Common Crop Insurance Regulations; Sugar Beet Crop Insurance Provisions

SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes

specific crop provisions for the insurance of sugar beets. 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 Sugar Beet Crop Insurance Regulations with the Common Crop

Insurance Policy for ease of use and consistency of terms.

EFFECTIVE DATE: November 19, 1996.

FOR FURTHER INFORMATION CONTACT: Arden Routh, Program Analyst, Research

and Development Division, Product Development Branch, Federal Crop

Insurance Corporation, United States Department of Agriculture, 9435

Holmes Road, Kansas City, MO 64131, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

This action has been reviewed under United States Department of

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

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 February 1, 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

Following publication of the proposed rule, the public was afforded

60 days to submit written comments, data, and opinions on information

collection requirements previously approved by OMB under OMB control

number 0563-0003 through September 30, 1998. No public comments were

received.

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. 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. New provisions included in this rule will not

impact small entities to a greater extent than large 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 also annually certify to the previous years production if adequate

records are available to support the certification. The producer must

maintain the production records to support the certified information

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

requirements. The amount of work required of the insurance companies

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 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 published at 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.

[[Page 58770]]

Background

On Friday, May 31, 1996, FCIC published a proposed rule in the

Federal Register at 61 FR 27315-27321 to add to the Common Crop

Insurance Regulations (7 CFR part 457) a new section, 7 CFR

Sec. 457.109, Sugar Beet Crop Provisions. The new provisions will be

effective for the 1997 and succeeding crop years in all States except

Arizona and California, and for the 1998 and succeeding crop years in

Arizona and California. These provisions will replace and supersede the

current provisions for insuring sugar beets found at 7 CFR part 430

(Sugar Beet Crop Insurance Regulations). By separate rule, FCIC will

restrict the effects of the Sugar Beet Crop Insurance Regulations

through the 1996 and prior crop years and later remove that part.

Following publication of that proposed rule, the public was afforded 30

days to submit written comments, data, and opinions. A total of 72

comments were received from the crop insurance industry, sugar beet

grower associations, and FCIC. The comments received, and FCIC's

responses are as follows:

Comment: Two comments received from the crop insurance industry had

a concern with the definition of ``Good farming practices,'' which

makes reference to ``generally recognized by the Cooperative Extension

Service.'' The comment indicated that the term ``generally'' would

allow the use of unrecognized practices.

Response: FCIC agrees with the comment and has amended the

definition accordingly.

Comment: One comment received from an FCIC Regional Service Office

(RSO) recommended changing the definition of ``Harvest'' to read,

``means the completion of topping and lifting of sugar beets in the

field.'' The commenter does not believe that removal of sugar beets

from the field should be a condition to be considered harvested. If

required, it would lengthen the insurance period and allow producers to

pile beets in the field and expose the insurer to unintended risks.

Response: FCIC agrees with the comment and has amended the

definition accordingly.

Comment: Two comments received from the crop insurance industry

recommended adding the words ``and quality'' after the word

``quantity'' in the definition of ``Irrigated practice.''

Response: FCIC agrees that water quality is an important issue.

However, since no standards or procedures have been developed to

measure water quality for insurance purposes, FCIC has elected not to

include quality in the definition. Therefore, no change will be made.

Comment: Two comments received from RSOs recommended removing or

changing provisions pertaining to late planting. One of the commenters

recommended changing the definition of ``Late planting period'' to

read, ``The period that begins the day after the final planting date

for the insured crop and ends 25 days after the final planting date,

unless otherwise provided by the Special Provisions.'' The commenters

added that: 1) the length of the late planting period should be

determined by the RSO by crop, by county, depending on the length of

the growing season, etc.; and 2) a blanket 25 days for all crops is not

appropriate for an actuarially sound program.

Response: County by county determinations of the appropriate length

of the late planting period would necessitate a substantial amount of

additional paperwork and procedure. For a majority of the counties, the

25 day late planting period is appropriate to permit the crop to mature

before the end of the insurance period. There is no evidence that

insureds are abusing the current 25 day period. Therefore, no change

will be made.

Comment: One comment received from the crop insurance industry

recommended adding a definition for ``raw sugar'' since this term is

used in the definition of ``local market price'' and elsewhere in the

crop provisions.

Response: FCIC agrees with the comment and has added a definition

for ``raw sugar.''

Comment: One comment received from a sugar beet growers group

concerned ``Local market price.'' The commenter believes that the

guarantee should not be established using the local market price

because it may be vulnerable to fluctuation caused by market demand.

Response: FCIC believes that the commenter misinterpreted the

provisions. The local market price is used to determine the production

to count for sugar beets eligible for a quality adjustment. The local

market price is not used to determine the insurance guarantee.

Comment: One comment received from an RSO recommended adding

language indicating that it will not be considered practical to replant

unless production for the replanted acreage can be delivered under the

terms of the processor contract.

Response: FCIC agrees with the comment and has amended the

definition accordingly.

Comment: Five comments, two from the crop insurance industry and

three from FCIC RSOs, did not agree that the definition of

``Processor'' should limit processors to being only corporations and

the language contained in redesignated section 7(b) (1) and (2), that

requires a processor to be a corporation.

Response: FCIC agrees with the comments and has amended the

definition and provisions accordingly.

Comment: Two comments received from the crop insurance industry

concerned the definition of ``Replanting.'' The comments questioned the

need to break this into two steps and recommended that FCIC consider

something like the definition in the 1986-CHIAA 707: ``Performing the

cultural practices necessary to replant insured acreage to sugar

beets.''

Response: The suggested language would unnecessarily create an

ambiguity because the cultural practices will always include the

preparation of the land and planting the sugar beet seed into the

insured acreage. Therefore, no change will be made.

Comment: One comment received from the crop insurance industry

recommended adding a definition for RMA-Risk Management Agency.

Response: These regulations are published under the authority of

the Federal Crop Insurance Act, which created FCIC and gave it the

authority to offer this crop insurance program. As a result, the term

FCIC rather than Risk Management Agency is used appropriately

throughout these regulations. Therefore, no change will be made.

Comment: Two comments received, one from an FCIC RSO and one from

the insurance industry, recommended clarifying the second to the last

sentence of the first paragraph of redesignated section 2(c). The

current wording may lead the insured to believe that premium may be

refunded any time optional units are combined. That is not true.

Premium is refunded only if there are no optional units within a basic

unit. One of the comments recommended changing the provisions to read

as follows: ``If failure to comply with these provisions is determined

to be inadvertent and if all of the optional units within a basic unit

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

electing optional units will be refunded to you.''

Response: FCIC agrees with the comment and has amended the

provisions accordingly.

Comment: One comment received from the insurance industry

questioned why all optional units must be identified on the acreage

report for each crop year. They asked if this reporting

[[Page 58771]]

is by crop or also by practice, type, and variety. Listing every

possible combination for every crop on a policy could test the limits

on the number of policy lines allowed.

