Common Crop Insurance Regulations; Arizona-California Citrus Crop Insurance Provisions

SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes

specific crop provisions for the insurance of Arizona-California

citrus. 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 Arizona-California Citrus Crop Insurance

Regulations 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 22, 1996, and will be

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

information collections under the Paperwork Reduction Act of 1995

continues through August 19, 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 (USDA), 9435

Holmes Road, Kansas City, MO 64131. Written comments will be available

for public inspection and copying in room 0324, South Building, USDA,

14th and Independence Avenue, S.W., Washington, D.C., 8:15 a.m.-4:45

p.m., Monday through Friday, except holidays.

FOR FURTHER INFORMATION CONTACT: John Meyer, Program Analyst, Research

and Development Division, Product Development Branch, FCIC, at the

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

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866 and Departmental Regulation 1512-1

This action has been reviewed under United States Department of

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

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

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

under those procedures. The sunset review date established for these

regulations is June 30, 2006.

This rule has been determined to be not significant for the

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

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

Paperwork Reduction Act of 1995

The information collection requirements contained in the Arizona-

California Crop Insurance Provisions have been submitted to OMB for

approval under section 3507(j) of the Paperwork Reduction Act of 1995.

This proposed rule will amend the information collection requirements

under OMB control number 0563-0003 through September 30, 1998.

The Federal Crop Insurance Corporation will be amending the

information collection to adjust the estimated reporting hours and

revising the usage of FCI-12-P, Pre-Acceptance Perennial Crop

Inspection Report as it applies to the Arizona-California Citrus Crop

Insurance Provisions.

Section 7 of the 1998 Arizona-California Citrus Crop Provisions

adds interplanting as an insurable farming practice as long as it is

interplanted with another perennial crop. This practice was not

insurable under the previous Arizona-California Citrus Crop Insurance

Policy. Consequently, interplanting information will need to be

collected using the FCI-12-P Pre-Acceptance Perennial Crop Inspection

Report form for approximately 0.5 percent of the 2,468 insureds who

interplant their Arizona-California citrus crop. Standard interplanting

language has been added to most perennial crops. Interplanting is an

insurable practice as long as it does not adversely affect the insured

crop. This is a benefit to agriculture because insurance is now

available for more perennial crop producers and as a result less

acreage will need to be covered by the noninsured crop disaster

assistance program (NAP).

Revised reporting estimates and requirements for usage of OMB

control number 0563-0003 will be submitted to OMB for approval under

the provisions of 44 U.S.C., chapter 35. Public comments are due by

August 19, 1996.

The title of this information collection is ``Catastrophic Risk

Protection Plan and Related Requirements including, Common Crop

Insurance Regulations; Arizona-California Citrus Crop Insurance

Provisions.'' The information to be collected includes a crop insurance

acreage report, 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 growers of Arizona-

California citrus 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 25 minutes per

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

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

collection is 2,669,970.

The comment period for information collections under the Paperwork

Reduction Act of 1995 continues on 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

[[Page 31465]]

or other forms of information 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 (OMB), Washington, DC 20503

and to Bonnie Hart, Advisory and Corporate Operations Staff, Regulatory

Review Group, Farm Service Agency, PO Box 2415, Ag Box 0572, United

States Department of Agriculture, Washington, DC 20013-2415. Copies of

the information collection may be obtained from Bonnie Hart at the

above address, telephone (202) 690-2857.

The Office of Management and Budget (OMB) is required to make a

decision concerning the collection(s) of information contained in these

proposed regulations between 30 and 60 days after submission to OMB.

Therefore, a comment to OMB is best assured of having its full effect

if OMB receives it within 30 days of publication. This does not affect

the deadline for the public to comment on the proposed regulation.

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

one year. When such a statement is needed for a rule, section 205 of

the UMRA generally requires FCIC to identify and consider a reasonable

number of regulatory alternatives and adopt the least costly, more

cost-effective or least burdensome alternative that achieves the

objectives of the rule.

This rule contains no Federal mandates (under the regulatory

provisions of Title II of the UMRA) for State, local, and tribal

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

the requirements of sections 202 and 205 of the UMRA.

