Common Crop Insurance Regulations; Texas Citrus Fruit Crop Insurance Provisions

SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes

specific crop provisions for the insurance of Texas citrus fruit. The

provisions will be used in conjunction with the Common Crop Insurance

Policy Basic Provisions, which contain standard terms and conditions

common to most crops. The intended effect of this action is to provide

policy changes to better meet the needs of the insured and combine the

current Texas Citrus Endorsement with the Common Crop Insurance Policy

for ease of use and consistency of terms.

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

be accepted until close of business July 5, 1996 and will be considered

when the rule is to be made final. The comment period for information

collections under the Paperwork Act of 1995 continues through August 5,

1996.

ADDRESSES: Interested persons are invited to submit written comments to

the Chief, Product Development Branch, Federal Crop Insurance

Corporation, United States Department of Agriculture, 9435 Holmes Road,

Kansas City, MO 64131. Written comments will be available for public

inspection and copying in room 0324, South Building, USDA, 14th and

Independence Avenue, S.W., Washington, D.C., 8:15 a.m.-5:45 p.m.,

Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Louise Narber, Program Analyst,

Research and Development Division, Product Development Branch, FCIC,

Kansas City, MO, address listed above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866 and Departmental Regulation 1512-1

This action has been reviewed under United States Department of

Agriculture (USDA) procedures established by Executive Order No. 12866

and Departmental Regulation 1512-1. This action constitutes a review as

to the need, currency, clarity, and effectiveness of these regulations

under those procedures. The sunset review date established for these

regulations is April 30, 2001.

This rule has been determined to be not significant for the

purposes of Executive Order No. 12866 and, therefore, has not been

reviewed by the Office of Management and Budget (OMB).

Paperwork Reduction Act of 1995

The information collection requirements contained in these

regulations were previously submitted to OMB pursuant to the Paperwork

Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB control number

0563-0003 through September 30, 1998.

The amendments set forth in this proposed rule do not contain

additional information collections that require clearance by OMB under

the provisions of 44 U.S.C. chapter 35.

The title of this information collection is ``Catastrophic Risk

Protection Plan and Related Requirements including, Common Crop

Insurance Regulations; Texas Citrus Fruit Crop Insurance Provisions.''

The information to be collected includes: a crop insurance acreage

report, an insurance application, and continuous contract. Information

collected from the acreage report and application is electronically

submitted to FCIC by the reinsured companies. Potential respondents to

this information collection are producers of Texas citrus fruit that

are eligible for Federal crop insurance.

The information requested is necessary for the reinsured companies

and FCIC to provide insurance and reinsurance, determine eligibility,

determine the correct parties to the agreement or contract, determine

and collect premiums or other monetary amounts, and pay benefits.

All information is reported annually. The reporting burden for this

collection of information is estimated to average 16.9 minutes per

response for each of the 3.6 responses from approximately 1,755,015

respondents. The total annual burden on the public for this information

collection is 2,676,932 hours.

The comment period for information collections under the Paperwork

Reduction Act of 1995 continues for the following: (a) whether the

proposed collection of information is necessary for the proper

performance of the functions of the agency, including whether the

information shall have practical utility; (b) the accuracy of the

agency's estimate of the burden of the proposed collection of

information; (c) ways to enhance the quality, utility, and clarity of

the information to be collected; and (d) ways to minimize the burden of

the collection of information on respondents, including through the use

of automated collection techniques or other forms of information

gathering technology.

Comments regarding paperwork reduction should be submitted to the

Desk Officer for Agriculture, Office of Information and Regulatory

Affairs, Office of Management and Budget, Washington, D.C. 20503 and to

Bonnie Hart, Advisory and Corporate Operations Staff, Regulatory Review

Group, USDA, Farm Service Agency, P.O. Box 2145, Ag Box 0570,

Washington, D.C. 20013-2415. Telephone (202) 690-2857. Copies of the

information collection may be obtained from Bonnie Hart at the above

stated address.

Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public

Law 104-4, establishes requirements for Federal agencies to assess the

effects of their regulatory actions on State, local, and tribal

governments and the private sector. Under section 202 of the UMRA, FCIC

generally must prepare a written statement, including a cost-benefit

analysis, for proposed and final rules with ``Federal mandates'' that

may result in expenditures of State, local, or tribal governments, in

the aggregate, or to the private sector, of $100 million or more in any

1 year. When such a statement is needed for a rule, section

[[Page 28513]]

205 of the UMRA generally requires FCIC to identify and consider a

reasonable number of regulatory alternatives and adopt the least

costly, more cost-effective or least burdensome alternative that

achieves the objectives of the rule.

This rule contains no Federal mandates (under the regulatory

provisions of title II of the UMRA) of State, local, and tribal

governments or the private sector. Thus, this rule is not subject to

the requirements of sections 202 and 205 of the UMRA.

Executive Order No. 12612

It has been determined under section 6(a) of Executive Order No.

12612, Federalism, that this rule does not have sufficient Federalism

implications to warrant the preparation of a Federalism Assessment. The

provisions contained in this rule will not have a substantial direct

effect on States or their political subdivisions, or on the

distribution of power and responsibilities among the various levels of

government.

Regulatory Flexibility Act

This regulation will not have a significant impact on a substantial

number of small entities. Under the current regulations, an insured is

required to complete an application and acreage report. If the crop is

damaged or destroyed, the insured is required to give notice of loss

and provide the necessary information to complete a claim for

indemnity. An insured must use actual records of production or receive

a transitional yield. This regulation does not alter those

requirements. Therefore, the amount of work required of the insurance

companies and Farm Service Agency (FSA) offices delivering and

servicing these policies will not increase significantly from the

amount of work currently required. This rule does not have any greater

or lesser impact on the insured. Therefore, this action is determined

to be exempt from the provisions of the Regulatory Flexibility Act (5

U.S.C. 605), and no Regulatory Flexibility Analysis was prepared.

Federal Assistance Program

This program is listed in the Catalog of Federal Domestic

Assistance under No. 10.450.

Executive Order No. 12372

This program is not subject to the provisions of Executive Order

No. 12372, which require intergovernmental consultation with State and

local officials. See the Notice related to 7 CFR part 3015, subpart V,

published at 48 FR 29115, June 24, 1983.

Executive Order No. 12778

The Office of the General Counsel has determined that these

regulations meet the applicable standards provided in sections 2(a) and

2(b)(2) of Executive Order No. 12778. The provisions of this rule will

not have a retroactive effect prior to the effective date. The

provisions of this rule will preempt State and local laws to the extent

such State and local laws are inconsistent herewith. The administrative

appeal provisions in 7 CFR parts 11 and 780 must be exhausted before

action for judicial review may be brought.

Environmental Evaluation

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

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

neither an Environmental Assessment nor an Environmental Impact

Statement is needed.

National Performance Review

This regulatory action is being taken as part of the National

Performance Review initiative to eliminate unnecessary or duplicative

regulations and improve those that remain in force.

Background

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

CFR part 457), a new section, 7 CFR Sec. 457.119, Texas Citrus Fruit

Crop Insurance Provisions. The provisions will be effective for the

1998 and succeeding crop years. The proposed provisions will replace

those found at 7 CFR Sec. 401.115 (Texas Citrus Endorsement). Upon

publication of 7 CFR Sec. 457.119 as a final rule, the provisions for

insuring Texas citrus fruit contained herein will supersede the current

provisions contained in 7 CFR Sec. 401.115. By separate rule, FCIC will

revise 7 CFR Sec. 401.115 to restrict its effect through the 1997 crop

year and later remove that section.

