[Federal Register Volume 78, Number 168 (Thursday, August 29, 2013)]
[Proposed Rules]
[Pages 53370-53374]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-20802]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
[Docket No. FCIC-13-0001]
RIN 0563-AC24
Common Crop Insurance Regulations; Forage Seed Crop Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Proposed rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to add
a provision to its regulations that provides forage seed insurance. The
provisions will be used in conjunction with the Common Crop Insurance
Policy Basic Provisions (Basic Provisions), which contain standard
terms and conditions common to most crop programs. The intended effect
of this action is to convert the Forage Seed pilot crop insurance
program to a permanent insurance program for the 2015 and succeeding
crop years.
DATES: Written comments and opinions on this proposed rule will be
accepted until close of business September 30, 2013, 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-13-0001, by any of the following
methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Tim Hoffman, Director, Actuarial and Product Design
Division, Risk Management Agency, United States Department of
Agriculture, P.O. Box 419205, Kansas City, MO 64141-6205.
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 submission. 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
[email protected].
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: Tim Hoffmann, Director, Product
Administration and Standards Division, Risk Management Agency, United
States Department of Agriculture, Beacon Facility, Stop 0812, Room 421,
PO Box 419205, Kansas City, MO 64141-6205, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
rule is not significant for the purpose of Executive Order 12866 and,
therefore, it has not been reviewed by OMB.
Paperwork Reduction Act of 1995
Pursuant to the provisions of the Paperwork Reduction Act of 1995
(44 U.S.C. chapter 35), the collections of information in this rule
have been approved by OMB under control number 0563-0053.
E-Government Act Compliance
FCIC is committed to complying with the E-Government Act of 2002,
to promote the use of the Internet and other information technologies
to provide increased opportunities for citizen access to Government
information and services, and for other purposes.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA),
establishes requirements for Federal agencies to
[[Page 53371]]
assess the effects of their regulatory actions on State, local, and
tribal governments and the private sector. This rule contains no
Federal mandates (under the regulatory provisions of title II of the
UMRA) for State, local, and tribal governments or the private sector.
Therefore, this rule is not subject to the requirements of sections 202
and 205 of the UMRA.
Executive Order 13132
It has been determined under section 1(a) of Executive Order 13132,
Federalism, that this rule does not have sufficient implications to
warrant consultation with the States. The provisions contained in this
rule will not have a substantial direct effect on States, or on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.
Executive Order 13175
This rule has been reviewed in accordance with the requirements of
Executive Order 13175, Consultation and Coordination with Indian Tribal
Governments. The review reveals that this regulation will not have
substantial and direct effects on Tribal governments and will not have
significant Tribal implications.
Regulatory Flexibility Act
FCIC certifies that this regulation will not have a significant
economic impact on a substantial number of small entities. Program
requirements for the Federal crop insurance program are the same for
all producers regardless of the size of their farming operation. For
instance, all producers are required to submit an application and
acreage report to establish their insurance guarantees, and compute
premium amounts, and all producers are required to submit a notice of
loss and production information to determine the amount of an indemnity
payment in the event of an insured cause of crop loss. Whether a
producer has 10 acres or 1000 acres, there is no difference in the kind
of information collected. To ensure crop insurance is available to
small entities, the Federal Crop Insurance Act authorizes FCIC to waive
collection of administrative fees from limited resource farmers. FCIC
believes this waiver helps to ensure small entities are given the same
opportunities as large entities to manage their risks through the use
of crop insurance. A Regulatory Flexibility Analysis has not been
prepared since this regulation does not have an impact on small
entities, and, therefore, this regulation is exempt from the provisions
of the Regulatory Flexibility Act (5 U.S.C. 605).
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order 12372
This program is not subject to the provisions of Executive Order
12372, which require intergovernmental consultation with State and
local officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
Executive Order 12988
This 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 and 7 CFR part 400, subpart J,
for the informal review process of good farming practices, as
applicable, must be exhausted before any action against FCIC may be
brought.
Environmental Evaluation
This action is not expected to have a significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
Background
FCIC offered a pilot crop insurance program for forage seed
beginning with the 2002 crop year. The pilot program was initially
offered in 10 counties in California, Idaho, Montana, Nevada, Oregon,
Washington and Wyoming. In the initial year, the program insured 104
producers and approximately 11,000 acres. Following an evaluation of
the Forage Seed pilot program in 2006, FCIC's Board of Director's
approved continuation and expansion until such time the program could
be made permanent. In 2007, program changes included 2 additional
counties and changes in the dates of the insurance period for Montana
and Wyoming. Currently the provisions insure only forage seed that is
contracted or grown as certified forage seed. All of the forage seed
covered under the pilot program is alfalfa seed. For the 2012 crop
year, 179 policies were sold and approximately 23,900 acres insured.
