[Federal Register Volume 76, Number 222 (Thursday, November 17, 2011)]
[Proposed Rules]
[Pages 71271-71276]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29218]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 76, No. 222 / Thursday, November 17, 2011 /
Proposed Rules
[[Page 71271]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
[Docket No. FCIC-11-0006]
RIN 0563-AC32
Common Crop Insurance Regulations; Fresh Market Tomato (Dollar
Plan) Crop Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to
amend the Common Crop Insurance Regulations, Fresh Market Tomato
(Dollar Plan) Crop Provisions. The intended effect of this action is to
provide policy changes, to clarify existing policy provisions to better
meet the needs of insured producers, and to reduce vulnerability to
program fraud, waste, and abuse. The proposed changes will be effective
for the 2013 and succeeding crop years.
DATES: Written comments and opinions on this proposed rule will be
accepted until close of business December 19, 2011 and will be
considered when the rule is to be made final.
ADDRESSES: FCIC prefers that comments be submitted electronically
through the Federal eRulemaking Portal. You may submit comments,
identified by Docket ID No. FCIC-11-0006, by any of the following
methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Director, Product Administration and Standards
Division, Risk Management Agency, United States Department of
Agriculture, P.O. Box 419205, Kansas City, MO 64133-6205.
All comments received, including those received by mail, will be posted
without change to http://www.regulations.gov, including any personal
information provided, and can be accessed by the public. All comments
must include the agency name and docket number or Regulatory
Information Number (RIN) for this rule. For detailed instructions on
submitting comments and additional information, see http://www.regulations.gov. If you are submitting comments electronically
through the Federal eRulemaking Portal and want to attach a document,
we ask that it be in a text-based format. If you want to attach a
document that is a scanned Adobe PDF file, it must be scanned as text
and not as an image, thus allowing FCIC to search and copy certain
portions of your submissions. For questions regarding attaching a
document that is a scanned Adobe PDF file, please contact the RMA Web
Content Team at (816) 823-4694 or by email at
rmaweb.content@rma.usda.gov.
Privacy Act: Anyone is able to search the electronic form of all
comments received for any dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review the
complete User Notice and Privacy Notice for Regulations.gov at http://www.regulations.gov/#!privacyNotice.
FOR FURTHER INFORMATION CONTACT: Director, Product Administration and
Standards Division, Risk Management Agency, United States Department of
Agriculture, Beacon Facility, Stop 0812, Room 421, P.O. Box 419205,
Kansas City, MO 64141-6205, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be non-significant for the
purposes of Executive Order 12866 and, therefore, it has not been
reviewed by the Office of Management and Budget (OMB).
Paperwork Reduction Act of 1995
Pursuant to the provisions of the Paperwork Reduction Act of 1995
(44 U.S.C. chapter 35), the collections of information in this rule
have been approved by OMB under control number 0563-0053.
E-Government Act Compliance
FCIC is committed to complying with the E-Government Act, to
promote the use of the Internet and other information technologies to
provide increased opportunities for citizen access to Government
information and services, and for other purposes.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and Tribal
governments and the private sector. This rule contains no Federal
mandates (under the regulatory provisions of title II of the UMRA) for
State, local, and Tribal governments or the private sector. Therefore,
this rule is not subject to the requirements of sections 202 and 205 of
UMRA.
Executive Order 13132
It has been determined under section 1(a) of Executive Order 13132,
Federalism, that this rule does not have sufficient implications to
warrant consultation with the States. The provisions contained in this
rule will not have a substantial direct effect on States, or on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.
Executive Order 13175
This rule has been reviewed in accordance with the requirements of
Executive Order 13175, Consultation and Coordination with Indian Tribal
Governments. The review reveals that this regulation will not have
substantial and direct effects on Tribal governments and will not have
significant Tribal implications.