Response: FCIC has clarified this provision to indicate that only

those optional units selected for the specific crop year need be

identified on the acreage report.

Comment: One comment received from the insurance industry indicated

that provisions in section 2(a)(1) requiring verifiable records ``for

at least the last crop year used to determine your production

guarantee'' could cause confusion. The commenter asked whether this is

the ``APH'' or the ``policy'' crop year because the reference to the

last year used to determine the guarantee suggests it is the APH crop

year. The comment questions whether this means that an insured cannot

qualify for any optional units without certifying as many years as

necessary to come up with one year of actual history for every

potential unit database. A record of zero acres planted is an

acceptable production report for maintaining continuity, but is not

``counted'' as a year of actual records when calculating the approved

APH yield.

Response: The APH is based on the actual production of the producer

for each crop year in which a crop is produced up to a maximum of 10

crop years. It is not required that a crop be insured for its

production to be included in the APH data base. To qualify for optional

units, the insured must have production records, by optional unit, for

at least the last year the crop was actually produced. FCIC believes

the provision is clearly stated and has not made changes.

Comment: One comment received from the insurance industry indicated

that the requirement to have verifiable records of planted acreage and

production for each optional unit for at least the last crop year used

to determine your production guarantee might be seen as a contradiction

of the rotation requirements for sugar beets. These requirements do not

allow sugar beets to be planted on the same acreage as the previous

year.

Response: The proposed provisions do not require sugar beets to be

grown on the same acreage in successive crop years. Only those crop

years in which the crop was actually produced are included in the data

base. The year the crop was not produced would not be considered as the

last crop year used to determine the guarantee. Therefore, no changes

have been made.

Comment: One comment received from the insurance industry

concerning section 2(b)(2) recommended deleting ``In addition to, or

instead of, establishing optional units by section, section equivalent,

or FSA Farm Serial Number,'' and beginning the section with ``Optional

units may be based on irrigated * * *'' Item 2(b) begins by saying one

or more of (1) and (2) may apply.

Response: It is the intent of FCIC to allow optional units for

irrigated and non-irrigated practices within an optional unit based on

section, section equivalent, or FSA Farm Serial Number. Therefore, no

change will be made.

Comment: One comment received from an RSO recommended the language

in section 3(b)(1) be changed to read ``First stage, with a guarantee

of 60 percent (60%) of the final stage guarantee, extends from planting

until:''

Response: FCIC agrees with the comment and has amended the

provision accordingly.

Comment: Five comments received, four from the insurance industry

and one from a sugar beet growers group, recommended that the first

stage guarantee should be eliminated, except possibly in California and

other areas where the practice of thinning still exists. References to

``July 1,'' ``thinning'' or ``90 days'' cause more problems than they

solve in other sugar beet areas where early season input costs are no

longer greater than those incurred later in the season. It is the

commenters understanding that machine or hand thinning is no longer a

common practice in many sugar beet areas. Stage production guarantees

were initially established when thinning was an expensive process. The

reduction in guarantee for first stage only adds to the losses the

producer incurs due to adverse weather conditions. Removal of the stage

guarantee would likely result in increased premium costs.

Response: This would be a significant change which could result in

higher premiums, therefore, an additional comment period would be

required to allow interested parties to consider the effects of this

change and any increase in the costs of insurance. No change will be

made to the present rule; however, it will be considered in any future

change to these provisions.

Comment: One comment received from the insurance industry

concerning section 3, Insurance Guarantees, Coverage Levels, and

Prices, recommended the language be changed to ``* * * select only one

price percentage * * *'' it would not then be necessary to say so much

for crops with different maximum prices by type.

Response: Methods used to select price elections vary between

insurance providers. While some require selecting of a percentage,

others require selection a specific dollar amount. The suggested change

will not work in all circumstances. Therefore, no change will be made.

Comment: Three comments received, two from RSOs and one from a

sugar beet growers group, concerned the cancellation and termination

date. One commenter stated that the language in the Background section

of the preamble printed in the proposed rule stated that the

cancellation and termination dates for all States except Arizona and

California were changed to March 15 but the dates contained in section

5 of the proposed Sugar Beet Crop Provisions were February 28. The

commenter believed the correct date should be March 15. Another

commenter advised that the cancellation and termination dates (February

28) are too early because contracting of acreage by the processor has

not been completed.

Response: The language in the Background section concerning the

cancellation and termination dates being changed from April 15 to March

15 for all States except Arizona and California is correct. The correct

cancellation and termination dates for these States are March 15. FCIC

corrected section 5 accordingly.

Comment: Two comments received from the insurance industry asked if

the sales closing date will match the cancellation and termination

dates contained in section 5. The commenters suggested that the

cancellation and sales closing dates should match, and that the date

should be March 15.

Response: The sales closing dates and the cancellation dates will

match and, as stated above, the cancellation date has been changed to

March 15 in most States.

Comment: One comment received from an RSO recommended adding

provisions to indicate that the premium is based on the final stage

production guarantee.

Response: FCIC agrees with the comment and has added a new section

6.

Comment: One comment received from the insurance industry

recommended that FCIC consider whether redesignated section 7(a)(3)

should specify that the processor contract show the insured's name.

This may reduce the potential for abuse by persons without insurable

interests.

Response: Processor contracts may not always indicate the name of

all persons who have an insurable interest

[[Page 58772]]

in the acreage. In many cases a contract is held by a producer, but

such contract also covers the share of one or more landlords. While it

is imperative that an insurable interest be established, FCIC does not

feel that the name on the processor contract is an adequate indicator

of an insurable interest. Therefore, no change has been made.

Comment: One comment received from the insurance industry

questioned the language contained in redesignated section 7(a)(4)(i)

regarding acreage interplanted with another crop. The commenter stated

that ``In some areas it is a common practice to plant a small grain

crop on sugar beet ground, let it grow to 6-8 inches, kill it off with

a chemical and then plant the sugar beets. The small grain residue

serves as protection from both wind and cold damage to the beet

seedlings. This should be considered a good farming practice and

possibly addressed in this section. The commenter recalled a FCIC

memorandum being issued a few years ago allowing the practice.

Response: The scenario presented in the comment would constitute

sequential planting, not interplanting. The definition of

``interplanted'' requires the two crops be planted in a manner that

does not permit separate agronomic maintenance or harvest of the

insured crop. In the case presented, the small grain crop would not

inhibit the maintenance or harvest of the sugar beets. Therefore, this

practice is not prohibited.

Comment: One comment received from the insurance industry expressed

concern regarding requirements for processor sales records contained in

redesignated section 7(b)(3). An insurance provider cannot require an

insured to provide copies of sales records for production owned by

other parties.

