Common Crop Insurance Regulations; Nursery Crop Insurance Provisions

[[Page 5339]]

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AA96

Common Crop Insurance Regulations; Nursery Crop Insurance

Provisions

AGENCY: Federal Crop Insurance Corporation.

ACTION: Proposed rule.

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

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

specific crop provisions for the insurance of nursery to be contained

in an endorsement to the Common Crop Insurance Policy which contains

standard terms and conditions common to most crops. The intended effect

of this action is to add a nursery frost, freeze, and cold damage

exclusion option to better meet the needs of the insured.

DATES: Written comments, data, and opinions on this proposed rule must

be submitted no later than February 27, 1995 to be sure of

consideration.

ADDRESSES: Written comments, data, and opinion on this proposed rule

should be sent to Diana Moslak, Regulatory and Procedural Development

Staff, Federal Crop Insurance Corporation, USDA, Washington, D.C.

20250. Hand or messenger delivery should be made to 2101 L Street,

N.W., suite 500, Washington, D.C. Written comments will be available

for public inspection and copying in the Office of the Manager, 2101 L

Street, N.W., 5th Floor, Washington, D.C., during regular business

hours, Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Diana Moslak, Federal Crop Insurance

Corporation, U.S. Department of Agriculture, Washington, D.C. 20250.

Telephone (202) 254-8314.

SUPPLEMENTARY INFORMATION: This action has been reviewed under United

States Department of Agriculture (``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 January 1, 2000.

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

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

by the Office of Management and Budget (``OMB'').

The information collection or record-keeping requirements contained

in these regulations (7 CFR part 457) have been submitted to the OMB in

accordance with the provisions of 44 U.S.C. Sec. 35 and will be

assigned an OMB control number.

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

Federalism, that this proposed 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 a

substantial direct effect on states or their political subdivisions, or

on the distribution of power and responsibilities among the various

levels of government.

Under the Regulatory Flexibility Act (5 U.S.C. Sec. 605), this

regulation will not have a significant impact on a substantial number

of small entities. This action reduces the paperwork burden on the

insured farmer and the reinsured company. 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 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.

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 12778. 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 or promulgated by the

National Appeals Division 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.

Background

FCIC proposes to add to the Common Crop Insurance Regulations (7

CFR Part 457), two new sections to be known as 7 CFR 457.114, the

Nursery Crop Insurance Provisions and 7 CFR 457.115, the Nursery Frost,

Freeze, and Cold Damage Exclusion Option. The provisions and option

will be effective for the 1996 and succeeding crop years.

The proposed Nursery Crop Insurance Provisions will replace the

provisions found at 7 CFR part 406. By separate rule, FCIC will amend

these regulations to restrict the crop years of application to those

prior to the crop year for which this rule will be effective and later

remove the nursery crop insurance regulations contained in 7 CFR part

406.

This rule makes minor editorial and format changes to improve its

compatibility with the Common Crop Insurance Policy. In addition, FCIC

is proposing other changes in the provisions for insuring nursery

crops:

1. Subsection 1.(a)--Revises the definition of ``amount of

insurance'' to allow a maximum amount of insurance based on the highest

reported monthly market value of inventory plus any additional

inventory added during the year, or which is restocked, if approved by

the insurer. Presently, the maximum amount of insurance is based on 90

percent of the average monthly market value of inventory reported at

the beginning of the crop year. The 10 percent reduced valuation in the

current regulations is eliminated to recognize the abnormal expenses

incurred in disposing of damaged inventory.

2. Subsection 1.(b)--Revises the definition of ``annual loss

deductible'' by replacing the term ``field market value'' with the term

``highest reported monthly market value.''

3. Subsection 1.(e)--Revises the definition, ``field market value

A'' to no longer contain the 10 percent reduced valuation contained in

the current regulations due to the change stated in item 1. above.

Language specifies that the insurer reserves the right to review the

insured's wholesale price list taking into consideration maximum

discounts [[Page 5340]] granted to any buyer as contained in the

definition of ``wholesale market value.''

