General Crop Insurance Regulations, Fresh Market Tomato Minimum Value Option, and Fresh Market Tomato (Dollar Plan) Endorsement; and Common Crop Insurance Regulations, Fresh Market Tomato (Dollar Plan) Crop Insurance Provisions

DEPARTMENT OF AGRICULTURE

7 CFR Parts 401 and 457

General Crop Insurance Regulations, Fresh Market Tomato Minimum

Value Option, and Fresh Market Tomato (Dollar Plan) Endorsement; and

Common Crop Insurance Regulations, Fresh Market Tomato (Dollar Plan)

Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes

specific crop provisions for the insurance of fresh market (dollar

plan) tomatoes. 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, include the current Fresh Market Tomato (Dollar Plan)

Endorsement and the Fresh Market Tomato Minimum Value Option with the

Common Crop Insurance Policy for ease of use and consistency of terms,

and to restrict the effect of the current Fresh Market Minimum Value

Option and the Fresh Market Tomato (Dollar Plan) Endorsement to the

1997 and prior crop years.

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

be accepted until close of business January 29, 1997, 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 February 25, 1997.

ADDRESSES: Interested persons are invited to submit written comments to

the Chief, Product Development Branch, Federal Crop Insurance

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

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

inspection and copying in room 0324, South Building, United States

Department of Agriculture, 14th and Independence Avenue, S.W.,

Washington, D.C., 8:15 a.m. to 4:45 p.m., est, Monday through Friday,

except holidays.

FOR FURTHER INFORMATION CONTACT: Linda Williams, Program Analyst,

Research and Development Division, Product Development Branch, Federal

Crop Insurance Corporation, at the Kansas City, MO, address listed

above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

The Office and Management Budget (OMB) has determined this rule to

be exempt for the purposes of Executive Order No. 12866, and,

therefore, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

The title of this information collection is ``Catastrophic Risk

Protection Plan and Related Requirements including, Common Crop

Insurance Regulations; Fresh Market Tomato (Dollar Plan) Crop Insurance

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

application and an acreage report. Information collected from the

application and acreage report is electronically submitted to FCIC by

the reinsured companies. Potential respondents to this information

collection are producers of fresh market tomatoes 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 of this

collection of information is estimated to average 16.9 minutes per

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

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

collection is 2,669,932 hours.

FCIC is requesting comments for the following: (a) Whether the

proposed collection of information is necessary for the proper

performance of the functions of the agency, including whether the

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

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

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

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

the collection of information on respondents, including through the use

of automated collection techniques or other forms or information

gathering technology.

Comments regarding paperwork reduction should be submitted to the

Desk Officer for Agriculture, Office of Information and Regulatory

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

OMB is required to make a decision concerning the collections 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 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 Mandates 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) 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. 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. 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.

[[Page 68683]]

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 subsections 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 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 457.139, Fresh Market Tomato

(Dollar Plan) Crop Insurance Provisions. The new provisions will be

effective for the 1998 and succeeding crop years. These provisions will

replace and supersede the current provisions for insuring fresh market

tomatoes (dollar plan) found at 7 CFR 401.137 (Fresh Market Tomato

Minimum Value Option) and 7 CFR 401.139 (Fresh Market Tomato (Dollar

Plan) Endorsement). FCIC also proposes to amend Sec. 401.137 and

Sec. 401.139 to limit their effect to the 1997 and prior crop years.

FCIC will later publish a regulation to remove and reserve Sec. 401.137

and Sec. 401.139.

This rule makes minor editorial and format changes to improve the

Fresh Market Tomato Minimum Value Option and the Fresh Market Tomato

(Dollar Plan) Endorsement's compatibility with the Common Crop

Insurance Policy. In addition, FCIC is proposing substantive changes in

the provisions for insuring fresh market tomatoes (dollar plan) as

follows:

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

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

practice,'' ``planted acreage,'' ``practical to replant,'' ``row

width,'' ``tropical depression,'' and ``written agreement'' for

clarification.