This proposed rule will add the forage seed program to the code of
federal regulations.
List of Subjects in 7 CFR Part 457
Crop Insurance, Forage Seed, Reporting and recordkeeping
requirements.
Proposed Rule
Accordingly, as set forth in the preamble, the Federal Crop
Insurance Corporation proposes to amend 7 CFR part 457 effective for
the 2015 and succeeding crop years as follows:
PART 457--COMMON CROP INSURANCE REGULATIONS
0
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(o).
0
2. Section 457.174 is added to read as follows:
Sec. 457.174 Forage Seed crop insurance provisions.
The forage seed crop provisions for the 2015 and succeeding crop
years are as follows:
FCIC Policies: United States Department of Agriculture, Federal Crop
Insurance Corporation
Forage Seed Crop Provisions
1. Definitions.
Actual value. The dollar value received, or that could be received,
for the forage seed if the forage seed production is properly handled
in accordance with the requirements in the forage seed contract or the
applicable certifying agency's requirements.
Adequate stand. A population of live plants that equals or exceeds
the minimum required number of plants per square foot as shown in the
actuarial documents.
Amount of insurance. The amount obtained by multiplying the
production guarantee per acre for each type and practice in the unit by
the insured acreage of that type and practice, by the applicable base
price, and by the percentage of base price you elected. The total of
these results will be the amount of insurance for the unit.
Base price. For seed under a forage seed contract, the price per
pound (excluding any discounts or incentives that may apply) stated in
the forage seed contract. For certified forage seed not under a forage
seed contract, and for forage seed producers who are also forage seed
companies, the price contained in the actuarial documents.
[[Page 53372]]
Certification application. The form used to request certification
of forage seed by the certifying agency.
Certification standards. The standards and procedures of the
certification agency to assure genetic purity and identity of the seed
certified.
Certified forage seed. Forage seed that meets the certification
standards administered by a certifying agency at the time of harvest
and that has been grown under a certification application accepted by
the certifying agency on or before the acreage reporting date.
Certifying agency. An agency authorized under the laws of a State,
Territory, or possession, to officially certify seed, which has
standards and procedures to assure the genetic purity and identity of
the seed certified, and approves certification applications for the
certified forage seed that meets the certification standards at time of
harvest.
Established stand. An adequate stand of live plants for crop years
after the seed-to-seed year.
Fall planted. Forage seed crop planted after May 31 of the previous
crop year.
Forage seed company. A business enterprise that possesses all
licenses for marketing forage seed required by the state in which it is
domiciled or operates, and which possesses facilities with enough
storage and capacity to accept and process the insured crop timely.
Forage seed contract. A written contract executed between the
forage seed crop producer and a forage seed company containing, at a
minimum:
(a) The producer's commitment to plant, grow, and deliver the
forage seed produced from such plants to the seed company;
(b) The seed company's commitment to purchase all the production
from a specified number of acres or the specified quantity of
production stated in the contract; and
(c) Either a fixed price per unit of the forage seed or a formula
to determine the price per unit value of such seed. Any formula for
establishing value must be specified in the written contract. If the
formula uses a future price that is settled after the applicable
acreage reporting date, then the base price contained in the actuarial
documents will apply.
Forage seed crop. Small seeded legume plants grown for seed (e.g.,
alfalfa, clovers, etc.) shown in the actuarial documents.
Harvest. Removal of seed from the windrow or field.
Pound. Sixteen (16) ounces avoirdupois.
Price election. In lieu of the definition in section 1 of the Basic
Provisions, the price election will be the base price and used for the
purposes of determining premium and indemnity under the policy.
Qualified seed testing laboratory. Laboratory qualified by the
State to test the forage seed to determine whether it qualifies as
certified forage seed.
Seed-to-seed year. The calendar year in which planting occurs for
spring planted forage seed and the subsequent calendar year for fall
planted forage seed.
Spring planted. Forage seed crop planted before June 1 of the
current crop year.
2. Unit Division.
In lieu of the optional unit provisions in section 34 of the Basic
Provisions, you may select optional units by forage seed contract or
variety if permitted by the Special Provisions.
3. Insurance Guarantees, Coverage Levels, and Prices for
Determining Indemnities.
In addition to the requirements of section 3 of the Basic
Provisions:
(a) You may elect only one percentage of base price and one
coverage level for each forage seed crop grown in the county and
designated in the actuarial documents. If separate base prices are
available by forage seed crop type, the percentage election of base
price and coverage level you choose for each forage seed crop type must
be the same. For example, if you choose 100 percent of the base price
and 65 percent coverage level for a specific forage seed crop type, you
must choose 100 percent of the base price and 65 percent coverage level
for all the forage seed crop types.