Regulatory Flexibility Act
FCIC certifies that this regulation will not have a significant
economic impact on a substantial number of small entities. Program
requirements for the Federal crop insurance program are the same for
all producers regardless of the size of their farming operation. For
instance, all producers are required to submit an application and
acreage report to establish their insurance guarantees and compute
premium amounts, and all producers are required to submit a notice of
loss and production information to determine the amount of an indemnity
payment in the event of an insured cause of crop loss. Whether a
producer has 10 acres or 1000 acres, there is no difference in the
[[Page 71272]]
kind of information collected. To ensure crop insurance is available to
small entities, the Federal Crop Insurance Act authorizes FCIC to waive
collection of administrative fees from limited resource farmers. FCIC
believes this waiver helps to ensure that small entities are given the
same opportunities as large entities to manage their risks through the
use of crop insurance. A Regulatory Flexibility Analysis has not been
prepared since this regulation does not have an impact on small
entities, and, therefore, this regulation is exempt from the provisions
of the Regulatory Flexibility Act (5 U.S.C. 605).
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order 12372
This program is not subject to the provisions of Executive Order
12372, which requires intergovernmental consultation with State and
local officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
Executive Order 12988
This proposed rule has been reviewed in accordance with Executive
Order 12988 on civil justice reform. The provisions of this rule will
not have a retroactive effect. The provisions of this rule will preempt
State and local laws to the extent such State and local laws are
inconsistent herewith. With respect to any direct action taken by FCIC
or to require the insurance provider to take specific action under the
terms of the crop insurance policy, the administrative appeal
provisions published at 7 CFR part 11 must be exhausted before any
action against FCIC for judicial review may be brought.
Environmental Evaluation
This action is not expected to have a significant economic impact
on the quality of the human environment, health, or safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
Background
FCIC proposes to amend the Common Crop Insurance Regulations (7 CFR
part 457) by revising Sec. 457.139 Fresh Market Tomato (Dollar Plan)
Crop Provisions, to be effective for the 2013 and succeeding crop
years. Several requests have been made for changes to improve the
coverage offered, address program integrity issues, simplify program
administration, and improve clarity of the policy provisions.
The proposed changes are as follows:
1. FCIC proposes to remove the paragraph immediately preceding
section 1 which refers to the order of priority in the event of a
conflict. This same information is contained in the Common Crop
Insurance Policy Basic Provisions (Basic Provisions). Therefore, it is
duplicative and no longer necessary in the Crop Provisions. Also FCIC
proposes to remove all references to section titles of the Basic
Provisions. This information is currently contained in parenthesis
following references to section numbers of the Basic Provisions
throughout the Crop Provisions. The section numbers should provide
sufficient guidance to locate the applicable provision.
2. Section 1--FCIC proposes to add a new definition of ``allowable
cost'' to specify the dollar amount per carton for harvesting, packing
and handling costs (as shown in the Special Provisions) for the purpose
of computing the total value of production to be counted. The allowable
cost per carton contained in the Special Provisions will be subtracted
from the price received for each carton of sold harvested production to
obtain the value of production to count.
FCIC proposes to add a new definition of ``amount of insurance per
acre'' because the term is currently used in the Crop Provisions but
was not previously defined. The definition specifies the dollar amount
of coverage per acre is obtained by multiplying the reference maximum
dollar amount shown in the actuarial documents by the coverage level
percentage you elect. In the settlement of claim section, the amount of
insurance per acre minus the total dollar value of production to count
per acre determines if an indemnity is payable to the insured.
FCIC proposes to add a new definition of ``fresh market tomatoes''
because the term is currently used in the Crop Provisions but was not
previously defined. The definition specifies they are field grown
mature green or ripe fresh market tomatoes that meet the Agricultural
Marketing Service United States Standards for Grades of Fresh Tomatoes;
and the applicable Florida Federal Marketing Order and Florida Tomato
Committee Regulations, or their successors. The above Florida Federal
Marketing Order and Florida Tomato Committee rules and regulations that
currently apply to these field grown fresh market tomato types and
varieties do not include ``greenhouse'', ``hydroponic, ``heirloom'' and
other varieties of tomatoes that are not field grown and do not comply
with these rules and regulations.
