Common Crop Insurance Regulations; Florida Citrus Fruit Crop Insurance Provisions

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

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

provisions will be used in conjunction with the Common Crop Insurance

Policy Basic Provisions, which contain standard terms and conditions

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

policy changes to better meet the needs of the insured, move the

current Florida Citrus Endorsement from 7 CFR 401.143 to the Common

Crop Insurance Policy (7 CFR 457) for ease of use by the public and

conformance among policy terms, and conform to the amendments to the

Federal Crop Insurance Act made by the Federal Crop Insurance Reform

Act of 1994.

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

be accepted until close of business April 15, 1996 and will be

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

information collections under the Paperwork Act of 1995 continues

through May 13, 1996.

ADDRESSES: Interested persons are invited to submit written comments to

the Chief, Product Development Branch, Federal Crop Insurance

Corporation (FCIC), Farm Service Agency (FSA), United States Department

of Agriculture (USDA), 9435 Holmes Road, Kansas City, MO 64131. Written

comments will be available for public inspection and copying in room

0324, South Building, USDA, 14th and Independence Avenue, S.W.,

Washington, D.C., during regular business hours, Monday through Friday.

FOR FURTHER INFORMATION CONTACT: William Klein, Program Analyst,

Research and Development Division, Product Development Branch, FCIC,

FSA, at the address listed above, telephone (816) 926-2704.

SUPPLEMENTARY INFORMATION:

Executive Order 12866 and Departmental Regulation 1512-1

This action has been reviewed under USDA procedures established by

Executive Order 12866 and Departmental Regulation 1512-1. This action

constitutes a review as to the need, currency, clarity, and

effectiveness of these regulations under those procedures. The sunset

review date established for these regulations is May 1, 2000.

This rule has been determined to be exempt for the purposes of

Executive Order 12866, and therefore has not been reviewed by the

Office of Management and Budget (OMB).

Paperwork Reduction Act of 1995

The information collection requirements contained in the Florida

Citrus Fruit Crop Provisions have been submitted to OMB for approval

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

proposed rule will amend the information collection requirements under

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

Crop Insurance Corporation will be amending the information collection

to adjust the estimated reporting hours and revising the usage of FCI-

12-P, Pre-Acceptance Perennial Crop Inspection Report as it applies to

the Florida Citrus Fruit Crop Insurance Provisions.

Section 7 of the 1997 Florida Citrus Fruit Crop provisions adds

interplanting as an insurable farming practice as long as it is

interplanted with another citrus fruit crop. This practice was not

insurable under the previous Florida Citrus Endorsement 90-02 and the

General Crop Policy 88-G (REV 3-91) to which it attached. Consequently,

interplanting information will need to be collected, using the FCI-12-P

Pre-Acceptance Perennial Crop Inspection Report form for approximately

20 percent of the Florida Citrus insureds who interplant their citrus

crop. Standard interplanting language has been added to most perennial

crops. Interplanting is an insurable practice as long as it does not

adversely affect the insured crop. This is a benefit to agriculture

because insurance is now available for more citrus and fruit producers

and as a result less acreage will need to be placed into the Noninsured

Crop Disaster Assistance Program (NAP).

Revised reporting estimates and requirements for usage of OMB

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

the provisions of 44 U.S.C 35. Public comments are due by May 13, 1996.

The title of this information collection is ``Catastrophic Risk

Protection Plan and Related Requirements Including Common Crop

Insurance Regulations; Florida Citrus Fruit Crop Insurance

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

insurance acreage report, an insurance application and a continuous

contract. Potential respondents to this information collection are

growers of Florida citrus fruit that are eligible for Federal crop

insurance.

The estimated increase in the number of respondents and total

burden hours associated with the OMB information collection is the

result of two new parts in chapter IV of title 7 of the Code of Federal

Regulations; Part 402, Catastrophic Risk Protection Plan, and Part 404,

Noninsured Crop Disaster Assistance Program. The Federal Crop Insurance

Reform Act of 1994 required the Federal Crop Insurance Corporation to

implement a catastrophic risk protection plan of insurance that

provides a basic level of coverage to protect producers in the event

that a covered disaster results in crop losses or prevented planting.

