Common Crop Insurance Regulations; Coarse Grains Crop Insurance Provisions

DEPARTMENT OF AGRICULTURE

7 CFR Part 457

Common Crop Insurance Regulations; Coarse Grains Crop Insurance

Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) hereby adopts

regulations for specific crop provisions to insure coarse grains (corn,

grain sorghum, and soybeans). These provisions will supplement the

Common Crop Insurance Policy which contains standard terms and

conditions common to most crops. This rule consolidates the provisions

for insuring coarse grains into one policy and provides insurance for

corn intended to be harvested as silage and corn intended to be

harvested as grain without the previously required corn silage option.

The intended effect of this rule is to move specific crop provisions

for insuring coarse grains from the General Crop Insurance Policy

(Sec. 401.8) to the Common Crop Insurance Policy for ease of use by the

public and conformance among policy terms.

EFFECTIVE DATE: October 27, 1994.

FOR FURTHER INFORMATION CONTACT:

Mari L. Dunleavy, Regulatory and Procedural Development, Federal Crop

Insurance Corporation, U.S. Department of Agriculture, Washington, DC

20250, telephone (202) 254-8314.

SUPPLEMENTARY INFORMATION: This action has been reviewed under USDA

procedures established by Executive Order 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

March 1, 1999.

This rule has been determined to be ``not significant'' for

purposes of Executive Order 12866 and therefore, has not been reviewed

by the Office of Management and Budget (OMB).

In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C.

3501 et seq.), the information collection or record-keeping

requirements included in this rule can be found in 7 CFR part 400,

subpart H.

It has been determined under section 6(a) of Executive Order 12612,

Federalism, that this rule does not have sufficient federalism

implications to warrant the preparation of a Federalism Assessment. The

policies and procedures contained in this rule will not have

substantial direct effects on states of their political subdivisions,

or on the distribution of power and responsibilities among various

levels of government.

This action will not have a significant impact on a substantial

number of small entities. The amount of work required of the insurance

companies delivering these policies will not increase from the amount

of work required to deliver previous policies. The combination of a

number of previously independent policies into one policy should ease

program administration and increase efficiency. Therefore, this action

is determined to be exempt from the provisions of the Regulatory

Flexibility Act and no Regulatory Flexibility Analysis was prepared.

This program is listed in the Catalog of Federal Domestic

Assistance under No. 10.450.

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.

The Office of General Counsel has determined that these regulations

meet the applicable standards provided in subsections 2(a) and 2(b)(2)

of Executive Order 12788. 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 located at

7 CFR part 400, subpart J must be exhausted before judicial action may

be brought.

This action is not expected to have any significant impact on the

quality of the human environment, health, and safety. Therefore,

neither an Environmental Assessment nor an Environmental Impact

Statement is needed.

This rule will provide one policy form for insuring corn, grain

sorghum, and soybeans and provide insurance for corn intended to be

harvested as silage and corn intended to be harvested as grain without

the previously required corn silage option. Using one policy for these

three crops will: (1) Substantially reduce paperwork by issuing one

policy form rather than the three separate policies previously used;

(2) reduce the time involved to amend or revise the provisions by

eliminating repetitious review processes; and (3) continue to allow

insured the flexibility to elect any of the three coarse grain crops

they wish to insure.

By separate rule, FCIC will revise and later remove the corn, grain

sorghum and soybean endorsements contained in 7 CFR 401.111, 7 CFR

401.113 and 7 CFR 401.117 and the Corn Silage Option contained in 7 CFR

401.112. These regulations will be amended to restrict the crop years

of application to those prior to the crop year for which this rule will

be effective.

On Tuesday, May 31, 1994, FCIC published a notice of proposed

rulemaking in the Federal Register at 59 FR 28016 proposing to revise

the Common Crop Insurance Regulations by adding new provisions for

corn, grain sorghum, and soybean crop insurance.

Following publication of the proposed rule, the public was afforded

30 days to submit written comments, data, and opinions. Comments were

received from the crop insurance industry. The comments received and

FCIC responses are as follows:

Comment: Two comments suggested that the crop provisions should not

be implemented for the 1995 crop year because:

(1) Crop insurance reform will require many policy changes.

Implementation of these crop provisions should be tabled until reform

decisions are reached because impacts on policy terms are not yet

clear. Delaying common policy implementation until it can be

implemented in an orderly fashion should be beneficial to everyone

concerned; and

(2) The Common Crop Insurance Policy should be thoroughly reviewed

and revised as needed before any additional crop provisions are

implemented under it.

Response: Program changes necessary to comply with crop insurance

reform will have the same effects on either the existing policies or

these Coarse Grains Crop Provisions. Any necessary changes can more

easily be made to the Coarse Grains Crop Provisions as to the existing

policies since only one policy will need to be amended. FCIC has

recently completed a review of the Common Crop Insurance Policy Basic

Provisions (Sec. 457.8). Any necessary changes required to be made to

the Basic Provisions as a result of this review or as a result of

reform will be required whether or not the Coarse Grains Crop

Provisions have been implemented. Therefore, FCIC does not find it

necessary to delay implementation for either of the reasons stated in

the comments.

Comment: Two comments were received regarding the proposed

definition of ``Planted acreage.'' This definition requires the crop to

be planted in rows far enough apart to permit mechanical cultivation

unless otherwise provided by the Special Provisions, or allowed by

written agreement.

(1) One comment stated that drilling soybeans is a widespread

practice and that the definition should include drilling as an

insurable planting practice for soybeans. The comment also suggested

that the Special Provisions could contain restrictions for any counties

where drilled soybeans are uninsurable unless a written agreement is

requested.

(2) One comment assumed that the Special Provisions will continue

to allow for drilling the crops in the same areas as in the past.

Response: FCIC acknowledges that planting of soybeans and grain

sorghum with a grain drill rather than a row planter is a common

practice in some areas. The definition has been modified by removing

the requirement to plant soybeans and grain sorghum in rows far enough

apart to permit mechanical cultivation. Since the crop provisions allow

insurance for drilled soybeans and grain sorghum, it will not be

necessary for the Special Provisions to specifically allow such

practice. If necessary, the Special Provisions which are provided to

the insured could restrict the insurability of this planting method in

a particular area.

Comment: One comment questioned requirements contained in the

definition of ``Practical to replant.'' This definition indicated that

the replanted acreage must have the potential to produce at least

ninety percent (90%) of the production guarantee. Late planting

provisions provide production guarantees much lower than the ninety

percent (90%) potential requirement contained in the definition even

though the late planted and replanted crop may be planted at the same

time. The comment recommended removing the production potential

requirement from the definition of ``Practical to replant.''

