[Federal Register Volume 79, Number 70 (Friday, April 11, 2014)]
[Proposed Rules]
[Pages 20110-20114]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-07155]


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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. 79, No. 70 / Friday, April 11, 2014 / 
Proposed Rules

[[Page 20110]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

[Docket No. FCIC-13-0003]
RIN 0563-AC42


Common Crop Insurance Regulations; Pear 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, Pear Crop Provisions. The 
intended effect of this action is to improve coverage available to pear 
producers, to clarify existing policy provisions to better meet the 
needs of insured producers, and to reduce vulnerability to program 
fraud, waste, and abuse. Changes are also proposed to the Optional 
Coverage for Pear Quality Adjustment Endorsement to broaden coverage 
available to producers to manage their risk more effectively. The 
proposed changes will be effective for the 2015 and succeeding crop 
years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business May 12, 2014 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-13-0003, 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: Tim Hoffmann, 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 not-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 of 2002, 
to promote the use of the Internet and other information technologies 
to provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

Unfunded Mandates Reform Act of 1995

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

[[Page 20111]]

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 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 action by FCIC directing 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, or 7 CFR part 400, 
subpart J for determinations of good farming practices, as applicable, 
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.  457.111 Pear Crop Provisions, to be 
effective for the 2015 and succeeding crop years. Several requests have 
been made for changes to improve the coverage offered by clarifying and 
strengthening existing policy provisions, adding provisions to improve 
the integrity of the program, and revising the Optional Coverage for 
Pear Quality Adjustment Endorsement.
    The proposed changes are as follows:
    1. 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 remove the definition of ``varietal 
group'' and replace it with the term type, the unit structure will be 
by type as specified in the Special Provisions.
    3. Section 2--FCIC proposes to revise section 2 to allow optional 
units by irrigated and non-irrigated practices. Some northeastern 
regions have both practices available and this change will allow 
producers to insure their non-irrigated acreage separately from their 
irrigated acreage. Optional units will also be available by type if 
specified in the Special Provisions. This change is recommended to 
offer insureds additional risk management options and to be consistent 
with other perennial crop policies.
    4. Section 3--FCIC proposes to revise section 3(a) to allow 
different coverage levels and price election percentages by type. The 
risks may not be the same for each type of pear so this gives the 
producer an opportunity to tailor the coverage to the specific risks 
associated with each type.
    FCIC proposes to redesignate section 3(c) and add subparagraphs (1) 
through (4) for determining production to count before and after the 
beginning insurance period if the producer fails to notify us of 
circumstances that may reduce their production guarantee. This language 
is proposed to clarify establishment of the production guarantee.
    5. Section 6--FCIC proposes a revision to section 6(c) to allow the 
insurance provider to consent to a different level of production than 
is specified in the Crop Provisions or Special Provisions. Currently 
the producer must get a written agreement from FCIC to obtain coverage. 
Under the proposed provisions, the Special Provisions may establish the 
production level or the insurance provider may approve a level of 
production in writing after completing an inspection. This change is 
proposed to allow the approval of the level of production to be made 
without a written agreement.
    6. Section 8--FCIC proposes a revision of section 8(a) for clarity 
of content and ease in reading. FCIC proposes to redesignate section 
8(a)(2) as 8(a)(3). FCIC proposes revising the redesignated section 
8(a)(3), which is the calendar date for the end of insurance by 
providing end of insurance dates by type. This proposed change better 
aligns the end of insurance period with the time the fruit will be 
mature and harvested. This proposed change may affect the APH 
databases' of some insureds that have acreage of summer or fall pears 
currently insured as ``all others'' making it necessary to reconfigure 
their databases. However, this change will provide consistency in 
classification and grading standards.
    7. Section 9--FCIC proposes to revise this section to clarify that 
losses due to insufficient or improper application of pest controls or 
disease controls are not covered causes of loss.
    8. Section 10--FCIC proposes to add a new section 10(a), to advise 
insureds that representative samples must be left in the event of 
damage. This provision is added to be consistent with other crop 
policies and allows insurance providers the opportunity to verify 
damage and its cause.
    9. Section 11--FCIC proposes to add an example at the end of 
section 11(b)(7) to illustrate the settlement of claim.
    FCIC proposes to revise the minimum size requirement from 180 to 
165 or smaller for California pear quality adjustment under section 
11(c)(3)(iii)(A). This change was recommended by the California Pear 
Advisory Board to align with industry standards.
    10. Section 13(b)--FCIC proposes to revise the coverage available 
under the Pear Quality Adjustment Endorsement. The current endorsement 
provides quality adjustment for damage caused by hail that does not 
grade U.S. No. 2 or better in accordance with 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. FCIC proposes revising the endorsement to include quality 
adjustment for all insured causes of loss for pears that do not grade a 
U.S. No.1 in accordance with the United States Standards for Grades of 
Summer and Fall Pears or United States Standards for Grades of Winter 
Pears. The United States Standards for Grades of Pears for Processing 
have been removed from the endorsement because processing pears are 
covered in the base policy. The proposed Optional Coverage for Pear