This rule makes minor editorial and format changes to improve the

Texas Citrus Crop Insurance Endorsement's compatibility with the Common

Crop Insurance Policy. In addition, FCIC is proposing substantive

changes in the provisions for insuring Texas citrus fruit as follows:

1. Section 1--Add definitions for ``days,'' ``direct marketing,''

``FSA,'' ``good farming practices,'' ``interplanted,'' ``irrigated

practice,'' ``local market price,'' ``production guarantee (per

acre),'' ``type,'' ``ton,'' and ``written agreement'' for clarification

purposes.

2. Section 1--Change the definitions for ``freeze,'' ``harvest,''

``hedged,'' ``non-contiguous land,'' and ``topped,'' for clarification.

3. Section 1--Delete the definition for ``frost'' because frost as

a cause of loss has been eliminated as unnecessary. The definition of

``freeze'' includes damage from frost. Also, replace the definition of

``excess moisture'' with ``excess rain'' for clarification.

4. Section 2--Add provisions to allow optional unit division by

section, section equivalent, or FSA Farm Serial Number, or by non-

contiguous land so that the unit structure will be the same in both the

Texas Citrus Fruit Provisions and the Texas Citrus Tree Provisions. The

previous provisions only allowed basic units to be divided into more

than one unit by section if each unit was non-contiguous.

5. Section 3(a)--Clarify that an insured may select one price

election for each citrus type, and that the price election selected for

each type need not bear the same percentage relationship to the maximum

price offered for each type. Since each type of Texas citrus fruit is

considered a separate crop, it should not be treated any differently

than any other crop with a separate price election. The insured may

select any available price election. However, if separate price

elections are available by variety within each type, the price

elections the insured chooses within the type must have the same

percentage relationship to the maximum price offered by the insurance

provider for each variety within the type.

6. Section 3(b)--Add a provision for a 1-year lag period for the

insured to report citrus production for Actual Production History (APH)

because all of the fruit will not be harvested until after the

production reporting date.

7. Section 3(c)--Add provisions for reporting the age and type, if

applicable, of any interplanted perennial crop, its planting pattern,

and any other information that the insurance provider requests in order

to establish the yield upon which the insurance guarantee is based. If

the producer fails to notify the insurance provider of any

circumstances that may cause the expected yield to fall below the yield

upon which the insurance guarantee is based, the insurance provider

will reduce the production guarantee at any time the insurance provider

becomes aware of the circumstances. This allows the insurance provider

to limit liability before insurance attaches based on the condition of

the citrus trees.

8. Section 3(d)--The yield upon which the guarantee is based will

be determined from APH yields unless previous damage requires

establishment of the yield based on the appraised yield

[[Page 28514]]

for the insured acreage. Currently the guarantee is based on crop

appraisals because a hard freeze severely damaged the citrus trees a

few years ago. Enough time has passed to determine the producers'

guarantee based on the producers' individual yield.

9. Section 5--Change the cancellation and termination dates from

November 30 to November 20 to be consistent with other perennial crops.

10. Section 6--Clarify that all premium computations will be based

on the final stage production guarantee.

11. Section 7--Include the insurable citrus type designations in

the Special Provisions rather than in the Texas Citrus Fruit

Provisions. This will prevent the need for an amendment to the Texas

Citrus Fruit Crop Provisions if it is later determined that additional

types need to be added. Also, eliminate the provision that requires

acceptable production records for the previous crop year for insurance

to attach. There is a 1 year lag period for reporting production.

12. Section 8--Add a provision making interplanted citrus insurable

if planted with another perennial crop unless after an inspection, the

insurance provider determines it does not meet insurability

requirements. This clause will make insurance available to more

producers and will reduce the number of acres for which coverage would

only be available under the noninsured crop disaster assistance program

(NAP).

13. Section 9--Change the beginning of the insurance period from

December 1 to November 21 to be consistent with other perennial crops.