(b) For each unit, separate guarantees will be determined by forage
seed crop type and practice.
4. Contract Changes.
In accordance with section 4 of the Basic Provisions, the contract
change date is June 30 preceding the cancellation date.
5. Cancellation and Termination Dates.
In accordance with section 2 of the Basic Provisions, the
cancellation and termination dates are:
California and Nevada October 31;
All Other States September 30.
6. Report of Acreage.
In addition to the requirements of section 6 of the Basic
Provisions, you must submit to us a copy of your forage seed contract
for your contracted forage seed acreage or, if not contracted, a copy
of the accepted certification application for your certified seed
acreage on or before the acreage reporting date. Failure to provide a
copy of the forage seed contract or the certification application
accepted by the certifying agency by the acreage reporting date will
result in denial of liability and no indemnity due.
7. Insured Crop.
(a) In accordance with section 8 of the Basic Provisions, the crop
insured will be all types and practices of each forage seed crop you
elect to insure, that is grown in the county and for which a premium
rate is provided by the actuarial documents:
(1) In which you have a share; and
(2) That is grown solely for harvest as:
(i) Certified forage seed; or
(ii) Seed grown under a forage seed contract executed on or before
the acreage reporting date.
(b) For contracted acreage of forage seed crops only, you will not
be considered to have a share in the insured crop unless, under the
terms of the forage seed contract, you are at risk of a financial loss
at least equal to the amount of insurance on such acreage.
(c) In addition to the crop and acreage listed as not insured in
sections 8 and 9 of the Basic Provisions, we will not insure any forage
seed crop that:
(1) Is interplanted with another crop, unless otherwise specified
in the Special Provisions;
(2) Is planted into an established grass or legume;
(3) Does not have an adequate stand at the beginning of the
insurance period;
(4) Exceeds the age limitations for the forage seed crop or type
contained in the Special Provisions; or
(5) Is utilized for any purpose during the crop year other than for
seed production.
(d) A forage seed producer who is also a forage seed company may
establish an insurable interest if the following requirements are met:
(1) The producer must comply with these Crop Provisions; and
(2) All the forage seed grown by the forage seed company is
enrolled with the appropriate certifying agency.
8. Insurance Period.
(a) Insurance attaches on acreage with an adequate stand on the
later of the date we accept your application or the applicable date as
follows, unless provided otherwise in the Special Provisions:
(1) For fall planted seed-to-seed year and established stands of
forage seed crops, coverage begins for each crop year on:
(i) October 1 for counties in Idaho, Montana, Oregon, Washington,
Wyoming and other states; and
(ii) November 1 for counties in California and Nevada.
[[Page 53373]]
(2) For spring planted seed-to-seed year stands of forage seed
crops coverage begins:
(i) May 1 for counties in California and Washington; and
(ii) May 15 for counties in Idaho, Montana, Nevada, Oregon, Wyoming
and other states.
(b) The calendar dates for the end of the insurance period for
counties in the following states are as follows unless otherwise
provided in the Special Provisions:
(1) California and Nevada October 31.
(2) Idaho, Oregon, Montana, Washington, Wyoming and all other
states September 30;
9. Causes of Loss.
(a) In accordance with the provisions of section 12 of the Basic
Provisions, insurance is provided only against the following causes of
loss that occur during the insurance period:
(1) Adverse weather conditions;
(2) Fire;
(3) Insects and plant disease, but not damage due to insufficient
or improper application of control measures;
(4) Wildlife;
(5) Earthquake;
(6) Volcanic eruption; or
(7) Failure of the irrigation water supply, if caused by a peril
specified in sections 9(a)(1) through (6) that occurs during the
insurance period.
(b) In addition to the causes of loss excluded in section 12 of the
Basic Provisions, we will not insure against damage or loss of
production due to:
(1) The crop not being timely harvested, unless such delay in
harvesting is solely and directly caused by a cause of loss specified
in sections 9(a)(1) through (6);
(2) Insufficient supply of pollinators, as determined by us, unless
lack of pollinators or pollination is solely and directly caused by a
cause of loss specified in sections 9(a)(1) through (7);
(3) Failure of the certification standard or forage seed company
contract acceptance caused by failure to follow proper isolation
requirements or inadequate weed control, as determined by us, unless
such failure is solely and directly due to a cause of loss specified in
sections 9(a)(1) through (6); or
(4) Failure of the certification standard or forage seed contract
acceptance due to failure to follow all other certification or contract
requirements, as determined by us, unless such failure is solely and
directly caused by a cause of loss specified in sections 9(a)(1)
through (6).