4. Subsection 1.(f)--Revises the definition, ``field market value

B'' to no longer contain the 10 percent reduced valuation contained in

the current regulations due to the change stated in item 1. above.

Maximum pricing discounts will also be considered in this determination

as specified in the definition of ``wholesale market value.''

5. Subsection 1.(h)--Add a definition for ``monthly loss

deductible.''

6. Subsection 1.(i)--Add a definition for ``monthly market value.''

7. Subsection 1.(n)--Add a definition for ``standard nursery

containers.''

8. Section 2--Clarify that locations outside a five mile radius of

the named locations, but within the same county, may be designated as a

separate basic unit or be included in the closest unit listed on the

insured's nursery plant inventory summary.

9. Subsection 6.(c )--Clarify that whenever inventory is expected

to change within a specific month, the highest value for the month will

be recorded on the nursery plant inventory summary.

10. Subsection 6.(d)--Require the insured to give notice in writing

at least 14 days before making a change in inventory value, if a

request for a revised nursery plant inventory summary is planned. This

provision allows the insurer to inspect the inventory if necessary.

11. Paragraphs 6.(d)(1) and 6.(d)(2)--Specify that insurance will

not attach on any increase in inventory until the insurer completes an

inspection and accepts such increase.

12. Subsection 6.(e)--Specify that any plants added to the

inventory that are not reported for insurance will not be insured, but

the value of these plants, after a loss, will be considered production

to count for purposes of loss determination and claim settlement.

13. Subsection 7.(b)--Allow the insured to pay the annual premium

in three installments. The first payment (40 percent of the annual

premium) is due and payable on the later of September 30 preceding the

crop year or the date the insurer accepts the inventory for insurance;

the second payment (30 percent of the annual premium) is due and

payable on January 1 of the crop year; and the third payment (30

percent of the annual premium) is due and payable on April 1 of the

crop year. Current provisions state that the annual premium is earned

and payable on or before September 30 preceding each crop year, but

allow a six month delay in the payment of premiums, until March 31 of

the crop year.

14. Subsection 7.(c)--Specify that additional premium resulting

from an increase in a nursery plant inventory summary is due and

payable when the revised summary is approved.

15. Subsection 7.(d)--Clarify that premium will not be reduced due

to a decrease in plant inventory, unless such decrease results from

deleting uninsurable inventory which was incorrectly reported.

16. Paragraph 8.(a)(1)--Require that the nursery plants be grown

under an irrigated practice.

17. Paragraph 8.(a)(3)--Clarify that the insured nursery plant

inventory will not include plants that produce edible berries, fruits,

or nuts.

18. Paragraph 8.(a)(4)--Clarify that nursery plants grown in

standard nursery containers less than three inches across at the

smallest dimension are not insured unless the insurer enters into a

written agreement to insure such plants.

19. Paragraph 8.(a)(6)--Allow plants not listed in the Nursery

Eligible Plant Listing to be insurable if the insured submits a written

request and the insurer agrees in writing to insure such plants.

20. Paragraph 8.(a)(7)--Clarify that stock plants will not be

insured.

21. Section 9--Specify that insurance attaches on the later of

October 1 or the date the insurer accepts the inventory for insurance,

and in either case upon payment of 40 percent of the annual premium.

This change allows the insurer to complete any necessary inspection

before insurance attaches. This paragraph also states that when the

nursery plant inventory summary is revised to add additional plant

inventory, coverage for the additional inventory will not attach until

the additional premium for that inventory is paid in full.

22. Subsection 9.(a)--Clarify that insurance coverage ends when

inventory is sold or removed unless that inventory is replaced and

additional premium is paid. Previous provisions did not permit

insurance to attach to restocked inventory.

23. Paragraph 10.(a)(9)--Add as an insurable cause of loss, failure

or breakdown of frost/freeze protection equipment or facilities

provided: 1) such failure or breakdown is caused by a named insurable

cause of loss, 2) the insured nursery plants are damaged by freezing

temperatures within 72 hours of such failure or breakdown, and 3) the

equipment or facilities could not be repaired or replaced between the

time of failure or breakdown and the time the freezing temperatures

occur.