As a result of the implementation of the Catastrophic Risk Protection

Endorsement, increased producer participation has increased the

information collections covered under OMB control number 0563-0003. The

information requested is necessary for the reinsured companies and the

Federal Crop Insurance Corporation to provide insurance and

reinsurance, determine eligibility, determine the correct parties to

the agreement or contract, determine and collect premiums or other

monetary amounts (or fees), and pay benefits.

All information is reported annually. The reporting burden for this

collection

[[Page 10700]]

of information is estimated to average 25 minutes per response for each

of the 3.6 responses from approximately 1,755,015 respondents. The

total annual burden on the public for this information collection is

2,669,970 hours.

The comment period for information collections under the Paperwork

Reduction Act of 1995 continues through May 13, 1996, for the

following: (a) Whether the proposed collection of information is

necessary for the proper performance of the functions of the agency,

including whether the information shall have practical utility; (b) the

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

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

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

minimize the burden of the collection of information on respondents,

including through the use of automated collection techniques or other

forms of information technology.

Comments should be submitted to the Desk Officer for Agriculture,

Office of Information and Regulatory Affairs, Office of Management and

Budget (OMB), Washington, D.C. 20503 and to Bonnie Hart, Advisory and

Corporate Operations Staff, Regulatory Review Group, Farm Service

Agency, P.O. Box 2415, Ag Box 0572, U.S. Department of Agriculture,

Washington, D.C. 20013-2415. Copies of the information collection may

be obtained from Bonnie Hart at the above address. Telephone (202) 690-

2857.

Unfunded Mandates Reform Act of 1995

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

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

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

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

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

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

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

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

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

UMRA generally requires FCIC to identify and consider a reasonable

number of regulatory alternatives and adopt the least costly, more

cost-effective or least burdensome alternative that achieves the

objectives of the rule.

This rule contains no Federal mandates (under the regulatory

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

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

the requirements of sections 202 and 205 of the UMRA.

Executive Order 12612

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

Federalism, that this rule does not have sufficient federalism

implications to warrant the preparation of a Federalism Assessment. The

policies and procedures contained in this rule will not have a

substantial direct effect on States or their political subdivisions, or

on the distribution of power and responsibilities among the various

levels of government.

Regulatory Flexibility Act

This regulation will not have a significant impact on a substantial

number of small entities. The amount of work required of the insurance

companies and FSA offices delivering these policies and procedures

therein will not increase significantly from the amount of work

currently required to deliver previous policies to which this

regulation applies. This rule does not have any greater or lesser

impact on the insured farmer. 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 12372

This program is not subject to the provisions of Executive Order

12372 which require intergovernmental consultation with State and local

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

at 48 FR 29115, June 24, 1983.

Executive Order 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 12778. The provisions of this

rule will not have a retroactive effect prior to the effective date.

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

extent such State and local laws are inconsistent herewith. The

administrative appeal provisions in 7 CFR part 11 and 7 CFR part 780

must be exhausted before action for judicial review may be brought.

Environmental Evaluation

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

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

neither an Environmental Assessment nor an Environmental Impact

Statement is needed.

National Performance Review

This regulatory action is being taken as part of the National

Performance Review initiative to eliminate unnecessary or duplicative

regulations and improve those that remain in force.

Background

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

CFR part 457), a new section to be known as 7 CFR 457.107, Florida

Citrus Fruit Crop Insurance Provisions. The provisions will be

effective for the 1997 and succeeding crop years. The proposed Florida

Citrus Fruit Crop Insurance provisions will replace the provisions

found at 7 CFR 401.143 (Florida Citrus Endorsement). Upon publication

of 7 CFR 457.107 as a final rule, the provisions for insuring Florida

citrus fruit contained herein will supersede the current provisions

contained in 7 CFR 401.143. By separate rule, FCIC will revise

Sec. 401.143 to restrict its effect through the 1996 crop year and

later remove that section.