10. Settlement of Claim.
(a) We will determine your loss on a unit basis. In the event you
are unable to provide separate acceptable production records:
(1) For any optional unit, we will combine all optional units for
which such production records were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for each unit.
(b) In the event of loss or damage to your forage seed crop covered
by this policy, we will settle your claim by:
(1) Multiplying the insured acreage for each type and practice by
the production guarantee;
(2) Multiplying each result in section 10(b)(1) above by the price
election;
(3) Totaling the results in section 10(b)(2);
(4) Multiplying the total production to count for each type and
practice by the price election;
(5) Totaling the results of each crop type in section 10(b)(4);
(6) Subtracting the result in section 10(b)(5) from the result in
section 10(b)(3); and
(7) Multiplying the result in section 10(b)(6) by your share.
(c) The total forage seed production to count (in pounds) from all
insurable acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee per acre for acreage:
(A) That is abandoned;
(B) That is put to another use without our consent;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide production records that are
acceptable to us.
(ii) Production lost due to uninsured causes;
(iii) Unharvested production; and
(iv) Potential production on insured acreage that you intend to put
to another use or abandon, if you and we agree on the appraised amount
of production. Upon such agreement, the insurance period for that
acreage will end when you put the acreage to another use or abandon the
crop. If agreement on the appraised amount of production is not reached
and if:
(A) You do not elect to continue to care for the crop, we may give
you consent to put the acreage to another use if you agree to leave
intact, and provide sufficient care for, representative samples of the
crop in locations acceptable to us (The amount of production to count
for such acreage will be based on harvested production or appraisals
from the samples at the time harvest should have occurred. If you do
not leave the required samples intact, or fail to provide sufficient
care for the samples, our appraisals made prior to giving consent to
put the acreage to another use will be used to determine the amount of
production to count);
(B) You elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production or
our reappraisal if additional damage occurs and the crop is not
harvested; and
(2) All harvested production from the insurable acreage in
accordance with section 10(e).
(d) In addition to the provisions of section 15 of the Basic
Provisions, we may determine the amount of production of any
unharvested forage seed on the basis of our field appraisals conducted
after the normal time of harvest for the area. If the acreage is later
harvested, production records must be provided and if the harvested
production exceeds the appraised production, the claim will be
adjusted.
(e) Production not meeting the minimum quality requirements
contained in the forage seed contract or certifying agency's standards
based on tests conducted by a qualified seed testing laboratory due to
insurable causes will be reduced as follows:
(1) Divide the actual value by the base price for the insured type;
and
(2) Multiply the result (not to exceed 1.0) by the number of pounds
of such production.
Example: You have a 100 percent share and 100 acres of forage
seed in the unit, with a guarantee of 600 pounds per acre on 75
acres of an established stand of forage seed and a guarantee of 300
pounds per acre on 25 acres of a spring planted seed-to-seed year
stand. All acreage is contracted with a base price of $1.20 per
pound and you have selected 100 percent of the base price. Losses
due to insured causes of loss have reduced production and quality
and you only harvested 37,000 pounds of seed. A portion of the total
production was of poor quality; 10,000 pounds of seed failed to
achieve the contract minimum germination requirement; and the
salvaged production was valued at $0.80 per pound. Your indemnity
would be calculated as follows:
(1) 75 acres x 600 pounds = 45,000 pound guarantee
25 acres x 300 pounds = 7,500 pound guarantee;
(2) 45,000 pounds x $1.20 per pound price election = $54,000 value
guarantee
7,500 pounds x $1.20 per pound price election = $9,000 value
guarantee;
(3) $54,000 + $9,000 = $63,000 total value of the guarantee;
(4) 27,000 pounds met the contract quality requirements = 27,000
pounds production to count
27,000 pounds x $1.20 per pound = $32,400 10,000 pounds x ($0.80 per
pound/$1.20
[[Page 53374]]
per pound) = 6,667 pounds production to count
6,667 pounds x $1.20 per pound = $8,000;
(5) $32,400 + $8,000 = $40,400 total value of production to count;
(6) $63,000 - $40,400 = $22,600 loss; and
(7) $22,600 x 100% share = $22,600 indemnity payment.
11. Late and Prevented Planting.
The late and prevented planting provisions of the Basic Provisions
are not applicable for forage seed.
Signed in Washington, DC, on August 20, 2013.
Brandon Willis,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2013-20802 Filed 8-28-13; 8:45 am]
BILLING CODE 3410-08-P