Common Crop Insurance Regulations; Table Grape Crop Insurance Provisions, and Table Grape Crop Insurance Regulations

DEPARTMENT OF AGRICULTURE

7 CFR Parts 441 and 457

Common Crop Insurance Regulations; Table Grape Crop Insurance

Provisions, and Table Grape Crop Insurance Regulations

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 table grapes. 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 Table Grape crop insurance regulations under the Common Crop

Insurance Policy for ease of use and consistency of terms, and to

restrict the effect of the current Table Grape crop insurance

regulations to the 1997 and prior crop years.

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

be accepted until close of business March 17, 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 is

through March 17, 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, SW.,

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

except holidays.

FOR FURTHER INFORMATION CONTACT: John Meyer, Insurance Management

Specialist, Research and Development Division, Product Development

Branch, Federal Crop Insurance Corporation, at the Kansas City, MO,

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

[[Page 2060]]

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

The Office of Management and 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

Section 8 of the 1998 Table Grape Crop Provisions adds

interplanting as an insurable farming practice provided it does not

adversely affect the crop. This practice was not insurable under the

previous Table Grape crop insurance regulations. Consequently,

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

Pre-Acceptance Perennial Crop Inspection Report form for approximately

0.5 percent of the 341 insureds who interplant their table grape crop.

Standard interplanting language has been added to most perennial crops.

This is a benefit to agriculture because insurance is now available for

more perennial crop producers and, as a result, less acreage will need

to be placed into the noninsured crop disaster assistance program

(NAP).

The title of this information collection is ``Catastrophic Risk

Protection Plan and Related Requirements including, Common Crop

Insurance Regulations; Table Grape 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 table grapes that are eligible for Federal crop insurance.

The information requested is necessary for the reinsured companies

and FCIC to provide insurance and reinsurance, determine eligibility,

determine the correct parties to the agreement or contract, determine

and collect premiums or other monetary amounts, and pay benefits.

All information is reported annually. The reporting burden for this

collection of information is estimated to average 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 2,669,970 hours.

FCIC requests 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 of 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.

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

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

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

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

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

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

Unfunded Mandates Reform Act of 1995

Title II of the Unfunded 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, all producers are required to complete an

application and acreage report. If the crop is damaged or destroyed,

all insureds are required to give notice of loss and provide the

necessary information to complete a claim for indemnity.

All insureds must also certify to the number of acres and

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

producer must maintain the records to support the certified information

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

requirements. The amount of work required of the insurance companies

delivering and servicing these policies will not increase significantly

from the amount of work currently required. This rule does not have any

greater or lesser impact on the producer. Therefore, this action is

determined to be exempt from the provisions of the Regulatory

Flexibility Act (5 U.S.C. 605) and no Regulatory Flexibility Analysis

was prepared.

Federal Assistance Program

This program is listed in the Catalog of Federal Domestic

Assistance under No. 10.450.

Executive Order No. 12372

This program is not subject to the provisions of Executive Order

No. 12372, which require intergovernmental consultation with state and

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

published at 48 FR 29115, June 24, 1983.

Executive Order No. 12778

The Office of the General Counsel has determined that these

regulations meet the applicable standards provided in sections 2(a) and

2(b)(2) of Executive Order No. 12778. The provisions of this rule will

not have a retroactive effect prior to the effective date. The

provisions of this rule will preempt state and local laws to the extent

such state and local laws are inconsistent herewith. The administrative

appeal provisions 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

[[Page 2061]]

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 457.149, Table Grape 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 table grapes found at 7 CFR part 441

and restrict the application of that part to the 1997 and prior crop

years. By separate rule, FCIC will later remove that part.

This rule makes minor editorial and format changes to improve the

Table Grape crop insurance regulations' compatibility with the Common

Crop Insurance Policy. In addition, FCIC is proposing substantive

changes in the provisions for insuring table grapes as follows:

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

marketing,'' ``FSA,'' ``good farming practices,'' ``graft,''

``interplanted,'' ``irrigated practice,'' ``lug,'' ``non-contiguous

land,'' ``production guarantee, per acre,'' ``set out,'' and ``written

agreement,'' for clarification, and change the lug (box weight) from 22

pounds to 20 pounds in the Coachella Valley, California district, and

from 23 pounds to 21 pounds in all other California districts.

Provisions are also added indicating a box weight of 22 pounds for

Arizona. These changes were made by the California Table Grape

Commission.

2. Section 2--Change provisions to allow basic units by table grape

variety to be consistent with other policies which allow insurance for

crop varieties.