This rule makes minor editorial and format changes to improve the

Florida Citrus Endorsement's compatibility with the Common Crop

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

the provisions for insuring Florida citrus fruit as follows:

Florida Citrus Endorsement

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

``good farming practices'', ``hurricane'', ``interplanted'', and

``written agreement'' for clarification purposes.

2. Subsection 1(b)--Add limes to the Florida Citrus Fruit Crop

Provisions as an insurable citrus crop. Limes are added in response to

public interest in coverage and findings of FCIC's field staff and

research and development staff supporting the insurability of this

additional citrus crop. Limes are grouped with Lemons under Type VI.

Limes and lemons are often grown together and are similar in their

growth patterns, maturity, and cultivation.

3. Section 2--Describe the guidelines under which basic units may

be divided into optional units. The definition of ``unit'' under

section 1(tt) of the Basic Provisions (Sec. 457.6) provides for the

division of units in accordance with applicable crop provisions. The

current Florida Citrus Endorsement does not

[[Page 10701]]

provide guidelines for determining optional units. Section 2 of these

crop provisions provides guidelines for optional unit division of

Florida citrus fruit basic units that are consistent with many other

perennial crop provisions. Optional units may be divided on the basis

of section, section equivalent, or FSA Farm Serial Number, or on

acreage located on non-contiguous land, or both. Consistent with the

definition of ``unit'' in the Basic Provisions (Sec. 457.6), section 10

of the Florida Citrus Fruit Crop Provisions will provide that, in

settling a claim, loss will be determined on a unit basis and all

optional units for which acceptable production records were not

provided will be combined.

4. Subsection 3(a)--Specify that the insured may select only 1

percent of the maximum dollar amount of insurance for all fruit

included in each type shown in section 1 of these crop provisions or as

designated in the Special Provisions. Beginning with the 1996 crop

year, certain citrus fruit within types (IV tangerines and V murcotts)

were priced differently, as shown in the actuarial table. While it was

not encouraged, producers could choose different percentages of the

maximum amount of insurance depending on anticipated market conditions.

This created administrative problems in settling claims. Section 3 of

the Basic Provisions provides that the insured may select only one

coverage level for each insured crop. Since FCIC considers each type to

be a ``crop'', the language in these crop provisions clearly limits

producers to 1 percent of the maximum dollar amount for each fruit

within a type, regardless of variations in the maximum amount of

insurance for the fruit.

5. Subsection 3(c)--Specify that the insured must report the age of

any interplanted crop, the planting pattern, and any other information

needed to establish the amount of insurance for the interplanted

acreage. The acreage or amount of insurance, or both, may be adjusted

by us when we become aware of the situation if the insured has not

previously reported it. Interplanting is not provided under the current

Florida Citrus Endorsement. Section 7 of these crop provisions allows

interplanting a citrus fruit crop with another citrus fruit crop. The

change in policy language is based on existing practices and FCIC's

desire to insure the maximum amount of acreage. Interplanting, as

provided in these crop provisions, is limited to existing interplanting

practices, i.e., with another citrus fruit crop, and excludes other

interplanting practices which may adversely impact the insured crop.

This policy change necessitates a change in reporting requirements.

Insureds with interplanted citrus acreage must report information

needed by the insurer to establish the amount of insurance or number of

acres of the interplanted insured crop.

6. Section 4--Change the contract change date from April 15 to

March 15. This change will allow insureds more time to make insurance

decisions before the April 30 cancellation date.

7. Subsection 6(b)(2)--Change the insurable tree age requirement

from 10 years after set out to 5 years after set out based on industry

recommendations. The amounts of insurance are listed in the actuarial

documents based on tree age, and are reduced proportionately for

younger trees.

8. Section 7--Add ``interplanting'' as an insurable farming

practice if the citrus fruit crop is interplanted with another citrus

fruit crop.