Response: FCIC agrees that the production potential required by the

definition of ``Practical to replant'' and the production guarantee for

late planted acreage may be inconsistent depending on the time of

planting. Acreage initially planted twenty-five (25) days after the

final planting date would have a production guarantee equal to sixty

(60%) of the guarantee for timely planted acreage, while the definition

of ``Practical to replant'' would require acreage replanted at the same

time to have a production potential equal to ninety percent (90%) of

the production guarantee. However, expected yield does have an effect

on whether it is practical to replant. The ninety percent (90%)

production potential requirement has been removed from the definition

of ``Practical to replant''. However, the expected yield must be

sufficient to cover production costs and must be at a level that

growers in the area would normally care for and harvest.

Comment: One comment recommended changing the term ``approved

yield'' to ``approved APH yield'' in the definition of ``Production

guarantee'' to correspond with terminology in underwriting procedure.

Response: Underwriting procedure contains several methods which may

be used to determine approved yields. These include the use of yields

which may not represent actual production history (APH). Using the term

``APH'' could be misleading to readers not familiar with administrative

procedures, and, therefore will not be used in the crop insurance

policy.

Comment: Three comments disagreed with the definition of ``Written

agreement.'' This definition required written agreements to be

requested at least 15 days prior to the sales closing date.

(1) One comment recommended keeping the current deadlines for

written agreements as specified in procedures. These procedures require

that requests be made not later than 15 days after the acreage

reporting date for most types of written agreements. Setting a deadline

15 days prior to the sales closing date will either force insureds to

submit requests for written agreements they may not need, or result in

uninsurable acreage if requests are not made for all possible

situations. Unnecessary requests will increase paperwork for the

insured, agent, FCIC Regional Service Office and company. The comment

also recommended deleting the last sentence of the definition, which

required written agreements to contain all variable terms including,

but not limited to, crop variety, guarantee, premium and price

election. The comment did not believe it was necessary to include this

information on every written agreement because many written agreements

do not alter these items.

(2) One comment recommended keeping the deadline of 15 days after

the acreage reporting date because there are many instances when it is

not known that a written agreement is necessary until the acreage is

reported. The comment stated that the change would be an unreasonable

requirement and would create difficulties since the sales closing dates

will be 30 days earlier than in prior years.

(3) One comment stated that it is hard to understand why the

written agreement deadline is 15 days prior to the time a producer has

to purchase coverage and that a more appropriate date should be

established. The comment also stated that the sales closing dates are

not listed in the proposed crop provisions. If these are to be the same

dates as the cancellation and termination dates, the policy should so

indicate.

Response: The proposed definition was intended to require that

requests for written agreements be made far enough ahead of the sales

closing date to allow the insurer to make the offer, and the insured to

accept the offer, by the sales closing date. Since the insurance policy

is a written contract, both parties must have a meeting of the minds

before the contract is valid. The terms and conditions of the policy

must be known by the final date for establishing the insurance

contract. In this program, the final date is the sales closing date.

FCIC has determined that some situations may allow written agreements

at other times. FCIC is preparing proposed written agreement

regulations which will specify when written agreements must be

completed. Until these regulations have been published, the written

agreement must be completed by the sale closing date, or, in specific

instances, a written agreement may be requested or approved after the

sales closing date if the crop is physically inspected and a

determination made that the crop has an expectancy of making the

guaranteed yield. No prevented planting liability will be established

as a result of any request submitted after the sales closing date. FCIC

does not agree that the final sentence should be deleted. Specifying

all variable terms in the written agreement is necessary to assure a

clear understanding of the terms in effect.

Although the sales closing dates normally will be the same as the

cancellation and termination dates, this is not always the case.

Therefore, the sales closing dates will not be included in the crop

provisions. Federal regulations authorize the Manager of FCIC to extend

the sales closing date in any county upon the Manager's determination

that no adverse selection will result during the extended period. The

extended date is placed on file in the applicable service offices and a

notice is placed in the Federal Register. If the sales closing dates

were contained in the crop provisions, the crop provisions would need

to be amended each time a sales closing date is extended.

Comment: One comment stated that unit division language contained

in subsection 2.(b) should allow for situations where the insured

creates a discernible break by some tillage operation. The proposed

provision states that the insured must plant the crop in a manner that

results in a clear and discernible break in the planting pattern at the

boundaries of each optional unit. There is no required method of

creating a boundary as long as a discernible break is provided.

Response: The intent of the policy language is to allow separate

optional units if acreage is farmed separately. Farming separately

includes planting separately and keeping separate records of inputs,

production, etc. Creating a boundary after the crop is planted by means

of a tillage operation along a section line may or may not meet the

policy requirement of planting the crop in a manner that results in a

clear and discernable break at the units boundary. FCIC believes the

present language clearly sets out the requirements for unit division.

Comment: One comment stated that subsection 3.(b) requires the

application to be revised when corn is harvested in a manner other than

reported, and that procedure should indicate how this revision is to be

made.

Response: Language in subsection 3.(b) does not require the

application to be revised to elect a price election for the method of

harvest (grain/silage) when the insured did not select an appropriate

price election. The price specified in this provision will only be used

to establish ``the dollar amount of production to count for indemnity

purposes.'' If an insured only selected a grain price election and

reported the acreage as intended for harvest as grain, but harvested

the acreage for silage, the amount of insurance is determined by

multiplying the production guarantee for grain by the price election

selected by the insured for grain. The value of any silage production

is determined by multiplying the number of tons of silage to count by a

price that bears the same relationship to the maximum silage price

election as the selected price for grain does to the maximum grain

price. FCIC has amended this subsection to clarify that this price is

assigned by us only for the purpose of determining the dollar value of

production to count for indemnity purposes and will not affect the

premium or amount of insurance.

Comment: One comment assumed that since cancellation and

termination dates were changed, that the sales closing dates will be

changed to align with the new cancellation and termination dates.

Response: The sales closing dates as contained in the Special

Provisions will be changed generally to be the same as, but no later

than, the new cancellation and termination dates.

Comment: One comment expressed concerns regarding changes that will

be required in underwriting and loss procedure since the new policy

allows both grain and silage to be insured. The comment stated that

procedure should be developed concurrently with policy language to

avoid major confusion. Specifically, underwriting procedure should

clearly address how grain and silage types are to be reported and

insured, how production can or cannot be converted for APH purposes and

whether appraisals are required if there is no loss, but the crop is

harvested in a manner other than as reported. The comment also

requested that FCIC consider previously submitted information when

developing the procedure.

Response: FCIC agrees with the comment and has begun drafting

procedure to address underwriting and loss issues. Previously submitted

correspondence will be considered in procedural development.

Comment: One comment stated that a definition of ``silage variety''

is necessary. The comment stated that subparagraph 6.(b)(2)(ii) refers

to ``a variety of corn adapted for silage use only,'' but that their

understanding is that there are no varieties adapted strictly for use

as silage. The comment asked if FCIC intends to designate silage

varieties on the Special Provisions.

Response: There is no uniform agreement regarding the existence or

definition of a ``silage variety.'' However, due to ongoing attempts to

develop new ``silage varieties,'' FCIC believes that language should

remain in these crop provisions to prevent insuring corn on a grain

basis for a variety of corn adapted for silage use only. Since there is

no uniform agreement regarding the existence of silage varieties, a

definition will not be added. FCIC has modified subparagraph

6.(b)(2)(ii) to delete the term ``silage variety.'' If research

succeeds in developing silage varieties, FCIC will evaluate placing

specific silage variety restrictions in the Special Provisions.