FCIC proposes to add a new definition of ``minimum value'' because
the minimum value amount shown in the Special Provisions and used in
the Settlement of Claim provisions was not previously defined. Minimum
value is used to value appraised and unsold harvested production to
count. In calculating the total value of all sold harvested production
to count, the price received for each carton of fresh market tomatoes
minus the allowable costs per carton cannot be less than the minimum
value, unless the Minimum Value Option is elected.
FCIC proposes to add a new definition of ``penhookers'' because
these are individuals who purchase the right to salvage fresh market
tomatoes remaining in the field after the insureds complete their
harvests on the unit. Any salvage value paid to the insured will be
added to the final dollar value of the production to count.
FCIC proposes to add a new definition of ``price received'' to
clarify that it is the gross dollar amount per carton received by the
producer before deductions for allowable costs.
FCIC proposes to add a new definition of ``registered handler'' to
identify those individuals who are specifically certified by the
Florida Tomato Committee or successor entity to inspect and enforce all
the handling regulations for shipment of fresh market tomatoes.
FCIC proposes to revise and clarify the definition of ``acre'' by
removing the phrase ``43,560 square feet of land'' and replacing it
with the phrase ``43,560 square feet of planted acreage.'' This change
helps clarify that substantial square footage being used for other
purposes such as roadways or irrigation canals should not be included
in the calculation of planted acreage.
FCIC proposes to revise the definition of ``direct marketing'' to
include ``registered handler'' in the list of examples of an
intermediary.
FCIC proposes to revise the definition of ``harvest'' by replacing
the phrase ``on the unit'' with the phrase ``from the plants'' and
clarifying that any fresh market tomatoes salvaged by penhookers is not
considered a harvest since the grower does not incur any picking or
harvesting costs. However, any salvage value paid to the producer by
the penhooker will be included in the total dollar value of production
to count.
FCIC proposes to revise and clarify the definition of ``plant
stand'' by replacing the word ``insurable'' with the word ``insured''.
[[Page 71273]]
FCIC proposes to revise and clarify the definition of ``potential
production'' by removing paragraphs (a) and (b) in the current policy
definition. The current crop provisions use the terminology
``classification size'' and ``6 x 7 (2-8/32 inch minimum diameter) or
larger'' which excludes all other size classifications under the
Agricultural Marketing Service United States Standards for Grades of
Fresh Tomatoes, the Florida Federal Marketing Order, and the Florida
Tomato Committee Regulations. FCIC also proposes to replace the phrase
``mature green or ripe tomatoes'' with the phrase ``field grown mature
green or ripe fresh market tomatoes'' to clarify this is the primary
growing practice recognized and governed by the Florida Tomato
Committee Regulations, or successor entity. FCIC proposes to revise
section 8 to limit insurability to field grown tomatoes.
FCIC proposes to remove the definition of ``planted acreage''
because this definition is contained in the Basic Provisions.
Therefore, this definition is duplicative and no longer necessary in
the Crop Provisions.
FCIC proposes to remove the definition of ``practical to replant''
because this definition is contained in the Basic Provisions.
Therefore, this definition is duplicative and no longer necessary in
the Crop Provisions.
3. Section 3--FCIC proposes to revise the table under section
(3)(d) by removing the column ``Length of time if Direct Seeded''
because the use of transplanted tomatoes is now the primary planting
method being used in the Florida Tomato Committee regulated area. FCIC
historical data indicates only one ``direct seeded'' policy was insured
in the regulated area in the last decade. However, a new provision is
being proposed in section 8(c)(4) for direct seeded tomatoes to be
insured by written agreement only. FCIC proposes to remove all other
references to direct seeded from the policy.
FCIC proposes to revise section 3(e) to clarify any acreage of
fresh market tomatoes damaged in the first, second, or third stage to
the extent that the majority of producers in the area would not
normally further care for the crop, the indemnity payable for such
acreage will be based on the stage guarantee the plants achieved when
the insured cause of loss occurred, even if the producer continues to
care for the damaged tomatoes. This is consistent with the provisions
of other similar crops policies. If the producer continues to care for
the damaged tomato acreage, any appraised or harvested production will
be included in the dollar value of production to count.