24. Paragraph 10.(b)(1)--Clarify that brownout is not an insured

cause of loss.

25. Paragraph 10.(b)(2)--Clarify that failure of the power supply

is not an insured cause of loss, unless such failure is a direct result

of an insured cause of loss.

26. Paragraph 10.(b)(5)--Clarify that collapse or failure of

buildings or structures are not insured causes of loss unless due to an

insured cause of loss.

27. Subsection 12(a)--Allow use of the highest reported monthly

market value for the unit and the monthly loss deductible (not to

exceed the remaining annual loss deductible) to calculate an indemnity.

References to the 10 percent reduced valuation have been deleted. These

changes were necessary due to the change in the definition of ``amount

of insurance'' as stated in item 1. above.

28. Add a nursery frost, freeze, and cold damage exclusion option.

This option excludes losses due to frost, freeze, and cold weather for

plants that have specific over-wintering requirements when those over-

wintering requirements will not be met.

List of Subjects in 7 CFR Part 457

Crop insurance, nursery crop.

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 1996 and succeeding

crop years, to read as follows:

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

1996 AND SUBSEQUENT CONTRACT YEARS

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

follows:

Authority: 7 U.S.C. 1506(1).

2. The heading for part 457 is revised as set forth above.

3. 7 CFR part 457 is amended by adding Secs. 457.114 and 457.115 to

read as follows:

Sec. 457.114 Nursery Crop Insurance Provisions.

The Nursery Crop Insurance Provisions for the 1996 and succeeding

crop years are as follows: [[Page 5341]]

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Nursery 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

(a) Amount of insurance--The result of multiplying the highest

monthly market value reported on the nursery plant inventory summary

(which will include inventory reported by you and accepted by us on

a revised nursery plant inventory summary or restocked), multiplied

by the percentage for the coverage level you elect.

(b) Annual loss deductible--The value calculated by subtracting

the amount of insurance from the highest monthly market value

reported on the nursery plant inventory summary. The annual loss

deductible will be revised if an inventory addition is approved.

(c) Brownout--A cutback or reduction in electric power, as a

result of a shortage.

(d) Crop year--The 12 month period which begins October 1 and

extends through September 30 of the next calendar year, designated

by the year in which it ends. (The 1996 crop year begins October 1,

1995, and ends September 30, 1996).

(e) Field market value A--The wholesale market value for the

unit immediately prior to the occurrence of the loss.

(f) Field market value B--The wholesale market value remaining

for the unit immediately following the occurrence of the loss.

(g) 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 maintain the amount of

insurance on the nursery plant inventory.

(h) Monthly loss deductible--The result of multiplying the

smaller of field market value A or the highest monthly market value

reported on the nursery plant inventory summary by 100 percent

(100%) less the percentage for the coverage level you elect, not to

exceed the annual loss deductible. When inventory is added or

restocked by a revised nursery plant inventory summary, the monthly

loss deductible will be calculated based on the revised monthly

market value, not to exceed the annual loss deductible.

(i) Monthly market value--The sum of the wholesale market value

of all insurable plants in the unit for a month based on your

wholesale price list less the maximum discount granted to any buyer.

(j) Nursery--A business enterprise that produces ornamental

plant types in standard nursery containers for the wholesale market.

(k) Nursery eligible plant listing--A listing contained in the

Actuarial Table which specifies the plants eligible for insurance

and any mandatory or recommended storage required for such plants in

each hardiness zone defined by the United States Department of

Agriculture.

(l) Nursery plant inventory summary--A report that specifies

numbers and prices of plants included in the nursery inventory.

(m) Smallest dimension--For a round container, the diameter; for

any other container, the distance measured from one side directly

across to the opposite side at the narrowest point.