Clarify the definition of crop year to specify that the crop year

begins on the first day of the earliest planting period for fall-

planted tomatoes and continues through the end of the insurance period

for spring-planted tomatoes.

Clarify the definition of excess rain to specify that it is an

amount of precipitation that is sufficient to directly damage the crop.

Previous regulations defined excessive rain as a minimum of 10 inches

of rain within a 24-hour period. This change will provide coverage for

crop damage that occurs when a lesser amount of precipitation is

received.

Change the definition of freeze to specify that freeze occurs when

low air temperatures cause ice to form in the cells of the plant or its

fruit to encompass conditions found in both frost and freeze.

Change the definition of harvest to clarify and remove the term

marketable. Tomatoes picked from the vine are considered harvested

whether marketable or not.

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

coverage level (and the corresponding amount of insurance designated in

the Actuarial Table for the applicable planting period and practice)

for all the tomatoes planted in the county insured under the policy.

3. Section 3(b)--Clarify that the amounts of insurance the insured

chooses for each planting period and practice must have the same

percentage relationship to the maximum amount of insurance offered by

FCIC for each planting period and practice.

4. Section 8(c)(4)--Clarify that plum or cherry tomatoes are not

insurable unless allowed by a written agreement. Previous regulations

did not provide crop insurance coverage for plum or cherry tomatoes.

This change will allow expansion of fresh market tomato crop insurance

coverage into other areas.

5. Section 9(b)(2)--Allow an insured to elect not to replant

damaged tomatoes that were initially planted within the fall or winter

planting periods, provided the final planting date for the planting

period has passed and damage occurs after 30 days of transplanting or

after 60 days of direct seeding. With this election, the insured may

collect an indemnity and that particular acreage will be uninsurable

for the next planting period. The insured may also elect to replant

such tomato acreage, collect a replanting payment under section 12, and

maintain the initial planting period coverage. This change incorporates

and standardizes procedures utilized in the fresh market vegetable

crops.

6. Section 10(f)(2)--Change the calendar date for the end of the

insurance period from 140 days to 125 days after the date of

transplanting or replanting with transplants. This change incorporates

the actual number of days for transplanted tomatoes to reach maturity

and for the crop to be harvested.

7. Section 11(a)(6)--Tropical depression has replaced cyclone as an

insured cause of loss. This change will standardize tropical depression

as an insured cause of loss among fresh market vegetable crops.

8. Section 14(b)(2)--Modify claim for indemnity calculations by

providing calculations for catastrophic risk protection coverage and

for coverage other than catastrophic risk protection. This provision

includes the use of the catastrophic risk protection price election

equivalent to determine the total dollar of production to count for

indemnity purposes. This change is necessary to assure that producers

that are insured based on a dollar amount of insurance are indemnified

comparable to producers that are insured based on an actual production

history (APH) yield basis.

9. Section 14(c)--Remove the provision requiring that unharvested

potential production in excess of 30 cartons after the second harvest

for ground culture tomatoes (third harvest for staked tomatoes) be

included in the value of appraised production to be counted. Consistent

with other fresh market vegetable crops, this provision will be

contained in the loss adjustment procedures.

10. Section 14(c)(2)(iv)--Require the insured to continue to care

for acreage when the insured does not agree with the appraisal on that

acreage. Production to count for such acreage will be determined using

the harvested production if the crop is harvested, or our reappraisal

if the crop is not harvested.

11. Section 14(c)(3)--Change the value to count for harvested

production to the dollar amount obtained by subtracting the allowable

cost from the price received (this resulting price must not be less

than the minimum value shown in the Special Provisions), and

multiplying this result by the number of cartons harvested. Current

regulations allow the value of sold production to be

[[Page 68684]]

as low as zero. Also, clarify that harvested mature tomatoes that are

damaged or defective due to insurable causes and are not marketable

will not be counted as production. These changes are made to assure

that the minimum value specified in the Special Provisions will be the

lowest value considered for any marketable harvested production unless

the insured selected the minimum value option.

12. Section 15--Add provisions for providing insurance coverage by

written agreement. FCIC has a long standing policy of permitting

certain modifications of the insurance contract by written agreement

for some policies. This amendment allows FCIC to tailor the policy to a

specific insured in certain instances. The new section will cover the

procedures for and duration of written agreements.