9. Subsection 8(a)(1)--Clarify that if an application is accepted

by us after April 20, insurance will attach on the 10th day after the

application is received in the insurance provider's local office. Full

premium, however, will be due for the partial year.

10. Section 8(b)--Provide policy guidelines for attachment of

insurance when insurable acreage is acquired or relinquished.

Previously this language was contained in the Crop Insurance Handbook

and Catastrophic Risk Protection Handbook.

11. Section 10--Change the deductible for determining when an

indemnity is due. For limited and additional coverage the indemnity had

been computed based on the determination of the percent of damage less

10 percent. For the 1997 crop year, it will be the percent of damage

less the deductible (25%, 30%, 35%, 40%, 45%, 50%) divided by the

coverage level percent. This change makes the Florida Citrus Fruit Crop

Provisions consistent with other crop provisions and with the way in

which other catastrophic losses were computed for the 1995 crop year.

12. Section 11--Add provisions for providing insurance coverage by

written agreement. FCIC has a long-standing policy of permitting

modification of certain provisions of insurance contracts by written

agreement. This provision is not documented in the current Florida

Citrus Endorsement. This section will provide for the application for,

and duration of, written agreements.

List of Subjects in 7 CFR Part 457

Crop insurance, Florida citrus fruit.

Proposed Rule

Pursuant to the authority contained in the Federal Crop Insurance

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

Corporation hereby proposes to amend the Common Crop Insurance

Regulations (7 CFR 457), effective for the 1997 and succeeding crop

years, as follows:

PART 457--[AMENDED]

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

follows:

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

2. 7 CFR 457 is amended by adding a new Sec. 457.107 to read as

follows:

Sec. 457.107 Florida Citrus Fruit Crop Insurance Provisions.

The Florida Citrus Fruit Crop Insurance Provisions for the 1997 and

succeeding crop years are as follows:

United States Department of Agriculture; Federal Crop Insurance

Corporation; Florida Citrus Fruit Crop Provisions

If a conflict exists among the Basic Provisions (Sec. 457.8),

these crop provisions, and the Special Provisions, the Special

Provisions will control these crop provisions and the Basic

Provisions; and these crop provisions will control the Basic

Provisions.

1. Definitions--

(a) Box--A standard field box as prescribed in the State of

Florida Citrus Fruit Laws.

(b) Citrus fruit type--Any of the following:

(1) Type I--Early and mid-season oranges;

(2) Type II--Late Oranges;

(3) Type III--Grapefruit for which freeze damage will be

adjusted on a juice basis;

(4) Type IV--Navel Oranges, tangelos and tangerines

(5) Type V--Murcott Honey Oranges (also known as Honey

Tangerines) and Temple Oranges;

(6) Type VI--Lemons and Limes; or

(7) Type VII--Grapefruit for which freeze damage will be

adjusted on a fresh fruit basis.

(c) Days--Calendar days.

(d) Freeze--The formation of ice in the cells of the fruit

caused by low air temperatures.

(e) Good farming practices--The cultural practices generally in

use in the area for the crop to make normal progress toward maturity

and produce the expected yield for the type and age of citrus fruit

and are those generally recognized by the Cooperative Extension

Service as compatible with agronomic and weather conditions in the

area.

(f) Harvest--The severance of mature citrus fruit from the tree

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

marketable fruit from the ground.

(g) Hurricane--A windstorm classified by the U.S. Weather

Service as a hurricane.

(h) Interplanted--Acreage on which two or more crops are planted

in any form of alternating or mixed pattern.

(i) Non-contiguous land--Any land owned by you or rented by you

for any consideration other than a share in the insured crop, whose

boundaries do not touch at any point. Land that is separated only by

a public or private right-of-way, waterway or irrigation canal will

be considered to be contiguous.

[[Page 10702]]

(j) Potential production--Includes production that would have

been produced had damage not occurred and includes citrus fruit

that:

(i) Was harvested before damage occurred;

(ii) Remained on the tree after damage occurred; and

(iii) Was lost from either an insured or uninsured cause.