Executive Order No. 12612

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

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

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, a producer is

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

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

and provide the necessary information to complete a claim for

indemnity. The insured must certify to the number of acres and

production on an annual basis or receive a transitional yield. The

producer must maintain the records to support the certified information

for at least 3 years. This regulation does not alter those

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

companies and 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 producer. Therefore, this action is determined

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

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

Federal Assistance Program

This program is listed in the Catalog of Federal Domestic

Assistance under No. 10.450.

Executive Order No. 12372

This program is not subject to the provisions of Executive Order

No. 12372, which require intergovernmental consultation with State and

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

published at 48 FR 29115, June 24, 1983.

Executive Order No. 12778

The Office of the General Counsel has determined that these

regulations meet the applicable standards provided in 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

any 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 457.121, Arizona-California Citrus

Crop Insurance Provisions. The new provisions will be effective for the

1998 and succeeding crop years. These provisions will supersede and

replace the current provisions for insuring Arizona-California citrus

found at 7 CFR part 409 (Arizona-California Citrus Crop Insurance

Regulations). By separate rule, the current provisions for insuring

Arizona-California citrus will be revised to restrict its effect

through the 1997 crop year and later remove that part.

This rule makes minor editorial and format changes to improve the

Arizona-California Citrus Crop Insurance Regulations' compatibility

with the Common Crop Insurance Policy. In addition, FCIC is proposing

substantive changes in the provisions for insuring Arizona-California

citrus as follows:

1. Section 1--Add definitions for the terms ``days,''

``dehorning,'' ``direct marketing,'' ``FSA,'' ``good farming

practices,'' ``hedged,'' ``interplanted,'' ``irrigated practice,''

``non-contiguous,'' ``production guarantee (per acre),'' ``scaffold

limb,'' ``set out,'' ``type,'' and ``written agreement'' for

clarification.

2. Section 1--Change the definition of ``harvest,'' for

clarification.

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

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

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

maximum price offered for each type. 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. This helps protect against

adverse selection and simplifies the administration of the program.

4. Section 3(b)--Add a provision to specify that instead of

reporting citrus

[[Page 31466]]

production for the previous crop year as required by the Basic

Provisions, there is a lag period of one year because the citrus is not

harvested until after the production reporting date.

5. Section 3(c)--Add a provision to specify that the insured must

report damage, dehorning, removal of trees, and change in practices

that may reduce yields. Further, add provisions that for the first year

of insurance for acreage interplanted with another perennial crop the

insured must report the age and type, if applicable, the planting

pattern, and any other information that the insurance provider requests

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

the insured fails to notify the insurance provider of circumstances

that may reduce the yield below the yield upon which the insurance

guarantee is based, the insurance provider will reduce the production

guarantee at any time the circumstances become known. This allows the

insurance provider to limit liability, if necessary, before insurance

attaches.

6. Section 5--The cancellation and termination dates are changed to

November 20. Currently, the policy states November 30. This change is

consistent with other perennial crop policies and allows for ease of

administration.

7. Section 6--Remove citrus type designations from the Arizona-

California Citrus Crop Provisions and add them to the Special

Provisions. This will eliminate the need to amend the Arizona-

California Citrus Crop Provisions if FCIC decides to add additional

types.

8. Section 7--Add a provision to make interplanted citrus insurable

if planted with another perennial crop unless the insurance provider

inspects the acreage and determines it does not meet the other

requirements for insurability. This clause will make insurance

available to more producers and will reduce the number of acres for

which coverage would be available only under the noninsured crop

disaster assistance program (NAP).

9. Section 8(a)--Change the beginning of the insurance period from

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

However, if an application is accepted by the insurance company after

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

application is received in the local agent's office, if approved.

10. Section 8(b)--Add provisions to clarify the procedure for

insuring acreage when an insurable share is acquired or relinquished on

or before the acreage reporting date.

11. Section 9(a)--Add the clause, ``if caused by an insured peril

that occurs during the insurance period,'' to the end of the phrase

``failure of the irrigation water supply.'' This will limit coverage to

a cause of loss covered by the policy.

12. Section 9(b)--Clarify that disease and insect infestation are

excluded causes of loss unless adverse weather prevents the proper

application of control measures, causes control measures to be

ineffective when properly applied, or causes disease or insect

infestation for which no effective control mechanism is available.

