[Federal Register Volume 61, Number 155 (Friday, August 9, 1996)]
[Proposed Rules]
[Pages 41531-41535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20193]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
7 CFR Part 457
Common Crop Insurance Regulations; Almond Crop Insurance
Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes
specific crop provisions for the insurance of almonds. The provisions
will be used in conjunction with the Common Crop Insurance Policy Basic
Provisions, which contain standard terms and conditions common to most
crops. The intended effect of this action is to provide policy changes
to better meet the needs of the insured and to combine the current
Almond Endorsement with the Common Crop Insurance Policy for ease of
use and consistency of terms.
DATES: Written comments, data, and opinions on this proposed rule will
be accepted until close of business September 9, 1996, and will be
considered when the rule is to be made final. The comment period for
information collections under the Paperwork Reduction Act of 1995
continues through October 7, 1996.
ADDRESSES: Interested persons are invited to submit written comments to
the Chief, Product Development Branch, Federal Crop Insurance
Corporation, United States Department of Agriculture, 9435 Holmes Road,
Kansas City, MO 64131. Written comments will be available for public
inspection and copying in room 0324, South Building, USDA, 14th and
Independence Avenue, S.W., Washington, D.C., 8:15 a.m.-4:45 p.m., EDT
Monday through Friday. For addresses see the Paperwork Reduction Act
paragraph under SUPPLEMENTARY INFORMATION.
FOR FURTHER INFORMATION CONTACT: Arden Routh, Program Analyst, Research
and Development Division, Product Development Branch, FCIC, at the
Kansas City, MO address listed above. Telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order No. 12866 and Departmental Regulation 1512-1
This action has been reviewed under United States Department of
Agriculture (USDA) procedures established by Executive Order No. 12866
and Departmental Regulation 1512-1. This action constitutes a review as
to the need, currency, clarity, and effectiveness of these regulations
under those procedures. The sunset review date established for these
regulations is April 30, 2001.
This rule has been determined to be not significant for the
purposes of Executive Order No. 12866 and, therefore, has not been
reviewed by the Office of Management and Budget (OMB).
Paperwork Reduction Act of 1995
The information collection requirements contained in the Almond
Crop Insurance Provisions have been submitted to OMB for approval under
section 3507(j) of the Paperwork Reduction Act of 1995. This proposed
rule will amend the information collection requirements under OMB
control number 0563-0003 through September 30, 1998. The Federal Crop
Insurance Corporation will be amending the information collection to
adjust the estimated reporting hours and revising the usage of FCI-12-
P, Pre-Acceptance Perennial Crop Inspection Report as it applies to the
Almond Crop Insurance Provisions.
Section 7 of the 1998 Almond Crop Provisions adds interplanting as
an insurable farming practice as long as it is interplanted with
another perennial crop. This practice was not insurable under the
previous Almond Endorsement or and the General Crop Insurance Policy to
which it attached. Consequently, interplanting information will need to
be collected using the FCI-12-P Pre-Acceptance Perennial Crop
Inspection Report form for approximately 3 percent (3%) of the almond
insureds who interplant their almond crop. Standard interplanting
language has been added to most perennial crops. Interplanting is an
insurable practice as long as it does not adversely affect the insured
crop. This is a benefit to agriculture because insurance is now
available for more perennial crop producers and, as a result, less
acreage will need to be placed into the noninsured crop disaster
assistance program (NAP).
Revised reporting estimates and requirements for usage of OMB
control number 0563-0003 will be submitted to OMB for approval under
the provisions of 44 U.S.C., chapter 35. Public comments are due by
October 7, 1996.
The title of this information collection is ``Catastrophic Risk
Protection Plan and Related Requirements including, Common Crop
Insurance Regulations; Almond Crop Insurance Provisions.'' The
information to be collected includes a crop insurance acreage report,
insurance application, and a continuous contract. Information collected
from the acreage report and application is electronically submitted to
FCIC by the reinsured companies. Potential respondents to this
information collection are producers of almonds that are eligible for
Federal crop insurance.
The information requested is necessary for the reinsured companies
and FCIC to provide insurance and reinsurance, determine eligibility,
determine the correct parties to the agreement or contract, determine
and collect premiums or other monetary amounts, and pay benefits.