(n) Standard nursery containers--Rigid containers not less than

three (3) inches across the smallest dimension which are

commercially sold to nurseries. Grow bags, trays, cellpacks, and

burlap are not considered standard nursery containers.

(o) Stock plants--Plants being used for reproduction, for

growing cuttings, for air layers or for propagating.

(p) Wholesale market value--The dollar valuation of the numbers

of insurable plants actually contained within the unit at any time.

The values used will be based on your wholesale price list less the

maximum discount granted to any buyer.

(q) 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, plant type

and premium rate must be contained in the written agreement.

Notwithstanding the sales closing date restriction contained herein,

in specific instances, a written agreement may be applied for after

the sales closing date and approved if, after a physical inspection

of the nursery plant inventory, there is a determination that the

inventory has the expectancy of meeting the amount of insurance. 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

In lieu of the definition of unit contained in subsection 1.(tt)

of the Basic Provisions (Sec. 457.8), a unit consists of all growing

locations in the county within a five mile radius of the named

insured locations designated on your nursery plant inventory

summary. Any growing location more than five miles from any other

growing location, but within the county, may be designated as a

separate basic unit or be included in the closest unit listed on

your nursery plant inventory summary.

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

Indemnities

Subsection 3.(c) of the Basic Provisions (Sec. 457.8) is not

applicable to the Nursery Crop Provisions.

4. Contract Changes

The contract change date is June 30 preceding the crop year (see

the provisions of section 4 (Contract Changes) of the Basic

Provisions (Sec. 457.8)).

5. Cancellation and Termination Dates

In accordance with subsection 2.(f) of the Basic Provisions

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

30 preceding the crop year.

6. Nursery Plant Inventory Summary

(a) For the purposes of the provisions of section 6 (Report of

Acreage) of the Basic Provisions (Sec. 457.8), the term ``acreage''

means ``nursery plant inventory.''

(b) Your annual nursery plant inventory summary will be used to

determine your premium and the amount of insurance for each unit. If

you do not submit the summary by the reporting date, we may elect to

determine the nursery plant inventory for each unit or we may deny

liability on any unit. Errors in reporting units may be corrected by

us at the time of loss adjustment.

(c) You must submit a nursery plant inventory summary to us on

or before September 30 preceding the crop year. This summary must

include, by unit and by month for each type of plant in the

inventory, the:

(1) Container sizes;

(2) Number of plants;

(3) Wholesale price for each month of the crop year; and

(4) Your share.

If your inventory will change within a specific month, report

the largest inventory that you will have for that month.

(d) With our consent, you may revise your nursery plant

inventory summary to correct or change the value of the insurable

inventory caused by a quantity change if the amount of the revision

is at least 10 percent of the highest monthly market value reported

on the nursery plant inventory summary or $25,000, whichever is

smaller. You may not revise your nursery plant inventory summary

after the sales closing date to add plants not listed on the Nursery

Eligible Plant Listing. If you wish to revise the nursery plant

inventory summary, you must notify us in writing at least 14 days

before a change in inventory value. We must inspect and accept the

nursery before insurance attaches on any proposed increase in

inventory if:

(1) The storage facilities have changed in any way since our

previous inspection; or

(2) The revision includes plants that have specific over-

wintering storage requirements and that were not previously reported

on your nursery plant inventory summary.

(e) Insurable plants that are not reported on your nursery plant

inventory summary will not be insured, but the value of such plants

after a loss will be included as production to count. Such

unreported inventory may reduce the amount of any indemnity payable

to you.

(f) You must designate separately any plant inventory that is

not insurable.

(g) Subsection 6.(f) of the Basic Provisions (Sec. 457.8) is not

applicable to the Nursery Crop Provisions.

7. Annual Premium

We will determine your premium as follows:

(a) The annual premium for each unit will be calculated by:

(1) Multiplying the number of each type of plant and size

container designated on your nursery plant inventory summary for

each month by prices for that type and container [[Page 5342]] size

shown on your wholesale price list, less the maximum discount

granted to any buyer;

(2) Adding the results of step 1, for each month;

(3) Multiplying the highest monthly market value for the crop

year by the percentage for the coverage level you have elected;

(4) Multiplying the product obtained in (3) above by the

appropriate premium rate for each appropriate plant classification

listed on the actuarial table; and

(5) Multiplying the product obtained in (4) above by your share.