13. Section 16--Permit the insured to select the minimum value

option by electing Option I or Option II on the application. A separate

form no longer will be required.

List of Subjects in 7 CFR Parts 401 and 457

Crop insurance, Fresh market tomatoes.

Proposed Rule

Accordingly, for the reasons set forth in the preamble, the Federal

Crop Insurance Corporation hereby proposes to amend 7 CFR parts 401 and

457, as follows:

PART 401--GENERAL CROP INSURANCE REGULATIONS--REGULATIONS FOR THE

1988 AND SUBSEQUENT CONTRACT YEARS

1. The authority citation for 7 CFR part 401 continues to read as

follows:

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

2. Section 401.137 introductory paragraph is revised to read as

follows:

Sec. 401.137 Fresh market tomato minimum value option.

The provisions of the Fresh Market Tomato Minimum Value Option for

the 1991 through the 1997 crop years are as follows:

* * * * *

3. Section 401.139 introductory paragraph is revised to read as

follows:

Sec. 401.139 Fresh market tomato (dollar plan) endorsement.

The provisions of the Fresh Market Tomato Crop Insurance

Endorsement for the 1991 through the 1997 crop years are as follows:

* * * * *

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

1994 AND SUBSEQUENT CONTRACT YEARS

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

follows:

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

5. 7 CFR part 457 is amended by adding a new Sec. 457.139 to read

as follows:

Sec. 457.139 Fresh Market Tomato (Dollar Plan) Crop Insurance

Provisions.

The Fresh Market Tomato (Dollar Plan) Crop Insurance Provisions for

the 1998 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:

Fresh Market Tomato (Dollar Plan) 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

Acre--43,560 square feet of land when row widths do not exceed six

feet, or if row widths exceed six feet, the land area on which at least

7,260 linear feet of rows are planted.

Carton--Twenty-five (25) pounds of the insured crop.

Crop year--In lieu of the definition of ``crop year'' contained in

section 1 (Definitions) of the Basic Provisions (Sec. 457.8), crop year

is a period of time that begins on the first day of the earliest

planting period for fall-planted tomatoes and continues through the

last day of the insurance period for spring-planted tomatoes. The crop

year is designated by the calendar year in which spring-planted

tomatoes are harvested.

Days--Calendar days.

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

without the intervention of an intermediary such as a wholesaler,

retailer, packer, processor, 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.

Excess rain--An amount of precipitation sufficient to directly

damage the crop.

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

Department of Agriculture, or a successor agency.

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

fruit, caused by low air temperatures.

Good farming practices--The cultural practices generally in use in

the county for the crop to make normal progress toward maturity and are

those recognized by the Cooperative State Research, Education, and

Extension Service as compatible with agronomic and weather conditions

in the county.

Harvest--The picking of tomatoes on the unit.

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 for the insured crop to make normal progress toward

maturity.

Mature green tomato--A tomato that:

(1) Has a glossy waxy skin that cannot be torn by scraping;

(2) Has well-formed, jelly-like substance in the locules;

(3) Has seeds that are sufficiently hard so as to be pushed aside

and not cut by a sharp knife in slicing; and

(4) Shows no red color.

Plant stand--The number of live plants per acre prior to the

occurrence of an insurable cause of loss.

Planted acreage--Land in which, for each planting period,

transplants or seed have been placed manually or by a machine

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

depth, into soil that has been properly prepared for the planting

method and production practice. For each planting period, tomatoes must

initially be planted in rows. Acreage planted in any other manner will

not be insurable unless otherwise provided by the Special Provisions or

by written agreement.

Planting period--The period of time designated in the Actuarial

Table in which the tomatoes must be planted to be considered fall,

winter or spring-planted tomatoes.

Potential production--The number of cartons of mature green or ripe

tomatoes with a classification size of 6 x 7 (2-\8/32\ inch minimum

diameter) or larger, that the tomato plants will or would have produced

per acre by the end of the

[[Page 68685]]

insurance period, assuming normal growing conditions and practices.