Response: There is no need to provide the records from other

persons. This provision only applies when a processor is also a sugar

beet producer. All that is required is the records of the processor's

sales to prove that it produced sugar the previous year. The provision

has been amended to specify that it is the sales records of the

processor showing the amount produced for the previous year that must

be provided.

Comment: One comment received from the insurance industry

questioned the requirement in redesignated section 7(b)(3) for

companies to inspect the processing facilities. The comment expressed

concern over the additional expenses incurred for the inspection

process.

Response: An inspection of the processing facilities is necessary

to verify that a producer who claims also to be a processor has

facilities or access to facilities with adequate equipment to accept

and process sugar beets in a reasonable amount of time after harvest.

FCIC does not anticipate a large number of inspections will be

necessary. Therefore, the extra expense should be minimal. No change

will be made.

Comment: One comment received from an RSO recommended changing the

language in redesignated section 8(a)(1) to read, ``the preceding crop

year, unless otherwise specified in the Special Provisions for the

county.'' The Special Provisions take precedence over these provisions;

however, the policy statement of ``preceding crop year'' is a change

for most States. The commenter stated that it would not hurt to remind

insureds to refer to the Special Provisions.

Response: FCIC agrees with the comment and has amended the

provision accordingly.

Comment: One comment received from the insurance industry states

that redesignated sections 8(a) (1) and (3) seem to overlap. The

commenter asked whether the requirement that sugar beets cannot have

been planted on the same acreage the preceding crop year is covered by

the rotation requirements in the Special Provisions. The commenter

states that unless there are areas with no Special Provisions, item (1)

seems to be an unnecessary repetition.

Response: There are areas with Special Provisions that do not

contain rotation requirements and the provisions in redesignated

section 8(a)(1) apply to these areas. Redesignated section 8(a)(3)

applies to counties that may have other rotation requirements.

Therefore, no change will be made.

Comment: One comment received from the insurance industry states

that redesignated section 8(a)(2) appears to conflict with redesignated

section 10(d) and request that redesignated section 8(a)(2) be

rewritten to add ``or controlled as prescribed by University

Extension'' to reduce the times a written agreement would have to be

requested and processed.

Response: Redesignated section 10(d) does not conflict with

redesignated section 8(a)(2). Redesignated section 8(a)(2) specifies

that acreage is not insurable the following crop year after the acreage

has been affected by rhizomania. Redesignated section 10(d) provides

that disease is not an insurable cause of loss in the current crop year

if caused by insufficient or improper application of disease control

measures. Therefore, no change will be made.

Comment: Two comments received from RSOs recommended changing the

language of redesignated section 8(a)(2) to read: ``In any crop year

following the discovery of rhizomania on the acreage unless a written

agreement or the Special Provisions allows otherwise; or.'' The sugar

beet industry is rapidly developing rhizomania tolerant varieties. The

commenters state that this revision will allow for insurance to attach

when specified in the Special Provisions and avoid the need of a costly

written agreement and allow for CAT level protection. This practice

will only be included in the Special Provisions if there are available

rhizomania tolerant varieties adapted to the area that exhibit adequate

yields.

Response: FCIC agrees with the comment and has amended the section

accordingly.

Comment: One comment received from a grower group indicated that

there may be situations where replanting could occur in a location

different than that originally planted. This may occur when it is not

practical to replant in the same field, township or county.

Consideration for replanting payments should be made in this

circumstance.

Response: FCIC agrees that this concept should be studied. However,

no procedure or provisions have been developed or proposed to

accomplish the recommended change. FCIC will consider this

recommendation for future use. Therefore, no change will be made.

Comment: One comment received from a sugar beet growers group

recommended changing the calendar date for the end of insurance period

to December 15 for North Dakota and Minnesota because sugar beets can

be harvested after November 15. They are concerned that producers may

file unnecessary claims to protect their interests. The commenter also

states that production data is only available after November 15,

therefore, the December 15 deadline would be more appropriate. They

claim that supporting documentation is available for this change.

Response: FCIC understands that harvest may occur after November 15

in some exceptional years. However, virtually all sugar beets are

harvested prior to this date. Extending the date for some exceptional

years would adversely affect premium rates. Therefore, no change is

necessary.

Comment: One comment received from an RSO recommended changing the

language redesignated section 11(b) to specify ``the lesser of 10% of

the final stage production guarantee or 1 ton, multiplied by your price

election, multiplied by your share.''

[[Page 58773]]

Response: FCIC agrees with the comment and has amended redesignated

section 11(b) accordingly.

Comment: One comment received from the insurance industry

questioned why a tenant is not allowed to receive the landlord's share

of the allowable replant payment if both are insured with the same

company at a coverage level greater than CAT. Provisions allowing this

are included in the Coarse Grains Crop Provisions (section 10(c)), and

the commenter states that it should be applicable to sugar beets as

well.

Response: FCIC has reevaluated this provision due to comments

received on other regulations and determined that the provision is not

equitable to all insureds. Specifically if a landlord and tenant are

insured with one company, the provisions apply, but if the landlord and

tenant are insured with different companies, the provisions do not

apply. Therefore, no change will be made. Crop provisions containing

these terms will be amended to eliminate them.

Comment: One comment received from a sugar beet growers group

concerned redesignated section 12(b). The commenter recommended that

the sugar beet processor contract include the terminology ``Maximum

Plantable Acreage.'' The term ``plantable acres'' may differ from

contracted acres.

Response: FCIC cannot require that such terminology be added to the

processor contract. FCIC only requires that such contract be binding on

the parties with respect to the production and purchase of a stated

amount and a fixed price. The actual terms of the processor contract

are established between the processor and the grower. Therefore, no

change will be made.

Comment: One comment received from an RSO recommended changing

redesignated section 13(c)(1) to read ``Multiplying the insured acreage

by its respective production guarantee''.

Response: FCIC agrees with comment and has amended redesignated

section 13(b) accordingly.

Comment: One comment received from an RSO recommended changing

redesignated section 13(c)(1)(iii) to read: ``Unharvested production

(unharvested sugar beets which have not reached the earliest delivery

date designated by the processor's harvest schedule for the area will

not be adjusted for quality deficiencies) * * *'' Current loss

adjustment procedure distinguishes appraisal techniques based on crop

maturity. Immature beets are appraised by percentage stand. Mature

beets are appraised by weight. This proposed revision would allow

samples to be submitted to the processor for determination of the

percentage of sugar and to allow a more accurate appraisal of crop

value. Samples submitted to the processor will also confirm whether or

not beets are damaged and whether redesignated section 13(d) or

redesignated section 13(e) is applicable.

Response: FCIC agrees with the substance of the comment and has

amended the provisions accordingly.

Comment: One comment received from an RSO recommended changing

redesignated section 13(d) to read: ``Any unharvested appraised

production which has matured (reached the earliest delivery date

designated by the processor's harvest schedule for the area) or

harvested production of sugar beets acceptable according to the sugar

beet processor contract or corporate resolution will be converted to

standardized tons by:'' The commenter states that this revision

incorporates the recommendation for redesignated section 13(d)(iii),

and clarifies when the percent sugar adjustment is used.