[[Page 41532]]
All information is reported annually. The reporting burden for this
collection of information is estimated to average 25 minutes per
response for each of the 3.6 responses from approximately 1,755,015
respondents. The total annual burden on the public for this information
collection is 2,669,970.
FCIC is requesting comments for the following: (a) Whether the
proposed collection of information is necessary for the proper
performance of the functions of the agency, including whether the
information shall have practical utility; (b) the accuracy of the
agency's estimate of the burden of the proposed collection of
information; (c) ways to enhance the quality, utility, and clarity of
the information to be collected; and (d) ways to minimize the burden of
the collection of information on respondents, including through the use
of automated collection techniques or other forms of information
gathering technology.
Comments regarding paperwork reduction should be submitted to the
Desk Officer for Agriculture, Office of Information and Regulatory
Affairs, Office of Management and Budget, Washington, D.C. 20503 and to
Bonnie Hart, Advisory and Corporate Operations Staff, Regulatory Review
Group, Farm Service Agency, P.O. Box 2415, Ag Box 0572, U.S. Department
of Agriculture, Washington, D.C. 20013-2415. Copies of the information
collection may be obtained from Bonnie Hart at the above address,
telephone (202) 690-2857.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandate 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. Under section 202 of the UMRA, FCIC
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, or tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
1 year. When such a statement is needed for a rule, section 205 of the
UMRA generally requires FCIC to identify and consider a reasonable
number of regulatory alternatives and adopt the least costly, more
cost-effective or least burdensome alternative that achieves the
objectives of the rule.
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. Thus, this rule is not subject to
the requirements of sections 202 and 205 of the UMRA.
Executive Order No. 12612
It has been determined under section 6(a) of Executive Order No.
12612, Federalism, that this rule does not have sufficient federalism
implication to warrant the preparation of a Federalism Assessment. The
provisions contained in this rule will not have a substantial direct
effect on States or their political subdivisions, or on the
distribution of power and responsibilities among the various levels of
government.
Regulatory Flexibility Act
This regulation will not have a significant impact on a substantial
number of small entities. Under the current regulations, a producer is
required to complete an application and acreage report. If the crop is
damaged or destroyed, the insured is required to give notice of loss
and provide the necessary information to complete a claim for
indemnity. The insured must certify to the number of acres and
production on an annual basis or receive a transitional yield. The
producer must maintain the records to support the certified information
for at least 3 years. This regulation does not alter those
requirements. Therefore, the amount of work required of the insurance
companies and FSA offices delivering and servicing these policies will
not increase significantly from the amount of work currently required.
This rule does not have any greater or lesser impact on the producer.
Therefore, this action is determined to be exempt from the provisions
of the Regulatory Flexibility Act (5 U.S.C. 605), and no Regulatory
Flexibility Analysis was prepared.
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order No. 12372
This program is not subject to the provisions of Executive Order
No. 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 No. 12778
The Office of the General Counsel has determined that these
regulations meet the applicable standards provided in subsections 2(a)
and 2(b)(2) of Executive Order No. 12778. The provisions of this rule
will not have a retroactive effect prior to the effective date. The
provisions of this rule will preempt State and local laws to the extent
such State and local laws are inconsistent herewith. The administrative
appeal provisions in 7 CFR parts 11 and 780 must be exhausted before
action for judicial review 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.
National Performance Review
This regulatory action is being taken as part of the National
Performance Review Initiative to eliminate unnecessary or duplicative
regulations and improve those that remain in force.
Background
FCIC proposes to add to the Common Crop Insurance Regulations (7
CFR part 457), a new section to be known as 7 CFR 457.123, Almond Crop
Insurance Provisions. The provisions will be effective for the 1998 and
succeeding crop years. The proposed provisions will supersede and
replace those found at 7 CFR 401.110 (Almond Endorsement). By separate
rule, FCIC will revise Sec. 401.110 to restrict its effect through the
1997 crop year and later remove that section.