However, for the 1st crop year for which insurance is sought, if the

application is accepted by the insurance provider after November 20,

insurance will attach on the 10th day after the application is received

in the insurance provider's local office. The current requirement that

insurance will not attach for 30 days after the application is received

if not received until after November 30, creates an unnecessary lag

time during which the crop is not covered. Add provisions to clarify

the procedure for insuring acreage when an insurable share is acquired

or relinquished on or before the acreage reporting date. Under the

current Texas Citrus Endorsement for acreage acquired (for which an

application is in place) on or before the acreage reporting date,

coverage would attach at the time the insurer considers the crop

inspection as being acceptable provided it was on or after November 30

(and not a late filed application and the first year of insurance). In

the same situation under these new provisions, coverage will have

started on November 21 (except for a late filed application and the 1st

year of insurance) even if the insurer considers the inspection as

being acceptable on January 14. Under the current Texas Citrus

Endorsement for acreage relinquished on or before the acreage reporting

date but after coverage had attached, the premium would still be due

from the insured even if the insured no longer had an insurable

interest. In the same situation under these new provisions, insurance

will not be considered to have attached so the premium will not be due

unless a transfer of right to an indemnity was completed.

14. Section 10--Add a clause clarifying that any failure of the

irrigation water supply must be caused by an insured peril occurring

during the insurance period. Delete ``frost'' as a cause of loss

because the definition of freeze also includes damage from frost. Also,

delete damage by Mediterranean Fruit Fly as an insurable cause and

specify that we will not insure against damage or loss of production

due to disease or insect infestation, unless an insured cause of loss

prevents the proper application of control measures, causes properly

applied control measures to be ineffective, or causes disease or insect

infestation for which no effective control mechanism is available.

15. Section 11--Require the producer to give notice at least 15

days before any production from any unit will be marketed directly to

consumers because insureds usually have inadequate records of such

marketing and an appraisal is necessary to accurately determine the

direct marketed production.

16. Section 12--Add a provision clarifying the procedure for when

the insured intends to abandon or not care for the acreage. If the

insured and the insurer agree on potential production on acreage the

insured wishes to abandon or no longer care for, the insurance period

for that acreage will end. If agreement is not reached, the claim may

be deferred if the insured agrees to continue to care for the crop. The

insurance provider will make another appraisal when the insured

notifies them of further damage or that harvest is general in the area

unless the crop is harvested, in which case the harvested production

will be used to determine the production to count. If the insured does

not continue to care for the crop the appraisal made prior to deferring

the claim will be used to determine the production to count. Also add a

provision to clarify that if individual records of juice content are

not available, the average juice content will be obtained from the

nearest juice plant, if available, or from an appraisal to determine

the average juice content. Delete the provision which allows the

contract price to be an applicable price for undamaged citrus fruit if

the contract was executed between the producer and buyer before damage

occurred because it allowed a potential for abuse and was seldom used.

17. Section 13--Add provisions for providing insurance coverage by

written agreement. FCIC has a long standing policy of permitting

certain modifications of the insurance contract by written agreement

for some policies. This amendment will extend this practice to Texas

citrus fruit and will make it possible to tailor the policy to a

specific insured in certain instances.

List of Subjects in 7 CFR Part 457

Crop insurance, Texas citrus fruit.

Proposed Rule

Pursuant to the authority contained in the Federal Crop Insurance

Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance

Corporation hereby proposes to amend the Common Crop Insurance

Regulations (7 CFR part 457), effective for the 1998 and succeeding

crop years, as follows:

PART 457--[AMENDED]

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

follows:

Authority: 7 U.S.C. 1506(l) and 1506(p).

2. A new Sec. 457.119 is added to read as follows:

Sec. 457.119 Texas Citrus Fruit Crop Insurance Provisions

The Texas Citrus Fruit Crop Insurance Provisions for the 1998 and

succeeding crop years are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

TEXAS CITRUS FRUIT 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

Crop year--The period beginning with the date insurance attaches

to the citrus crop and extends through normal harvest time, and will

be designated by the calendar year following the year in which the

bloom is normally set.

Days--Calendar days.

