
acreage on the unit will include:
    (1) Not less than the amount of insurance per acre for the stage for 
any acreage:
    (i) That is abandoned;
    (ii) Put to another use without our consent;
    (iii) That is damaged solely by uninsured causes; or
    (iv) For which you fail to provide acceptable production records;
    (2) The value of the following appraised production will not be less 
than the dollar amount obtained by multiplying the number of containers 
of appraised sweet corn times the minimum value per container shown in 
the Special Provisions for the planting period:
    (i) Unharvested production (unharvested production that is damaged 
or defective due to insurable causes and is not marketable will not be 
counted as production to count);
    (ii) Production lost due to uninsured causes; and
    (iii) 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

[[Page 199]]

another use or abandon the crop. If agreement on the appraised amount of 
production is not reached:
    (A) We may require you to continue to care for the crop so that a 
subsequent appraisal may be made or the crop harvested to determine 
actual production (If we require you to continue to care for the crop 
and you do not do so, the original appraisal will be used); or
    (B) You may elect to continue to care for the crop, in which case 
the amount of production to count for the acreage will be the harvested 
production, or our reappraisal if the crop is not harvested.
    (3) The total value of all harvested production from the insurable 
acreage will be the dollar amount obtained by subtracting the allowable 
cost contained in the Special Provisions from the price received for 
each container of sweet corn (this result may not be less than the 
minimum value shown in the Special Provisions for any container of sweet 
corn), and multiplying this result by the number of containers of sweet 
corn harvested. Harvested mature sweet corn that is damaged or defective 
due to insurable causes and is not marketable, will not be counted as 
production to count.

                     15. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

                        16. Minimum Value Option

    (a) The provisions of this option are continuous and will be 
attached to and made a part of your insurance policy, if:
    (1) You elect the Minimum Value Option on your application, or on a 
form approved by us, on or before the sales closing date for the initial 
crop year in which you wish to insure fresh market sweet corn under this 
option, and pay the additional premium indicated in the actuarial 
documents for this optional coverage; and
    (2) You have not elected coverage under the Catastrophic Risk 
Protection Endorsement.
    (b) In lieu of the provisions contained in section 14(c)(3), the 
total value of harvested production will be determined as follows:
    (1) For sold production, the dollar amount obtained by subtracting 
the allowable cost contained in the Special Provisions from the price 
received for each container of sweet corn (this result may not be less 
than zero for any container of sweet corn), and multiplying this result 
by the number of containers of sweet corn sold; and
    (2) For marketable production that is not sold, the dollar amount 
obtained by multiplying the number of containers of such sweet corn on 
the unit by the minimum value shown in the Special Provisions for the 
planting period (harvested production that is damaged or defective due 
to insurable causes and is not marketable will not be counted as 
production).
    (c) This option may be canceled by either you or us for any 
succeeding crop year by giving written notice on or before the 
cancellation date preceding the crop year for which the cancellation of 
this option is to be effective.

[62 FR 14783, Mar. 28, 1997; 62 FR 26205, May 13, 1997, as amended at 62 
FR 65171, Dec. 10, 1997]



Sec. 457.130  Macadamia tree crop insurance provisions.

    The macadamia tree crop insurance provisions for the 1999 and 
succeeding crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider).
    Both FCIC and reinsured policies:

                     Macadamia Tree Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Age. The number of complete 12-month periods that have elapsed since 
the month the trees were set out or were grafted, whichever is later. 
Age determination will be made for each unit, or portion thereof, as of 
January 1 of each crop year.
    Crop year. A period beginning with the date insurance attaches to 
the macadamia tree crop extending through December 31 of the same 
calendar year. The crop year is designated by the calendar year in which 
insurance attaches.
    Destroyed. Trees damaged to the extent that we determine 
replacement, including grafts, is required.
    Good farming practices. The cultural practices generally in use in 
the county for the crop to have normal growth and vigor, and are those 
recognized by the Cooperative State Research, Education, and Extension 
Service as compatible with agronomic and weather conditions in the area.
    Graft. The uniting of a macadamia shoot to an established macadamia 
tree rootstock for future production of macadamia nuts.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.

[[Page 200]]

    Irrigated practice. A method by which the normal growth and vigor of 
the insured trees is maintained by artificially applying adequate 
quantities of water during the growing season by appropriate systems and 
at the proper times.
    Rootstock. The root and stem portion of a macadamia tree to which a 
macadamia shoot can be grafted.

                            2. Unit Division

    (a) Sections 34(a) (1), (3), and (4) of the Basic Provisions are not 
applicable.
    (b) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Unless otherwise allowed 
by written agreement, optional units may be established only if each 
optional unit:
    (1) Contains at least 80 acres of insurable age macadamia trees; or
    (2) Is located on non-contiguous land.
    (c) You must have provided records, which can be independently 
verified, of acreage and age of trees for each unit for at least the 
last crop year.

    3. Insurance Guarantees, Coverage Levels, and Dollar Amounts for 
                         Determining Indemnities

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8):
    (1) You may select only one dollar amount of insurance for all the 
macadamia trees in the county in each age group contained in the 
actuarial table that are insured under this policy. The dollar amount of 
insurance you choose for each age group must have the same percentage 
relationship to the maximum dollar amount offered by us for each age 
group. For example, if you choose 100 percent of the maximum dollar 
amount of insurance for one age group, you must also choose 100 percent 
of the maximum dollar amount of insurance for all other age groups.
    (2) If the stand is less than 90 percent, based on the original 
planting pattern, the dollar amount of insurance will be reduced 1 
percent for each percent below 90 percent. For example, if the dollar 
amount of insurance you selected is $2,000 and the stand is 85 percent 
of the original stand, the dollar amount of insurance on which any 
indemnity will be based is $1,900 ($2,000 multiplied by 0.95).
    (3) You must report, by the sales closing date contained in the 
Special Provisions, by type if applicable:
    (i) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the dollar amount of insurance and the 
number of affected acres;
    (ii) The number of trees on insurable and uninsurable acreage;
    (iii) The month and year on which the trees were set out or grafted 
and the planting pattern;
    (iv) For the first year of insurance following replacement, the 
month and year of replacement if more than 10 percent of the trees on 
any unit have been replaced in the previous five crop years; and
    (v) For the first year of insurance for acreage interplanted with 
another perennial crop, and any time the planting pattern of such 
acreage is changed:
    (A) The age of the interplanted crop, and type if applicable;
    (B) The planting pattern; and
    (C) Any other information that we request in order to establish your 
dollar amount of insurance.
    We will reduce the dollar amount of insurance as necessary, based on 
our estimate of the effect of interplanted perennial crop, removal of 
trees, damage, change in practices, and any other circumstance that 
adversely affects the insured crop. If you fail to notify us of any 
circumstance that may reduce your dollar amount of insurance from 
previous levels, we will reduce your dollar amount of insurance as 
necessary at any time we become aware of the circumstance.
    (b) The production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8), do not apply to 
macadamia trees.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 preceding 
the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are December 31.

                             6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all macadamia trees in the county 
for which a premium rate is provided by the actuarial table:
    (a) In which you have a share;
    (b) That are grown for the production of macadamia nuts;
    (c) For which the rootstock is adapted to the area;
    (d) That are at least one year of age when the insurance period 
begins; and
    (e) That, if the orchard is inspected, is considered acceptable by 
us.

[[Page 201]]

                          7. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, macadamia trees interplanted with 
another perennial crop are insurable unless we inspect the acreage and 
determine that it does not meet the requirements contained in your 
policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on January 1 of each crop year, except that for 
the year of application, if your application is received after December 
22 but prior to January 1, insurance will attach on the 10th day after 
your properly completed application is received in our local office, 
unless we inspect the acreage during the 10-day period and determine 
that it does not meet insurability requirements. You must provide any 
information that we require for the crop or to determine the condition 
of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is December 31.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of macadamia trees on or before the acreage reporting date for the crop 
year, insurance will not be considered to have attached to, and no 
premium or indemnity will be due for such acreage for that crop year 
unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the orchard;
    (3) Earthquake;
    (4) Volcanic eruption;
    (5) Wildlife, unless proper measures to control wildlife have not 
been taken; or
    (6) Failure of irrigation water supply, if caused by an insured 
cause of loss that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage due to disease or insect infestation, unless adverse 
weather:
    (1) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (2) Causes disease or insect infestation for which no effective 
control mechanism is available.