Comment: One comment suggested subsection 1.(m) conflicts with

subsection 10.(a), stating that: (1) Subsection 1.(m) specifies that it

may be considered practical to replant after the end of the late

planting period if replanting is generally occurring in the area; and

(2) subection 10.(a) specifies that a replant payment may be made if

replanting occurs no later than 25 days after the final planting date.

The comment further stated that if it is determined to be practical to

replant after the late planting period, a replanting payment must be

made and subsection 10.(a) should indicate the same.

Response: FCIC agrees with the comment and has removed the

provision in subsection 10.(a) that requires replanting within 25 days

after the final planting date.

Comment: One comment stated that subsections 10.(b) and 10.(c) are

confusing because: (1) Subsection 10.(c) allows a replant payment,

based on the total insured shares, to be made to one party if an

agreement exists to that effect between the insured persons; and (2)

subsection 10.(b) uses ``your share'' in calculating the maximum

replant payment. The comment suggested that a qualifier should be added

to subsection 10.(b) to reflect paying a replant payment based on the

total insured share if 10.(c) applies. The comment also asked which

company pays the entire replant payment when persons sharing in the

crop are insured with different companies.

Response: FCIC agreed that a replant payment should be calculated

using the insured share or the share determined in subsection 10.(c),

if applicable and has modified subsection 10.(b) accordingly. The

proposed language contained in subsection 10.(c) would have required

the company insuring the person given the right to the replant payment

to pay the entire amount due. Upon further review, FCIC has determined

it is not appropriate to require an insurer to pay replant payments

based on a share in excess of the share they actually insure.

Therefore, subsection 10.(c) has been revised to allow replant payments

based on the total shares insured with the insurer.

Comment: One comment questioned whether FCIC intends to incorporate

language contained in subsection 10.(d) into every crop provision that

provides for a replant payment. This language requires that when the

crop is replanted using a practice that is uninsurable as an original

planting, the liability for the unit will be reduced by the amount of

the replanting payment which is attributable to the insured's share and

that the premium amount will not be reduced.

Response: As policies are revised, this provision will be added if

appropriate for the specific crop.

Comment: One comment questioned whether a person who insured grain

and silage within one unit, but did not discover damage until after the

beginning of grain harvest, could give timely notice of damage more

than 15 days after the end of the insurance period for silage but

within the period timely notice could be given for grain.

Response: Notice would be considered timely as long as the silage

acreage within the unit was not damaged. If the silage acreage within

the unit was damaged, notice would be required within 72 hours of the

insured's initial discovery of damage to the silage acreage (but not

later than 15 days after the end of the insurance period for silage).

FCIC has clarified paragraph 11.(b)(1).

Comment: One comment recommended that subparagraph 12.(b)(2)(ii) be

revised to read ``Multiplying each result by the price election for

that type;'' because the phrase ``price election for each type''

indicates multiplying by both grain and silage price elections.

Response: FCIC agrees with the comment and has modified the

provision.

Comment: One comment recommended either revising or deleting

provisions that allow the inured to leave representative samples if

they disagree with the insurer's appraisal. In the event the provision

cannot be deleted the comment recommended changing the provision so

that the insurer can decide when using representative samples is

appropriate. In many situations, samples are more susceptible to loss

and do not accurately represent what the entire unit would have

produced.

Response: FCIC agrees that there are situations in which it may not

be reasonable to leave representative strips from which production to

count would ultimately be determined. The samples could be more

vulnerable to damage than an entire field, or the insurer may be

confident that the appraisal made accurately reflects production

potential. However, the entire provision should not be removed. The

provision has been changed to allow the insurer to determine those

situations in which it is reasonable to leave representative samples to

determine the amount of production to be counted. In cases where it is

necessary to defer determinations, the insured must be advised how

production to count will ultimately be determined and the consequences

of failure to leave or care for the samples.

Comment: One comment recommended amending subsection 12.(e) by

specifically stating that moisture adjustment, if applicable, will be

made prior to any adjustment for quality.

Response: FCIC agrees with the comment and has modified subsection

12.(e) accordingly.

Comment: One comment recommended amending subsection 12.(f) to

require that moisture adjustments for silage, if applicable, will be

made prior to any adjustment for quality for grain-deficient silage.

Response: Subsection 12.(f) contains the requirements that must be

met for silage production to be adjusted for moisture and for grain-

deficiency. Current FCIC procedure specifies that when both adjustments

apply, the silage moisture adjustment factor is to be multiplied by the

silage grain-deficient factor and the result multiplied by the number

of tons of silage that qualify for both adjustments. This method of

adjustment results in a proportionate adjustment of the silage

production based on both factors. FCIC does not agree with the comment

because adjusting for moisture first may result in a disproportionate

adjustment of the silage production. FCIC has not amended subsection

12.(f).

Comment: One comment assumed that moving to a factor-based quality

adjustment process as specified in paragraph 12.(e)(4) removes any

reliance on local market price, except for quality, such as aflatoxin,

not addressed by the factor table in the Special Provisions. The

comment also stated that if language in subparagraph 12.(e)(3)(ii)

remains in the policy, an insured would have strong justification for

requesting adjustment of production that meets the grade requirements

in the policy, but which has a value less than the local market price.

The comment recommends deletion of subparagraph 12.(e)(3)(ii).

Response: FCIC agrees that quality adjustment should not apply if

grain meets minimum grade requirements and other substances or

conditions are not present causing a value less than the local market

price. The Special Provisions will specify how the quality factor will

be determined for quality deficiencies, substances and conditions.

Subparagraph 12.(e)(3)(ii) has been deleted.

Comment: One comment recommended that language in subsection 13.(b)

be changed to require only one notice for prevented planting acreage

rather than requiring notice three days after the final planting date

and three days after the date the insured stops planting within the

late planting period.

Response: The crop provisions provide two distinct periods during

which the insured may be prevented from planting (i.e., by the final

planting date and during the late planting period). The notice

requirement allows the insurer the opportunity to verify that the

acreage could not have been planted during such periods. FCIC agrees

that an insured should only be required to give one notice if it is

sufficient to cover all acreage for prevented planting purposes.

Subsection 13.(b) has been modified to clarify that written notice must

be given not later than three days after the final planting date for

acreage the insured was prevented from planting by the final planting

date, and not later than three days after the date the insured

discovers that planting will not be possible if the insured was not

prevented from planting such acreage by the final planting date but was

prevented from planting such acreage during the late planting period.

Comment: One comment indicated that the proposed provisions in

paragraph 13.(d)(3) will allow an insured to request a written

agreement for prevented planting coverage for acreage exceeding the

policy limitations, and to subsequently enroll in a USDA program that

allows less acreage to be planted. The comment recommended revising the

paragraph to limit eligible acreage to the amount allowed by any

applicable USDA program, regardless of when the insured enrolls in such

program or any previously approved written agreement.