Potential production does not include citrus fruit that:

(i) Was lost before insurance attached for any crop year;

(ii) Was lost by normal dropping; or

(iii) Any tangerines that normally would not, by the end of the

insurance period for tangerines, meet the 210 pack size (2 and 4/16

inch minimum diameter) under United States Standards.

(k) Written agreement--A written document that alters designated

terms of a policy.

2. Unit Division--A unit as defined in section 1 (Definitions)

of the Basic Provisions (Sec. 457.8), will be divided into basic

units by each citrus fruit type shown in section 1 of these crop

provisions or designated in the Special Provisions. Unless limited

by the Special Provisions, a basic unit 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 to such

division exists. Basic units may not be divided into optional units

on any basis including, but not limited to, production practice,

type, and variety other than as described in this section. 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 may combine the optional

units at any time we discover that you have failed to comply with

these provisions. If failure to comply with these provisions is

determined to be inadvertent, and the optional units are combined,

that portion of the premium paid for the purpose of electing

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

combined. All optional units must be reflected on the acreage report

for each crop year.

(a) Each optional unit must meet one or more of the following

criteria as applicable:

(1) Optional Units by Section, Section Equivalent, or Farm

Service Agency (FSA) Farm Serial Number: Optional units may be

established if each optional unit is located in a separate legally

identified section. The trees must be planted in such a manner that

the planting does not continue into the adjacent 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; or

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

addition to or instead of establishing optional units by section,

section equivalent or FSA Farm Serial Number, optional units may be

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

3. Insurance Guarantees, Coverage Levels, and Prices for

Determining Indemnities--In addition to the requirements of section

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

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

(a) You may select only 1 percent of the maximum dollar amount

of insurance for all citrus fruit included in each type, shown in

section 1 of these crop provisions or designated in the Special

Provisions, that you elect to insure.

(b) In lieu of the production reporting date contained in

section 3 (Insurance Guarantees, Coverage Levels, and Prices for

Determining Indemnities) of the Basic Provisions (Sec. 457.8),

potential production for each unit will be determined during loss

adjustment.

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

with another citrus fruit crop, and anytime the planting pattern of

such acreage is changed, you must report, by the sales closing date

contained in the Special Provisions, the following:

(1) The age of the interplanted trees and type if applicable;

(2) The planting pattern; and

(3) Any other information we may need to establish your amount

of insurance. We will reduce acreage or the amount of insurance, or

both, as necessary, based on the effect of the interplanted citrus

fruit trees on the insured citrus fruit crop. If you fail to notify

us, we will reduce the acreage or amount of insurance, or both, any

time we become aware of the interplanted crop.

4. Contract Changes--The contract change date is March 15

preceding the cancellation date. (See the provisions of section 4

(Contract Changes) of the Basic Provisions (Sec. 457.8).)

5. Cancellation and Termination Dates--In accordance with

section 2 (Life of Policy, Cancellation, and Termination) of the

Basic Provisions (Sec. 457.8), the cancellation date is April 30

preceding the crop year. The termination date is April 30 of the

crop year.

6. Insured Crop--

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

Provisions (Sec. 457.8), the crop insured will be all of each citrus

fruit type that you elect to insure, in which you have a share, that

are grown in the county shown on the application, and for which a

premium rate is quoted in the actuarial table. If you insure

grapefruit, you must insure all of your grapefruit under a single

type designation (type III or type VII).

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

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

insure any citrus fruit:

(1) That cannot be expected to mature each crop year within the

normal maturity period for the type;

(2) Produced by trees that have not reached the fifth growing

season after being set out, unless otherwise provided in the Special

Provisions or by a written agreement approved by us to insure such

citrus fruit;

(3) Of ``Meyer Lemons'' and oranges commonly known as ``Sour

Oranges'' or ``Clementines''; or

(4) Of the Robinson tangerine variety, for any crop year in

which you have elected to exclude such tangerines from insurance.