                10. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), in case of 
damage or probable loss, if you intend to claim an indemnity on any 
unit, you must allow us to inspect all insured acreage before pruning or 
removing any damaged trees.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by the dollar amount of 
insurance per acre for each age group;
    (2) Totaling the results in section 11(b)(1);
    (3) Multiplying the total dollar amount of insurance obtained in 
section 11(b)(2) by the applicable percent of loss, which is determined 
as follows:
    (i) Subtract the coverage level percent you elected from 100 
percent;
    (ii) Subtract the result obtained in section 11(b)(3)(i) from the 
actual percent of loss;
    (iii) Divide the result in section 11(b)(3)(ii) by the coverage 
level you elected (For example, if you elected the 75 percent coverage 
level and your actual percent of loss was 70 percent, the percent of 
loss specified in section 11(b)(3) would be calculated as follows: 100% 
- 75% = 25%; 70% - 25% = 45%; 45% / 75% = 60%.); and
    (4) Multiply the result in section 11(b)(3) by your share.
    (c) The total amount of loss will include both trees damaged and 
trees destroyed as follows:
    (1) Any orchard with over 80 percent actual damage due to an insured 
cause of loss will be considered to be 100 percent damaged; and
    (2) Any percent of damage by uninsured causes will not be included 
in the percent of loss.

[[Page 202]]

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 35668, July 2, 1997, as amended at 62 FR 65172, Dec. 10, 1997]



Sec. 457.131  Macadamia nut crop insurance provisions.

    The macadamia nut crop insurance provisions for the 2000 and 
succeeding crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and reinsured policies:

                      Macadamia Nut Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Age. The number of complete 12-month periods that have elapsed since 
the month the trees were set out or were grafted, whichever is later. An 
age determination will be made for each unit, or portion thereof, as of 
January 1 of each crop year.
    Crop year. A period beginning with the date insurance attaches to 
the macadamia nut crop and extending through the normal harvest time. 
The crop year is designated by the calendar year in which the insurance 
period ends.
    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the orchard for the 
purpose of picking all or a portion of the crop.
    Graft. The uniting of a macadamia shoot to an established macadamia 
tree rootstock for future production of macadamia nuts.
    Harvest. Picking of mature macadamia nuts from the ground.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Pound. A unit of weight equal to 16 ounces avoirdupois.
    Production guarantee (per acre). The number of wet, in-shell pounds 
determined by multiplying the approved APH yield per acre by the 
coverage level percentage you elect.
    Rootstock. The root and stem portion of a macadamia tree to which a 
macadamia shoot can be grafted.
    Wet in-shell. The weight of the macadamia nuts as they are removed 
from the orchard with the nut meats in the shells after removal of the 
husk but prior to being dried.

                            2. Unit Division

    (a) Section 34(a)(1) of the Basic Provisions is not applicable.
    (b) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Unless otherwise allowed 
by written agreement, optional units may be established only if each 
optional unit:
    (1) Contains at least 80 acres of bearing macadamia trees; or
    (2) Is located on non-contiguous land.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election for all the macadamia 
nuts 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 macadamia nut 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 (Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities) of the Basic Provisions (Sec. 457.8), by type 
if applicable:
    (1) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based and the number of affected acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed:
    (i) The age of the interplanted crop, and type if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.

[[Page 203]]

    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of the following: 
interplanted perennial crop; removal of trees; damage; change in 
practices and any other circumstance on the yield potential of the 
insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time we become aware of the circumstance.
    (c) The yield used to compute your production guarantee will be 
determined in accordance with Actual Production History (APH) 
regulations, 7 CFR part 400, subpart G, and applicable policy provisions 
unless damage or changes to the orchard or trees require establishment 
of the yield by another method. In the event of such damage or changes, 
the yield will be based on our appraisal of the potential of the insured 
acreage for the crop year.
    (d) Instead of reporting your macadamia nut production for the 
previous crop year, as required by section 3 of the Basic Provisions 
(Sec. 457.8), there is a one year lag period. Each crop year you must 
report your production from two crop years ago, e.g., on the 2001 crop 
year production report, you will provide your 1999 crop year production.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 preceding 
the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are December 31.

                             6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all macadamia nuts in the county 
for which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are grown on tree varieties that:
    (1) Were commercially available when the trees were set out;
    (2) Are adapted to the area; and
    (3) Are grown on a rootstock that is adapted to the area.
    (c) That are grown in an orchard that, if inspected, is considered 
acceptable by us;
    (d) That are grown on trees that have reached at least the fifth 
growing season after being set out or grafted. However, we may agree in 
writing to insure acreage that has not reached this age if it has 
produced at least 200 pounds of (wet, in-shell) macadamia nuts per acre 
in a previous crop year; and
    (e) That are produced from blooms that normally occur during the 
calendar year in which insurance attaches and that are normally 
harvested prior to the end of the insurance period.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, macadamia nuts interplanted with another 
perennial crop are insurable unless we inspect the acreage and determine 
that it does not meet the requirements contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on January 1 of each crop year, except that for 
the year of application, if your application is received after December 
22 but prior to January 1, insurance will attach on the 10th day after 
your properly completed application is received in our local office, 
unless we inspect the acreage during the 10-day period and determine 
that it does not meet insurability requirements. You must provide any 
information that we require for the crop or to determine the condition 
of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is the second June 30th after insurance attaches.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of macadamia nuts on or before the acreage reporting date for the crop 
year, insurance will not be considered to have attached to, and no 
premium or indemnity will be due for such acreage for that crop year 
unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only

[[Page 204]]

against the following causes of loss that occur during the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the orchard;
    (3) Earthquake;
    (4) Volcanic eruption;
    (5) Wildlife, unless proper measures to control wildlife have not 
been taken; or
    (6) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available;
    (2) Inability to market the macadamia nuts 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

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following 
will apply:
    (a) You must notify us within 3 days of the date harvest should have 
started if the crop will not be harvested.
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing. We will conduct an appraisal 
that will be used to determine your production to count for production 
that is sold by direct marketing. If damage occurs after this appraisal, 
we will conduct an additional appraisal. These appraisals, and any 
acceptable records provided by you, will be used to determine your 
production to count. Failure to give timely notice that production will 
be sold by direct marketing will result in an appraised amount of 
production to count of not less than the production guarantee per acre 
if such failure results in our inability to make the required appraisal.
    (c) If you intend to claim an indemnity on any unit, you must notify 
us at least 15 days prior to the beginning of harvest or immediately if 
damage is discovered during harvest, so that we may inspect the damaged 
production. You must not destroy the damaged crop until after we have 
given you written consent to do so. If you fail to meet the requirements 
of this section and such failure results in our inability to inspect the 
damaged production, we may consider all such production to be undamaged 
and include it as production to count.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate, acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each type, if applicable, by 
its respective production guarantee;
    (2) Multiplying each result in section 11(b)(1) by the respective 
price election for each type, if applicable;
    (3) Totaling the results in section 11(b)(2);
    (4) Multiplying the total production to be counted of each type, if 
applicable, (see section 11(c)) by the respective price election;
    (5) Totaling the results in section 11(b)(4);
    (6) Subtracting the results in section 11(b)(5) from the results in 
section 11(b)(3); and
    (7) Multiplying the result in section 11(b)(6) by your share.
    (c) The total production to count (wet, in-shell 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 sold by direct marketing if you fail to meet the 
requirements contained in section 10;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count; and

[[Page 205]]

    (2) All harvested production from the insurable acreage.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 35664, July 2, 1997, as amended at 62 FR 65172, Dec. 10, 1997]



Sec. 457.132  Cranberry crop insurance provisions.