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, marketing windows,

and time to crop maturity, that replanting to the insured crop will

allow the crop to attain maturity prior to the calendar date for the

end of the insurance period (inability to obtain plants or seed will

not be considered when determining if it is practical to replant).

Replanting--Performing the cultural practices necessary to replace

the tomato seed or transplants and then replacing the tomato seed or

transplants in the insured acreage with the expectation of growing a

successful crop.

Ripe tomato--A tomato that has a definite break in color from green

to tannish-yellow, pink or red.

Row width--The widest distance from the center of one row of plants

to the center of an adjacent row of plants.

Tropical depression--A system identified by the U.S. Weather

Service as a tropical depression, and for the period of time so

designated, including tropical storms, gales, and hurricanes.

Written agreement--A written document that alters designated terms

of this policy in accordance with section 15.

2. Unit Division

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

Provisions (Sec. 457.8), (basic unit) will be divided by planting

period.

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

be further divided into optional units if, for each optional unit you

meet all the conditions of this section or if a written agreement for

such further division exists.

(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 premium paid for the

purpose of electing optional units will be refunded to you for the

units combined.

(d) All optional units established for a 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 in which the insured crop was planted;

(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 be kept separate until loss

adjustment is completed by us; and

(4) Each optional unit must be 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.

3. Amounts of Insurance and Production Stages

(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 coverage

level (and the corresponding amount of insurance designated in the

Actuarial Table for the applicable planting period and practice) for

all the tomatoes in the county insured under this policy.

(b) The amount of insurance you choose for each planting period and

practice must have the same percentage relationship to the maximum

price offered by us for each planting period and practice. For example,

if you choose 100 percent of the maximum amount of insurance for a

specific planting period and practice, you must also choose 100 percent

of the maximum amount of insurance for all other planting periods and

practices.

(c) The amount of insurance available under the catastrophic risk

protection plan of insurance will be specified in the Actuarial Table.

(d) The production reporting requirements contained in section 3

(Insurance Guarantees, Coverage Levels, and Prices for Determining

Indemnities) of the Basic Provisions (Sec. 457.8), do not apply to

fresh market dollar plan tomatoes.

(e) The amounts of insurance per acre are progressive by stages as

follows:

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

Percent of

amount of

insurance

Stage per acre Length of time if direct seeded Length of time if transplanted

that you

selected

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

1............................ 50 From planting through the 59th From planting through the 29th

day after planting. day after planting.

2............................ 75 From the 60th day after planting From the 30th day after planting

until the beginning of stage 3. until the beginning of stage 3.

3............................ 90 From the 90th day after planting From the 60th day after planting

until the beginning of the final until the beginning of the final

stage. stage.

Final........................ 100 Begins the earlier of 105 days Begins the earlier of 75 days

after planting, or the beginning after planting, or the beginning

of harvest. of harvest.

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

(f) Any acreage of tomatoes damaged in the first, second, or third

stage to the extent that the majority of producers in the area would

not normally further care for it, will be deemed to have been

destroyed. The indemnity payable for such acreage will be based on the

stage the plants had achieved when the damage occurred.

[[Page 68686]]

4. Contract Changes

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

Provisions (Sec. 457.8), the contract change date is April 30 preceding

the cancellation date.

5. Cancellation and Termination Dates

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

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

termination dates are July 31.

6. Report of Acreage

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

the Basic Provisions (Sec. 457.8), you must report on or before the

acreage reporting date contained in the Special Provisions for each

planting period:

(a) All the acreage of tomatoes in the county insured under this

policy in which you have a share; and

(b) The row width.

7. Annual Premium

In lieu of the premium amount determinations contained in section 7

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

premium amount for each cultural practice (e.g. fall direct seeded

irrigated) is determined by multiplying the final stage amount of

insurance per acre by the premium rate for the cultural practice as

established in the Actuarial Table, by the insured acreage, by your

share at the time coverage begins, and by any applicable premium

adjustment factors contained in the Actuarial Table.