4. Section 8--FCIC proposes to revise the introductory paragraph to
clarify only field grown mature green or ripe fresh market tomato types
and varieties will be insurable as specified in the Special Provisions
for which a premium rate is provided in the actuarial documents, and
allowed by the Florida Tomato Committee.
Also, FCIC proposes to remove the current language in section
8(c)(4) because cherry, grape and plum field grown fresh market
tomatoes will now be insurable if allowed by Special Provisions and
premium rates are listed in the actuarial documents.
FCIC also proposes adding new language in section 8(c)(4) allowing
direct seeded field grown fresh market tomatoes to be insured by
written agreement.
5. Section 9--FCIC proposes to revise section 9(b)(1)(iii) by
removing the direct seeded reference ``or 60 days of direct seeding''
because such tomatoes are only insurable by written agreement, which
will contain the terms and conditions of insurance.
FCIC also proposes to add ``strawberries'' in section 9(b)(3) to
the list of crops that require soil fumigation before planting fresh
market tomatoes. Strawberries are susceptible to nematode damage and
pose the same risk of nematodes to new fresh market tomato planted
acreage as these other crops.
6. Section 10--FCIC proposes to clarify section 10(e) by stating
``Final harvest on the unit'' since this policy allows additional basic
units by planting period and some counties have multiple planting
periods.
FCIC also proposes to revise section 10(f) to remove the reference
to direct seeding since the practice is proposed to be only insurable
by written agreement.
7. Section 11--FCIC proposes to revise and clarify section 11(b)(2)
by revising the current language to clarify that insurance will not be
provided against any loss of production due to the failure to harvest
in a timely manner or failure to market the tomatoes, unless such
failure is due to an insured cause of loss that occurs during the
insurance period. For example, the policy does not cover the inability
to market the insured crop due to quarantine, boycott, or refusal of
any person to accept production.
8. Section 14(b)(4)(ii)--FCIC proposes to remove the provisions
pertaining to the 1998 and 1999 crop years because they are obsolete.
This change allows the catastrophic risk percentage of coverage to be
changed if necessary.
FCIC proposes to add an example of a claim for indemnity after
section 14(b)(5).
FCIC proposes to revise the language in section 14(c)(2)(i) to
explain appraised potential production will be determined for claim
purposes on any fresh market tomato acreage that has not been harvested
the required number of times as specified in the Special Provisions.
FCIC also proposes removing the reference to ``ground-culture'' tomato
planting since this planting practice is no longer used.
FCIC proposes to revise section 14(c)(3) by adding a new section
14(c)(4) to separate and clarify the settlement of claims procedures
for sold harvested and unsold harvested production. Section 14(c)(3)
describes the total value of all sold harvested production and the use
of allowable costs in determining the total dollar value of production
to count. The last sentence currently in section (14)(c)(3) is now the
last sentence in section (14)(c)(4). Section 14(c)(4) as proposed will
describe the total value of all unsold harvested production and using
the minimum value shown in the Special Provisions in determining the
total dollar value of production to count.
FCIC proposes adding a new section 14(c)(5) to clarify any salvage
value paid to the insured by penhookers will be added to the total
dollar value of production to count.
9. Section 16--FCIC proposes revising section 16(a)(1) and 16(b)(2)
of the current policy Minimum Value Option by removing the Minimum
Value Option II. Allowing the Minimum Value Option II price to go down
to zero has resulted in unfavorable loss experience and program abuse.
This change will improve the integrity of the Minimum Value Option
benefit.
FCIC also proposes revising section (16)(b)(1)(ii) by changing the
phrase ``For marketable production that is not sold,'' to ``For unsold
harvested production,''. The new wording is consistent with the wording
in section (14)(c)(4).
FCIC proposes to add an example of a claim for indemnity after
paragraph 16(c).
Other minor changes have been made to make the provisions more
effective and consistent with other similar Crop Provisions.
List of Subjects in 7 CFR Part 457
Crop insurance, Fresh market tomato (dollar plan), Reporting and
recordkeeping requirements.