    The cranberry crop insurance provisions for the 1999 and succeeding 
crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and Reinsured Policies

                        Cranberry Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Barrel--100 pounds of cranberries.
    Harvest--Removal of the cranberries from the bog.
    Market price--The cash price per barrel of cranberries offered by 
buyers in the area in which you normally market the cranberries.

                            2. Unit Division

    Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may be 
established only if each optional unit is located on non-contiguous 
land, unless otherwise allowed by written agreement.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election for all the cranberries 
in the county insured under this policy.
    (b) You must report, by the production reporting date designated in 
section 3 (Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities) of the Basic Provisions (Sec. 457.8):
    (1) Any damage, removal of vines, change in practices, or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The age of the vines; and
    (3) Any other information that we request in order to establish your 
approved yield.
    We will adjust the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of the removal of 
vines, damage, change in practices, and any other circumstance that may 
affect the yield potential of the insured crop. If you fail to notify us 
of any circumstance that may affect your yields from previous levels, we 
will adjust your production guarantee as necessary at any time we become 
aware of the circumstance.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 preceding 
the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are November 20.

                             6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the cranberries in the county 
for which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are grown for harvest as cranberries;
    (c) That are grown in a bog that, if inspected, is considered 
acceptable by us; and
    (d) That are grown on vines that have completed four growing seasons 
after the vines were set out, unless otherwise provided by the actuarial 
table or by written agreement.

                           7. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on November 21 of each crop year, except that 
for the year of application, if your application is received after 
November 11, but prior to November 21, insurance will attach on the 10th 
day after your properly completed application is received in our local 
office, unless we inspect the acreage during the 10 day period and 
determine that it does not meet insurability requirements. You must 
provide any information that we require for the crop or to determine the 
condition of the bog.

[[Page 206]]

    (2) The calendar date for the end of the insurance period for each 
crop year is November 20.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of cranberries on or before the acreage reporting date for the crop 
year, insurance will not be considered to have attached to, and no 
premium or indemnity will be due for, such acreage for that crop year 
unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            8. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the bog;
    (3) Wildlife;
    (4) Earthquake;
    (5) Volcanic eruption;
    (6) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period; or
    (7) Failure or breakdown of irrigation equipment or facilities due 
to direct damage to the irrigation equipment or facilities from an 
insurable cause of loss if the cranberry crop is damaged by freezing 
temperatures within 72 hours of such failure or breakdown and repair or 
replacement was not possible before damage occurred.
    (b) In addition to the causes of loss excluded in section 12 (Cause 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available; or
    (2) Inability to market the cranberries for any reason other than 
actual physical damage from an insurable cause of loss 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.

                9. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8):
    (a) If you discover damage, or if you intend to claim an indemnity 
on any insured unit, you must give us notice of probable loss:
    (1) At least 15 days before the beginning of any harvesting, or
    (2) Immediately if probable loss is discovered after harvesting has 
begun.
    (b) You must not sell or dispose of any damaged production until the 
earlier of 15 days from the date of notice of loss or when we give you 
written consent to do so.
    (c) If you fail to meet the requirements of this section, and such 
failure results in our inability to inspect the damaged production, all 
such production will be considered undamaged and included as production 
to count.

                         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 covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying the result of section 10(b)(1) by the price 
election;
    (3) Multiplying the total production to be counted, (see section 
10(c)) by the price election;
    (4) Subtracting the total in section 10(b)(3) from the total in 
section 10(b)(2); and
    (5) Multiplying the result in section 10(b)(4) by your share.
    (c) The total production to count (in barrels) 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) Damaged solely by uninsured causes;
    (C) For which you fail to provide acceptable production records; or
    (D) Destroyed or put to another use without our consent;

[[Page 207]]

    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we will use 
the appraised amount of production or defer the claim if you agree to 
continue to care for the crop. We will then make another appraisal when 
you notify us of further damage or that harvest is general to the area 
unless you harvested the crop, in which case we will use the harvested 
production. If you do not continue to care for the crop, our appraisal 
made prior to deferring the claim will be used to determine the 
production to count; and
    (2) All harvested production from the insurable acreage.
    (3) Harvested production which, due to insurable causes, is 
determined not to meet the United States Standards for Fresh Cranberries 
if available, or would not meet those standards if properly handled, or 
does not meet the quality requirements of the receiving handler if the 
United States Standards for Fresh Cranberries, if not available, and 
such harvested production has a value less than 75 percent of the market 
price for cranberries meeting the minimum requirements will be adjusted 
by:
    (i) Dividing the value per barrel of such cranberries by the market 
price per barrel for cranberries meeting the minimum requirements; and
    (ii) Multiplying the result by the number of barrels of such 
cranberries.

                     11. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 5905, Feb. 10, 1997, as amended at 62 FR 65172, Dec. 10, 1997]



Sec. 457.133  Prune crop insurance provisions.

    The Prune Crop Insurance Provisions for the 2001 and succeeding crop 
years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and reinsured policies:

                          Prune Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include: selling through an on-farm or roadside stand, 
farmer's market, and permitting the general public to enter the field 
for the purpose of picking all or a portion of the crop.
    Harvest. Picking of mature prunes from the trees or ground either by 
hand or machine.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Market price for standard prunes. The price per ton shown on the 
processor's settlement sheet for each size count of standard prunes.
    Natural condition prunes. The condition of prunes in which they are 
normally delivered from a dehydrator or dry yard.
    Prunes. Any type or variety of plums that is grown in the area for 
the production of prunes and that meets the requirements defined in the 
applicable Federal Marketing Agreement Dried Prune Order.
    Standard prunes. Any natural condition prunes:
    (a) That grade ``C'' or better in accordance with the United States 
Standards for Grades of Fresh Plums and Prunes; or
    (b) That meet or exceed the grading standards in effect for the crop 
year if a Federal Marketing Agreement Dried Prune Order has been 
established for the area in which the insured crop is grown.
    Substandard prunes. Any natural condition prunes failing to meet the 
applicable grading specifications for standard prunes.
    Ton. Two thousand (2,000) pounds avoirdupois.

                            2. Unit Division

    Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable. Instead of 
establishing optional units by section, section equivalent, or FSA farm 
serial number optional units may be established if each optional unit is 
located on non-contiguous land.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) You may select only one price election for all the prunes in the 
county insured under this policy unless the Special Provisions provide 
different price elections by varietal group, in which case you may 
select

[[Page 208]]

one price election for each prune varietal group designated in the 
Special Provisions. The price elections you choose for each varietal 
group must have the same percentage relationship to the maximum price 
offered by us for each varietal group. For example, if you choose 100 
percent of the maximum price election for one varietal group, you must 
also choose 100 percent of the maximum price election for all other 
varietal groups.
    (b) You must report, by the production reporting date designated in 
section 3 of the Basic Provisions, by varietal group if applicable:
    (1) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the expected yields below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and any time the planting pattern of such 
acreage is changed:
    (i) The age of the interplanted crop, and varietal group if 
applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of interplanting the 
perennial crop; removal of trees; damage; a change in practices, and any 
other circumstance that may affect the yield potential of the insured 
crop. If you fail to notify us of any circumstance that may reduce your 
yields from previous levels, we will reduce your production guarantee at 
any time we become aware of the circumstance.
    (c) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election if a 
cause of loss that could or would reduce the yield of the insured crop 
has occurred prior to the time that you request the increase.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is October 31 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are January 31.