Response: FCIC agrees that if the farm is enrolled in a USDA

program that limits the number of acres planted, acreage in excess of

the amount allowed under a USDA program should not be eligible for

prevented planting coverage. Paragraph 13.(d)(3) has been amended

accordingly.

Comment: One comment recommended that language be added to

paragraph 13.(d)(3) to allow prevented planting coverage by written

agreement for acreage added to the insured's farming operation after

the sales closing date.

Response: The insurance period for prevented planting coverage

begins on the sales closing date. Allowing additional coverage to

attach after the beginning of this period would likely result in

coverage being requested primarily when conditions are favorable for a

prevented planting indemnity. This adverse selection should be avoided

to help maintain an actuarially sound program and to keep premium rates

from rising to cover such losses. The definition of ``Written

agreement'' has been amended to specifically disallow any prevented

planting liability as a result of any request submitted after the sales

closing date.

In addition to the changes indicated in the responses to comments,

FCIC has made the following changes:

1. FCIC has modified paragraph 3.(a)(2) to require that the price

elections for grain and silage have the same percentage relationship to

the maximum price election offered for grain and silage.

2 FCIC has modified subsection 5.(b) to simplify the cancellation

and termination dates in Texas.

3. The provisions in section 6 have been modified to allow

insurance for coarse grains planted into an established grass or legume

if allowed by the Special Provisions or by written agreement.

4. FCIC has modified paragraph 12.(b)(2) to specify that the

production guarantee for a unit will be computed by multiplying the

insured acreage of each type (grain/silage) by the production guarantee

for the applicable type. The proposed language contained in

subparagraph 12.(b)(1)(i) has been modified in a similar manner.

Accordingly, the rule, ``Common Crop Insurance Regulations; Coarse

Grains Crop Insurance Provisions'' published at 59 FR 28016, revised as

set out below, is hereby adopted as final rule.

List of Subjects in 7 CFR Part 457

Crop Insurance; corn, grain sorghum, soybean.

Final Rule

Accordingly, 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 amends the Common Crop Insurance

Regulations (7 CFR part 457), effective for the 1995 and succeeding

crop years, in the following instances:

PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE

1994 AND SUBSEQUENT CONTRACT YEARS

1. The authority citation for 7 CFR part 457 continues to read as

follows:

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

2. 7 CFR part 457 is amended by adding Sec. 457.113 Coarse Grains

Crop Insurance Provisions to read as follows:

Sec. 457.113 Coarse Grains Crop Insurance Provisions.

The Coarse Grains Crop Insurance Provisions for the 1995 and

succeeding crop year are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Coarse Grains Crop Provisions

If a conflict exists among the Common Crop Insurance Policy

(Sec. 457.8), these crop provisions, and the Special Provisions, the

Special Provisions will control these crop provisions and the common

policy and these crop provisions will control the common policy.

1. Definitions

(a) Coarse grains--Corn, grain sorghum, and soybeans.

(b) Days--Calendar days.

(c) Final planting date--The date contained in the Special

Provisions for the insured crop by which the crop must initially be

planted in order to be insured for the full production guarantee.

(d) Good farming practices--Good farming practices are the

cultural practices generally in use in the county for the insured

crop to make normal progress toward maturity and produce at least

the yield used to determine the production guarantee and are those

recognized by the Cooperative Extensive Service as compatible with

agronomic and weather conditions in the area.

(e) Grain sorghum--The crop defined as sorghum under the United

States Grain Standards Act.

(f) Harvest--Combining, threshing, or picking the insured crop

for grain, or cutting for hay, silage, or fodder.

(g) Interplanted--Acreage on which two or more crops are planted

in a manner that does not permit separate agronomic maintenance or

harvest of the insured crop.

(h) 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.

(i) Late planted--Acreage planted to the insured crop during the

late planting period.

(j) Late planting period--The period that begins the day after

the final planting date for the insured crop and ends twenty-five

(25) days after the final planting date.

(k) Local market price--The cash grain price per bushel for the

U.S. No. 2 yellow corn, U.S. No. 2 grain sorghum, or U.S. No. 1

soybeans, offered by buyers in the area in which you normally market

the insured crop. The local market price will reflect the maximum

limits of quality deficiencies allowable for the U.S. No. 2 grade

for yellow corn and grain sorghum, or U.S. No. 1 grade for soybeans.

Factors not associated with grading under the Official United

Standards for Grain, including but not limited to protein and oil,

will not be considered.

(l) Planted acreage--Land in which seed has been placed by a

machine appropriate for the insured crop and planting method, at the

correct depth, into a seedbed which as been properly prepared for

the planting method and production practice. Coarse grains must

initially be planted in rows to be considered planted. Corn must be

planted in rows far enough apart to permit mechanical cultivation.

Planting in any other manner will be considered as a failure to

follow recognized good farming practices and any loss of production

will not be insured unless otherwise provided by the Special

Provisions or by written agreement to insure such crop.

(m) Practical to replant--In lieu of subsection 1.(ff) of the

Common Crop Insurance Policy (Sec. 457.8) practical to replant is

defined as our determination, after loss or damage to the insured

crop, based on factors including, but not limited to moisture

availability, condition of the field, and time to crop maturity that

replanting to the insured crop will allow the crop to attain

maturity prior to the calendar date for the end of the insurance

period. It will not be considered practical to replant after the end

of the late planting period unless replanting is generally occurring

in the area.

(n) Prevented planting--Inability to plant the insured crop with

proper equipment by:

(1) The final planting date designated in the Special Provisions

for the insured crop in the county; or

(2) The end of the late planting period.

You must have been unable to plant the insured crop due to an

insured cause of loss that has prevented most producers in the

surrounding area from planting due to similar insurable causes. The

insured cause of prevented planting must occur between the sales

closing date and the final planting date for the insured crop in the

county or within the late planting period.

(o) Production guarantee--The number of bushels (tons for corn

insured as silage) determined by multiplying the approved yield per

acre by the coverage level percentage you elect.

(p) Replanting--Performing the cultural practices necessary to

replace the seed of the same insured crop, and replacing the seed

for the same crop in the insured acreage with the expectation of

growing a successful crop.

(q) Silage--A product that results from severing the plant from

the land and chopping it for the purpose of livestock feed.

(r) Timely planted--Planted on or before the final planting date

designated in the Special Provisions for the insured crop in the

county.

(s) Ton--Two thousand (2000) pounds avoirdupois.