[[Page 71274]]
Proposed Rule
Accordingly, as set forth in the preamble, the Federal Crop
Insurance Corporation proposes to amend 7 CFR part 457 effective for
the 2013 and succeeding crop years as follows:
PART 457--COMMON CROP INSURANCE REGULATIONS
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(o).
2. Amend Sec. 457.139 as follows:
a. Revise the introductory text;
b. Remove the paragraph immediately preceding section 1;
c. Amend section 1 by:
i. Adding definitions for ``allowable cost,'' ``amount of insurance
per acre,'' ``fresh market tomatoes,'' ``minimum value,''
``penhookers,'' ``price received,'' and ``registered handler;''
ii. Removing the definitions of ``planted acreage'' and ``practical
to replant;''
iii. Revising the definitions of ``acre,'' ``direct marketing,''
``harvest,'' ``plant stand,'' and ``potential production;'' and
iv. Amending the definition of ``crop year'' by removing the phrase
``of `crop year' contained in section 1 (Definitions) of the Basic
Provisions (Sec. 457.8)'' and adding the phrase ``contained in the
Basic Provisions'' in its place.
d. Amend section 3 by:
i. Removing the phrases ``(Insurance Guarantees, Coverage Levels,
and Prices for Determining Indemnities)'' and ``(Sec. 457.8)'' in
paragraphs (a) and (c);
ii. Revising the table in paragraph (d); and
iii. Revising paragraph (e).
e. Amend section 4 by removing the phrases ``(Contract Changes)''
and ``(Sec. 457.8).''
f. Amend section 5 by removing the phrases ``(Life of Policy,
Cancellation, and Termination)'' and ``(Sec. 457.8).''
g. Amend section 6 introductory text by removing the phrases
``(Report of Acreage)'' and ``(Sec. 457.8).''
h. Amend section 7 by:
i. Removing the phrases ``(Annual Premium)'' and ``(Sec. 457.8);''
and
ii. Removing the phrase ``(e.g., fall direct-seeded irrigated))''
and adding the phrase ``(e.g., fall transplanted irrigated)'' in its
place.
i. Amend section 8 by:
i. Revising the introductory text; and
ii. Revising paragraph (c)(4).
j. Amend section 9 by:
i. Removing the phrases ``(Insurable Acreage)'' and ``(Sec.
457.8)'' in paragraphs (a) and (b);
ii. Removing the phrase ``or 60 days of direct seeding'' in
paragraph (b)(1)(iii);
iii. Removing the word ``satisfied'' and adding the word ``met'' in
its place in paragraph (b)(2); and
iv. Revising paragraph (b)(3).
k. Amend section 10 by:
i. Revising the introductory paragraph;
ii. Revising paragraph (e); and
iii. Revising paragraph (f).
l. Amend section 11 by:
i. Removing the phrases ``(Causes of Loss)'' and ``(Sec. 457.8)''
in paragraphs (a) and (b);
ii. Revising paragraph (b)(2).
m. Amend section 12(a) and 12(c) by removing the phrases
``(Replanting Payment)'' and ``(Sec. 457.8).''
n. Amend section 13 by removing the phrases ``(Duties in the Event
of Damage or Loss)'' and ``(Sec. 457.8).''
o. Amend section 14 by:
i. Revising paragraph (b)(4)(ii);
ii. Adding an example following paragraph (b)(5);
iii. Revising paragraph (c)(2)(i);
iv. Revising paragraph (c)(3);
v. Adding a new paragraph (c)(4); and
vi. Adding a new paragraph (c)(5).
p. Revise section 16.
q. Adding an example following paragraph 16(c).
The revised and added text reads as follows:
Sec. 457.139 Fresh market tomato (dollar plan) crop insurance
provisions.
The fresh market tomato (dollar plan) crop insurance provisions for
the 2013 and succeeding crop years are as follows:
* * * * *
1. Definitions
Acre. 43,560 square feet of planted acreage when row widths do not
exceed six feet. If row widths exceed six feet, the land area on which
at least 7,260 linear feet of rows are planted.
Allowable cost. The dollar amount per carton for harvesting,
packing, and handling as stated in the Special Provisions.