[[Page 20112]]

Quality Adjustment Endorsement has also changed the grading standard 
from a U.S. No. 2 to a U.S. No. 1. The change to insure a higher 
standard should prove to be more valuable to producers. This change was 
made at the request of producers who want to manage their risk more 
effectively. Premium rating for the changes in this endorsement will 
also be reviewed to establish appropriate premium rates to maintain 
actuarial soundness.
    FCIC proposes removing references pertaining to all cull production 
as found at the end of provision 13(b)(2), 13(c), and 13(e). Currently, 
pears that are knocked down to the ground by wind, or that are frozen 
and cannot be packed or marketed as fresh pears are considered culls. 
The proposed quality endorsement will include all insured causes of 
loss, therefore, damage caused by wind or freeze will be covered. Under 
the proposed quality endorsement, pears grading a U.S. No. 1 will be 
production to count at the full value. FCIC proposes adding a new 
section 13(b)(3) stating any production sold as U.S. No. 1 or better 
will be included as production to count under this option.
    This change is proposed at the request of producers and industry 
personnel as the value of lower grade pears has diminished.
    FCIC proposes adding a new section 13(d), stating that production 
to count under the endorsement will not apply in determining the 
producer's actual production history (APH). The APH will be based on 
all harvested and appraised marketable production from insurable 
acreage. This change is proposed in order to maintain consistency in 
APH reporting, as coverage is optional for the pear quality endorsement 
and can be cancelled in writing on or before the cancellation date; 
therefore, the APH can vary significantly from year to year.
    FCIC proposes to include an example at the end of the endorsement 
to demonstrate how the quality adjustment would be administered.
    Other minor editorial 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, Pear, 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. Amend Sec.  457.111 as follows:
0
a. In the introductory text by removing ``2011'' and adding ``2015'' in 
its place;
0
b. In section 1 by removing the definition of ``varietal group'';
0
c. By revising section 2:
0
d. In section 3 by:
0
i. Removing the phrase ``(Insurance Guarantees, Coverage Levels, and 
Prices for Determining Indemnities)'' in the introductory text;
0
ii. Revising paragraph (a);
0
iii. Revising paragraph (b) introductory text by: removing the phrase 
``(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities)''; and removing ``varietal group'' and adding the term 
``type'' in its place;
0
iv. Revising paragraph 3(b)(4)(iii);
0
v. Redesignating paragraph (c) as (d); and
0
vi. Adding new paragraph (c);
0
e. In section 4 by removing the phrase ``(Contract Changes)'' in the 
introductory text;
0
f. In section 5 by removing the phrase ``(Life of Policy, Cancellation, 
and Termination)'' in the introductory text;
0
g. Amend section 6 by:
0
i. Removing the phrase ``(Insured Crop)'' in the introductory text;
0
ii. Revising paragraph (c);
0
h. In section 7 by removing the phrase ``(Insurable Acreage)'' in the 
introductory text;
0
i. Amend section 8 by:
0
i. Revising paragraphs (a) introductory text and (a)(1);
0
ii. Redesignating paragraph (a)(2) as paragraph (a)(3) and revising 
newly redesignated paragraph (a)(3);
0
iii. Redesignating paragraph (c) as paragraph (a)(2) and revising newly 
redesignated paragraph (a)(2);
0
iv. Redesignating paragraph (d) as paragraph (a)(4); and
0
v. Removing the phrase ``(Insurance Period)'' in paragraph (b) 
introductory text;
0
j. Amend section 9 by:
0
i. Removing the phrase ``(Cause of Loss)'' in paragraph (a) 
introductory text;
0
ii. Adding new paragraphs (a)(6) and (7);
0
iii. Removing the phrase ``(Cause of Loss)'' in paragraph (b) 
introductory text;
0
iv. Removing paragraphs (b)(1) and (b)(1)(i) and (ii); and
0
v. Redesignating paragraphs (b)(2) and (3) as (b)(1) and (2) 
respectively;
0
k. Amend section 10 by:
0
i. Designating the undesignated paragraph at the beginning of the 
section as paragraph (b) and removing the phrase ``(Duties in the Event 
of Damage or Loss)'' in newly redesignated paragraph (b);
0
ii. Redesignating paragraphs (a), (b), and (c) as paragraphs (b)(1), 
(2), and (3) respectively; and
0
iii. Adding a new paragraph (a);
0
l. Amend section 11 by:
0
i. Removing the term ``varietal group'' in paragraph (b)(1) and 
replacing it with the term ``type'';
0
ii. Revising paragraph (b)(2);
0
iii Revising paragraph (b)(4);
0
iv. Removing the word ``this'' in paragraph (b)(6) and adding the word 
``the'' in its place;
0
v. Revising paragraph (b)(7);
0
vi. In paragraph (c)(3)(iii)(A) by removing the number ``180'' and 
adding the number ``165'' in its place; and
0
vii. Removing the phrase ``varietal group'' in paragraph (c)(3)(iii)(B) 
and adding in its place the term ``type'';
0
m. By revising section 13.
    The revisions and additions read as follows:


Sec.  457.111  Pear crop insurance provisions.

* * * * *

2. Unit Division

    In addition to the provisions in section 34 of the Basic 
Provisions, optional units may be established if each optional unit is:
    (a) Located on non-contiguous land; or
    (b) A type specified in the Special Provisions.
    3. * * *
    (a) You may select different coverage levels and percent of price 
elections for each type in the county as specified in the Special 
Provisions. For example, if you choose 75 percent coverage level and 
100 percent of the maximum price election for one type, you may choose 
65 percent coverage level and 75 percent of the maximum price election 
for another type. If you elect the Catastrophic Risk Protection (CAT) 
level of insurance for any pear type, the CAT level of coverage will be 
applicable to all insured pear acreage for all types in the county.
    (b) * * *
    (4) * * *
    (iii) Any other information that we request in order to establish 
your approved yield.
    (c) We will reduce the yield used to establish your production 
guarantee, as necessary, based on our estimate of the

[[Page 20113]]

effect of any situation listed in sections 3(b)(1) through (b)(4). If 
the situation occurred:
    (1) Before the beginning of the insurance period, the yield used to 
establish your production guarantee will be reduced for the current 
crop year regardless of whether the situation was due to an insured or 
uninsured cause of loss (If you fail to notify us of any circumstance 
that may reduce your yields from previous levels, we will reduce the 
yield used to establish your production guarantee at any time we become 
aware of the circumstance);
    (2) After the beginning of the insurance period and you notify us 
by the production reporting date, the yield used to establish your 
production guarantee will be reduced for the current crop year only if 
the potential reduction in the yield used to establish your production 
guarantee is due to an uninsured cause of loss; or
    (3) After the beginning of the insurance period and you fail to 
notify us by the production reporting date, production lost due to 
uninsured causes equal to the amount of the reduction in yield used to 
establish your production guarantee will be applied in determining any 
indemnity (see section 11(c)(1)(ii)). We will reduce the yield used to 
establish your production guarantee for the subsequent crop year.
* * * * *
    6. * * *
    (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 most 
recent crop years unless the Special Provisions establishes a lower 
production level or we inspect such acreage and give our approval in 
writing; and
* * * * *
    8. * * *
    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) For the year of application, coverage begins:
    (i) In California, on February 1, except that 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, except that, 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) 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 an existing policy 
to a different insurance provider for a subsequent crop year will not 
be considered a break in continuous coverage.
    (3) The calendar date for the end of the insurance period for each 
crop year is:
    (i) September 15 for all types of summer or fall pears;
    (ii) October 15 for all types of winter pears; or
    (iii) As otherwise provided for specific types in the Special 
Provisions.
* * * * *
    9. * * *
    (a) * * *
    (6) Insects, but not damage due to insufficient or improper 
application of pest control measures; or
    (7) Plant disease, but not damage due to insufficient or improper 
application of disease control measures.
* * * * *
    10. * * *
    (a) In accordance with the requirements of section 14 of the Basic 
Provisions, you must leave representative samples in accordance with 
our procedures.
* * * * *
    11. * * *
    (b) * * *
    (2) Multiplying the results of section 11(b)(1) by your price 
election for each type, if applicable;
* * * * *
    (4) Multiplying the total production to be counted of each type, if 
applicable, by your price election;
* * * * *
    (7) Multiplying the result of section 11(b)(6) by your share.