                             6. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the prunes in the county for which a premium rate is 
provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are grown for the production of natural condition prunes;
    (c) That are grown on tree varieties that:
    (1) Were commercially available when the trees were set out;
    (2) Are adapted to the area;
    (3) Are grown on rootstock that is adapted to the area; and
    (4) Are irrigated (except where otherwise provided in the Special 
Provisions);
    (d) That are grown in an orchard that, if inspected, is considered 
acceptable by us; and
    (e) That are grown on trees that have reached at least the seventh 
growing season after being set out.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 of the Basic Provisions that 
prohibit insurance attaching to a crop planted with another crop, prunes 
interplanted with another perennial crop are insurable unless we inspect 
the acreage and determine that it does not meet the insurability 
requirements contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) Coverage begins for each crop year on March 1.
    (2) The calendar date for the end of the insurance period for each 
crop year is:
    (i) October 1 for California; or
    (ii) October 15 for Oregon.
    (b) In addition to the provisions of section 11 of the Basic 
Provisions:
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of prunes on or before the acreage reporting date for the crop year and 
if the acreage was insured by you the previous crop year, insurance will 
not be considered to have attached to, and no premium or indemnity will 
be due for such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

[[Page 209]]

    (c) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that 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.
    (d) If your prune policy is canceled or terminated for any crop 
year, in accordance with the terms of the policy, after insurance 
attached for that crop year but on or before the cancellation and 
termination dates whichever is later, insurance will not be considered 
to have attached for that crop year and no premium, administrative fee, 
or indemnity will be due for such crop year.

                            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, unless weeds and undergrowth have not been controlled or 
pruning debris has not been removed from the orchard;
    (3) Wildlife;
    (4) Earthquake;
    (5) Volcanic eruption; or
    (6) Failure of the irrigation water supply, if due to a cause 
specified in section 9(a)(1) through (5) 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) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available; or
    (2) 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

    In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
    (a) You must notify us within 3 days of the date harvest should have 
started if the crop will not be harvested.
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing or sold as fresh fruit. We 
will conduct an appraisal that will be used to determine your production 
to count for production that is sold by direct marketing or is sold as 
fresh fruit production. If damage occurs after this appraisal, we will 
conduct an additional appraisal. These appraisals, and any acceptable 
records provided by you, will be used to determine your production to 
count. Failure to give timely notice that production will be sold by 
direct marketing or sold as fresh fruit will result in an appraised 
amount of production to count of not less than the production guarantee 
per acre if such failure results in our inability to make the required 
appraisal.
    (c) If you intend to claim an indemnity on any unit, you must notify 
us at least 15 days prior to the beginning of harvest, or immediately if 
damage is discovered during harvest, so that we may inspect the damaged 
production.
    (d) You must not destroy the damaged crop until after we have given 
you written consent to do so. If you fail to meet the requirements of 
this section and such failure results in our inability to inspect the 
damaged production, all such production will be considered undamaged and 
included as production to count.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each varietal group, if 
applicable, by its respective production guarantee;
    (2) Multiplying the result of 11(b)(1) by the respective price 
election for each varietal group, if applicable;
    (3) Totaling the results of section 11(b)(2) if there is more than 
one varietal group;
    (4) Multiplying the total production to count (see section 11(c)), 
of each varietal group if applicable, by its respective price election;
    (5) Totaling the results of section 11(b)(4) if there is more than 
one varietal group;
    (6) Subtracting the result of section 11(b)(4) from the result of 
section 11(b)(2) if there is only one varietal group or subtracting the 
result of section 11(b)(5) from the result of section 11(b)(3) if there 
is more than one varietal group; and
    (7) Multiplying the result of section 11(b)(6) by your share.

[[Page 210]]

                               For Example

    You have a 100 percent share in 50 acres of varietal group A prunes 
in the unit, with a guarantee of 2.5 tons per acre and a price election 
of $630.00 per ton. You are only able to harvest 10.0 tons. Your 
indemnity would be calculated as follows:
    (1) 50 acres x 2.5 tons = 125.0 ton guarantee;
    (2) 125.0 tons x $ 630.00 price election = $78,750.00 value of 
guarantee;
    (4) 10.0 tons x $630.00 price election = $6,300.00 value of 
production to count;
    (6) $78,750.00 - $6,300.00 = $72,450.00 loss; and
    (7) $72,450.00 x 100 percent = $72,450 indemnity payment.
    You also have a 100 percent share in 50 acres of varietal group B 
prunes in the same unit, with a guarantee of 2.0 ton per acre and a 
price election of $550.00 per ton. You are only able to harvest 5.0 
tons. Your total indemnity for both varietal groups A and B would be 
calculated as follows:
    (1) 50 acres x 2.5 tons = 125.0 ton guarantee for varietal group A 
and 50.0 acres x 2.0 tons = 100.0 ton guarantee for varietal group B;
    (2) 125.0 ton guarantee x $630.00 price election = $78,750.00 value 
of guarantee for varietal group A and 100.0 ton guarantee x $550.00 
price election = $55,000.00 value guarantee for varietal group B;
    (3) $78,750.00 + $55,000.00 = $133,750.00 total value guarantee;
    (4) 10.0 tons x $630.00 price election = $6,300.00 value of 
production to count for varietal group A and 5.0 tons x $550.00 price 
election = $2,750.00 value of production to count for varietal group B;
    (5) $6,300.00 + $2,750.00 = $9,050.00 total value of production to 
count;
    (6) $133,750.00 - $9,050.00 = $124,700.00 loss; and
    (7) $124,700.00 loss x 100 percent = $124,700 indemnity payment.
    (c) The total production to count (in tons) from all insurable 
acreage on the unit will include all harvested and appraised production 
of natural condition prunes that grade substandard or better and any 
production that is harvested and intended for use as fresh fruit. The 
total production to count 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 sold by direct marketing or sold as fresh fruit if you 
fail to meet the requirements contained in section 10;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage you intend to abandon 
or no longer care for, if you and we agree on the appraised amount of 
production. Upon such agreement, the insurance period for that acreage 
will end. If you do not agree with our appraisal, we may defer the claim 
only if you agree to continue to care for the crop. We will then make 
another appraisal when you notify us of further damage or that harvest 
is general in the area unless you harvested the crop, in which case we 
will use the harvested production. If you do not continue to care for 
the crop, our appraisal made prior to deferring the claim will be used 
to determine the production to count; and
    (2) All harvested production from the insurable acreage.
    (d) Any prune production harvested for fresh fruit will be converted 
to a dried prune weight basis by dividing the total amount (in tons) of 
fresh fruit production by 3.0.
    (e) Any production of substandard prunes resulting from damage by 
insurable causes will be adjusted based on the average size count as 
indicated on the applicable Dried Fruit Association (DFA) Inspection 
Report and Certification Form. Any insurable damage will be adjusted by:
    (1) Dividing the value per ton of such substandard prunes by the 
market price per ton for standard prunes (of the same size count); and
    (2) Multiplying the result by the number of tons of such prunes.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 58630, Oct. 30, 1997, as amended at 62 FR 65172, Dec. 10, 1997; 
65 FR 47839, Aug. 4, 2000]



Sec. 457.134  Peanut crop insurance provisions.

    The peanut crop insurance provisions for the 1999 and succeeding 
crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)

    Both FCIC and reinsured policies:

                    Peanut Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions, with (1) controlling (2), etc.