This rule makes minor editorial and format changes to improve the
Almond Endorsement's compatibility with the Common Crop Insurance
Policy. In addition, FCIC is proposing substantive changes in the
provisions for insuring almonds as follows:
1. Section 1--Add the definitions for the terms ``days,'' ``good
farming practices,'' ``insurable rejects,'' ``interplanted,''
``irrigated practice,'' ``production guarantee (per acre),'' ``rejects
(inedible meats),'' ``set out,'' and ``written agreement'' for the
purpose of clarification.
2. Section 2--Revise the unit language for clarity. There is no
change in the unit structure.
3. Section 3(a)--Specify that the insured may select only one price
election for all the almonds in the county insured under the policy,
unless the Special Provisions provide different price elections by
type, in which case the insured may select one price election for each
almond type designated in the Special Provisions. The price election
the insured selects for each almond type must have the same percentage
relationship to the
[[Page 41533]]
maximum price offered. This helps protect against adverse selection and
simplifies administration of the program.
4. Section 3(b)--Specify that the insured must report damage,
removal of trees, and any change in practice that may reduce yields.
The insured must also report, 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 and type, if
applicable, of any interplanted crop, the planting pattern, and any
other information needed to establish the approved yield. The acreage
or the yield used to establish your production guarantee, or both, may
be adjusted by us when the insurance provider become aware of the
situation if the insured has not previously reported it. Interplanting
is not provided under the current Almond Endorsement. Section 7 of
these crop provisions allows interplanting almonds with another
perennial crop. The change in policy language is based on FCIC's desire
to insure the maximum amount of acreage.
5. Section 7--Add interplanting as an insurable farming practice if
the almond crop is interplanted with another perennial in order to make
insurance available on more acreage and reduce reliance on the
noninsured crop disaster assistance program (NAP) for protection for
crop losses.
6. Section 8(a)--Clarify that if an application is accepted by us
after December 31, insurance will attach on the 10th day after the
application is received in the insurance provider's local office.
However, full premium will be due for the partial year.
7. Section 8(b)--Add provisions to clarify the procedure for
insuring acreage when an insurable share is acquired or relinquished on
or before the acreage reporting date.
8. Section 9(a)--Remove direct Mediterranean Fruit Fly damage as a
cause of loss because insect infestations are no longer covered.
9. Section 9(b)(1)--Clarify that disease and insect infestations
are excluded causes of loss unless adverse weather prevents the proper
application of control measures, causes control measures to be
ineffective when properly applied, or causes disease or insect
infestation for which no effective control mechanism is available.
10. Section 10--Add provisions that require an insured to notify
the insurer of damage prior to harvest so that an inspection can be
made in order to permit a timely appraisal. The provisions also
prohibit the insured from selling or otherwise disposing of any damaged
production until consent to do so is provided by the insurer.
11. Section 12--Add provisions for providing insurance coverage by
written agreement. FCIC has a long standing policy of permitting
modification of certain provisions of insurance contracts by written
agreement. Written agreements are not available in the current Almond
Endorsement. The new section will cover application for, and duration
of, written agreements.
List of Subjects in 7 CFR Part 457
Crop insurance, Almonds.
Proposed Rule
Pursuant to the authority contained in the Federal Crop Insurance
Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance
Corporation hereby proposes to amend the Common Crop Insurance
Regulations (7 CFR part 457), effective for the 1998 and succeeding
crop years, as follows:
PART 457--[AMENDED]
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(1), 1506(p).
2. 7 CFR part 457 is amended by adding a new Sec. 457.123 to read
as follows:
Sec. 457.123 Almond crop insurance provisions.
The Almond Crop Insurance Provisions for the 1998 and succeeding
crop years are as follows:
UNITED STATES DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Almond Crop Provisions
If a conflict exists among the Basic Provisions (Sec. 457.8),
these crop provisions, and the Special Provisions, the Special
Provisions will control these crop provisions and the Basic
Provisions, and these crop provisions will control the Basic
Provisions.
1. Definitions
Days--Calendar days.
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, and are those generally recognized by the Cooperative
Extension Service as compatible with agronomic and weather
conditions in the county.
Harvest--The removal of mature almonds from the orchard.
Insurable rejects--Inedible meats that due to an insurable cause
of loss will not be considered as production to count.