Direct marketing--Sale of the insured crop directly to consumers

without the intervention of an intermediary such as a wholesaler,

retailer, packer, processor,

[[Page 28515]]

shipper, or buyer. Examples of direct marketing include selling

through an on-farm or roadside stand or a farmer's market, and

permitting the general public to enter the field for the purpose of

picking all or a portion of the crop.

Excess rain--An amount of precipitation that damages the crop.

Excess wind--A natural movement of air that has sustained speeds

in excess of 58 miles per hour recorded at the U. S. Weather Service

reporting station nearest to the crop at the time of crop damage.

Freeze--The formation of ice in the cells of the tree or its

fruit caused by low air temperatures.

FSA--The Farm Service Agency, an agency of the United States

Department of Agriculture or any successor agency.

Good farming practices--The cultural practices generally in use

in the county for the crop to make normal progress toward maturity

and produce at least the yield used to determine the production

guarantee, and generally recognized by the Cooperative Extension

Service as compatible with agronomic and weather conditions in the

county.

Harvest--The severance of mature citrus fruit from the tree by

pulling, picking, or any other means, or by collecting marketable

fruit from the ground.

Hedged--A process of trimming the branches of the citrus trees

for better or more fruitful growth of the citrus fruit.

Interplanted--Acreage on which two or more crops are planted in

any form of alternating or mixed pattern.

Irrigated practice--A method of producing a crop by which water

is artificially applied during the growing season by appropriate

systems and at the proper times, with the intention of providing the

quantity of water needed to produce at least the yield used to

establish the irrigated production guarantee on the irrigated

acreage planted to the insured crop.

Local market price--The applicable citrus price per ton offered

by buyers in the area in which you normally market the insured crop.

Non-contiguous land--Any two or more tracts of land owned by

you, or rented by you for any consideration other than a share in

the insured crop, whose boundaries do not touch at any point. Land

that is separated by a public or private right-of way, waterway or

irrigation canal will be considered to be touching.

Production guarantee (per acre):

(a) First stage production guarantee--The second stage

production guarantee multiplied by 40 percent.

(b) Second stage production guarantee--The quantity of citrus

(in tons) determined by multiplying the approved yield per acre by

the coverage level percentage you elect.

Ton--Two thousand (2,000) pounds avoirdupois.

Topped--A process of trimming the upper most portion of the

citrus trees for better and more fruitful growth of the citrus

fruit.

Type--Classes of fruit with similar characteristics that are

grouped for insurance purposes as specified in the Special

Provisions.

Written agreement--A written document that alters designated

terms of a policy in accordance with section 13.

2. Unit Division

(a) A unit as defined in section 1 (Definitions) of the Basic

Provisions (Sec. 457.8), will be divided into basic units by each

citrus type designated in the Special Provisions.

(b) Unless limited by the Special Provisions, these basic units

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.

(c) Basic units may not be divided into optional units on any

basis including, but not limited to, production practice, type, and

variety, other than as described in this section.

(d) If you do not comply fully with these provisions, we will

combine all optional units that are not in compliance with these

provisions into the basic unit from which they were formed. We will

combine the optional units at any time we discover that you have

failed to comply with these provisions. If failure to comply with

these provisions is determined to be inadvertent, and the optional

units are combined, that portion of the premium paid for the purpose

of electing optional units will be refunded to you pro rata for the

units combined.

(e) All optional units must be identified on the acreage report

for each crop year.

(f) The following requirements must be met for each optional

unit:

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

of acreage and production for each optional unit for at least the

last crop year used to determine your production guarantee;

(2) You must have records of marketed production or measurement

of stored production from each optional unit maintained in such a

manner that permits us to verify the production from each optional

unit, or the production from each unit must be kept separate until

loss adjustment is completed by us; and

(3) Each optional unit must meet one of the following criteria

as applicable:

(i) Optional Units by Section, Section Equivalent, or FSA 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 that 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 discernible, each

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

single FSA Farm Serial Number; or

(ii) Optional Units on Acreage Located on Non-Contiguous Land:

In lieu of establishing optional units by section, section

equivalent or FSA Farm Serial Number, optional units may be

established if each optional unit is located on non-contiguous land.