(t) Written agreement--Designated terms of this policy may be

altered by written agreement. Each agreement must be applied for by

the insured in writing no later than the sales closing date and is

valid for one year only. If not specifically renewed the following

year, continuous insurance will be in accordance with the printed

policy. All variable terms including, but not limited to, crop

variety, guarantee, premium rate and price election must be set out

in the written agreement. In specific instances, a written agreement

may be applied for after the sales closing date and approved if,

after a physical inspection of the acreage, there is a determination

that the crop has the expectance of making at least the guaranteed

yield. However, no prevented planting liability will be established

as a result of any request submitted after the closing date. All

applications for written agreements as submitted by the insured must

contain all variable terms of the contract between the company and

the insured that will be in effect if the written agreement is

disapproved.

2. Unit Division

Unless limited by the Special Provisions, a unit as defined in

subsection 1.(tt) of the Common Crop Insurance Policy (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. All optional units must be reflected on the

acreage report for each crop year.

(a) You must have records, which can be independently verified,

of planted acreage and production for each optional unit for at

least the last crop year used to determine your production

guarantee.

(b) You must plant the crop in a manner that results in a clear

and discernable break in the planting pattern at the boundaries of

each optional unit.

(c) You must have records of measurement of stored or marketed

production from each optional unit maintained in such a manner that

we can verify the production from each optional unit or the

production from each unit must be kept separate until after loss

adjustment under the policy is completed.

(d) Each optional unit must meet one or more of the following

criteria as applicable:

(1) Optional Units by Section, Section Equivalent, or ASCS Farm

Serial Number: Optional units may be established if each optional

unit is located in a separate legally identified Section. In the

absence of Sections, we may consider parcels of land legally

identified by other methods of measure including, but not limited

to: Spanish grants, railroad surveys, leagues, labors, or Virginia

Military Lands as the equivalent of Sections for unit purposes. In

areas which have not been surveyed using the systems identified

above or another system approved by us, or in areas where such

systems exist but boundaries are not readily discernable, each

optional unit must be located in a separate farm identified by a

single ASCS Farm Serial Number.

(2) Optional Units on Acreage Including Both Irrigated and Non-

Irrigated Practices: In addition to or instead of establishing

optional units by Section, section equivalent, or ASCS Farm Serial

Number, optional units may be established based on irrigated acreage

or non-irrigated acreage if both are located in the same Section,

section equivalent, or ASCS Farm Serial Number.

The irrigated acreage may not extend beyond the point at which

your irrigation system can deliver the quantity of water needed to

produce the yield on which your guarantee is based and you may not

continue into non-irrigated acreage in the same rows or planting

pattern. You must plant, cultivate, fertilize, or otherwise care for

the irrigated acreage in accordance with recognized good irrigated

farming practices.

Basic units may not be divided into optional units on any basis

(production practice, type, variety, planting period, etc.) other

than as described under this section. If you do not comply fully

with these provisions, we will combine all optional units which are

not in compliance with these provisions into the basic unit from

which they were formed. We may 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 all the optional units are combined, the

premium paid for the purpose of electing optional units will be

refunded to you.

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

Indemnities

(a) In addition to the requirements of section 3 (Insurance

Guarantees, Coverage Levels, and Prices for Determining Indemnities)

of the Common Crop Insurance Policy (Sec. 457.8) you may select:

(1) For grain sorghum and soybeans, only one price election for

each crop in the county insured under this policy; and

(2) For corn, only one price election for all the corn in the

county insured as grain under this policy, and only one price

election for all the corn in the county insured as silage under this

policy. The price elections you choose for grain and silage must

have the same percentage relationship to the maximum price election

offered by us for grain and silage. For example, if you choose one

hundred percent (100%) of the maximum grain price election and you

also insure corn on a silage basis, you must choose one hundred

percent (100%) of the maximum silage price election.

(b) For corn only, if you harvest the crop in a manner other

than the manner you reported (for example, you reported grain but

harvested as silage) and you did not select a price election for the

type harvested, we will assign a price election for the type

harvested that bears the same percentage relationship to the maximum

price election you selected for the type reported (for example, if

you selected a grain price election in the amount of eighty percent

(80%) of the maximum price election for grain and you did not select

a silage price election, we will assign a silage price election in

the amount of eighty percent (80%) of the maximum price election for

silage specified in the Special Provisions if you harvest for

silage). This assigned price election will be used only to determine

the dollar value of production to count for indemnity purposes and

will not be used to determine the amount of insurance or premium.

4. Contract Changes

The contract change date is November 30 preceding the

cancellation date (see the provisions of section 4 (Contract

Changes) of the Common Crop Insurance Policy (Sec. 457.8)).

5. Cancellation and Termination Dates

In accordance with subsection 2.(f) of the Common Crop Insurance

Policy (Sec. 457.8), the cancellation and termination dates are:

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

Cancellation and

State and county termination dates

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

(a) For corn and grain sorghum:

Val Verde, Edwards, Kerr, Kendall, Bexar, Wilson, January 15.

Karnes, Goliad, Victoria, and Jackson Counties,

Texas, and all Texas counties lying south thereof.

El Paso, Hudspeth, Culberson, Reeves, Loving, February 15.

Winkler, Ector, Upton, Reagan, Sterling, Coke,

Tom Green, Concho, McCulloch, San Saba, Mills,

Hamilton, Bosque, Johnson, Tarrant, Wise, Cooke

Counties, Texas, and all Texas counties lying

south and east thereof to and including Terrell,

Crockett, Sutton, Kimble, Gillespie, Blanco,

Comal, Guadalupe, Gonzales, De Witt, Lavaca,

Colorado, Wharton, and Matagorda Counties, Texas.

Alabama; Arizona; Arkansas; California; Florida; February 28.

Georgia; Louisiana; Mississippi; Nevada; North

Carolina; and South Carolina.

All other Texas counties and all other states..... March 15.

(b) For soybeans:

Jackson, Victoria, Goliad, Bee, Live Oak, February 15.

McMullen, LaSalle, and Dimmit Counties, Texas and

all Texas counties lying south thereof.

Alabama; Arizona; Arkansas; California; Florida; February 28.

Georgia; Louisiana; Mississippi; Nevada; North

Carolina; and South Carolina; and El Paso,

Hudspeth, Culberson, Reeves, Loving, Winkler,

Ector, Upton, Reagan, Sterling, Coke, Tom Green,

Concho, McCulloch, San Saba, Mills, Hamilton,

Bosque, Johnson, Tarrant, Wise, Cooke Counties,

Texas, and all Texas counties lying south and

east thereof to and including Maverick, Zavala,

Frio, Atascosa, Karnes, De Witt, Lavaca,

Colorado, Wharton, and Matagorda Counties, Texas.

All other Texas counties and all other states..... March 15.

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

6. Insured Crop

(a) In accordance with section 8 (Insured Crop) of the Common

Crop Insurance Policy (Sec. 457.8), the crop insured will be each

coarse grain crop you elect to insure for which premium rates are

provided by the actuarial table:

(1) In which you have a share;

(2) That is adapted to the area based on days to maturity and is

compatible with agronomic and weather conditions in the area; and

(3) That is not (unless allowed by the Special Provisions or by

written agreement):

(i) Interplanted with another crop except as allowed in

paragraph 6.(b)(1); or

(ii) Planted into an established grass or legume.