3. Section 3(b)--Specify that the insured must report damage,

removal of bearing vines, and change in practices that may reduce

yields. For the first year of insurance for acreage interplanted with

another perennial crop and anytime the planting pattern of such acreage

is changed, the insured must also report the age and variety, if

applicable, of any interplanted crop, its planting pattern, and any

other information needed to establish the approved yield. If the

insured fails to notify the insurer of factors that may reduce yields

from previous levels, the insurer will reduce the production guarantee

at any time the insurer becomes aware of damage, removal of vines, or

change in practices. This allows the insurance provider to limit

liability if necessary, before insurance attaches.

4. Section 7(a)--Clarify that the insured crop will be any insured

variety of grapes in the county. Previous provisions required that all

insurable table grape acreage in the county be insured. This change is

commensurate with previous changes made in the regulations for insuring

grapes.

5. Section 7(b)--Specify that at least 150 lugs per acre must have

been produced in at least one of the most recent three years of a

producer's actual production history base period. Previous provisions

required a minimum of 150 lugs per acre, but did not specify an

applicable time period.

6. Section 8--Allow insurance for table grapes interplanted with

another perennial crop in order to make insurance available for more

acreage and reduce reliance on the noninsured crop disaster assistance

program (NAP) for protection against crop losses. 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.

7. Section 9--Clarifies that for the year of application, if an

application is received after January 22 but prior to February 1,

insurance will attach on the 10th day after the properly completed

application is received in the insurance provider's local office,

unless we inspect the acreage during the 10 day period and determine

that it does not meet insurability requirements. Provisions were also

added to clarify insurability when an insurable share is acquired or

relinquished on or before the acreage reporting date.

8. Section 10(b)--Clarify that disease and insect infestation are

excluded causes of loss unless adverse weather prevents the proper

application of control measures, causes control measures to be

ineffective when properly applied, or causes disease or insect

infestation for which no effective control mechanism is available. Add

a provision that states that damage caused by phylloxera is not covered

regardless of cause.

9. Section 11(b)--Require the producer to give notice at least 15

days prior to harvest so a preharvest inspection can be made if the

insured intends to engage in direct marketing to consumers in order to

permit an accurate appraisal of production to count since it is

difficult to verify direct marketed production. Also removed provisions

regarding harvest prior to full maturity. Table grapes are not

harvested before the production reaches maturity.

10. Section 11(c)--Add provisions that the insured must give notice

prior to harvest so that any damaged production may be inspected.

Failure to do so may result in all such production being considered

undamaged and included as production to count.

11. Section 13--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

application for and duration of written agreements.

List of Subjects in 7 CFR Parts 441 and 457

Crop insurance, Table grape.

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

Crop Insurance Corporation hereby proposes to amend 7 CFR parts 441 and

457, effective for the 1998 and succeeding crop years, as follows:

PART 441--TABLE GRAPE CROP INSURANCE REGULATIONS

1. The authority citation for 7 CFR part 441 is amended to read as

follows:

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

2. The subpart heading preceeding Sec. 441.1 is revised to read as

follows:

Subpart-Regulations for the 1987 through 1997 Crop Years.

3. Section 441.7 is amended by revising the introductory text of

paragraph (d) to read as follows:

Sec. 441.7 The application and policy.

* * * * *

(d) The application for the 1987 through 1997 crop years is found

at subpart D of part 400, General Administrative Regulations (7 CFR

400.37, 400.38). The provisions of the Table Grape Insurance Policy for

the 1987 through 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. A new Sec. 457.149 is added to read as follows:

Sec. 457.149 Table Grape Crop Insurance Provisions.

The Table Grape Crop Insurance Provisions for the 1998 and

succeeding crop years are as follows:

For FCIC policies:

[[Page 2062]]

Department of Agriculture

Federal Crop Insurance Corporation

For reinsured policies: (Insurance provider's name or other

appropriate heading).

For both FCIC and reinsured policies:

Table Grape 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

Cluster thinning and removal--Removing parts of an immature

cluster or the entire cluster of grapes.

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.

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

Department of Agriculture, or a successor agency.

Good farming practices--The cultural practices generally in use

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

and produce at least the yield used to determine the production

guarantee, and recognized by the Cooperative State Research,

Education, and Extension Service as compatible with agronomic and

weather conditions in the county.

Graft--To unite a shoot or bud (scion) with a rootstock or an

existing vine in accordance with recommended practices to form a

living union.

Harvest--Severing the clusters of mature grapes from the vine.

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

any form of alternating or mixed pattern.

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

is artificially applied during the growing season by appropriate

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

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

establish the irrigated production guarantee on the irrigated

acreage planted to the insured crop.