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

Indemnities

In addition to the requirements of section 3 (Insurance

Guarantees, Coverage Levels, and Prices for Determining Indemnities)

of the Basic Provisions (Sec. 457.8):

(a) You may select only 1 price election and coverage level for

each citrus fruit type designated in the Special Provisions that you

elect to insure. The price election you choose for each type need

not bear the same percentage relationship to the maximum price

offered by us for each type. For example, if you choose one hundred

percent (100%) of the maximum price election for early oranges, you

may choose seventy-five percent (75%) of the maximum price election

for late oranges. However, if separate price elections are available

by variety within each type, the price elections you choose within

the type must have the same percentage relationship to the maximum

price offered by us for each variety within the type.

(b) Instead of reporting your citrus production for the previous

crop year, as required by section 3 of the Basic Provisions

(Sec. 457.8), there is a one-year lag period. Each crop year you

must report your production from two crop years ago, e.g., on the

1998 crop year production report, you will provide your 1996 crop

year production.

(c) In addition to the reported production, each crop year you

must report by type:

(1) The number of trees damaged, topped, hedged, pruned or

removed; any change in practices that may reduce the expected yield

below the yield upon which the insurance guarantee is based; and the

number of affected acres;

(2) The number of bearing trees on insurable and uninsurable

acreage;

(3) The age of the trees and the planting pattern; and

(4) For the first year of insurance for acreage interplanted

with another perennial crop, and anytime the planting pattern of

such acreage is changed:

(i) The age of the interplanted crop, and type, if applicable;

(ii) The planting pattern; and

(iii) Any other information that we request in order to

establish your approved yield.

We will reduce the yield used to establish your production

guarantee as necessary, based on our estimate of the effect of the

following: interplanted perennial crop; removal, topping, hedging,

or pruning of trees; damage; and change in practices on the yield

potential of the insured crop. If you fail to notify us of any

circumstance that may reduce your yields from previous levels, we

will reduce your production guarantee as necessary at any time we

become aware of the circumstance.

(d) The yield used to compute your production guarantee will be

determined in accordance with Actual Production History (APH)

regulations, 7 CFR part 400, subpart G, and applicable policy

provisions unless previous damage or changes to the grove or trees

require establishment of the yield by another method. In the event

of such damage, your production guarantee will be established based

on our appraisal of the yield potential for the insured acreage.

(e) The production guarantee per acre is progressive by stage

and increases at specific

[[Page 28516]]

intervals to the final stage production guarantee. The stages and

production guarantees per acre are:

(1) The first stage extends from the date insurance attaches

through April 30 of the calendar year of normal bloom. The

production guarantee will be 40 percent of the yield calculated in

paragraph (d) of this section multiplied by your coverage level.

(2) The second or final stage extends from May 1 of the calendar

year of normal bloom until the end of the insurance period. The

production guarantee will be the yield calculated in paragraph (d)

of this section multiplied by your coverage level.

(f) Any acreage of citrus damaged to the extent that the

majority of producers in the area would not further maintain it will

be deemed to have been destroyed even though you may continue to

maintain it. The production guarantee for such acreage will be the

guarantee for the stage in which such damage occurs.

4. Contract Changes

In accordance with Section 4 (Contract Changes) of the Basic

Provisions (Sec. 457.8), the contract change date is August 31

preceding the cancellation date.

5. Cancellation and Termination Dates

In accordance with Section 2 (Life of Policy, Cancellation, and

Termination) of the Basic Provisions (Sec. 457.8), the cancellation

and termination dates are November 20.

6. Annual Premium

In lieu of the premium computation method in Section 7 (Annual

Premium) of the Basic Provisions (Sec. 457.8), the annual premium

amount is computed by multiplying the second stage production

guarantee per acre by the price election, the premium rate, the

insured acreage, your share at the time coverage begins, and by any

applicable premium adjustment percentages contained in the Special

Provisions.