(b) For corn only, in addition to the provisions of subsection

6.(a), the corn crop insured will be all corn that is:

(1) Planted for harvest either as grain or as silage (see

subsection 6.(c)). A mixture of corn and sorghum (grain or forage-

type) will be insured as corn silage if the sorghum does not

constitute more than twenty percent (20%) of the plants;

(2) Yellow dent or white corn, including mixed yellow and white,

waxy or high-lysine corn, and excluding:

(i) High-amylose, high-oil, high-protein, flint, flour, Indian,

or blue corn, or a variety genetically adapted to provide forage for

wildlife or any other open pollinated corn, unless a written

agreement allows insurance of such excluded crops.

(ii) A variety of corn adapted for silage use only when the corn

is reported for insurance as grain.

(c) For corn only, if the actuarial table for the county

provides a premium rate for:

(1) Both grain and silage, all insurable acreage will be insured

as the type or types reported by you on or before the acreage

reporting date;

(2) Grain but not silage, all insurable acreage will be insured

as grain unless a written agreement allows insurance on all or a

portion of the insurable acreage as silage; or

(3) Silage but not grain, all insurable corn acreage will be

insured as silage unless a written agreement allows insurance on all

or a portion of the insurable acreage as grain.

(d) For grain sorghum only, in addition to the provisions of

subsection 6.(a), the grain sorghum crop insured will be all of the

grain sorghum in the county:

(1) That is planted for harvest as grain;

(2) That is a combine-type hybrid grain sorghum (grown from

hybrid seed); and

(3) That is not a dual-purpose type of grain sorghum (a type

used for both grain and forage), unless a written agreement allows

insurance of such grain sorghum.

(e) For soybeans only, in addition to the provisions of

subsection 6.(a), the soybean crop insured will be all of the

soybeans in the county that are planted for harvest as beans.

7. Insurable Acreage

In addition to the provisions of section 9 (Insurable Acreage)

of the Common Crop Insurance Policy (Sec. 457.8), any acreage of the

insured crop damaged before the final planting date, to the extent

that the remaining stand will not produce at least ninety percent

(90%) of the production guarantee, must be replanted unless we agree

that replanting is not practical (see subsection 1.(m)).

8. Insurance Period

In accordance with the provisions under section 11 (Insurance

Period) of the Common Crop Insurance Policy (Sec. 457.8), the

calendar date for the end of the insurance period is the date

immediately following planting as follows:

(a) For corn insured as grain:

(1) Val Verde, Edwards, Kerr, Kendall, Bexar, September 30.

Wilson, Karnes, Goliad, Victoria, and Jackson

Counties, Texas, and all Texas counties lying

south thereof.

(2) Clark, Cowlitz, Grays Harbor, Island, October 31.

Jefferson, King, Kitsap, Lewis, Pierce, Skagit,

Snohomish, Thurston, Wahkiakum, and Whatcom

Counties, Washington.

(3) All other counties and states................. December 10.

(b) For corn insured as silage:

All states........................................ September 30.

(c) For grain sorghum:

(1) Val Verde, Edwards, Kerr, Kendall, Bexar, September 30.

Wilson, Karnes, Goliad, Victoria, and Jackson

Counties, Texas, and all Texas counties lying

south thereof.

(2) All other Texas counties and all other states. December 10.

(d) For soybeans: All states........................ December 10.

9. Causes of Loss

In accordance with the provisions of section 12 (Causes of Loss)

of the Common Crop Insurance Policy (Sec. 457.8), insurance is

provided only against the following causes of loss which occur

within the insurance period:

(a) Adverse weather conditions;

(b) Fire;

(c) Insects, but not damage due to insufficient or improper

application of pest control measures;

(d) Plant disease, but not damage due to insufficient or

improper application of disease control measures;

(e) Wildlife;

(f) Earthquake;

(g) Volcanic eruption; or

(h) Failure of the irrigation water supply, if applicable, due

to an unavoidable cause of loss occurring within the insurance

period.

10. Replanting Payments

(a) In accordance with section 13 (Replanting Payment) of the

Common Crop Insurance Policy (Sec. 457.8), replanting payments for

coarse grains are allowed if the coarse grains are damaged by an

insurable cause of loss to the extent that the remaining stand will

not produce at least ninety percent (90%) of the production

guarantee for the acreage and it is practical to replant (see

subsection 1.(m)).

(b) The maximum amount of the replanting per acre will be the

lesser of twenty percent (20%) of the production guarantee or the

number of bushels (tons for corn insured as silage) set out herein,

multiplied by your price election multiplied by your insured share

or the share determined under 10.(c), if applicable. The number of

bushels or tons are 8 bushels for corn grain; 1 ton for corn silage;

7 bushels for grain sorghum; and 3 bushels for soybeans.

(c) When more than one person insures the same crop on a share

basis, a replanting payment based on the total shares insured by us

may be made to the insured person who incurs the total cost of

replanting. Payment will be made in this manner only if an agreement

exists between the insured persons which:

(1) Requires one person to incur the entire cost of replanting;

or

(2) Gives the right to all replanting payments to one person.

(d) When the insured crop is replanted using a practice that is

uninsurable as an original planting, the liability for the unit will

be reduced by the amount of the replanting payment which is

attributable to your share. The premium amount will not be reduced.

11. Duties in the Event of Damage or Loss

(a) In accordance with the requirements of section 14 (Duties in

the Event of Damage or Loss) of the Common Crop Insurance Policy

(Sec. 457.8), if you initially discover damage to any insured crop

within 15 days of or during harvest, you must leave representative

samples of the unharvested crop for our inspection. The samples must

be at least 10 feet wide and extend the entire length of each field

in the unit, and must not be harvested or destroyed until the

earlier of our inspection or 15 days after harvest of the balance of

the unit is completed.

(b) For any corn unit that has separate dates for the end of the

insurance period (grain and silage):

(1) In lieu of paragraph 14.(a)(2) of the Common Crop Insurance

Policy (Sec. 457.8), if damage occurs:

(i) Before the earliest end of insurance period date (grain or

silage), you must give us notice within 72 hours of your initial

discovery of damage (but not later than 15 days after that earliest

end of insurance period date); or

(ii) If damage does not occur before the earliest end of

insurance period date (grain or silage), but occurs before the

latest end of insurance period date (grain or silage), you must give

notice within 72 hours of your initial discovery of damage (but not

later than 15 days after that latest end of insurance period date).

(2) In lieu of subsection 14.(c) of the Common Crop Insurance

Policy (Sec. 457.8), in addition to complying with all other notice

requirements, you must submit a claim for indemnity declaring the

amount of your loss not later than 60 days after the latest date for

the end of insurance period for the unit. This claim must include

all the information we require to settle the claim.

12. Settlement of Claim

(a) We will determine your loss on a unit basis. In the event

you are unable to provide records of production:

(1) For any optional unit, we will combine all optional units

for which acceptable records of production were not provided; or

(2) For any basic unit, we will allocate any commingled

production to such units in proportion to our liability on the

harvested acreage for each unit.