Interplanted--Acreage on which two or more crops are planted in
any form of alternating or mixed pattern.
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.
Non-contiguous land--Any two or more tracks of land whose
boundaries do not touch at any point, except that land separated
only by a public or private right-of-way, waterway or an irrigation
canal will be considered as contiguous.
Production guarantee (per acre)--The quantity of almonds (total
meat pounds) determined by multiplying the approved yield per acre
by the coverage level percentage you elect.
Rejects (inedible meats)--As defined by the USDA Agricultural
Marketing Service for Handling of Almonds Grown in California.
Set out--Transplanting the tree into the orchard.
Total meat pounds--The total pounds of almond meats (whole,
chipped and broken, and in-shell meats) and rejects, excluding
insurable rejects. Unshelled almonds will be converted to meat
pounds in accordance with FCIC approved procedures.
Written agreement--A written document that alters designated
terms of a policy in accordance with section 12.
2. Unit Division
(a) Unless limited by the Special Provisions, a unit as defined
in section l (Definitions) of the Basic Provisions (Sec. 457.8), may
be divided into optional units if, for each optional unit, you meet
all the conditions of this section or if a written agreement to such
division exists.
(b) Basic units may not be divided into optional units on any
basis including, but not limited to, production practice, type, and
variety, other than as described in this section.
(c) If you do not comply fully with these provisions, 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 to be inadvertent, and the optional
units are combined, that portion of the premium paid for the purpose
of electing optional units will be refunded to you pro rata for the
units combined.
(d) All optional units must be identified on the acreage report
for each crop year.
(e) The following requirements must be met for each optional
unit:
(1) You must have records, which can be independently verified,
of acreage and production for each optional unit for at least the
last crop year used to determine your production guarantee;
(2) You must 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 unit must be kept separate until loss adjustment is
completed by us; and
[[Page 41534]]
(3) Each optional unit must be 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 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
(100%) of the maximum price election for a specific type, you must
also choose 100 percent (100%) 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, or change in practices 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; 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
interplanted perennial crop, removal of trees, damage, or change in
practices on the yield potential of the insured crop. If you fail to
notify us of any circumstances that may reduce 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 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 the almonds 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 harvest as almonds;
(c) That are irrigated;
(d) That are grown in an orchard that, if inspected, is
considered acceptable to us; and
(e) That are grown on trees that have reached at least the
seventh growing season after set out, unless we agree in writing 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, almonds interplanted with
another perennial crop are insurable unless we inspect the acreage
and determine it does not meet insurability requirements.
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 first crop year, if the application is accepted by us after
December 31, insurance will attach on the 10th day after the
application is received in our local agent's office.
(2) The calendar date for the end of the insurance period for
each crop year is November 30.
(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 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 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;
and
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date.
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 occurs 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) Wildlife;
(4) Earthquake;
(5) Volcanic eruption; or
(6) Failure of the irrigation water supply, if due to a cause of
loss covered by this policy and occurring within 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 almonds 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), 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 subsection, 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 production records:
(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 by:
(1) Multiplying the insured acreage by its respective production
guarantee;
(2) Multiplying each result in paragraph (1) by the respective
price election for the type;
(3) Totaling the results in paragraph (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 paragraph (4);
(6) Subtracting the total in paragraph (5) from the total in
paragraph (3); and
(7) Multiplying the result of paragraph (6) by your share.
(c) The total production to count (in meat pounds) from all
insurable acreage on the unit will include:
(l) 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; or
(C) For which you fail to provide records of production 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
[[Page 41535]]
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) The total meat pounds harvested from the insurable acreage.
12. Written Agreements
Designated terms of this policy may be altered by written
agreement. The following conditions will apply:
(a) You must apply in writing for each written agreement no
later than the sales closing date, except as provided in subsection
12(e).
(b) The application for written agreement must contain all terms
of the contract between you and us and the insured 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 1 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.
(e) An application for written agreement submitted after the
sales closing date may be approved if, after a physical inspection
of the acreage, it is determined that no loss has occurred and the
crop is insurable in accordance with the policy provisions.
Signed in Washington D.C., on August 1, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-20193 Filed 8-8-96; 8:45 am]
BILLING CODE 3410-FA-P