7. Insured Crop

In accordance with Section 8 (Insured Crop) of the Basic

Provisions (Sec. 457.8), the crop insured will be all the acreage in

the county of each citrus type designated in the Special Provisions

that you elect to insure and for which a premium rate is provided by

the actuarial table:

(a) In which you have a share;

(b) That are types adapted to the area;

(c) That are irrigated;

(d) That has produced an average yield of at least three tons

per acre the previous year, unless the trees are inspected by us and

we agree in writing to insure such acreage with less potential; and

(e) That is grown in a grove that, if inspected, is considered

acceptable by us.

8. Insurable Acreage

In lieu of the provisions in Section 9 (Insurable Acreage) of

the Basic Provisions (Sec. 457.8), that prohibit insurance attaching

to a crop planted with another crop, citrus interplanted with

another perennial crop is insurable unless we inspect the acreage

and determine it does not meet the requirements for insurability

contained in these crop provisions.

9. Insurance Period

(a) In accordance with the provisions of section 11 (Insurance

Period) of the Basic Provisions (Sec. 457.8):

(1) Coverage begins on November 21 of each crop year except

that, for the first crop year, if the application is accepted by us

after November 20, insurance will attach on the 10th day after the

application is received in your insurance provider's local office.

(2) The calendar date for the end of the insurance period for

each crop year is May 31.

(b) In addition to the provisions of Section 11 (Insurance

Period) of the Basic Provisions (Sec. 457.8):

(1) If you acquire an insurable share in any insurable acreage

after coverage begins, but on or before the acreage reporting date

for the crop year, and after any inspection we consider the acreage

acceptable, insurance will be considered to have attached to such

acreage on the calendar date for the beginning of the insurance

period.

(2) If you relinquish your insurable share on any insurable

acreage of citrus on or before the acreage reporting date for the

crop year, insurance will not be considered to have attached to such

acreage for that crop year unless;

(i) A transfer of coverage and right to an indemnity, or a

similar form approved by us is completed by all affected parties;

and

(ii) We are notified by you or the transferee in writing of such

transfer on or before the acreage reporting date. If you relinquish

your share, no premium will be due and no indemnity paid unless a

transfer of coverage is properly executed.

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

only against the following causes of loss that occur within the

insurance period:

(1) Excess rain;

(2) Excess wind;

(3) Fire, unless weeds and other forms of undergrowth have not

been controlled or pruning debris has not been removed from the

grove;

(4) Freeze;

(5) Hail;

(6) Tornado;

(7) Wildlife; or

(8) Failure of the irrigation water supply, if caused by an

insured peril that occurs during the insurance period.

(b) In addition to the causes of loss excluded in Section 12

(Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not

insure against damage or loss of production due to:

(1) Disease or insect infestation, unless a cause of loss

specified in section 10(a):

(i) Prevents the proper application of control measures or

causes properly applied control measures to be ineffective; or

(ii) Causes disease or insect infestation for which no effective

control mechanism is available; and

(2) Inability to market the citrus for any reason other than

actual physical damage from an insurable cause specified in this

section. For example, we will not pay you an indemnity if you are

unable to market due to quarantine, boycott, or refusal of any

person to accept production.

11. Duties in the Event of Damage or Loss

In addition to the requirements of Section 14 (Duties in the

Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), you

must notify us at least 15 days before any production from any unit

will be marketed directly to consumers. We will conduct an appraisal

that will be used to determine your production to count for direct

marketed production. If damage occurs after this appraisal, we will

conduct an additional appraisal. These appraisals, and any

acceptable records provided by you, will be used to determine your

production to count. Failure to give timely notice that production

will be marketed directly to consumers will result in an appraised

amount of production to count that is not less than the production

guarantee per acre if such failure results in our inability to make

an accurate appraisal.