[[Page 211]]

                             1. Definitions

    Approved yield. The yield calculated in accordance with 7 CFR part 
400, subpart G, if required by section 3(c) of these provisions.
    Average price per pound:
    (1) The average CCC support price per pound, by type, for 
Segregation I peanuts and Segregation II and III peanuts eligible to be 
valued as quota peanuts; or
    (2) The highest non-quota price election contained in the Special 
Provisions for all Segregation II and III peanuts not eligible to be 
valued as quota peanuts.
    Average support price per pound. The average price per pound for 
each type of quota peanuts announced by the USDA under the peanut price 
support program.
    CCC. Commodity Credit Corporation, a wholly owned government 
corporation within USDA.
    County. In addition to the definition contained in the Basic 
Provisions, ``county'' also includes any land identified by a FSA farm 
serial number for such county but physically located in another county.
    Effective poundage marketing quota. The number of pounds reported on 
the acreage report as eligible for the average support price per pound 
(including transfers of quota peanuts from one farm serial number to 
another farm serial number), not to exceed the Marketing Quota 
established by FSA for the farm serial number.
    Farmers' stock peanuts. Peanuts customarily marketed by producers, 
produced in the United States, and which are not shelled, crushed, 
cleaned, or otherwise changed (except for removal of foreign material, 
loose shelled kernels, and excess moisture) from the condition in which 
peanuts are harvested.
    Green peanuts. Peanuts that are harvested and marketed prior to 
maturity without drying or removal of moisture either by natural or 
artificial means.
    Inspection certificate and sales memorandum. A USDA form that 
records the inspection grading results and marketing record for the net 
weight of peanuts delivered to a buyer.
    Non-quota peanuts. Peanuts other than quota peanuts.
    Planted acreage. In addition to the requirement in the definition in 
the Basic Provisions, peanuts must initially be planted in rows wide 
enough apart to permit mechanical cultivation. Acreage planted in any 
other manner will not be insurable unless otherwise provided by the 
Special Provisions or by written agreement.
    Production guarantee (per acre). In addition to the definition of 
``production guarantee (per acre)'' in the Basic Provisions, the 
production guarantee (per acre) is the number of pounds determined by 
multiplying the yield per acre contained in the actuarial documents or 
the approved yield multiplied by the coverage level percentage you 
elect.
    Quota peanuts. Peanuts that are eligible to be valued at the average 
support price per pound.
    Segregation I, II, or III. Grades designated and defined for peanuts 
by the Agricultural Marketing Service of USDA.
    Value per pound. A price determined by USDA as shown on the USDA 
``Inspection Certificate and Sales Memorandum'' or other value accepted 
by us.

                            2. Unit Division

    (a) In lieu of the provisions in section 34 of the Basic Provisions 
that permit optional unit by section, section equivalent, irrigated or 
non-irrigated acreage, each optional unit must be located in a separate 
farm identified by a single FSA Farm Serial Number.
    (b) We may reject or modify any FSA reconstitution for the purpose 
of the unit definition, if we determine the reconstitution was done in 
whole or in part to defeat the purpose of the Federal crop insurance 
program or to gain a disproportionate advantage under this policy.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) The price elections you choose for the quota and non-quota 
peanuts must have the same percentage relationship to the maximum price 
election offered by us for quota and non-quota peanuts. For example, if 
you choose 100 percent of the maximum quota peanut price election, you 
must also choose 100 percent of the maximum non-quota election.
    (b) The maximum pounds that may be insured at the quota price 
election are the lesser of :
    (1) The effective poundage marketing quota; or
    (2) The insured acreage multiplied by the production guarantee. If 
the insured acres multiplied by the production guarantee exceeds the 
effective poundage marketing quota, the difference will be insured at 
the non-quota peanut price election.
    (c) You may be required to file an annual production report to us, 
if required by the Special Provisions, to establish an approved yield in 
lieu of the yield published in the actuarial documents. If we require 
you to file an annual production report, you must do so in accordance 
with section 3(c) of the Basic Provisions.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.

[[Page 212]]

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

                      Cancellation and Termination
------------------------------------------------------------------------
                  State and county                          Dates
------------------------------------------------------------------------
Jackson, Victoria, Golliad, Bee, Live Oak,           January 15
 McMullen, La Salle, and Dimmit Counties, Texas and
 all Texas Counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves, Loving,        February 28
 Winkler, Ector, Upton, Reagan, Sterling, Coke, Tom
 Green, Concho, McCulloch, San Saba, Mills,
 Hamilton, Bosque, Johnson, Tarrant, Wise, Cooke
 Counties, Texas, and all Texas counties south and
 east thereof; and all other states.
New Mexico; Oklahoma; Virginia; and all other Texas  March 15
 counties.
------------------------------------------------------------------------

                          6. Report of Acreage

    In addition to the requirements of section 6 of the Basic 
Provisions, you must report the effective poundage marketing quota, if 
any, that is applicable to each basic and optional unit for the current 
crop year.

                            7. Annual Premium

    In lieu of the premium amount determinations contained in section 
7(c) of the Basic Provisions, the annual premium will be determined by:
    (a) Multiplying the insured effective poundage marketing quota by 
the price election for quota peanuts;
    (b) Multiplying the insured pounds of non-quota peanuts by the price 
election for non-quota peanuts;
    (c) Totaling the results of section 7(a) and 7(b);
    (d) Multiplying the total of section 7(c) by the applicable premium 
rate stated in the actuarial documents;
    (e) Multiplying the result of section 7(d) by your share at the time 
coverage begins; and
    (f) Multiplying the result of section 7(e) by any premium adjustment 
percentages that may apply.

                             8. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the peanuts in the county for which a premium rate 
is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are planted for the purpose of marketing as farmers' stock 
peanuts;
    (c) That are a type of peanut designated in the Special Provisions 
as being insurable; and
    (d) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Planted for the purpose of harvesting as green peanuts;
    (2) Interplanted with another crop; or
    (3) Planted into an established grass or legume.

                          9. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions:
    (a) Any acreage of the insured crop damaged before the final 
planting date, to the extent that the majority of producers in the area 
would normally not further care for the crop, must be replanted unless 
we agree that replanting is not practical.
    (b) We will not insure any acreage:
    (1) On which peanuts are grown using no-till or minimum tillage 
farming methods unless allowed by the Special Provisions or written 
agreement; or
    (2) Which does not meet the rotation requirements, if any, contained 
in the Special Provisions.

                          10. Insurance Period

    In accordance with the provisions of section 11 of the Basic 
Provisions, the calendar date for the end of the insurance period is the 
date immediately following planting as follows:
    (a) November 30 in all states except New Mexico, Oklahoma, and 
Texas; and
    (b) December 31 in New Mexico, Oklahoma, and Texas.
    (c) ``Removal of peanuts from the field'' replaces ``harvest'' as an 
event marking the end of the insurance period in section 11 of the Basic 
Provisions.

                           11. Causes of Loss

    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:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or

[[Page 213]]

    (h) Failure of the irrigation water supply, if due to a cause of 
loss contained in section 11(a) through (g) that occurs during the 
insurance period.

                         12. Replanting Payments

    (a) In accordance with section 13 of the Basic Provisions:
    (1) A replanting payment is allowed if the crop is damaged by an 
insurable cause of loss to the extent that the remaining stand will not 
produce at least 90 percent of the production guarantee for the acreage 
and it is practical to replant.
    (2) The maximum amount of the replanting payment for the unit will 
be the lesser of :
    (i) Eighty dollars ($80.00) per acre multiplied by the number of 
acres replanted and multiplied by your insured share;
    (ii) The actual cost of replanting per acre multiplied by the number 
of acres replanted and multiplied by your insured share; or
    (iii) Twenty percent (20%) of the production guarantee multiplied by 
your quota price election, multiplied by the number of acres replanted, 
and multiplied by your insured share.
    (b) When peanuts are replanted using a practice that is uninsurable 
as an original planting, the liability for the unit will be reduced by 
the amount of the replanting payment. The premium amount will not be 
reduced.

                13. Duties In The Event of Damage or Loss

    In accordance with the requirements of section 14 of the Basic 
Provisions, the representative samples of the unharvested crop that we 
may require must be at least 10 feet wide and extend the entire length 
of each field in the unit. If you intend to put the acreage to another 
use or not harvest the crop, the samples must not be harvested or 
destroyed until our inspection.