Response: FCIC disagrees with the comment. The provisions in

redesignated section 13(d) are intended for both harvested and

unharvested production that is appraised after the earliest delivery

date that the processor accepts harvested production and that meet the

minimum acceptable standards contained in the processor contract. This

provision will be clarified accordingly.

Comment: One comment received from the insurance industry

recommended changing provisions in redesignated section 13(d)(2) that

requires the percentage of sugar to be determined for each load at the

time of delivery. Normal practice is to test every other load, because

it has been discovered that the sugar percentage does not vary much

between loads. Processors should not have to change this accepted

practice to satisfy this policy requirement.

Response: FCIC agrees with the comment and has amended the

provisions to conform with industry practices.

Comment: One comment received from an RSO recommended changing

redesignated section 13(e) to read: ``Any unharvested appraised

production which has matured (sugar beets which have reached the

earliest delivery date designated by the processor's harvest schedule

for the area) or harvested production of sugar beets that does not meet

the minimum acceptable conditions specified in the sugar beet processor

contract or corporate resolution due to insurable causes will be

converted to standardized tons by:'' The revision incorporates the

recommendation for redesignated section 13(c)(iii), and clarifies the

specific conditions of the crop for which production to count is

adjusted according to this subsection.

Response: FCIC disagrees with the comment. The provisions in

redesignated section 13(e) are intended for both harvested and

unharvested production that is appraised after the earliest delivery

dated that the processor accepts harvested production and that does not

meet the minimum acceptable standards contained in the processor

contract. This provision will be clarified accordingly.

Comment: One comment received from an RSO recommended changing

redesignated section 13(e) to read: ``Production that does not meet the

minimum acceptable standards contained in the sugar beet processor

contract or corporate resolution (damaged sugar beets) will be

converted to standardized tons by:'' Redesignated section 13(e)(1)

refers to ``damaged sugar beets.'' Without adding the clarification of

damaged beets to redesignated section 13(e), there may be (and has been

in the past) some confusion.

Response: FCIC agrees with the comment and has amended the section

accordingly.

Comment: One comment received from an FCIC RSO recommended changing

the language ``the insured crop'' to ``sugar beets'' in redesignated

section 14, Late and Prevented Planting.

Response: Since the insured crop clearly is sugar beets, and the

term is used in other provisions, no change will be made.

Comment: One comment received from an RSO recommended eliminating

late and prevented planting provisions that reference participating in

a USDA program that limits acreage planted, compliance with

conservation plans, and base acreage. These do not apply.

Response: FCIC agrees that acreage limiting programs and base

acreage do not apply to sugar beets and has amended the appropriate

provisions. However, conservation plans may allow the insurance

provider to verify an intent to produce or not produce the crop.

Therefore, provisions regarding the use of conservation plans have not

been changed.

Comment: One comment received from an RSO recommended adding a

statement to the prevented planting provisions to assure compliance

with rotation requirements contained in the Special provisions when

determining eligible prevented planting acreage.

Response: FCIC does not believe the recommended change is

necessary. It would be duplicative since the Insured

[[Page 58774]]

Crop section already contains this requirement. Therefore, no change

will be made.

Comment: Three comments received from the insurance industry

recommended limiting the number of acres eligible for prevented

planting to the number of acres that are under the processor contract

for the crop year.

Response: FCIC agrees with comment and has amended language to

limit the number of acres eligible for prevented planting to the number

of acres under the processor contract or the number of acres needed to

produce the amount of contracted production based on the APH yield for

the acreage.

Comment: One comment received from the insurance industry

recommended that a written release be required from the processor

before a prevented planting guarantee is provided.

Response: FCIC cannot require such a release for the purposes of

the insurance contract since the processor contract is executed between

the processor and the producer. If the producer meets the requirements

for a prevented planting payment under this policy, the payment will be

made regardless of whether the processor releases the acreage.

Comment: One comment received from the insurance industry

recommended that late and prevented planting coverage should not be

provided on crops grown under contract with a processor. The processor

determines what the producer does if the insured crop is not planted

during the normal planting period.

Response: FCIC believes that the inclusion of late and prevented

planting provisions is appropriate for sugar beets. As the comment

indicates, the processor may or may not allow planting within the late

planting period. If planting is allowed under the contract, and the

crop can reach maturity, coverage should be provided. Therefore, no

change will be made.

Comment: Three comments received, two from the insurance industry

and one from an RSO, asked whether the prevented planting coverage

available when a substitute crop is planted will be dropped, or at

least revised, for all affected crops for the 1997 crop year, and

whether it is possible to remove (or revise) redesignated section

14(d)(1)(iii)(B) and 14(d)(2)(iii)(B).

Response: Consideration is being given to removal of prevented

planting provisions that allow a substitute crop for all affected crops

for the 1998 crop year. Necessary changes will be made in a separate

rule for these and any other affected crop provisions. Therefore, no

change will be made.

Comment: One comment received from the insurance industry

recommended that the requirement for a written agreement to be renewed

each year should be removed. Terms of the agreement should be stated in

the agreement to fit the particular situation for the policy, or if no

substantive changes occur from one year to the next, allow the written

agreement to be continuous.

Response: Written agreements are intended to change policy terms or

permit insurance in unusual situations where such changes will not

increase risk. If such practices continue year to year, they should be

incorporated into the policy or Special Provisions. It is important to

keep non-uniform exceptions to the minimum and to insure that the

insured is well aware of the specific terms of the policy. Therefore,

no change will be made.

Comment: One comment received from the insurance industry

recommended that the policy language concerning written agreements

should not be so detailed, but should be handled in procedure. The

commenter suggested that redesignated sections 15 (a) and (c) should

not be so specific as to the sales closing date, especially when it is

possible to request some written agreements until the acreage reporting

date. If these items are kept, the commenter suggests combining both

sections into redesignated section 15(a) instead of having two separate

items.

Response: FCIC disagrees with the comment. To prevent the practice

of delaying the purchase of insurance until a loss is more probable,

most written agreements must be requested by the sales closing date. It

is only rare circumstances when an insured can request a written

agreement after the sales closing date. FCIC believes the current

format clearly states the necessary requirements for a written

agreement. Written agreements are the exceptions, not the rule and

their use must be strictly controlled. Therefore, no change will be

made.

Comment: One comment received from an RSO recommended deleting

paragraph (b) of redesignated section 15. A request for a written

agreement is really a Request for Actuarial Change. If it is not

approved, all contract provisions will remain in effect as before. The

commenter receives requests for actuarial change for many situations

and the requirement as outlined in part (b) seems cumbersome and

unwarranted.

Response: This requirement is necessary to ensure that the producer

will be aware of the terms of his insurance in case the request for

written agreement is denied. Therefore, no change will be made.