    Basic Coverage Example: You have a 100 percent share of a 20-
acre pear orchard. You elect 100 percent of the $500/ton price 
election. You have a production guarantee of 15 tons/acre; you are 
only able to produce 10 tons of pears per acre. Your indemnity will 
be calculated as follows:
    (1) 20 acres x 15 tons/acre = 300-ton production guarantee;
    (2) $500/ton (100 percent of the price election) x 300-ton 
production guarantee;
    (3) = $150,000 value of production guarantee;
    (4) 20 acres x 10 tons = 200-ton production to count;
    (5) $500/ton (100 percent of the price election) x 200-ton 
production to count = $100,000 value of production to count;
    (6) $150,000 value of production guarantee - $100,000 value of 
production to count = $50,000 loss; and
    (7) $50,000 x 100 percent share = $50,000 indemnity payment.


[End of Example]
* * * * *

13. Pear Quality Adjustment Endorsement

    In the event of a conflict between the Pear Crop Insurance 
Provisions and this option, this option will control.
    (a) This endorsement applies to any crop year, provided:
    (1) The insured pears are located in a State designated for such 
coverage on the actuarial documents and for which there is designated a 
premium rate for this endorsement;
    (2) You have not elected to insure your pears under the 
Catastrophic Risk Protection (CAT) Endorsement;
    (3) You elect it on your application or other form approved by us, 
and do 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 agree to pay 
the additional premium designated in the actuarial documents for this 
optional coverage; and
    (4) You or we do 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 of this endorsement by you.
    (b) If the fresh pear production is damaged by an insured cause of 
loss, and if eleven percent (11%) or more of the harvested and 
appraised production does not grade at least U. S. No. 1 in accordance 
with applicable United States Standards for Grades of Summer and Fall 
Pears or the United States Standards for Grades of Winter Pears as 
applicable, the amount of production to count will be reduced as 
follows:
    (1) By two percent (2%) for each full one percentage point (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.
    (3) Notwithstanding sections 13(b)(1) and (2), if you sell any of 
your fresh pear production as U. S. No. 1 or better, all such sold 
production will be included as production to count under this option.

[[Page 20114]]

    (c) Marketable production that grades less than U.S. No. 1 due to 
uninsurable causes not covered by this endorsement will not be reduced.
    (d) Any adjustments that reduce your production to count under this 
option will not be applicable when determining production to count for 
Actual Production History purposes.

    Optional Coverage for Pear Quality Adjustment Example: You have 
a 100 percent share of a 20-acre pear orchard. You have a production 
guarantee of 15 tons/acre. You elect 100 percent of the $500/ton 
price election. You are only able to produce 10 tons/acre and only 
7.5 tons/acre grade a U. S. No. 1 or better. Assuming you do not 
sell any of your fresh pear production as U. S. No. 1 or better, 
your indemnity would be calculated as follows:
    (A) 20 acres x 15 tons per acre = 300 tons production guarantee;
    (B) 300 tons production guarantee x $500/ton = $150,000 value of 
production guarantee;
    (C) The value of fresh pear production to count is determined as 
follows:
    (i) 200 tons harvested production minus 150 tons that graded 
U.S. No. 1 or better = 50 tons failing to make grade;
    (ii) 50 tons failing grade/200 tons of production = 25 percent 
of production failing to grade U.S. No. 1 or better;
    (iii) In accordance with section 13(b)(1): 25 percent minus 10 
percent = 15 percent in excess of 10 percent allowance failing to 
make grade;
    (iv) 15 percent x 2 = 30 percent total quality adjustment for 
pears failing to grade U.S. No. 1;
    (v) 200 tons production x 30 percent quality adjustment = 60 
tons of pears failing to make grade;
    (vi) 200 tons production minus 60 tons failing to make grade = 
140 tons of quality adjusted fresh pear production to count;
    (vii) 140 tons of quality adjusted fresh pear production to 
count x $500/ton price election = $70,000 value of fresh pear 
production to count;
    (D) $150,000 value of production guarantee minus $70,000 value 
of fresh pear production to count = $80,000 value of loss;
    (E) $80,000 value of loss x 100 percent share = $80,000 
indemnity payment.


[End of Example]

    Signed in Washington, DC, on March 25, 2014.
Brandon C. Willis,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2014-07155 Filed 4-10-14; 8:45 am]
BILLING CODE 3410-08-P