                         14. 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 units, we will combine all optional units for 
which such production records were not provided; and
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) When settling your claim, the effective poundage marketing 
quota, if any, for each unit will be limited to the lesser of:
    (1) The amount of the effective poundage marketing quota reported on 
the acreage report;
    (2) The amount of the FSA effective poundage marketing quota; or
    (3) The amount determined at the final settlement of your claim.
    (c) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for the unit by the production 
guarantee per acre, by type if applicable;
    (2) Subtracting the insured effective poundage marketing quota from 
the result of section 14(c)(1) to determine the amount of insured non-
quota peanuts;
    (3) Multiplying the insured effective poundage marketing quota and 
the result of section 14(c)(2) by the respective price election by type, 
if applicable, for quota and non-quota peanuts, respectively;
    (4) Totaling the results of section 14(c)(3) (This amount will be 
the same as (3) if there is only one type);
    (5) Multiply the production to count for quota and non-quota peanuts 
(see section 14(d)), for each type if applicable, by the respective 
price elections;
    (6) Totaling the results of section 14(c)(5) (This amount will be 
the same as (5) if there is only one type);
    (7) Subtracting the result of section 14(c)(6) from section 
14(c)(4); and
    (8) Multiplying the result in section 14(b)(7) and section 14(b)(8) 
by your share.
    For example:
    You have 100 percent share in 25 acres of Valencia peanuts in the 
unit, with a 2000 pounds per acre guarantee, an effective poundage 
marketing quota of 40,000 pounds, and a price election of $0.34 per 
pound for quota and $0.15 per pounds for non-quota. You are able to 
harvest 43,000 pounds in which 40,000 pounds are quota segregation I and 
3,000 pounds are non-quota segregation II and III due to quality 
adjustment. Your indemnity would be calculated as follows:
    (1) 25 acres x 2,000 pounds per acre = 50,000 pounds guarantee;
    (2) 50,000 pounds guarantee - 40,000 pounds of effective marketing 
quota = 10,000 pounds of non-quota guarantee;
    (3) 40,000 pounds x $.34 price election for quota = $13,600.00 value 
of guarantee; 10,000 pounds x $.15 price election for non-quota = 
$1,500.00 value of guarantee;
    (4) $13,600.00 + $1,500.00 = $15,100.00 total of value of guarantee;
    (5) 40,000 pounds of quota production to count x .34 = $13,600.00 
quota value of production to count;
    3,000 pounds of non-quota production to count x .15 = $450.00 non-
quota value of production to count;
    (6) $13,600.00 + $450.00 = $14,050.00 total value of production to 
count;
    (8) $15,100.00 total value guarantee - $14,050.00 total value of 
production to count = $1,050.00 loss; and
    (9) $1,050.00 value of loss x 100 percent = $1,050.00 indemnity 
payment.
    (d) The total production to count (in pounds) from all insurable 
acreage on the

[[Page 214]]

unit will include all appraised and harvested production.
    (e) All appraised production will include:
    (1) Not less than the production guarantee for acreage:
    (i) That is abandoned;
    (ii) Put to another use without our consent;
    (iii) Damaged solely by uninsured causes; or
    (iv) For which you fail to provide production records that are 
acceptable to us.
    (2) Production lost due to uninsured causes;
    (3) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
section 14(f)); and
    (4) 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:
    (i) If 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 the 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 appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (ii) If 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
    (5) All harvested production from the insurable acreage.
    (f) Mature peanut production that is damaged by insurable causes and 
for which the value per pound is less than the average support price per 
pound for the type will be adjusted by:
    (1) Dividing the value per pound for the insured type of peanuts by 
the applicable average price per pound; and
    (2) Multiplying this result by the number of pounds of such 
production.
    (g) To enable us to determine the net weight and quality of 
production of any peanuts for which an ``Inspection Certificate and 
Sales Memorandum'' has not been issued, we must be given the opportunity 
to have such peanuts inspected and graded before you dispose of them. If 
you dispose of any production without giving us the opportunity to have 
the peanuts inspected and graded, the gross weight of such production 
will be used in determining total production to count unless you submit 
a marketing record satisfactory to us which clearly shows the net weight 
and quality of such peanuts.

    Note: In accordance with the Federal Crop Insurance Act, in the 
event of a crop loss, policyholders with the Catastrophic Risk 
Protection level of coverage must elect to either receive benefits under 
these Crop Provisions or if applicable, the Commodity Credit Corporation 
Quota Loan Pool Regulations.)

[63 FR 31335, June 9, 1998; 63 FR 52134, Sept. 30, 1998; 64 FR 33378, 
June 23, 1999]



Sec. 457.135  Onion crop insurance provisions.

    The onion crop insurance provisions for the 2000 and succeeding crop 
years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)
    Both FCIC and reinsured policies:

                          Onion Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2) etc.

                             1. Definitions

    Damaged onion production. Storage type onions that do not grade U.S. 
No. 1 or do not satisfy any other standards that may be contained in the 
Special Provisions; or non-storage type onions which do not satisfy 
standards contained in any applicable marketing order or other standards 
that may be contained in the Special Provisions.
    Direct Marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of harvesting all or a portion of the crop.
    Direct seeded. Placing onion seed by machine or by hand at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice.
    Harvest. Removal of the onions from the field after topping and 
lifting or digging.

[[Page 215]]

    Hundredweight. 100 pounds avoirdupois.
    Lifting or digging. A pre-harvest process in which the onion roots 
are severed from the soil and the onion bulbs laid on the surface of the 
soil for drying in the field.
    Non-storage onions. Generally of a Bermuda, Granex, or Grano 
variety, or hybrids developed from these varieties, that are harvested 
as a bulb and dried only a short time, and consequently have a higher 
moisture content. They are thinner skinned, contain a higher sugar 
content, and are generally milder in flavor than storage onions. Due to 
a higher moisture and sugar content, they are subject to deterioration 
both on the surface and internally if not used shortly after harvest.
    Onion production. Onions of recoverable size and condition, with 
excess dirt and foliage material removed and that are not considered 
damaged onion production.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, onions must be planted in rows.
    Production Guarantee (per acre):
    (a) First stage production guarantee--Thirty-five percent (35%) of 
the final stage production guarantee for direct seeded storage and non-
storage onions and 45 percent of the final stage production guarantee 
for transplanted storage and non-storage onions, unless otherwise 
specified in the Special Provisions.
    (b) Second stage production guarantee--Seventy percent (70%) of the 
final stage production guarantee for direct seeded storage onions and 60 
percent of the final stage production guarantee for transplanted storage 
onions and all non-storage onions, unless otherwise specified in the 
Special Provisions.
    (c) Final stage production guarantee--The quantity of onions (in 
hundredweight) determined by multiplying the approved yield per acre by 
the coverage level percentage you elect.
    Storage onions. Onions other than a Bermuda, Granex, or Grano 
variety, or hybrids developed from these varieties that are harvested as 
a bulb and dried to a lower moisture content, are firmer, have more 
outer layers of paper-like skin, and are darker in color than non-
storage onions. They are generally more pungent, have a lower sugar 
content, and can normally be stored for several months under proper 
conditions prior to use without deterioration.
    Topping. A pre-harvest process to initiate curing, in which onion 
foliage is removed or bent over.
    Transplanted. Placing of the onion plant or bulb, by machine or by 
hand at the correct depth, into a seedbed that has been properly 
prepared for the planting method and production practice.
    Type. A category of onions as identified in the Special Provisions.

                            2. Unit Division

    2. Unit Division.
    In addition to, or instead of, establishing optional units as 
provided in section 34 of the Basic Provisions, optional units may be 
established by type, if the type is designated in the Special 
Provisions.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8), you may select only one price 
election for all the onions 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 onion 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) Your production guarantee progresses, in stages, to the final 
stage production guarantee. Stages will be determined on an acre basis 
and at least 75% of the plants on such acreage must be at the same stage 
to qualify for the applicable stage guarantee. The stages are as 
follows:
    (1) First stage extends:
    (i) For direct seeded storage and non-storage onions, from planting 
until the emergence of the fourth leaf; and
    (ii) For transplanted storage and non-storage onions, from 
transplanting of onion plants or sets through the 30th day after 
transplanting.
    (2) Second stage extends:
    (i) For direct seeded storage and non-storage onions, from the 
emergence of the fourth leaf; and
    (ii) For transplanted storage and non-storage onions, from the 31st 
day after transplanting.
    (3) Final stage extends from the completion of topping and lifting 
or digging on the acreage until the end of the insurance period, and is 
the quantity of onions (in hundredweight) determined by multiplying the 
approved yield per acre by the coverage level percentage elected.
    (c) Any acreage of onions damaged in the first or second stage, to 
the extent that producers in the area would not normally further care 
for the onions, will be deemed to have been destroyed even though you 
may continue to care for the onions. The production guarantee for such 
acreage will not exceed the production guarantee for the stage in which 
the damage occurred.