In addition to the changes described above, FCIC has made the

following changes to the Sugar Beet Provisions:

1. Moved Arizona from section 3(b)(1)(i) to section 3(b)(1)(ii)

because production practices in Arizona are more similar to Central and

Southern California than Northern California and other States.

2. Section 7(a)(3)--Added provisions to clarify that sugar beets

are not insurable if excluded from the processor contract at anytime

during the crop year.

3. Section 9--Added a provision to clarify that the insurance

period ends when the production delivered to the processor equals the

production stated in the sugar beet processor contract.

4. Section 13(b)--Clarified the calculations used to settle the

claim.

5. Section 14(d)--Clarified that the production guarantee for

prevented planting will be based on the final stage guarantee.

6. Section 14(d)(4)(ii)--Clarified when prevented planting coverage

begins to include the 1997 crop year.

Good cause is shown to make this rule effective upon publication in

the Federal Register. This rule improves the sugar beet insurance

coverage and brings it under the Common Crop Insurance Policy Basic

Provisions for consistency among policies. The earliest contract change

date that can be met for the 1997 crop year is November 30, 1996. It is

therefore imperative that these provisions be made final before that

date so that the reinsured companies and insureds may have sufficient

time to implement these changes. Therefore, public interest requires

the agency to act immediately to make these provisions available for

the 1997 crop year.

List of Subjects in 7 CFR Part 457

Crop insurance, Sugar beets.

Final 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 amends the Common Crop Insurance Regulations, (7 CFR

part 457), effective for the 1997 and succeeding crop years in all

States except Arizona and California and for the 1998 and succeeding

crop years in Arizona and California, to read as follows:

PART 457--[AMENDED]

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

follows:

[[Page 58775]]

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

2. 7 CFR part 457 is amended by adding a new Sec. 457.109 to read

as follows:

Sec. 457.109 Sugar Beet Crop Insurance Provisions.

The Sugar Beet Crop Insurance Provisions for the 1997 and

succeeding crop years are as follows:

FCIC Policies

United States Department of Agriculture

Federal Crop Insurance Corporation

Reinsured policies

(Appropriate title for insurance provider)

Both FCIC and Reinsured Policies

Sugar Beet 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--In Imperial, Lassen, Modoc, Shasta and Siskiyou

counties, California and all other States, the period within which

the sugar beets are normally grown, which is designated by the

calendar year in which the sugar beets are normally harvested. In

all other California counties, the period from planting until the

applicable date for the end of the insurance period which is

designated by:

(a) The calendar year in which planted if planted on or before

July 15; or

(b) The following calendar year if planted after July 15.

Days--Calendar days.

FSA--Farm Service Agency of the United States Department of

Agriculture, or a successor agency.

Final planting date--The date contained in the Special

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

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

Good farming practices--The cultural practices generally in use

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

and produce at least the yield used to determine the production

guarantee and are those recognized by the Cooperative State

Research, Education, and Extension Service as compatible with

agronomic and weather conditions in the county.

Harvest--Topping and lifting of sugar beets in the field.

Initially planted--The first occurrence that land is considered

as planted acreage for the crop year.

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

a manner that does not permit separate agronomic maintenance or

harvest of the insured crop.

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.

Late planted--Acreage planted to the insured crop during the

late planting period.

Late planting period--The period that begins the day after the

final planting date for the insured crop and ends twenty-five (25)

days after the final planting date.

Local market price--The price per pound for raw sugar offered by

buyers in the area in which you normally market the sugar beets.

Planted acreage--Land in which seed has been placed by a machine

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

depth, into a seedbed that has been properly prepared for the

planting method and production practice. Sugar beets must initially

be planted in rows to be considered planted. Acreage planted in any

other manner will not be insurable unless otherwise provided by the

Special Provisions or by written agreement.

Practical to replant--In lieu of the definition of ``Practical

to replant'' contained in section 1 of the Basic Provisions

(Sec. 457.8), practical to replant is defined as our determination,

after loss or damage to the insured crop, based on factors,

including but not limited to moisture availability, condition of the

field, time to crop maturity, and marketing window, that replanting

the insured crop will allow the crop to attain maturity prior to the

calendar date for the end of the insurance period. It will not be

considered practical to replant if production from the replanted

acreage cannot be delivered under the terms of the processor

contract, or 30 days after the initial planting date for all

counties where a late planting period is not applicable, unless

replanting is generally occurring in the area.

Prevented planting--Inability to plant the insured crop with

proper equipment by the final planting date designated in the

Special Provisions for the insured crop in the county or the end of

the late planting period. You must have been unable to plant the

insured crop due to an insured cause of loss that has prevented the

majority of producers in the surrounding area from planting the same

crop.

Processor--Any business enterprise regularly engaged in

processing sugar beets for sugar that possesses all licenses and

permits for processing sugar beets required by the State in which it

operates, and that possesses facilities, or has contractual access

to such facilities, with enough equipment to accept and process the

contracted sugar beets within a reasonable amount of time after

harvest.

Production guarantee (per acre):

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

guarantee multiplied by 60 percent.

(b) Final stage production guarantee--The number of tons

determined by multiplying the approved yield per acre by the

coverage level percentage you elect.

Raw sugar--Sugar that has not been extracted from the sugar

beet.

Replanting--Performing the cultural practices necessary to

replace the sugar beet seed and then replacing the sugar beet seed

in the insured acreage with the expectation of growing a successful

crop.

Standardized ton--A ton of sugar beets containing the percentage

of raw sugar specified in the Special Provisions.

Sugar beet processor contract--A written contract between the

producer and the processor, containing at a minimum:

(1) The producer's commitment to plant and grow sugar beets, and

to deliver the sugar beet production to the processor;

(2) The processor's commitment to purchase the production stated

in the contract; and

(3) A price or formula for a price based on third party data

that will be paid to the producer for the production stated in the

contract.

Thinning--The process of removing, either by machine or hand, a

portion of the sugar beet plants to attain a desired plant

population.

Timely planted--Planted on or before the final planting date

designated in the Special Provisions for the insured crop in the

county.

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

Written agreement--A written document that alters designated

terms of this policy in accordance with section 15.

2. Unit Division

(a) Unless limited by the Special Provisions, a unit as defined

in section 1 (Definitions) of the Basic Provisions (Sec. 457.8), a

basic unit may be divided into optional units if, for each optional

unit, you meet all the conditions of this section or if a written

agreement to such division exists.

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

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

variety, and planting period other than as described in this

section.

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

combine all optional units that are not in compliance with these

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

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

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

these provisions is determined to be inadvertent, and the optional

units are combined into a basic unit, that portion of the additional

premium paid for the optional units that have been combined will be

refunded to you.

(d) All optional units you selected for the crop year must be

identified on the acreage report for that crop year.