(b) The annual premium will be earned in full when insurance

attaches. It is due and payable as follows:

(1) Forty percent (40%) on the later of September 30 preceding

each crop year or the date we accept the inventory for insurance;

(2) Thirty percent (30%) on January 1 of the crop year; and

(3) Thirty percent (30%) on April 1 of the crop year.

(c) Additional premium earned from an increase in the nursery

plant inventory summary is due and payable when the revised nursery

plant inventory summary is approved by us.

(d) Premium will not be reduced due to a decrease in the nursery

plant inventory summary, unless such decrease results from the

deletion of uninsurable inventory from the summary that was

erroneously reported as insurable.

8. Insured Plants

(a) In lieu of the provisions of section 8 (Insured Crop) of the

Basic Provisions (Sec. 457.8), the insured nursery plant inventory

will be all nursery plants in the county reported by you or

determined by us for which an application is accepted, for which a

premium rate is provided by the actuarial table, and that:

(1) Are grown under an irrigated practice for which you have

adequate facilities and water at the time coverage begins in order

to carry out a good irrigation practice;

(2) Are classified as woody, herbaceous, or foliage landscape

plants;

(3) Do not include plants that produce edible berries, fruits or

nuts;

(4) Are grown in standard nursery containers (not planted in the

ground), at least three (3) inches across the smallest dimension

unless a written agreement is extended allowing a smaller container;

(5) Are initially inspected by us and determined to be

acceptable;

(6) Are listed on the Nursery Eligible Plant Listing unless a

written agreement provides otherwise;

(7) Are not stock plants;

(8) Are grown in accordance with the production practices for

which premium rates have been established; and

(9) Meet the ``mandatory'' or ``recommended'' storage

requirements unless you have signed the Frost, Freeze, and Cold

Damage Exclusion Option for those nursery plants.

(b) The provisions of section 9 of the Basic Provisions

(Sec. 457.8) are not applicable to the Nursery Crop Provisions.

9. Insurance Period

In lieu of the provisions of section 11 (Insurance Period) of

the Basic Provisions (Sec. 457.8), coverage begins on each unit or

part of a unit the later of October 1 or the date we accept the

inventory for insurance, provided at least 40 percent (40%) of the

annual premium is paid by the date specified in paragraph 7.(b)(1).

Coverage will not attach for plant inventory added due to a revised

nursery plant inventory summary until any additional premium is paid

in full. Insurance ends for each unit at the earliest of:

(a) The date all plant inventory within the unit is sold or

otherwise removed unless that inventory is replaced and additional

earned premium is paid. (If a portion of the plants are sold or

otherwise removed from inventory and are not replaced, insurance

ends only on that part of the unit.);

(b) The date of final adjustment of the loss on the unit; or

(c) September 30 of the crop year.

10. 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

for unavoidable damage caused only by the following causes of loss

which occur within the insurance period:

(1) Adverse weather conditions;

(2) Fire;

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

application of pest control measures;

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

improper application of disease control measures;

(5) Wildlife;

(6) Earthquake;

(7) Volcanic eruption;

(8) Failure of the irrigation water supply, due to an

unavoidable cause of loss occurring within the insurance period; or

(9) Failure or breakdown of frost/freeze protection equipment or

facilities due to direct damage to such equipment or facilities from

an insurable cause of loss, provided the insured nursery plants are

damaged by freezing temperatures within 72 hours after the failure

of such equipment or facilities and repair or replacement was not

possible between the time of failure or breakdown and the time the

freezing temperatures occurred.