Lug--Twenty pounds of table grapes in the Coachella Valley,

California district; 21 pounds in all other California districts;

and 22 pounds in Arizona.

Non-contiguous--Any two or more tracts of land whose boundaries

do not touch at any point, except that land separated only by a

public or private right-of-way, waterway, or an irrigation canal

will be considered as contiguous.

Production guarantee (per acre)--The number of lugs of grapes

determined by multiplying the approved APH yield per acre by the

coverage level percentage you elect.

Set out--Physically planting the desired variety of grape plant

in the ground in a desired planting pattern.

Table grapes--Grapes that are grown for commercial sale for

human consumption as fresh fruit on acreage where the cultural

practices to produce fresh marketable grapes were carried out.

Written agreement--A written document that alters designated

terms of this policy in accordance with section 12.

2. Unit Division

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

Provisions (Sec. 457.8), will be divided into basic units by each

table grape variety you insure.

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

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

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

such division exists.

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

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

variety, other than as described in this section.

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

combine all optional units that are not in compliance with these

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

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

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

these provisions is determined to be inadvertent, and the optional

units are combined 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.

(e) All optional units that you elect must be identified on the

acreage report for that crop year.

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

unit:

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

of acreage and production for each optional unit for at least the

last crop year used to determine your production guarantee; and

(2) 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

(3) Each optional unit must be 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 one price election and coverage level

for each table grape variety in the county insured under this

policy.

(b) You must report, by the production reporting date designated

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

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

variety if applicable:

(1) Any damage, removal of bearing vines, change in practices,

or any other circumstance that may reduce the expected yield below

the yield upon which the insurance guarantee is based, and the

number of affected acres;

(2) The number of bearing vines on insurable and uninsurable

acreage;

(3) The age of the vines and the planting pattern; and

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

with another perennial crop, and anytime the planting pattern of

such acreage is changed:

(i) The age of the interplanted crop, and type if applicable;

(ii) The planting pattern; and

(iii) Any other information that we request in order to

establish your approved yield.

We will reduce the yield used to establish your production

guarantee as necessary, based on our estimate of the effect of

interplanting the perennial crop, removal of vines; damage; change

in practices and any other circumstance that may affect the yield

potential of the insured crop. If you fail to notify us of any

circumstance that may reduce your yields from previous levels, we

will reduce your production guarantee as necessary at any time we

become aware of the circumstance.

4. Contract Changes

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

Provisions (Sec. 457.8), the contract change date is October 31

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 January 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 the acreage of

table grapes in the county by variety.

7. Insured Crop

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

Provisions (Sec. 457.8), the crop insured will be any insurable

variety of grapes in the county that you elect and for which a

premium rate is provided by the actuarial table:

(1) In which you have a share;

(2) That are grown for harvest as table grapes;

(3) That are adapted to the area; and

(4) That are grown in a vineyard that, if inspected, is

considered acceptable by us.

(b) In addition to table grapes not insurable under section 8

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

insure any grapes grown on vines:

(1) That, after being set out or grafted, have not reached the

number of growing seasons designated by the Special Provisions; or

(2) That have not produced an average of at least 150 lugs of

table grapes per acre in at least one of the most recent three crop

years in your actual production history base period. However, we may

inspect and agree in writing to insure acreage that has not produced

this amount.

8. Insurable Acreage

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

the Basic Provisions

[[Page 2063]]

(Sec. 457.8) that prohibit insurance attaching to a crop planted

with another crop, table grapes interplanted with another perennial

crop are insurable unless we inspect the acreage and determine that

it does not meet the requirements contained in your policy.

9. Insurance Period

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

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

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

for the year of application, if your application is received after

January 22 but prior to February 1, insurance will attach on the

10th day after your properly completed application is received in

our local office, unless we inspect the acreage during the 10 day

period and determine that it does not meet insurability

requirements. You must provide any information that we require for

the crop or to determine the condition of the vineyard.

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

each crop year is the date during the calendar year in which the

grapes are normally harvested, as follows:

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Variety Date

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Arizona:

All counties............................... Perlette.......................... June 15.

Flame Seedless.................... July 15.

All others........................ July 31.

California:

Fresno, Kern, Kings, Madera, and Tulare Perlette.......................... August 15.

counties.

Cardinal.......................... August 15.

Exotic............................ August 31.

Flame Seedless.................... September 15.

Superior Seedless................. August 31.

Red Malaga........................ September 15.

Queen............................. September 15.

Thompson Seedless................. September 15.

Black Rose........................ September 30.

Italia............................ September 30.

White Malaga...................... October 15.

Ribier............................ October 15.