(You must elect this exclusion prior to the crop year for which the

exclusion is to be effective, except that for the first crop year

you must elect this exclusion by the later of April 30 or the time

you submit the application for insurance.)

(c) Upon our approval, you may elect to insure or exclude from

insurance for any crop year any insurable acreage in any unit that

has a potential production of less than 100 boxes per acre. If you:

(1) Elect to insure such acreage, we will consider the potential

production to be 100 boxes per acre when determining the amount of

loss;

(2) Elect to exclude such acreage, we will disregard the acreage

for all purposes related to this contract; or

(3) Do not elect to insure or exclude such acreage:

(i) We will disregard the acreage if the potential production is

less than 100 boxes per acre; or

(ii) If the potential production from such acreage is 100 or

more boxes per acre, we will determine the percent of damage on all

of the insurable acreage for the unit, but will not allow the

percent of damage for the unit to be increased by including such

acreage.

(d) We may exclude from insurance, or limit the amount of

insurance, on any acreage that was not insured the previous crop

year.

7. Insurable Acreage--In lieu of the provisions in Section 9

(Insurable Acreage) of the Basic Provisions (Sec. 457.8) that

prohibit insurance attaching to a crop planted with another crop,

citrus fruit interplanted with another citrus fruit crop is

insurable unless we inspect the acreage and determine it does not

meet insurability requirements.

8. Insurance Period--(a) In accordance with the provisions of

section 11 (Insurance Period) of the Basic Provisions (Sec. 457.8):

(1) Coverage begins on May 1 of each crop year, except that for

the first crop year, if the application is accepted by us after

April 20, insurance will attach on the 10th day after the completed

application and acreage and production reports are received in your

insurance provider's local office. Full premium is due for any

partial year.

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

each crop year is:

(i) January 31 for tangerines and navel oranges;

(ii) April 30 for lemons, limes, tangelos, early and mid-season

oranges; and

(iii) June 30 for late oranges, grapefruit, Temple and Murcott

Honey Oranges.

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

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

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

on or before the acreage reporting date of any crop year and if we

inspect and consider the acreage acceptable, insurance will be

considered to have attached to such acreage on the calendar date for

the beginning of the insurance period.

(2) If you relinquish your insurable interest on any acreage of

insurable citrus fruit on or

[[Page 10703]]

before the acreage reporting date of any crop year, insurance will

not be considered to have attached to such acreage for that crop

year unless:

(i) A transfer of right to an indemnity or a similar form

approved by us is completed by all affected parties; and

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

transfer on or before the acreage reporting date.

9. Causes of Loss--

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

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

only against the following causes of loss that occur within the

insurance period:

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

been controlled or pruning debris has not been removed from the

grove;

(2) Freeze;

(3) Hail;

(4) Hurricane; or

(5) Tornado.

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

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

insure against damage or loss of production due to:

(1) Any damage to the blossoms or trees; or

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

than actual physical damage from an insurable cause specified in

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

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

person to accept production.

10. Settlement of Claim--

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

you are unable to provide production records:

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

for which acceptable production records were not provided; or

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

production to such units in proportion to our liability on the

harvested acreage for each unit.

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

will settle your claim for each unit by:

(1) Multiplying the number of acres by the respective dollar

amount of insurance per acre for the citrus fruit by the share;

(2) Computing the average percent of damage to the respective

citrus fruit, rounded to the nearest tenth of a percent (0.1%),

without regard to any percent of damage determined in prior

inspections. The percent of damage will be the ratio of the number

of boxes of citrus fruit considered damaged from an insured cause,

divided by the undamaged potential production. Citrus fruit will be

considered undamaged potential production if it is:

(i) Or could be marketed as fresh fruit;

(ii) Harvested prior to inspection by us; or

(iii) Harvested within 7 days after a freeze;

(3) Subtracting the insurance (level) deductible from the

respective percent of damage and, if this result is positive,

dividing this result by the coverage level percentage;

(4) Multiplying this result by the amount of insurance for the

respective citrus fruit.