Amount of insurance per acre. The dollar amount of insurance per
acre obtained by multiplying the reference maximum dollar amount shown
in the actuarial documents by the coverage level percentage you elect.
* * * * *
Direct marketing. The sale of the insured crop directly to
consumers without the intervention of an intermediary such as a
registered handler, 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.
* * * * *
Fresh Market Tomatoes. Field grown mature green or ripe fresh
market tomatoes that meet the Agricultural Marketing Service United
States Standards for Grades of Fresh Tomatoes; and the applicable
Federal Marketing Order and Florida Tomato Committee Regulations, or
their successors.
Harvest. The picking of tomatoes from the plants, excluding fresh
market tomatoes salvaged by penhookers.
* * * * *
Minimum value. The dollar amount per carton shown in the Special
Provisions we will use to value appraised and marketable production to
count.
Penhookers. Individuals who purchase the right to salvage tomatoes
remaining in the field after commercial harvests are completed.
Plant stand. The number of live plants per acre prior to the
occurrence of an insured cause of loss.
* * * * *
Potential production. The number of cartons of mature green or ripe
field grown fresh market tomatoes that the tomato plants will or would
have produced per acre assuming normal growing conditions and practices
by the end of the insurance period.
Price received. The gross dollar amount per carton received by the
producer before deductions of allowable costs.
Registered handler. A person or entity officially certified by the
Florida Tomato Committee, or successor entity, to inspect and enforce
all the handling regulations for fresh market tomatoes, and report the
required packout data to the Florida Tomato Committee.
* * * * *
3. Amounts of Insurance and Production Stages
* * * * *
(d) * * *
[[Page 71275]]
------------------------------------------------------------------------
Percent of the
amount of
Stage insurance per Length of time if
acre that you transplanted
selected
------------------------------------------------------------------------
1............................. 50............... From planting through
the 29th day after
planting.
2............................. 75............... From the 30th day
after planting until
the beginning of
stage 3.
3............................. 90............... From the 60th day
after planting until
the beginning of the
final stage.
Final......................... 100.............. Begins the earlier of
75 days after
planting, or the
beginning of
harvest.
------------------------------------------------------------------------
(e) Any acreage of fresh market tomatoes damaged in the first,
second, or third stage to the extent that the majority of producers in
the area would not normally further care for the crop, the indemnity
payable for such acreage will be based on the stage the plants had
achieved when the insured damage occurred, even if the producer
continues to care for the damaged tomatoes.
* * * * *
8. Insured Crop
In accordance with section 8 of the Basic Provisions, the crop
insured will be all the field grown fresh market tomato types and
varieties in the county as specified in the Special Provisions for
which a premium rate is provided in the actuarial documents:
* * * * *
(c) * * *
(4) Direct seeded fresh market tomatoes, unless insured by written
agreement.
* * * * *
9. Insurable Acreage
* * * * *
(3) We will not insure any acreage on which tomatoes (except for
replanted tomatoes in accordance with sections 9(b)(1) and (2)),
peppers, eggplants, strawberries or tobacco have been grown and the
soil was not fumigated or otherwise properly treated before planting
the insured tomatoes.
10. Insurance Period
In lieu of section 11 of the Basic Provisions, coverage begins on
each unit or part of a unit the later of the date we accept your
application, or when the tomatoes are planted in each planting period.
Coverage ends on each unit at the earliest of:
* * * * *
(e) Final harvest on the unit; or
(f) The calendar date for the end of insurance period that is 125
days after the date of transplanting or replanting with transplants.
11. Causes of Loss
* * * * *
(b) * * *
(2) Failure to harvest in a timely manner or failure to market the
tomatoes, unless such failure is due to actual physical damage caused
by an insured cause of loss that occurs during the insurance period.
For example, we will not pay an indemnity if you are unable to market
the insured crop due to quarantine, boycott, or refusal of any person
to accept production.
* * * * *
14. Settlement of Claim
* * * * *
(b) * * *
(4) * * *
(ii) For catastrophic risk protection coverage, the result of
multiplying the total value of production to count determined in
accordance with section 14(c) by the percentage contained in the
Special Provisions.