12. Settlement of Claim

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

you are unable to provide production records:

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

for which acceptable production records were not provided; or

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

production to such units in proportion to our liability on the

harvested acreage for each unit.

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

will settle your claim on a unit basis by:

(1) Multiplying the insured acreage for each type crop by its

respective production guarantee (see sections 1 and 3);

(2) Multiplying each result in section 12(b)(1) by the

respective price election for each type, or variety within a type;

(3) Totaling the results in section 12(b)(2);

(4) Multiplying the total production to be counted of each type

or variety, if applicable, (see section 12(c)) by the respective

price election;

(5) Totaling the results of section 12(b)(4);

(6) Subtracting the total of section 12(b)(5) from the total in

paragraph (3); and

(7) Multiplying the result of section 12(b)(6) by your share.

(c) The total production to count (in tons) from all insurable

acreage on the unit will include:

(1) All appraised production as follows:

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

(A) That is abandoned;

(B) Marketed directly to consumers if you fail to meet the

requirements contained in section 11;

(C) Damaged solely by uninsured causes; or

(D) For which you fail to provide acceptable production records;

(ii) Production lost due to uninsured causes;

(iii) Unharvested production; and

(iv) Potential production on insured acreage you intend to

abandon or 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 do not agree with our appraisal,

[[Page 28517]]

we may defer the claim only if you agree to continue to care for the

crop. We will then make another appraisal when you notify us of

further damage or that harvest is general in the area unless you

harvested the crop, in which case we will use the harvested

production. If you do not continue to care for the crop, our

appraisal made prior to deferring the claim will be used to

determine the production to count; and

(2) All harvested production from the insurable acreage.

(d) Any citrus fruit that is not marketed as fresh fruit and,

due to insurable causes, does not contain 120 or more gallons of

juice per ton, will be adjusted by:

(1) Dividing the gallons of juice per ton obtained from the

damaged citrus by 120; and

(2) multiplying the result by the number of tons of such citrus.

If individual records of juice content are not available, an

average juice content from the nearest juice plant will be used, if

available. If not available, a field appraisal will be made to

determine the average juice content.

(e) Where the actuarial table provides for, and you elect, the

fresh fruit option, citrus fruit that is not marketable as fresh

fruit due to insurable causes will be adjusted by:

(1) Dividing the value per ton of the damaged citrus by the

price of undamaged citrus fruit; and

(2) Multiplying the result by the number of tons of such citrus

fruit.

The applicable price for undamaged citrus fruit will be the

local market price the week before damage occurred.

(f) Any production will be considered marketed or marketable as

fresh fruit unless, due solely to insured causes, such production

was not marketed as fresh fruit.

(g) In the absence of acceptable records of disposition of

harvested citrus fruit, the disposition and amount of production to

count for the unit will be the guarantee on the unit.

(h) Any citrus fruit on the ground that is not harvested will be

considered totally lost if damaged by an insured cause.

13. Written Agreements

Designated terms of this policy may be altered by written

agreement. The following conditions will apply:

(a) You must apply in writing for each written agreement no

later than the sales closing date, except as provided in paragraph

(e) of this section.

(b) The application for written agreement must contain all terms

of the contract between you and us that will be in effect if the

written agreement is not approved.

(c) If approved, the written agreement will include all variable

terms of the contract, including, but not limited to, crop type or

variety, the guarantee, premium rate, and price election.

(d) Each written agreement will only be valid for 1 year. If the

written agreement is not specifically renewed the following year,

insurance coverage for subsequent crop years will be in accordance

with the printed policy.

(e) An application for written agreement submitted after the

sales closing date may be approved if, after a physical inspection

of the acreage, it is determined that no loss has occurred and the

crop is insurable in accordance with the policy and written

agreement provisions.

Signed in Washington, D.C., on May 23, 1996.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 96-13590 Filed 6-4-96; 8:45 am]

BILLING CODE 3410-FA-P