8. Insured Crop

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

(Sec. 457.8), the crop insured will be all the tomatoes in the county

for which a premium rate is provided by the Actuarial Table:

(a) In which you have a share;

(b) That are:

(1) Planted to be harvested and sold as fresh market tomatoes;

(2) Planted within the planting periods designated in the Actuarial

Table;

(3) Grown under an irrigated practice;

(4) Grown on acreage covered by plastic mulch except where the

Special Provisions allows otherwise;

(5) Grown by a person who in at least one of the three previous

crop years:

(i) Grew tomatoes for commercial sale; or

(ii) Participated in managing a fresh market tomato farming

operation;

(c) That are not:

(1) Interplanted with another crop;

(2) Planted into an established grass or legume;

(3) Grown for direct marketing; or

(4) Plum or cherry type tomatoes, unless allowed by written

agreement.

9. Insurable Acreage.

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

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

a crop has not been planted in at least one of the three previous crop

years, we will insure newly cleared land or former pasture land planted

to fresh market tomatoes.

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

of the Basic Provisions (Sec. 457.8):

(1) You must replant any acreage of tomatoes damaged during the

planting period in which initial planting took place whenever less than

50 percent of the plant stand remains: and

(i) It is practical to replant;

(ii) If, at the time the crop was damaged, the final day of the

planting period has not passed; and

(iii) The damage occurs within 30 days of transplanting or 60 days

of direct seeding.

(2) Whenever tomatoes initially are planted during the fall or

winter planting periods and the conditions specified in sections

9(b)(1) (ii) and (iii) are not satisfied, you may elect:

(i) To replant such acreage and collect any replant payment due as

specified in section 12. The initial planting period coverage will

continue for such replanted acreage.

(ii) Not to replant such acreage and receive an indemnity based on

the stage of growth the plants had attained at the time of damage.

However, such an election will result in the acreage being uninsurable

in the subsequent planting period.

(3) We will not insure any acreage which, in the preceding planting

period was planted to tomatoes (except as allowed in sections 9(b) (1)

and (2)), peppers, eggplants, or tobacco unless the soil has been

fumigated or otherwise properly treated.

10. Insurance Period

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

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

a unit the later of the date we accept your application, or when the

tomatoes are planted in each planting period. Coverage ends at the

earliest of:

(a) Total destruction of the tomatoes on the unit;

(b) Abandonment of the tomatoes on the unit;

(c) The date harvest should have started on the unit on any acreage

which will not be harvested;

(d) Final adjustment of a loss on the unit;

(e) Final harvest; or

(f) The calendar date for the end of the insurance period as

follows:

(1) 140 days after the date of direct seeding or replanting with

seed; and

(2) 125 days after the date of transplanting or replanting with

transplants.

11. 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) Excess rain;

(2) Fire;

(3) Freeze;

(4) Hail;

(5) Tornado;

(6) Tropical depression; or

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

cause of loss 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 any loss of production due to:

(1) Disease;

(2) Insect infestation; or

(3) Failure to market the tomatoes, unless such failure is due to

actual physical damage caused by an insured cause of loss that occurs

during the insurance period.

12. Replanting Payments

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

Provisions (Sec. 457.8), a replanting payment is allowed if, due to an

insured cause of loss, more than 50 percent of the plant stand will not

produce tomatoes and it is practical to replant.

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

the result obtained by multiplying $175.00 by your insured share.

(c) In lieu of the provisions contained in section 13 (Replanting

Payment) of the Basic Provisions (Sec. 457.8), limiting a replanting

payment to one each crop year, only one replanting payment will be made

for acreage planted during each planting period within the crop year.

13. Duties in the Event of Damage or Loss

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

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

you intend to claim an indemnity on any unit you must also give us

notice not later than 72 hours after the earliest of:

[[Page 68687]]

(a) The time you discontinue harvest of any acreage on the unit;

(b) The date harvest normally would start if any acreage on the

unit will not be harvested; or

(c) The calendar date for the end of the insurance period.