(For example, if the average percent of damage is 70 percent and

the coverage level is 75 percent (the deductible is 25 percent), the

amount payable is 60 percent times the amount of insurance (70%

damage -25% level deductible)=45% (45%75%)=60% adjusted

damage X the amount of insurance); and

(5) Summing all such products to determine the amount payable

for the unit.

(c) Pink and red grapefruit of Type III, and citrus fruit of

Types IV, V, and VII, that are seriously damaged by freeze, as

determined by a fresh-fruit cut of a representative sample of fruit

in the unit in accordance with the applicable provisions of the

State of Florida Citrus Fruit laws, and are not or could not be

marketed as fresh fruit will be considered damaged to the following

extent:

(1) If less than 16 percent (16%) of the fruit in a sample shows

serious freeze damage, the fruit will be considered undamaged; or

(2) If 16 percent (16%) or more of the fruit in a sample shows

serious freeze damage, the fruit will be considered 50 percent (50%)

damaged, except that:

(i) For tangerines of Type IV, damage in excess of 50 percent

(50%) will be the actual percent of damaged fruit; and

(ii) For pink and red grapefruit of citrus Type III, and citrus

of Types IV(except tangerines), V, and VII, if it is determined that

the juice loss in the fruit exceeds 50 percent (50%), such percent

will be considered the percent of damage.

(d) Notwithstanding the provisions of subsection 11(c) as to any

pink and red grapefruit of Type III and citrus fruit of Types IV, V,

and VII, in any unit that is mechanically separated using the

specific gravity ``floatation'' method into undamaged and freeze-

damaged fruit, the amount of damage will be the actual percent of

freeze-damaged fruit not to exceed 50 percent (50%) and will not be

affected by subsequent fresh-fruit marketing. Notwithstanding the

preceding sentence, the 50 percent (50%) limitation on freeze-

damaged fruit, mechanically separated, will not apply to tangerines

of citrus fruit Type IV.

(e) Any citrus fruit of Types I, II, and VI and white grapefruit

of Type III that is damaged by freeze, but may be processed into

products for human consumption, will be considered as marketable for

juice. The percent of damage will be determined by relating the

juice content of the damaged fruit as determined by analysis to:

(1) The average juice content of the fruit produced on the unit for

the three previous crop years based on your records, if they are

acceptable to us; or

(2) The following juice content, if acceptable records are not

furnished:

(i) Type I--44 pounds of juice per box

(ii) Type II--47 pounds of juice per box

(iii) Type III--38 pounds of juice per box

(iv) Type VI--43 pounds of juice per box

(f) Any citrus fruit on the ground that is not collected and

marketed will be considered totally lost if the damage was due to an

insured cause.

(g) Any citrus fruit that is unmarketable either as fresh fruit

or as juice because it is immature, unwholesome, decomposed,

adulterated, or otherwise unfit for human consumption due to an

insured cause will be considered totally lost.

(h) Pink and red grapefruit of citrus fruit Type III and citrus

fruit of Types IV, V, and VII that are unmarketable as fresh fruit

due to serious damage from hail as defined in United States

Standards for grades of Florida fruit will be considered totally

lost.

11. Written Agreements--Designated terms of this policy may be

altered by written agreement. You must apply in writing for each

written agreement no later than the sales closing date. Each

agreement is valid for one year only. 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.

All variable terms, including, but not limited to, crop type and

variety, guarantee, premium rate, and price election must be

contained in the written agreement. Notwithstanding the sales

closing date restriction contained herein, application for a written

agreement may be made after the sales closing date, and approved if,

after physical inspection of the acreage it is determined that the

crop is insurable in accordance with policy and written agreement

provisions. Applications for written agreements submitted by the

insured must also contain all variable terms of the contract between

the company and the insured that will be in effect if the written

agreement is not approved.

Signed in Washington, D.C., on March 21, 1996.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 96-6262 Filed 3-12-96; 1:54 pm]

BILLING CODE 3410-FA-P