[[Page 216]]

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is June 30 preceding 
the cancellation date for counties with an August 31 cancellation date, 
and November 30 preceding the cancellation date for all other counties.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
         State & County           Termination Date    Cancellation Date
------------------------------------------------------------------------
All Georgia Counties; Kinney,..
Uvalde, Medina, Bexar, Wilson,.
Karnes, Bee, and San Patrico
 Counties,.
Texas, and all Texas Counties    August 31........  August 31.
 lying south thereof..
Umatilla County, Oregon; and
 Walla.
Walla County, Washington.......  August 31........  September 30.
All other states and counties..  February 1.......  February 1.
------------------------------------------------------------------------

                            6. Annual Premium

    In lieu of the provisions of section 7(c) (Annual Premium) of the 
Basic Provisions (Sec. 457.8), the annual premium amount is computed by 
multiplying the final stage production guarantee by the price election, 
the premium rate, the insured acreage, your share at the time of 
planting, and any applicable premium adjustment factors contained in the 
actuarial documents.

                             7. Insured Crop

    In accordance with section 8 (Insured Crop of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the storage and non-storage 
onions (excluding green (bunch) or seed onions, chives, garlic, leeks, 
and scallions) in the county for which a premium rate is provided by the 
actuarial documents:
    (a) In which you have a share;
    (b) That are planted for harvest as either storage onions or non-
storage onions;
    (c) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Interplanted with another crop, unless the onions are 
interplanted with a windbreak crop and the windbreak crop is destroyed 
within 70 days after completion of seeding or transplanting; or
    (2) Planted into an established grass or legume.

                          8. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8), we will not insure any acreage of the 
insured crop that:
    (a) Was planted the previous year to storage or non-storage onions, 
green (bunch) onions, seed onions, chives, garlic, leeks, shallots, or 
scallions unless different rotation requirements are specified in the 
Special Provisions or we agree in writing to insure such acreage; or
    (b) Is damaged before the final planting date to the extent that the 
majority of producers in the area would normally not further care for 
the crop and is not replanted, unless we agree that it is not practical 
to replant.

                           9. Insurance Period

    (a) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8), the acreage must be planted on or 
before the final planting date designated in the Special Provisions 
except as allowed in section 14(c).
    (b) The insurance period ends at the earliest of:
    (1) The calendar date for the end of the insurance period as 
follows:
    (i) June 1 for Vidalia, and any other non-storage onions planted in 
the State of Georgia;
    (ii) July 15 for 1015 Super Sweets, and any other non-storage onions 
in the State of Texas;
    (iii) July 31 for Walla Walla Sweets, and any other non-storage 
onions in the states of Oregon and Washington;
    (iv) August 31 for all non-storage onions in any other state; and
    (v) October 15 for all storage onions; or
    (2) The following event for each unit or portion of a unit:
    (i) Removal of the onions from the field; or
    (ii) Fourteen days after lifting or digging.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur within the insurance period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife, unless control measures have not been taken;

[[Page 217]]

    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss not insured against as listed 
in section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), we 
will not insure against any loss of production due to damage that occurs 
or becomes evident after the end of the insurance period, including, but 
not limited to, loss of production that occurs after onions have been 
placed in storage.

                         11. Replanting Payment

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if the crop is 
damaged by an insurable cause of loss to the extent that the remaining 
stand will not produce at least 90 percent of the final stage production 
guarantee for the acreage and we determine that it is practical to 
replant.
    (b) The maximum amount of the replanting payment per acre will be 
your actual cost for replanting, but will not exceed the lesser of:
    (1) 7 percent of the final stage production guarantee multiplied by 
your price election for the type originally planted and by your insured 
share; or
    (2) 18 hundredweight multiplied by your price election for the type 
originally planted and by your insured share.
    (c) When onions are replanted using a practice that is uninsurable 
as an original planting, the liability for the unit will be reduced by 
the amount of the replanting payment. The premium amount will not be 
reduced.

                12. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), any 
representative samples of the unharvested crop that may be required must 
be at least 10 feet wide and extend the entire length of each field in 
the unit. The samples must not be harvested or destroyed until the 
earlier of our inspection or 15 days after harvest of the balance of the 
unit is completed.
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing. We will conduct an appraisal 
that will be used to determine your production to count for production 
that is sold by direct marketing. If damage occurs after this appraisal, 
we will conduct an additional appraisal. These appraisals, and any 
acceptable records provided by you, will be used to determine your 
production to count. Failure to give timely notice that production will 
be sold by direct marketing will result in an appraised amount of 
production to count that is not less than the production guarantee per 
acre if such failure results in our inability to make the required 
appraisal.

                         13. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide production records:
    (1) For any optional units, we will combine all optional units for 
which acceptable production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying each result of section 13(b)(1) by the respective 
price election;
    (3) Totaling the results in section 13(b)(2);
    (4) Multiplying the total production to be counted (see section 
13(c)) by the respective price elections you chose;
    (5) Totaling the results of section 13(b)(4);
    (6) Subtracting the result in section 13(b)(5) from the result in 
13(b)(3); and
    (7) Multiplying the result in section 13(b)(6) by your share.
    (c) The total production (in hundredweight) to count from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) That is direct marketed to consumers if you fail to meet the 
requirements contained in section 12;
    (C) Put to another use without our consent;
    (D) That is damaged solely by uninsured causes; or
    (E) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested onion production (mature unharvested production 
may be adjusted based on the percent of damaged onion production in 
accordance with section 13(d));
    (iv) The appraised production that exceeds the difference between 
the first or second stage (as applicable) and the final stage production 
guarantee for acreage that does not qualify for the final stage 
guarantee, if such acreage is not subject to section 13(c)(1) (i) and 
(ii); and
    (v) 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 if you put the acreage to another use or abandon the 
crop.

[[Page 218]]

    (vi) If agreement on the appraised amount of production is not 
reached:
    (A) If 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 the harvested onion 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 appraisal made prior to giving you 
consent to put the acreage to another use will be used to determine the 
amount of production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested onion 
production, or our reappraisal if additional damage occurs and the crop 
is not harvested.
    (2) All harvested onion production from the insurable acreage.
    (d) If the damage to harvested or unharvested onion production 
exceeds the percentage shown in the Special Provisions for the type, no 
production will be counted for that unit or portion of a unit unless 
such damaged onion production from that acreage is sold. If sold, the 
hundredweight of production to be counted will be adjusted by dividing 
the price received for the damaged onion production by the price 
election and multiplying the resulting factor times the hundredweight 
sold.
    (e) The extent of any damaged onion production must be determined 
not later than the time onions are placed in storage if the production 
is stored prior to sale, or the date the onions are delivered to a 
packer, processor, or other handler if production is not stored.

                         14. Prevented Planting

    Your prevented planting coverage will be 45 percent of your 
production guarantee for timely planted acreage. Additional prevented 
planting coverage levels are not available for onions.