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

unit:

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

of planted acreage and production for each optional unit for at

least the last crop year used to determine your production

guarantee;

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

and discernable break in the planting pattern at the boundaries of

each optional unit;

(3) 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

[[Page 58776]]

be kept separate until loss adjustment is completed by us;

(4) The sugar beet processor contract provides that the

processor will accept all the production from the number of acres

designated in the contract (Acreage insured under a sugar beet

processor contract which provides that the processor will accept a

designated amount of production will not be eligible for optional

units).

(5) Each optional unit must meet one or more 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 discernable, each

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

single FSA Farm Serial Number.

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

Irrigated Practices: In addition to, or instead of, establishing

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

Number, optional units may be based on irrigated acreage or non-

irrigated acreage if both are located in the same Section, section

equivalent, or FSA Farm Serial Number. To qualify as separate

irrigated and non-irrigated optional units, the non-irrigated

acreage may not continue into the irrigated acreage in the same rows

or planting pattern. The irrigated acreage may not extend beyond the

point at which the irrigation system can deliver the quantity of

water needed to produce the yield on which the guarantee is based.

However, the corners of a field in which a center-pivot irrigation

system is used will be considered as irrigated acreage if separate

acceptable records of production from the corners are not provided.

If the corners of a field in which a center-pivot irrigation system

is used do not qualify as a separate non-irrigated optional unit,

they will be a part of the unit containing the irrigated acreage.

However, non-irrigated acreage that is not a part of a field in

which a center-pivot irrigation system is used may qualify as a

separate optional unit provided that all requirements of this

section are met.

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 for all the sugar beets in the county insured under this

policy.

(b) The production guarantees are progressive by stages, and

increase at specified intervals to the final stage. The stages are:

(1) First stage, with a guarantee of 60 percent (60%) of the

final stage production guarantee, extends from planting until:

(i) July 1 in Lassen, Modoc, Shasta and Siskiyou counties,

California and all other States except Arizona; and

(ii) The earlier of thinning or 90 days after planting in

Arizona and all other California counties.

(2) Final stage, with a guarantee of 100 percent (100%) of the

final stage production guarantee, applies to all insured sugar beets

that complete the first stage.

(c) The production guarantee will be expressed in standardized

tons.

(d) Any acreage of sugar beets damaged in the first stage to the

extent that growers in the area would not normally further care for

the sugar beets will be deemed to have been destroyed, even though

you may continue to care for it. The production guarantee for such

acreage will not exceed the first stage production guarantee.

4. Contract Changes

In accordance with the provisions of section 4 (Contract

Changes) of the Basic Provisions (Sec. 457.8), the contract change

date is April 30 preceding the cancellation date for counties with a

July 15 or August 31 cancellation date and November 30 preceding the

cancellation date for all other counties.

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:

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

State and County Cancellation date Termination date

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

Arizona; and Imperial County, August 31.......... August 31.

California.

All California counties, except July 15............ November 30.

Imperial, Lassen, Modoc,

Shasta and Siskiyou.

All Other States, and Lassen, March 15........... March 15.

Modoc, Shasta and Siskiyou

Counties, California.

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

6. Annual Premium

In lieu of the premium computation method contained in section 7

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

premium amount is computed by multiplying the final stage production

guarantee by the price election, the premium rate, the insured

acreage, your share at the time of planting, and any applicable

premium adjustment factors contained in the Actuarial Table.

7. Insured Crop

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

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

beets in the county for which a premium rate is provided by the

Actuarial Table:

(1) In which you have a share;

(2) That are planted for harvest as sugar beets;

(3) That are grown under a sugar beet processor contract

executed before the acreage reporting date and are not excluded from

the processor contract at any time during the crop year; and

(4) That are not (unless allowed by the Special Provisions or by

written agreement):

(i) Interplanted with another crop;

(ii) Planted into an established grass or legume; or

(iii) Planted prior to submitting a properly completed

application.

(b) Sugar beet growers who are also processors may establish an

insurable interest if they meet the following requirements:

(1) The processor must meet the definition of a ``processor'' in

section 1 of these crop provisions and have a valid insurable

interest in the sugar beet crop;

(2) The Board of Directors or officers of the processor must

have duly promulgated a resolution that sets forth essentially the

same terms as a sugar beet processor contract. Such resolution will

be considered a sugar beet processing contract under the terms of

the sugar beet crop insurance policy;

(3) The sales records of the processor showing the amount of

sugar produced the previous year must be supplied to us to confirm

the processor has produced and sold sugar in the past; and

(4) Our inspection of the processing facilities determines that

they conform to the definition of processor contained in section 1

of these crop provisions.

8. Insurable Acreage

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

of the Basic Provisions (Sec. 457.8):

(a) We will not insure any acreage planted to sugar beets:

(1) The preceding crop year, unless otherwise specified in the

Special Provisions for the county;

(2) In any crop year following the discovery of rhizomania on

the acreage, unless allowed by the Special Provisions or by written

agreement; or

(3) That does not meet the rotation requirements shown in the

Special Provisions;

(b) Any acreage of the insured crop damaged before the final

planting date, (or within 30 days of initial planting for those

counties without a final planting date) to the extent that growers

in the area would normally not further care for the crop, must be

replanted unless we agree that replanting is not practical.

9. Insurance Period

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

Period) of the Basic Provisions (Sec. 457.8), the calendar date for

the end of the insurance period is:

(1) July 15 in Arizona and in Imperial County, California;

(2) The last day of the 12th month after the insured crop was

initially planted in all

[[Page 58777]]

California counties except Imperial, Lassen, Modoc, Shasta and

Siskiyou;

(3) October 31 in Lassen, Modoc, Shasta and Siskiyou Counties,

California, and in Klamath County, Oregon;

(4) November 25 in Ohio;

(5) December 31 in New Mexico and Texas; and

(6) November 15 in all other States and counties.

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

Period) of the Basic Provisions (Sec. 457.8), regarding the end of

the insurance period, the insurance period ends for all units when

the production delivered to the processor equals the amount of

production stated in the sugar beet processor contract.

10. Causes of Loss

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:

(a) Adverse weather conditions;

(b) Fire;

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

application of pest control measures;

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

improper application of disease control measures;

(e) Wildlife;

(f) Earthquake;

(g) Volcanic eruption; or

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

insured peril that occurs during the insurance period.

11. Replanting Payments

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

Basic Provisions (Sec. 457.8), a replanting payment is allowed if

the crop is damaged by an insurable cause of loss to the extent that

the remaining stand will not produce at least 90 percent (90%) of

the final stage production guarantee for the acreage and it is

practical to replant.

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

be the lesser of 10 percent (10%) of the final stage production

guarantee or one ton, multiplied by your price election, multiplied

by your insured share.

(c) When sugar beets are replanted using a practice that is

uninsurable for an original planting, our liability on the unit will

be reduced by the amount of the replanting payment. The premium

amount will not be reduced.