(b) In addition to the causes of loss not insured against under

section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), we

do not insure against any loss caused by:

(1) Brownout;

(2) Failure of the power supply unless such failure is due to an

insurable cause of loss;

(3) The inability to market the nursery plants as a direct

result of quarantine, boycott, or refusal of a buyer to accept

production;

(4) Fire, where weeds and other forms of undergrowth in the

vicinity of the building and on your property have not been

controlled; or

(5) Collapse or failure of buildings or structures unless due to

an insured cause of loss.

11. Duties in the Event of Damage or Loss

(a) In addition to your duties contained under section 14

(Duties in the Event of Damage or Loss) of the Basic Provisions

(Sec. 457.8), you must:

(1) Obtain our written consent prior to:

(i) Destroying, selling or otherwise disposing of any plant

inventory that is damaged; or

(ii) Changing or discontinuing your normal growing practices

with respect to care and maintenance of the insured plant inventory.

(2) Upon our request, provide complete copies of your nursery

plant inventory wholesale price list for the 12 month period

immediately preceding the loss and your marketing records including

plant shipping invoices for the same period.

(b) In addition to subsection 14.(c) of the Basic Provisions

(Sec. 457.8), you must submit a claim for indemnity to us on our

form, not later than 60 days after the earliest of:

(1) Your loss; or

(2) The end of the insurance period.

12. Settlement of Claim

(a) The indemnity will be the amount calculated by us for each

unit as follows:

(1) Subtracting field market value B from the lesser of field

market value A or the highest monthly market value for the unit

reported on the nursery plant inventory summary to determine the

total amount of loss;

(2) Subtracting therefrom the monthly loss deductible (not to

exceed the remaining annual loss deductible); and

(3) Multiplying the result of (2) above by your share.

(b) Individual insured losses occurring on the same unit during

the crop year may be accumulated if each loss is reported and valued

by us to satisfy the annual loss deductible. Paragraph 12.(a)(2)

will not apply to any subsequent individual loss determinations when

the total amount of accumulated monthly loss deductibles is equal to

or greater than the annual loss deductible. Total indemnities for a

unit will not exceed the amount of insurance for the unit.

(c) The value of any insured plant inventory may be determined

on the basis of our appraisals conducted after the end of the

insurance period.

Sec. 457.115 Nursery Frost, Freeze, and Cold Damage Exclusion Option.

This is not a continuous option. Application for this option must

be made on or before the sales closing date for each crop year this

Option is to be in effect (see exception in item 2 below).

Insured's Name---------------------------------------------------------

Address----------------------------------------------------------------

Contract Number--------------------------------------------------------

Identification Number--------------------------------------------------

SSN/EIN ________ Tax I.D. ________

Crop Year ________ Unit Number ________ Hardiness Zone ________

For the crop year designated above, the Nursery Crop Provisions

(Sec. 457.114) are amended in accordance with the following terms and

conditions:

1. You must have the Common Crop Insurance Policy Basic Provisions

and Nursery Crop Provisions in force.

2. This option must be submitted to us on or before the final date

for [[Page 5343]] accepting applications for the crop year in which you

wish to insure your nursery plant inventory under this option. If the

provisions of paragraph 6.(d)(2) of the Nursery Crop Provisions apply,

we may accept this option after the sales closing date, or we may allow

additional plants to be added to this option after such date.

3. Executing this option does not reduce the premium rate for

nursery crop insurance.

4. All provisions of the Basic Provisions (Sec. 457.8) and Nursery

Crop Provisions (Sec. 457.114) not in conflict with this option are

applicable.

5. Upon execution of this option, the following plant varieties

will not have frost, freeze, or cold damage coverage on this unit

because the mandatory (Risk Group A) or recommended (Risk Group B)

over-wintering requirements will not be met.

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

Over-wintering

Scientific name Common name requirements to be

excluded

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

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

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

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

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

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

Insured's Signature

Date-------------------------------------------------------------------

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

Insurance Company Representative's Signature and Code Number

Date-------------------------------------------------------------------

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

Done in Washington, DC, on January 23, 1995.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 95-2057 Filed 1-26-95; 8:45 am]

BILLING CODE 3410-08-P