Ruby Seedless..................... October 15.

All others........................ October 31.

Merced, Stanislaus, and San Joaquin Flame Seedless.................... September 15.

counties.

Thompson Seedless................. September 30.

Ribier............................ October 15.

Flame Tokay....................... October 15.

All others........................ October 31.

Imperial, Riverside, and San Bernardino Beauty Seedless................... July 15.

counties.

Perlette.......................... July 15.

All others........................ July 31.

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

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

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

after coverage begins but on or before the acreage reporting date

for the crop year, and after an inspection we consider the acreage

acceptable, insurance will be considered to have attached to such

acreage on the calendar date for the beginning of the insurance

period.

(2) If you relinquish your insurable share on any insurable

acreage of table grapes on or before the acreage reporting date for

the crop year, insurance will not be considered to have attached to,

and no premium will be due or indemnity paid for such acreage for

that crop year unless:

(i) A transfer of coverage and right to an indemnity, or a

similar form approved by us, is completed by all affected parties;

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

transfer on or before the acreage reporting date; and

(iii) The transferee is eligible for crop insurance.

10. Causes of Loss

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

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

only against the following causes of loss that occur during the

insurance period:

(1) Adverse weather conditions;

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

been controlled or pruning debris has not been removed from the

vineyard;

(3) Wildlife;

(4) Earthquake;

(5) Volanic eruption; or

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

peril that occurs during the insurance period.

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

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

insure against damage or loss of production due to:

(1) Disease or insect infestation, unless adverse weather:

(i) Prevents the proper application of control measures or

causes properly applied control measures to be ineffective; or

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

control mechanism is available;

(2) Phylloxera, regardless of cause; or

(3) Inability to market the table grapes 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.

11. Duties In The Event of Damage or Loss

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

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

following will apply:

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

have started if the crop will not be harvested.

(b) You must notify us at least 15 days before any production

from any unit will be sold by direct marketing. We will conduct an

appraisal that will be used to determine your production to count

for production that is sold by direct marketing. If damage occurs

after this appraisal, we will conduct an additional appraisal. These

appraisals, and any acceptable records provided by you, will be used

to determine your production to count. Failure to give timely notice

that production will be sold by direct marketing will result in an

appraised amount of production to count of not less than the

production guarantee per acre if such failure results in our

inability to make the required appraisal.

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

notify us at least 15 days prior to the beginning of harvest if you

previously gave notice in accordance with section 14 of the Basic

Provisions (Sec. 457.8) so that we may inspect any damaged

production. If you fail to notify us, we may

[[Page 2064]]

consider all such production to be undamaged and include it as

production to count.

12. 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 by its respective production

guarantee;

(2) Multiplying the result in section 12(b)(1) by the respective

price election for the variety;

(3) Totaling the results in section 12(b)(2);

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

variety (see section 12(c)) by the respective price election;

(5) Totaling the results in section 12(b)(4);

(6) Subtracting the result of section 12(b)(5) from the result

in section 12(b)(3); and

(7) Multiplying the result of section 12(b)(6) by your share.

(c) The total production to count (in lugs) from all insurable

acreage on the unit will include:

(1) All appraised production as follows:

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

(A) That is abandoned;

(B) That is sold by direct marketing if you fail to meet the

requirements in section 11(b);

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

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

(ii) Production lost due to uninsured causes;

(iii) Unharvested production that meets, or would meet if

properly handled, the California Department of Food and Agriculture

minimum standards for table grapes; and

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

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

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

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

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

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

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

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

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

appraisal made prior to deferring the claim will be used to

determine the production to count; and

(2) All harvested production from insurable acreage regardless

of condition or disposition.

(d) The quantity of production to count for table grape

production damaged by insurable causes within the insurance period

and that is marketed for any use other than table grapes will be

determined by multiplying the greater of (1) the value of the table

grapes per ton or (2) $50, by the number of tons and dividing that

result by the highest price election available for the insured unit.

This result will be the number of lugs to count.

13. Written Agreement

Designated terms of this policy may be altered by written

agreement in accordance with the following:

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

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

13(e);

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

variable terms of the contract between you and us that will be in

effect if the written agreement is not approved;

(c) If approved, the written agreement will include all variable

terms of the contract, including, but not limited to, crop type or

variety, the guarantee, premium rate, and price election;

(d) Each written agreement will only be valid for one year (If

the written agreement is not specifically renewed the following

year, insurance coverage for subsequent crop years will be in

accordance with the printed policy); 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.

Signed in Washington, DC, on January 10, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 97-1015 Filed 1-14-97; 8:45 am]

BILLING CODE 3410-FA-P