13. Section 10--The previous 15 day ``notice of probable loss''

requirement is replaced by the requirement that the insured provide

notice of damage within 72 hours of discovery to be consistent with

other citrus policies.

14. Section 10(a)--Add a provision requiring the insured to give

notice within 3 days of the date harvest should have started if the

crop will not be harvested in order to permit a timely appraisal of the

marketable production.

15. Section 10(b)--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 provisions for providing insurance coverage by

written agreement. FCIC has a long standing policy of permitting

certain modifications of the insurance contracts by written agreement

for some policies. This amendment will extend this practice to Arizona-

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

specific insured in certain specific instances.

List of Subjects in 7 CFR Part 457

Crop insurance, Arizona-California citrus.

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, to read 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. 7 CFR part 457 is amended by adding a new Sec. 457.121 to read

as follows:

Sec. 457.121 Arizona-California Citrus Crop Insurance Provisions.

The Arizona-California Citrus Crop Insurance Provisions for the

1998 and succeeding crop years are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Arizona-California Citrus 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

Carton--The standard container for marketing fresh packed fruit

by citrus type as shown below. In the absence of marketing records

on a carton basis, production will be converted to cartons on the

basis of the following average net pounds of packed fruit in a

standard packed carton.

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

Container size Types of fruit Pounds

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

Container #58 Navel oranges.......... ........................ 38

Valencia oranges & Sweet .......

oranges

Container #58 Lemons................. ........................ 40

Container #59 Grapefruit............. ........................ 32

Container #63 Tangerines............. ........................ 25

(including Tangelos) & .......

Mandarin oranges

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

Crop year--In lieu of the definition in section 1 (Definitions)

of the Basic Provisions (Sec. 457.8), crop year is the period

beginning with the date insurance attaches to the citrus crop and

extending 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.

Dehorning--Cutting of any scaffold limb to a length that is not

greater than one-fourth (\1/4\) the height of the tree before

cutting.

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

without the intervention of an intermediary such as a wholesaler,

retailer, packer, processor, shipper or buyer. Examples of direct

marketing include selling through an on-farm or roadside stand,

farmer's market, and permitting the general public to enter the

field for the purpose of picking all or a portion of the crop.

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

[[Page 31467]]

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 from the tree by

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

fruit from the ground.

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

any form of alternating or mixed pattern.

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

is artificially applied during the growing season by appropriate

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

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

establish the irrigated production guarantee on the irrigated

acreage planted to the insured crop.

Non-contiguous land--Any two or more 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 only by a public or private right-of-way, waterway

or irrigation canal will be considered to be contiguous.

Production guarantee (per acre)--The number of citrus (cartons)

determined by multiplying the approved yield per acre by the

coverage level percentage you elect.

Scaffold limb--A major limb attached directly to the trunk.

Set out--Transplanting a tree into the grove.

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 12.

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 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; and

(3) Each optional unit must be located on non-contiguous land.

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 Basic Provisions (Sec. 457.8), you may select only one price

election and coverage level for each citrus fruit type designated in

the Special Provisions that you elect to insure. The price elections

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 sweet oranges, you may choose seventy-five

percent (75%) of the maximum price election for grapefruit. However,

if separate price elections are available for varieties within each

type, the price elections you choose for each variety must have the

same percentage relationship to the maximum price offered by us for

each variety within the type.

(b) In lieu of reporting your citrus production of marketable

fresh fruit for the previous crop year, as required by the Basic

Provisions (Sec. 457.8), there is a lag period of one year. 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, you must report, by the production reporting

date designated in section 3 (Insurance Guarantees, Coverage Levels,

and Prices for Determining Indemnities) of the Basic Provisions

(Sec. 457.8), by type, if applicable:

(1) The number of trees damaged, dehorned or removed, and any

change in practices or any other circumstance 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; damage; dehorning; removal

of trees; or change in practices on the yield potential of the

insured crop. If you fail to notify us of any circumstance that may

reduce yields from previous levels, we will reduce your production

guarantee, as necessary, at any time we become aware of the

circumstance.

4. Contract Changes

The contract change date is August 31 preceding the cancellation

date (see the provisions of section 4 (Contract Changes) of the

Basic Provisions (Sec. 457.8)).