14. 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 such 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 in each stage by the amount of

insurance per acre for the final stage;

(2) Multiplying each result in section 14(b)(1) by the percentage

for the applicable stage (see section 3(e));

(3) Total the results of section 14(b)(2);

(4) Subtracting either of the following values from the result of

section 14(b)(3):

(i) For other than catastrophic risk protection coverage, the total

value of production to be counted (see section 14(c)); or

(ii) For catastrophic risk protection coverage, the result of

multiplying the total value of production to be counted (see section

14(c)) by:

(A) Sixty percent for the 1998 crop year; or

(B) Fifty-five percent for 1999 and subsequent crop years; and

(3) Multiplying the result of section 14(b)(4) by your share.

(c) The total value of production to count from all insurable

acreage on the unit will include:

(1) Not less than the amount of insurance per acre for the stage

for any acreage:

(i) That is abandoned;

(ii) Put to another use without our consent;

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

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

(2) The value of the following appraised production will not be

less than the dollar amount obtained by multiplying the number of

cartons of appraised tomatoes times the minimum value per carton shown

in the Special Provisions for the planting period:

(i) Potential production on any acreage that has not been harvested

the second time for ground-culture tomatoes (the third time for staked

tomatoes);

(ii) Unharvested mature green tomatoes (unharvested production that

is damaged or defective due to insurable causes and is not marketable

will not be counted as production to count);

(iii) Production lost due to uninsured causes; and

(iv) 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 when you put the acreage to another use or abandon the

crop. If agreement on the appraised amount of production is not

reached:

(A) We may require you to continue to care for the crop so that a

subsequent appraisal may be made or the crop harvested to determine

actual production (If we require you to continue to care for the crop

and you do not do so, the original appraisal will be used); or

(B) You may elect to continue to care for the crop, in which case

the amount of production to count for the acreage will be the harvested

production, or our reappraisal if the crop is not harvested.

(3) The total value of all harvested production from the insurable

acreage will be the dollar amount obtained by subtracting the allowable

cost contained in the Special Provisions from the price received for

each carton of tomatoes (this result may not be less than the minimum

value shown in the Special Provisions for any carton of tomatoes), and

multiplying this result by the number of cartons of tomatoes harvested.

Harvested production that is damaged or defective due to insurable

causes and is not marketable, will not be counted as production to

count.

15. Written Agreements

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 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, and premium rate;

(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 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.

16. Minimum Value Option

(a) The provisions of this option are continuous and will be

attached to and made a part of your insurance policy, if:

(1) You elect either Option I or Option II of the Minimum Value

Option on your application, or on a form approved by us, on or before

the sales closing date for the initial crop year in which you wish to

insure fresh market tomatoes (dollar plan) under this option, and pay

the additional premium indicated in the Actuarial Table for this

optional coverage; and

(2) You have not elected coverage under the Catastrophic Risk

Protection Endorsement.

(b) In lieu of the provisions contained in section 14(c)(3), the

total value of harvested production will be determined as follows:

If you selected Option I of the Minimum Value Option, the total

value of harvested production will be as follows:

(i) For sold production, the dollar amount obtained by subtracting

the allowable cost contained in the Special Provisions from the price

received for each carton of tomatoes (this result may not be less than

$2.00 for any carton of tomatoes), and multiplying this result by the

number of cartons of tomatoes sold; and

(ii) For marketable production that is not sold, the dollar amount

obtained by multiplying the number of cartons of such tomatoes on the

unit by the minimum value shown in the Special Provisions for the

planting period (harvested production that is damaged or defective due

to insurable causes and is not marketable will not be counted as

production).

(2) If you selected Option II of the Minimum Value Option, the

total value of harvested production will be as provided in section

16(b)(1), except that the dollar amount specified in section

(16)(b)(1)(i) may not be less than zero.

(c) This option may be canceled by either you or us for any

succeeding crop year by giving written notice on or before the

cancellation date preceding

[[Page 68688]]

the crop year for which the cancellation of this option is to be

effective.

Signed in Washington, D.C. on December 20, 1996.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 96-33066 Filed 12-27-96; 8:45 am]

BILLING CODE 3410-FA-P