12. Duties In The Event of Damage or Loss

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

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

(a) Representative samples of the unharvested crop must be at

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

unit. The samples must not be harvested or destroyed until the

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

the unit is completed; and

(b) You must provide a copy of your sugar beet processor

contract or corporate resolution if you are the processor.

13. Settlement of Claim

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

you are unable to provide separate acceptable 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 any unit by:

(1) Multiplying the insured acreage by its respective production

guarantee;

(2) Subtracting the total production to count from the result in

paragraph (b)(1);

(3) Multiplying the result of paragraph (b)(2) by your price

election; and

(4) Multiplying the result of paragraph (b)(3) by your share.

(c) The total production to count (in standardized tons) from

all insurable acreage on the unit will include:

(1) All appraised production as follows:

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

(A) That is abandoned;

(B) Put to another use without our consent;

(C) That is damaged solely by uninsured causes; or

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

that are acceptable to us;

(ii) Production lost due to uninsured causes;

(iii) Unharvested production (unharvested production that is

appraised prior to the earliest delivery date that the processor

accepts harvested production will not be eligible for a conversion

to standardized tons in accordance with section 13 (d) and (e));

(iv) Only appraised production in excess of the difference

between the first and final stage production guarantee for acreage

that does not qualify for the final stage guarantee will be counted,

except that all production from acreage subject to section 13(c)(1)

(i) and (ii) will be counted; and

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

put to another use or abandon, if you and we agree on the appraised

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

that acreage will end if you put the acreage to another use or

abandon the crop. If agreement on the appraised amount of production

is not reached:

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

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

leave intact, and provide sufficient care for, representative

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

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

production or appraisals from the samples at the time harvest should

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

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

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

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

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

production to count for the acreage will be the harvested

production, or our reappraisal if additional damage occurs and the

crop is not harvested; and

(2) All harvested production from the insurable acreage.

(d) Harvested production or unharvested production that is

appraised after the earliest delivery date that the processor

accepts harvested production and that meets the minimum acceptable

standards contained in the sugar beet processor contract or

corporate resolution will be converted to standardized tons by:

(1) Dividing the average percentage of raw sugar in such sugar

beets by the raw sugar content percentage shown in the Special

Provisions; and

(2) Multiplying the result (rounded to three places) by the

number of tons of such sugar beets.

The average percentage of raw sugar will be determined from

tests performed by the processor at the time of delivery. If

individual tests of raw sugar content are not made at the time of

delivery, the average percent of raw sugar may be based on the

results of previous tests performed by the processor during the crop

year if it is determined that such results are representative of the

total production. If not representative, the average percent of raw

sugar will equal the raw sugar content percent shown in the Special

Provisions.

(e) Harvested production or unharvested production that is

appraised after the earliest delivery date that the processor

accepts harvested production and that does not meet the minimum

acceptable standards contained in the sugar beet processor contract

due to an insured peril will be converted to standardized tons by:

(1) Dividing the gross dollar value of all of the damaged sugar

beets on the unit (including the value of cooperative stock,

patronage refunds, etc.) by the local market price per pound on the

earlier of the date such production is sold or the date of final

inspection for the unit;

(2) Dividing that result by 2,000; and

(3) Dividing that result by the county average raw sugar factor

contained in the Special Provisions for this purpose.

For example, assume that the total dollar value of the damaged

sugar beets is $6,000.00; the local market price is $0.10; and the

county average raw sugar factor is 0.15. The amount of production to

count would be calculated as follows:

(($6,000.00$0.10)2,000)0.15=200 tons.

14. Late and Prevented Planting

(a) In lieu of provisions contained in the Basic Provisions

(Sec. 457.8) regarding acreage initially planted after the final

planting date and the applicability of a Late Planting Agreement

Option, insurance will be provided for acreage planted to the

insured crop during the late planting period (see section 14(c)),

and acreage you were prevented from planting (see section 14(d)).

These coverages provide reduced production guarantees and are

applicable in all counties except California counties with a July 15

cancellation date. The premium amount for late planted acreage and

eligible prevented planting acreage will be the same as that for

timely planted acreage. If the amount of

[[Page 58778]]

premium you are required to pay (gross premium less our subsidy) for

late planted acreage or prevented planting acreage exceeds the

liability on such acreage: coverage for those acres will not be

provided; no premium will be due; and no indemnity will be paid for

such acreage.

(b) You must provide written notice to us not later than the

acreage reporting date if you were prevented from planting.

(c) Late planting.

(1) For sugar beet acreage planted during the late planting

period, the production guarantee for the applicable stage for each

acre will be reduced for each day planted after the final planting

date by:

(i) One percent (1%) for the 1st through the 10th day; and

(ii) Two percent (2%) for the 11th through the 25th day.

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

Acreage) of the Basic Provisions (Sec. 457.8), you must report the

dates the acreage is planted within the late planting period.

(3) If planting of sugar beets continues after the final

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

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

(i) The acreage reporting date contained in the Special

Provisions for the insured crop; or

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

(d) Prevented Planting (Including Planting After the Late

Planting Period)

(1) If you were prevented from timely planting sugar beets, you

may elect:

(i) To plant sugar beets during the late planting period. The

production guarantee for such acreage will be determined in

accordance with section 14(c)(1);

(ii) Not to plant this acreage to any crop except a cover crop

not for harvest. You may also elect to plant the insured crop after

the late planting period. In either case, the production guarantee

for such acreage will be 35 percent of the final stage production

guarantee for timely planted acres. For example, if your final stage

production guarantee for timely planted acreage is 20.0 tons per

acre, your prevented planting production guarantee would be 7.0 tons

per acre (20.0 tons multiplied by 0.35). If you elect to plant the

insured crop after the late planting period, production to count for

such acreage will be determined in accordance with section 13; or

(iii) Not to plant the intended crop but plant a substitute crop

for harvest, in which case:

(A) No prevented planting production guarantee will be provided

for such acreage if the substitute crop is planted on or before the

10th day following the final planting date for the insured crop; or

(B) A production guarantee equal to 17.5 percent of the final

stage production guarantee for timely planted acres will be provided

for such acreage, if the substitute crop is planted after the 10th

day following the final planting date for the insured crop. If you

elected the Catastrophic Risk Protection Endorsement or excluded

this coverage, and plant a substitute crop, no prevented planting

coverage will be provided. For example, if your final stage

production guarantee for timely planted acreage is 20.0 tons per

acre, your prevented planting production guarantee would be 3.5 tons

per acre (20.0 ton multiplied by 0.175). You may elect to exclude

prevented planting coverage when a substitute crop is planted for

harvest and receive a reduction in the applicable premium rate. If

you wish to exclude this coverage, you must so indicate, on or

before the sales closing date, on your application or on a form

approved by us. Your election to exclude this coverage will remain

in effect from year to year unless you notify us in writing on our

form by the applicable sales closing date for the crop year for

which you wish to include this coverage. All acreage of the crop

insured under this policy will be subject to this exclusion.