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. Insured Crop

(a) 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:

(1) In which you have a share;

(2) That is a type adapted to the area; and

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

acceptable by us.

(b) In addition to citrus not insurable in section 8 (Insured

Crop) of the Basic Provisions (Sec. 457.8), we do not insure any

citrus fruit:

(1) That is not irrigated; and

(2) That has not reached the sixth growing season after being

set out, unless we inspect and allow insurance on such acreage.

7. Insurable Acreage

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

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

to a crop planted with another crop, 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 your policy.

8. Insurance Period

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

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

(1) Coverage begins on 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, if approved, is received in our local agent's office.

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

each crop year is:

(i) August 31 for Navel oranges and Southern California lemons;

(ii) November 20 for Valencia oranges; and

(iii) July 31 for all other types of citrus.

(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 an inspection we consider the acreage

acceptable, insurance will be considered to have attached to such

acreage on the calendar date for the beginning of the insurance

period.

[[Page 31468]]

(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 or indemnity will be

due unless a transfer of coverage is properly executed.

9. Causes of Loss

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

Loss) of the Basic Provisions (Sec. 457.8), insurance is provided

only against the following causes of loss that occur during the

insurance period:

(1) Adverse weather conditions;

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

been controlled or pruning debris has not been removed from the

grove;

(3) Wildlife;

(4) Earthquake;

(5) Volcanic eruption; or

(6) Failure of 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 adverse weather

conditions:

(i) Prevents the proper application of control measures or

causes properly applied control measures to be ineffective; or

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

control mechanism is available;

(2) Inability to market the 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.

10. Duties in the Event of Damage or Loss

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

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

following will apply:

(a) You must notify us within three 3 days of the date harvest

should have started if the crop will not be harvested.

(b) 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 the required appraisal.

(c) If you intend to claim an indemnity on any unit, you must

notify us prior to the beginning of harvest so that we may inspect

the damaged production. You must not sell or dispose of the damaged

crop until after we have given you written consent to do so. If you

fail to meet the requirements of this section, all such production

will be considered undamaged and included as production to count.

11. Settlement Of Claim

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

you are unable to provide production records:

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

for which acceptable production records were not provided; or

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

production to such units in proportion to our liability on the

harvested acreage for each unit.

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

will settle your claim by:

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

respective production guarantee;

(2) Multiplying each result in paragraph (1) by the respective

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

(3) Totaling the results in paragraph (2);

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

or variety, if applicable (see section 11(c)), by the respective

price election;

(5) Totaling the results of paragraph (4);

(6) Subtracting the total of paragraph (5) from the total in

paragraph (3); and

(7) Multiplying the result of paragraph (6) by your share;

(c) The total production to count (in cartons) 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 10;

(C) Damaged solely by uninsured causes; or

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

acceptable to us;

(ii) Production lost due to uninsured causes;

(iii) Unharvested production determined to be marketable as

fresh packed fruit; and

(iv) Potential production on insured acreage that you intend to

abandon or no longer care for, if you and we agree on the appraised

amount of production. Upon such agreement, the insurance period for

that acreage will end. If you do not agree with our appraisal, we

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

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

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

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

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

appraisal made prior to deferring the claim will be used to

determine the production to count; and

(2) All harvested production marketed as fresh packed fruit from

the insurable acreage.

(3) All disposed or sold damaged citrus that was disposed or

sold without an inspection or written consent.

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

fresh packed fruit unless, due to insurable causes, such production

was not marketed or marketable as fresh packed fruit.

(e) Citrus that cannot be marketed due to insurable causes will

not be considered production to count.

(f) If we determine that frost protection equipment was not

properly utilized or not properly reported, the indemnity for the

unit will be reduced by the percentage of premium reduction allowed

for frost protection equipment. You must, at our request, provide us

records showing the start-stop times by date for each period the

frost protection equipment was used.

12. Written Agreement

Designated terms of this policy may be altered by written

agreement in accordance with the following:

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

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

12(e);

(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 one 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); and

(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, DC., on June 13, 1996.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 96-15770 Filed 6-19-96; 8:45 am]

BILLING CODE 3410-FA-P