(5) * * *
------------------------------------------------------------------------
------------------------------------------------------------------------
For Example: You have a 100 percent share in 10.0 acres of fresh market
tomatoes. You select a 70% coverage level of the reference maximum
dollar amount of $7,500 per acre. The average price received is $10.00
per carton of tomatoes. Allowable costs are $4.25 per carton. Minimum
value is $5.00 per carton. Your total production sold is 5,000 cartons
(5,000 / 10.0 = 500 cartons per acre) and you have an additional 1,000
cartons of unsold harvested production (1,000 / 10.0 = 100 cartons per
acre). Your loss is in the final stage of production. Your indemnity per
acre is calculated as follows:
------------------------------------------------------------------------
$7,500 x 70% = dollar amount $5,250
of insurance per acre.
14(c)(3)................. 500 cartons x $5.75 = value 2,875
of sold production.
($10 selling price minus
$4.25 allowable cost).
14(c)(4)................. 100 cartons of unsold +500
harvested production x $5
minimum value per carton.
Value of production to count. 3,375
14(b)(5)................. Indemnity per acre = ($5,250- 1,875
$3,375) x 100% share.
$1,875 x 10.0 acres = $18,750 18,750
indemnity payment.
------------------------------------------------------------------------
(c) * * *
(2) * * *
(i) Potential production on any fresh market tomato acreage that
has not been harvested the required number of times as specified in the
Special Provisions.
* * * * *
(3) The total value of all sold 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 carton of fresh market tomatoes in the load (this
result may not be less than the minimum value shown in the Special
Provisions for any carton of tomatoes), and multiplying this result by
the number of cartons of fresh market tomatoes harvested.
(4) The total value of all unsold harvested production will be the
dollar amount obtained by multiplying the number of cartons of such
tomatoes 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 or
sold will not be counted as production to count.
(5) Any penhooker salvage value paid to you will be added to the
total dollar value of production to count.
* * * * *
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 tomatoes
(dollar plan) 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.
[[Page 71276]]
(b) In lieu of the provisions contained in section 14(c)(3) of
these Crop Provisions, the total value of harvested production will be
determined as follows:
(1) For sold harvested production, the dollar amount obtained by
subtracting the allowable cost contained in the Special Provisions from
the price received for each carton of fresh market tomatoes in the load
(this result may not be less than the minimum value option price
contained in the Special Provisions for any carton of tomatoes sold),
and multiplying this result by the number of cartons of fresh market
tomatoes sold; and
(2) For unsold harvested production, the dollar amount obtained by
multiplying the number of cartons of such fresh market tomatoes 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 or sold will not be counted
as production to count).
(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.
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Example with Minimum Value Option: You have a 100 percent share in 10.0
acres of fresh market tomatoes. You select a 70% coverage level of the
reference maximum dollar amount of $7,500 per acre. The average price
received is $6.00 per carton of tomatoes. Allowable costs are $4.25 per
carton. Minimum value is $5.00 per carton. The Minimum Value Option
price is $2.00 per carton. Your total production sold is 5,000 cartons
(5,000 / 10.0 = 500 cartons per acre) and you have an additional 1,000
cartons of unsold harvested production (1,000 / 10.0 = 100 cartons per
acre of unsold marketable production). Your loss is in the final stage
of production. Your indemnity per acre is calculated as follows:
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7,500 x 70% = dollar amount $5,250
of insurance per acre.
16(b)(1)................. 500 cartons x $2 = value of 1,000
sold production ($6 price
received minus $4.25
allowable costs = $1.75.
$2.00 minimum value option is
greater than $1.75).
16(b)(2)................. 100 cartons of unsold +500
harvested production x $5
minimum value per carton.
Value of production to count. 1,500
16(b).................... Indemnity per acre = $5,250- 3,750
$1,500 = $3,750 x 100% share.
$3,750 x 10.0 acres = $37,500 37,500
indemnity payment.
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* * * * *
Signed in Washington, DC, on November 7, 2011.
William J. Murphy,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2011-29218 Filed 11-16-11; 8:45 am]
BILLING CODE 3410-08-P