(2) Production guarantees for timely, late, and prevented

planting acreage within a unit will be combined to determine the

production guarantee for the unit. For example, assume you insure 1

unit in which you have a 100 percent share. The unit consists of 150

acres, of which 50 acres were planted timely, 50 acres were planted

7 days after the final planting date (late planted), and 50 acres

were not planted but are eligible for a prevented planting

production guarantee. The production guarantee for the unit will be

computed as follows:

(i) For the timely planted acreage, multiply the per acre

production guarantee for timely planted acreage by the 50 acres

planted timely;

(ii) For the late planted acreage, multiply the per acre

production guarantee for timely planted acreage by 93 percent and

multiply the result by the 50 acres planted late; and

(iii) For prevented planting acreage, multiply the final stage

per acre production guarantee for timely planted acreage by:

(A) Thirty five percent and multiply the result by the 50 acres

you were prevented from planting, if the acreage is eligible for

prevented planting coverage, and if the acreage is left idle for the

crop year, or if a cover crop is planted not for harvest. Prevented

planting compensation hereunder will not be denied because the cover

crop is hayed or grazed; or

(B) Seventeen and one-half percent and multiply the result by

the 50 acres you were prevented from planting, if the acreage is

eligible for prevented planting coverage, and if you elect to plant

a substitute crop for harvest after the 10th day following the final

planting date for the insured crop. (This subparagraph (B) is not

applicable, and prevented planting coverage is not available

hereunder, if you elected the Catastrophic Risk Protection

Endorsement or you elected to exclude prevented planting coverage

when a substitute crop is planted (see section 14(d)(1)(iii)).)

Your premium will be based on the result of multiplying the per

acre production guarantee for timely planted acreage by the 150

acres in the unit.

(3) You must have the inputs available to plant and produce the

intended crop with the expectation of at least producing the

production guarantee. Proof that these inputs were available may be

required.

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

Period) of the Basic Provisions (Sec. 457.8), the insurance period

for prevented planting coverage begins:

(i) On the sales closing date contained in the Special

Provisions for the insured crop in the county for the crop year the

application for insurance is accepted; or

(ii) For any subsequent crop year, on the sales closing date for

the insured crop in the county for the previous crop year, provided

continuous coverage has been in effect since that date. For example:

If you make application and purchase insurance for sugar beets for

the 1997 crop year, prevented planting coverage will begin on the

1997 sales closing date for sugar beets in the county. If the sugar

beet coverage remains in effect for the 1998 crop year (is not

terminated or canceled during or after the 1997 crop year),

prevented planting coverage for the 1998 crop year began on the 1997

sales closing date. Cancellation for the purpose of transferring the

policy to a different insurance provider when there is no lapse in

coverage will not be considered terminated or canceled coverage for

the purpose of the preceding sentence.

(5) The acreage to which prevented planting coverage applies

will not exceed the total eligible acreage on all FSA Farm Serial

Numbers in which you have a share, adjusted for any reconstitution

that may have occurred on or before the sales closing date. Eligible

acreage for each FSA Farm Serial Number is determined as follows:

(i) Eligible acreage will not exceed the number of acres

required to be grown in the current crop year under a contract

executed with a processor prior to the acreage reporting date or the

number of acres needed to produce the amount of contracted

production based on the APH yield for the acreage.

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

will be limited to the number of acres for which you had adequate

irrigation facilities prior to the insured cause of loss which

prevented you from planting.

(iii) A prevented planting production guarantee will not be

provided for any acreage:

(A) That does not constitute at least 20 acres or 20 percent of

the acreage in the unit, whichever is less (Acreage that is less

than 20 acres or 20 percent of the acreage in the unit will be

presumed to have been intended to be planted to the insured crop

planted in the unit, unless you can show that you had the inputs

available before the final planting date to plant and produce

another insured crop on the acreage);

(B) For which the actuarial table does not designate a premium

rate unless a written agreement designates such premium rate;

(C) Used for conservation purposes or intended to be left

unplanted under any program administered by the United States

Department of Agriculture;

(D) On which another crop is prevented from being planted, if

you have already received a prevented planting indemnity, guarantee

or amount of insurance for the same acreage in the same crop year,

unless you provide adequate records of acreage and production

showing that the acreage was double-cropped in each of the last 4

years;

(E) On which the insured crop is prevented from being planted,

if any other crop is

[[Page 58779]]

planted and fails, or is planted and harvested, hayed or grazed on

the same acreage in the same crop year, (other than a cover crop as

specified in section 14(d)(2)(iii)(A), or a substitute crop allowed

in section 14 (d)(2)(iii)(B), unless you provide adequate records of

acreage and production showing that the acreage was double-cropped

in each of the last 4 years;

(F) When coverage is provided under the Catastrophic Risk

Protection Endorsement if you plant another crop for harvest on any

acreage you were prevented from planting in the same crop year, even

if you have a history of double-cropping. If you have a Catastrophic

Risk Protection Endorsement and receive a prevented planting

indemnity, guarantee, or amount of insurance for a crop and are

prevented from planting another crop on the same acreage, you may

only receive the prevented planting indemnity, guarantee, or amount

of insurance for the crop on which the prevented planting indemnity,

guarantee, or amount of insurance is received; or

(G) For which planting history or conservation plans indicate

that the acreage would have remained fallow for crop rotation

purposes.

(iv) For the purpose of determining eligible acreage for

prevented planting coverage, acreage for all units will be combined

and be reduced by the number of sugar beet acres timely planted and

late planted. For example, assume you have 100 acres eligible for

prevented planting coverage in which you have a 100 percent (100%)

share. The acreage is located in a single FSA Farm Serial Number

which you insure as two separate optional units consisting of 50

acres each. If you planted 60 acres of sugar beets on one optional

unit and 40 acres of sugar beets on the second optional unit, your

prevented planting eligible acreage would be reduced to zero (i.e.,

100 acres eligible for prevented planting coverage minus 100 acres

planted equals zero).

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

Acreage) of the Basic Provisions (Sec. 457.8), you must report by

unit any insurable acreage that you were prevented from planting.

This report must be submitted on or before the acreage reporting

date. For the purpose of determining acreage eligible for a

prevented planting production guarantee, the total amount of

prevented planting and planted acres cannot exceed the maximum

number of acres eligible for prevented planting coverage. Any

acreage you report in excess of the number of acres eligible for

prevented planting coverage, or that exceeds the number of eligible

acres physically located in a unit, will be deleted from your

acreage report.

15. 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 section

15(e).

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

variable 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.

(e) An application for a 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 November 13, 1996.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 96-29560 Filed 11-18-96; 8:45 am]

BILLING CODE 3410-FA-P