# Common Crop Insurance Regulations; Florida Citrus Fruit Crop Insurance Provisions

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URL: https://www.frixlaw.com/law-library/documents/fr%3A96-6262

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** March 15, 1996
- **Citation:** 61 FR 10699

## Text

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A96-6262. Public record. Not legal advice.