(b) In the event of loss or damage covered by this policy, we

will settle your claim on any unit:

(1) For grain sorghum and soybeans by:

(i) Multiplying the insured acreage by the production guarantee;

(ii) Subtracting from this the total production to count;

(iii) Multiplying the remainder by your price election; and

(iv) Multiplying this result by your share.

(2) For corn by:

(i) Multiplying the insured acreage of each type (grain/silage)

by the production guarantee for the applicable type;

(ii) Multiplying each result by the price election for the

applicable type;

(iii) Adding these values;

(iv) Multiplying the production to count of each type (see

subsection 12.(d)) by the price election for that type (see the

provisions under section 3 (Insurance Guarantees, Coverage Levels,

and Prices for Determining Indemnities));

(v) Adding these dollar values;

(vi) Subtracting the result of step (v) from the result of step

(iii); and

(vii) Multiplying the result by your share.

(c) The total production in bushels (tons for corn silage) (see

subsection 12.(d)) to count from all insurable acreage on the unit

will include:

(1) All appraised production as follows:

(i) Not less than the production guarantee for acreage:

(A) That is abandoned;

(B) Put to another use without our consent;

(C) Damaged solely by uninsured causes; or

(D) For which you fail to provide records of production that are

acceptable to us;

(ii) Production lost due to uninsured causes;

(iii) Unharvested production (mature unharvested production may

be adjusted for quality deficiencies and excess moisture in

accordance with subsection 12.(e)); and

(iv) Potential production on insured acreage you want to put to

another use or you wish to abandon and no longer care for, if you

and we agree on the appraised amount of production. Upon such

agreement the insurance period for that acreage will end if you put

the acreage to another use or abandon the crop. If agreement on the

appraised amount of production is not reached:

(A) If you do not elect to continue to care for the crop we may

give you consent to put the acreage to another use if you agree to

leave intact, and provide sufficient care for, representative

samples of the crop in locations acceptable to us (The amount of

production to count for such acreage will be based on the harvested

production or appraisals from the samples at the time harvest should

have occurred. If you do not leave the required samples intact, or

you fail to provide sufficient care for the samples, our appraisal

made prior to giving you consent to put the acreage to another use

will be used to determine the amount of production to count); or

(B) If you elect to continue to care for the crop, the amount of

production to count for the acreage will be the harvested

production, or our reappraisal if additional damage occurs and the

crop is not harvested; and

(2) All harvested production from the insurable acreage.

(d) The production to count for corn will be in bushels for

grain and in tons for silage as follows:

(1) For harvested acreage, according to the method of harvest;

and

(2) For unharvested acreage, according to the information

contained on your acreage report;

except as otherwise provided in paragraph 12.(c)(1).

(e) Mature coarse grain production (excluding corn insured or

harvested as silage) may be adjusted for excess moisture and quality

deficiencies. If moisture adjustment is applicable it will be made

prior to any adjustment for quality. Corn insured or harvested as

silage will be adjusted for excess moisture and quality only as

specified in subsection 12.(f).

(1) Production will be reduced by 0.12 percent for each 0.1

percentage point of moisture in excess of:

(i) Fifteen percent (15%) for corn (If moisture exceeds 30

percent (30%), production will be reduced 0.2 percent for each 0.1

percentage point above 30 percent (30%));

(ii) Fourteen percent (14%) for grain sorghum; and

(iii) Thirteen percent (13%) for soybeans.

We may obtain samples of the production to determine the

moisture content.

(2) Production will be eligible for quality adjustment if:

(i) Deficiencies in quality, in accordance with the Official

United States Standards for Grain, result in:

(A) Corn not meeting the grade requirements for U.S. No. 4

(grades U.S. No. 5 or worse) because of test weight or kernel damage

(excluding heat damage) or having a musty, sour, or commercially

objectionable foreign odor;

(B) Grain sorghum not meeting the grade requirements for U.S.

No. 4 (grades U.S. Sample grade) because of test weight or kernel

damage (excluding heat damage) or having a musty, sour, or

commercially objectionable foreign odor (except smut odor), or meets

the special grade requirements for smutty grain sorghum; or

(C) Soybeans not meeting the grade requirements for U.S. No. 4

(grades U.S. Sample grade) because of test weight or kernel damage

(excluding heat damage) or having a musty, sour, or commercially

objectionable foreign odor (except garlic odor), or which meet the

special grade requirements for garlicky soybeans; or

(ii) Substances or conditions are present that are identified by

the Food and Drug Administration or other public health

organizations of the United States as being injurious to human or

animal health.

(3) Quality will be a factor in determining your loss only if:

(i) The deficiencies, substances, or conditions resulted from a

cause of loss against which insurance is provided under these crop

provisions;

(ii) All determinations of these deficiencies, substances, or

conditions are made using samples of the production obtained by us

or by a disinterested third party approved by us; and

(iii) The samples are analyzed by a grader licensed under the

authority of the United States Grain Standards Act or the United

States Warehouse Act with regard to deficiencies in quality, or by a

laboratory approved by us with regard to substances or conditions

injurious to human or animal health. (Test weight for quality

adjustment purposes may be determined by our loss adjuster.)

(4) Coarse grain production that is eligible for quality

adjustment, as specified in paragraphs 12.(e) (2) and (3), will be

reduced by the quality adjustment factor contained in the Special

Provisions.

(f) For corn insured or harvested as silage:

(1) Whenever our appraisal of grain content is less than 4.5

bushels of grain per ton of silage, the silage production will be

reduced by 1 percentage point for each 0.1(1/10) of a bushel less

than 4.5 bushels per ton (If we cannot make a grain appraisal before

harvest and you do not leave a representative unharvested sample, in

accordance with the policy no reduction for grain-deficient silage

will be made.); and

(2) If the normal silage harvesting period has ended, or for any

acreage harvested as silage or appraised as silage prior to October

1, we may increase the silage production to count to 65 percent

(65%) moisture equivalent to reflect the normal moisture content of

silage harvested during the normal silage harvesting period.

(g) Any production harvested from plants growing in the insured

crop may be counted as production of the insured crop on a weight

basis.