[62 FR 28613, May 27, 1997, as amended at 62 FR 65173, Dec. 10, 1997; 64 
FR 33385, June 23, 1999]



Sec. 457.136  Guaranteed tobacco crop insurance provisions

    The Guaranteed Tobacco Crop Insurance Provisions for the 1999 and 
succeeding crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

(Appropriate title for insurance provider)

    Both FCIC and reinsured policies:

              Guaranteed Tobacco Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Adequate stand. A population of live plants per unit of acreage that 
can be expected to produce at least your production guarantee.
    Approved yield. The yield calculated in accordance with 7 CFR part 
400, subpart G, if required by section 3(b) of these provisions.
    Average value. For appraised production, the estimated value of all 
such production divided by the appraised pounds. For harvested 
production, the total value of such production divided by the harvested 
pounds.
    Basic unit. In lieu of the definition in the Basic Provisions, a 
basic unit is all insurable acreage of an insurable type of tobacco in 
the county in which you have a share on the date of planting for the 
crop year and that is identified by a single FSA farm serial number at 
the time insurance first attaches under these provisions for the crop 
year.
    Carryover tobacco. Any tobacco produced on the FSA farm serial 
number in previous years that remained unsold at the end of the most 
recent marketing year.
    Discount variety. Tobacco defined as such under the provisions of 
the United States Department of Agriculture tobacco price support 
program.
    Fair market value. The current year's tobacco season average market 
price for the applicable type of tobacco obtained from the average sale 
of tobacco through a market other than an auction warehouse.
    Harvest. Cutting or priming and removing all insured tobacco from 
the field in which it was grown.
    Hydroponic plants. Seedlings grown in liquid nutrient solutions.
    Late planting period. In lieu of the definition in section 1 of the 
Basic Provisions, the period that begins the day after the final 
planting date for the insured crop and ends 15 days after the final 
planting date, unless otherwise specified in the Special Provisions.
    Market price.
    (a) For types 11, 12, 13, 14, 21, 22, 23, 31, 35, 36, 37, 42, 44, 
54, and 55:
    (1) The support price per pound for the insured type of tobacco as 
announced by the

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USDA for its tobacco price support program; or
    (2) The current year's season average market price, when available; 
if not available because the insured type of tobacco has not been 
marketed in the area, the previous year's season average market price 
for the applicable insured type tobacco grown in the area for any crop 
year a tobacco price support program is not in effect.
    (b) For types 32, 41, 51, 52, and 61, the current year's season 
average market price, when available; if not available because the 
insured type of tobacco has not been marketed in the area, the previous 
year's season average market price for the applicable insured type of 
tobacco grown in the area.
    Planted acreage. Land in which tobacco seedlings, including 
hydroponic plants, have been transplanted by hand or machine from the 
tobacco bed to the field.
    Pound. Sixteen ounces avoirdupois.
    Priming. A method of harvesting tobacco by which each leaf is 
severed from the stalk as it matures.
    Production guarantee (per acre). Either the number of pounds of 
tobacco for the tobacco type and classification shown on the county 
actuarial table, or the approved yield as provided in the Special 
Provisions, multiplied by the coverage level percentage you elect.
    Replanting. In lieu of the definition in section 1 of the Basic 
Provisions, performing the cultural practices necessary to replace the 
tobacco plant, and then replacing the tobacco plant in the insured 
acreage with the expectation of producing at least the guarantee.
    Season average market price. The simple average price paid by buyers 
for a tobacco type for all days sales occur at public markets during the 
tobacco sales season in the area in which the farm is located.
    Support price. The average price per pound for the type of tobacco 
as announced by the USDA under its tobacco price support program, or, if 
there is no such program, as announced by FCIC.
    Tobacco bed. An area protected from adverse weather in which tobacco 
seeds are sown and seedlings are grown until transplanted into the 
tobacco field by hand or machine.

                            2. Unit Division

    A unit will be determined in accordance with the definition of basic 
unit contained in section 1 of these Crop Provisions. The provision in 
the Basic Provisions regarding optional units are not applicable, unless 
specified 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 must select only one price election and coverage level for 
each guaranteed tobacco type designated in the Special Provisions that 
you elect to insure.
    (b) A production report, if required by the Special Provisions, must 
be filed in accordance with section 3(c) of the Basic Provisions.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 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 March 15.

                          6. Report of Acreage

    In addition to the requirements of section 6 of the Basic 
Provisions, you must report any carryover tobacco from previous years on 
the acreage report.

                             7. Insured Crop

    In accordance with section 8 of the Basic Provisions, the insured 
crop will be any of the tobacco types designated in the Special 
Provisions, in which you have a share, that you elect to insure, and for 
which a premium rate is provided by the actuarial documents.

                          8. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions, 
we will not insure any acreage under these crop provisions that is:
    (a) Planted to a discount variety;
    (b) Planted to a tobacco type for which no premium rate is provided 
by the actuarial documents;
    (c) Planted in any manner other than as provided in the definition 
of ``planted acreage'' in section 1 of these Crop Provisions, unless 
otherwise provided by the Special Provisions or by written agreement; or
    (d) Damaged before the final planting date to the extent that most 
producers of tobacco acreage with similar characteristics in the area 
would normally not further care for the crop, unless such crop is 
replanted or we agree that replanting is not practical.

                           9. Insurance Period

    In accordance with the provisions of section 11 of the Basic 
Provisions, insurance ceases at the earliest of:
    (a) Total destruction of the tobacco on the unit;
    (b) Weighing-in at the tobacco warehouse;
    (c) Removal of the tobacco from the field where grown except for 
curing, grading, packing, or immediate delivery to the tobacco 
warehouse; or

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    (d) The calendar date for the end of the insurance period, which is:
    (i) Types 11 and 12--November 30;
    (ii) Type 13--October 31;
    (iii) Type 14--October 15;
    (iv) Types 31 and 36--February 28;
    (v) Types 21, 35 and 37--March 15;
    (vi) Types 22 and 23--April 15;
    (vii) Type 32--May 15;
    (viii) All other types--April 30.

                           10. Causes of Loss

    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:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if caused by a peril 
specified in section 10(a) through (g) that occurs during the insurance 
period.

                11. Duties In The Event of Damage or Loss

    (a) In accordance with the requirements of section 14 of the Basic 
Provisions, any representative samples we may require of each 
unharvested tobacco type must be at least 5 feet wide (at least two 
rows), and extend the entire length of each field in the unit. The 
samples must not be harvested or destroyed until after our inspection.
    (b) If tobacco types 11, 12, 13, or 14 are insured and you have 
filed a notice of damage, you also must leave all tobacco stalks and 
stubble intact for our inspection. The stalks and stubble must not be 
destroyed until we give you written consent to do so or until 30 days 
after the end of the insurance period, whichever is earlier.

                         12. 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 units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee, by type if applicable;
    (2) Multiplying each result in section 12(b)(1) by the respective 
price election, by type if applicable;
    (3) Totaling the results of section 12(b)(2) if there are more than 
one type;
    (4) Multiplying the total production to count (see section 12(c)), 
for each type if applicable, by its respective price election;
    (5) Totaling the results of section 12(b)(4), if there are more than 
one type;
    (6) Subtracting the results of section 12(b)(4) from the results of 
section 12(b)(2) if there is only one type or subtracting the results of 
section 12(b)(5) from the result of section 12(b)(3) if there are more 
than one type; and
    (7) Multiplying the result of section 12(b)(6) by your share.
    For example:
    You have 100 percent share in 1 acre of type 35 (dark air cured) 
guaranteed tobacco in the unit, with a 2,000 pounds per acre guarantee 
and a price election of $2.00 per pound. You are only able to harvest 
500 pounds. Your indemnity would be calculated as follows:
    (1) 1.0 acre x 2,000 pounds = 2,000 pounds guarantee;
    (2) 2,000 pounds x $2.00 price election = $4,000.00 value of 
guarantee;
    (4) 500 pounds x $2.00 price election = $1,000.00 value of 
production to count;
    (6) $4,000.00 - $1,000.00 = $3,000.00 loss; and
    (7) $3,000 x 100 percent = $3,000 indemnity payment.
    (c) The total production to count (pounds of appraised or harvested 
production multiplied by the applicable price) for all insurable acreage 
on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for the unit for 
any acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes;
    (D) For which you fail to provide production records, if required by 
the Special Provisions, that are acceptable to us; or
    (E) Of types 11, 12, 13, or 14 when the stalks and stubble have been 
destroyed without our consent;
    (ii) Production lost due to uninsured causes.
    (iii) Potential production on insured acreage that you intend to put 
to another use or abandon with our consent, 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:
    (A) If 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,

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representative samples of the crop in locations acceptable to us (The 
value of production to count for such acreage will be the number of 
pounds harvested or appraised production multiplied by the support price 
taken 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 appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harves