13. Late Planting and Preventing Planting

(a) In lieu of paragraph 8.(b)(2) and subsection 1.(aa) of the

Common Crop Insurance Policy (Sec. 457.8), insurance will be

provided for acreage planted to the insured crop during the late

planting period (see subsection 13.(c)), and acreage you were

prevented from planting (see subsection 13.(d)). These coverages

provide reduced production guarantees. The reduced guarantees will

be combined with the production guarantee for timely planted acreage

for each unit. The premium amount for late planted acreage and

eligible prevented planting acreage will be the same as that for

timely planted acreage. If the amount of premium you are required to

pay (gross premium less our subsidy) for late planted acreage or

prevented planting acreage exceeds the liability on such acreage,

coverage for those acres will not be provided (no premium will be

due and no indemnity will be be paid for such acreage). (For

example, assume you insure one unit in which you have a 100 percent

(100%) share. The unit consists of 150 acres, of which 50 acres were

planted timely, 50 acres were planted 7 days after the final

planting date (late planted), and 50 acres are unplanted and

eligible for prevented planting coverage. To calculate the amount of

any indemnity which may be due to you, the production guarantee for

the unit will be computed as follows:

(1) For timely planted acreage, multiply the per acre production

guarantee for timely planted acreage by the 50 acres planted timely;

(2) For late planted acreage, multiply the per acre production

guarantee for timely planted acreage by 93 percent (0.93) and

multiply the result by the 50 acres planted late; and

(3) For prevented planting acreage, multiply the per acre

production guarantee for timely planted acreage by 50 percent (0.5)

and multiply the result by the 50 acres eligible for prevented

planting coverage.

The total of the three calculations will be the production

guarantee for the unit. Your premium will be based on the result of

multiplying the per acre production guarantee for timely planted

acreage by the 150 acres in the unit.)

(b) You must provide written notice to us if you were prevented

from planting (see subsection 1.(n)). This notice must be given not

later than three (3) days after:

(1) The final planting date for acreage you were prevented from

planting by the final planting date if you have unplanted acreage

that may be eligible for prevented planting coverage; and

(2) The date you discover that planting will not be possible

within the late planting period for acreage that may be eligible for

prevented planting coverage if you were not prevented from planting

such acreage by the final planting date, but were prevented from

planting such acreage during the late planting period.

(c) Life Planting

(1) For acreage planted to the insured crop after the final

planting date but on or before 25 days after the final planting

date, the production guarantee for each acre will be reduced for

each day planted after the final planting date by:

(i) One percent (.01) for the first through the tenth day; and

(ii) Two percent (.02) for the eleventh through the twenty-fifth

day.

(2) In addition to the requirements of section 6 (Report of

Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must

report the dates the acreage is planted within the late planting

period.

(3) If planting of the insured crop continues after the final

planting data, or you are prevented from planting during the late

planting period, the acreage reporting date will be the later of:

(i) The acreage reporting date contained in the Special

Provisions for the insured crop; or

(ii) Five (5) days after the end of the late planting period.

(d) Prevented Planting (Including Planting After the Late

Planting Period)

(1) If you were prevented from planting the insured crop (see

subsection 1.(n)), you may elect:

(i) To plant the insured crop during the late planting period

(the production guarantee for such acreage will be determined in

accordance with paragraph 13.(c)(1));

(ii) Not to plant this acreage to any crop that is intended for

harvest in the same crop year, (the production guarantee for such

acreage will be fifty percent (0.5) of the production guarantee for

timely planted acres, (For example, if your production guarantee for

timely planted acreage is 30 bushels per acre, your prevented

planting production guarantee would be equivalent to 15 bushels per

acre (30 bushels multiplied by 0.5). This paragraph does not

prohibit the preparation and care of the acreage for conservation

practices, such as planting a cover crop, as long as such crop is

not intended for harvest.); or

(iii) To plant the insured crop after the late planting period,

(the production guarantee for such acreage will be fifty percent

(0.5) of the production guarantee for timely planted acres, (For

example, if your production guarantee for timely planted acreage is

30 bushels per acre, your prevented planting production guarantee

would be equivalent to 15 bushels per acre (30 bushels multiplied by

0.5). Production to count for such acreage will be determined in

accordance with subsections 12.(c) through (g)).

(2) In addition to the provisions of section 11 (Insurance

Period) of the Common Crop Insurance Policy (Sec. 457.8), the

insurance period for prevented planting coverage begins on the sales

closing date contained in the Special Provisions for the insured

crop in the county.

(3) The acreage to which prevented planting coverage applies

will be limited as follows:

(i) If you participate in any program administered by the United

States Department of Agriculture for the crop year which limits the

number of acres that may be planted, prevented planting acreage will

not exceed the ASCS base acreage for the insured crop, reduced by

any acreage reduction applicable to the farm under such program.

(ii) If you do not participate in any program administered by

the United States Department of Agriculture which limits the number

of acres that may be planted, unless a written agreement exists to

the contrary, eligible acreage will not exceed the greater of:

(A) The ASCS base acreage for the insured crop, if applicable;

(B) The number of acres planted to the insured crop on each ASCS

Farm Serial Number during the previous crop year (adjusted for any

reconstitution which may have occurred prior to the sales closing

date); or

(C) One hundred percent (100%) of the simple average of the

number of acres planted to the insured crop during the crop years

that were used to determine your yield.

(iii) Acreage intended to be planted under an irrigated practice

will be limited to the number of acres properly prepared to carry

out an irrigated practice.

(iv) A prevented planting production guarantee will no be

provided for:

(A) Any acreage that does not constitute at least 20 acres or 20

percent (20%) of the acres in the unit, whichever is less;

(B) Land for which the actuarial table does not designate a

premium rate unless a written agreement is in place designating such

premium rate;

(C) Land used for conservation purposes or intended to be or

considered to have been left unplanted under any program

administered by the United States Department of Agriculture;

(D) Land on which any crop, other than the insured crop, has

been planted and is intended for harvest, or has been harvested in

the same crop year; or

(E) Land which planting history or conservation plans indicate

would remain fallow for crop rotation purposes.

(v) For the purpose of determining eligible acreage for

prevented planting coverage, acreage for all units will be combined

and be reduced by the number of acres of the insured crop timely

planted and planted after the final planting date. (For example,

assume you have 100 acres eligible for prevented planting coverage

in which you have a 100 percent (100%) share. The acreage is located

in a single ASCS Farm Serial Number which you insure as two separate

optional units consisting of 50 acres each. If you planted 60 acres

of the insured crop on one optional unit and 40 acres of the insured

crop on the second optional unit, your prevented planting eligible

acreage would be reduced to zero. (100 acres eligible for prevented

planting coverage minus 100 acres planted equals zero). If you

report more insured crop acreage under this contract than is

eligible for prevented planting coverage, we will allocate the

eligible acreage to insured units based on the number of prevented

planting acres and share you reported for each unit.)

(4) When the ASCS Farm Serial Number covers more than one unit,

or a unit consists of more than one ASCS Farm Serial Number, the

covered acres will be pro-rated based on the number of acres in each

unit or ASCS Farm Serial Number that could have been planted to the

insured crop in the crop year.

(5) In accordance with the provisions of section 6 (Report of

Acreage) of the Common Crop Insurance Policy (Sec. 457.8), you must

report any insurable acreage you were prevented from planting. This

report must be submitted on or before the acreage reporting date,

even though you may elect to plant the acreage after the late

planting period. Any acreage you report as eligible for prevented

planting coverage which is not eligible will be deleted from

prevented planting coverage.

Done in Washington, DC, on September 13, 1994.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 94-23834 Filed 9-26-94; 8:45 am]

BILLING CODE 3410-08-M