General Crop Insurance Regulations, Onion Endorsement; and Common Crop Insurance Regulations, Onion Crop Insurance Provisions

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 401 and 457

General Crop Insurance Regulations, Onion Endorsement; and Common

Crop Insurance Regulations, Onion Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes

specific crop provisions for the insurance of onions. 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 Onion

Endorsement under the Common Crop Insurance Policy for ease of use and

consistency of terms, and to restrict the effect of the current Onion

Endorsement to the 1997 and prior crop years.

EFFECTIVE DATE: May 27, 1997.

FOR FURTHER INFORMATION CONTACT: Bill Klein, Insurance Management

Specialist, Research and Development, Product Development Division,

Federal Crop Insurance Corporation, United States Department of

Agriculture, 9435 Holmes Road, Kansas City, MO 64131, telephone (816)

926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

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

Following publication of the proposed rule, the public was afforded

60 days to submit written comments on information collection

requirements previously approved by OMB under OMB control number 0563-

0003 through September 30, 1998. No public comments were received.

[[Page 28610]]

Unfunded Mandates Reform Act of 1995

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

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

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

governments and the private sector. This rule contains no Federal

mandates (under the regulatory provisions of title II of the UMRA) for

State, local, and tribal governments or the private sector. Thus, this

rule is not subject to the requirements of sections 202 and 205 of the

UMRA.

Executive Order No. 12612

It has been determined under section 6(a) of Executive Order No.

12612, Federalism, that this rule does not have sufficient federalism

implications to warrant the preparation of a Federalism Assessment. The

provisions contained in this rule will not have a substantial direct

effect on states or their political subdivisions, or on the

distribution of power and responsibilities among the various levels of

government.

Regulatory Flexibility Act

This regulation will not have a significant impact on a substantial

number of small entities. New provisions included in this rule will not

impact small entities to a greater extent than large entities. Under

the current regulations, a producer is required to complete an

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

the insured is required to give notice of loss and provide the

necessary information to complete a claim for indemnity.

The producer must also annually certify to the number of acres and

the previous years production, if adequate records are available to

support the certification, or receive a transitional yield. The

producer must maintain the production records to support the

certification 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. 12988

This proposed rule has been reviewed in accordance with Executive

Order 12988 on civil justice reforms. The provisions of this rule will

not have 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 part 11 must be exhausted before any

action for judicial review may be brought.

Environmental Evaluation

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

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

neither an Environmental Assessment nor an Environmental Impact

Statement is needed.

National Performance Review

This regulatory action is being taken as part of the National

Performance Review Initiative to eliminate unnecessary or duplicative

regulations and improve those that remain in force.

Background

On Thursday, February 13, 1997, FCIC published a proposed rule, in

the Federal Register at 62 FR 6739-6746 to add to the Common Crop

Insurance Regulations (7 CFR part 457) a new section, 7 CFR 457.135,

Onion 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 onions found at 7 CFR

401.126 (Onion Endorsement). This rule also amends Sec. 401.126 to

limit its effect to the 1997 and prior crop years.

Following publication of the proposed rule, the public was afforded

30 days to submit written comments, data and opinions. A total of 28

comments were received from reinsured companies, an insurance service

organization, and FCIC Regional Service Offices (RSO). The comments

received, and FCIC's responses, are as follows:

Comment: An insurance service organization recommended that FCIC

consider defining in section 1 the term ``onion'' or ``bulb onion'' to

clarify that green (bunch) and seed onions are not insurable types.

Response: Insurable types of onions are clearly identified in

section 7 (Insured Crop). The provision states in part ``* * * the crop

insured will be all the onions (excluding green (bunch) or seed onions,

chives, garlic, leeks, and scallions) in the county * * *''. Therefore,

no change will be made in the definitions.

Comment: A reinsured company recommended deleting the definition

for ``FSA'' in section 1 of the provisions because they do not see a

need for this definition.

Response: FCIC disagrees with the recommendation. The term ``FSA''

is used numerous times in section 14, Late planting and Prevented

Planting. Therefore, the definition has not been deleted.

Comment: A reinsured company recommended adding in section 1 the

words ``and quality'' after the word ``quantity'' in the definition of

``irrigated practice.''

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

However, since no standards or procedures have been developed to

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

include quality in the definition. Therefore, no change has been made.

Comment: A reinsured company recommended that either the master

yield concept be incorporated or that onions be insured solely for

production loss with a quality option endorsement to cover quality

concerns.

Response: FCIC disagrees with the recommendations. The ``master

yield'' is used by FCIC to establish an actual production history yield

for crops that require several years between plantings in the same

field to avoid buildup of insects, disease, or both. It is useful

principally when optional units are authorized by section or section

equivalent. For onions, however, location of land within a county is

not a factor in determining eligibility for optional units. Therefore,

each year's production is considered in establishing the APH yield

regardless of the field in which the onions are planted. This differs

materially from the conditions that necessitate the use of a master

yield. Use of a master yield in the circumstances surrounding onion

insurance would only complicate the onion insurance program needlessly.

FCIC considered a ``straight production'' policy but circumstances

do not support the concept. In general, onions that do not meet U.S.

No. 1 standards for storage onions or the applicable marketing order

for non-

[[Page 28611]]

storage onions are not marketable. Furthermore, only a small

percentage of onions normally fail to meet marketing requirements due

to factors such as doubles, seeders, off color, or hand or machine

damage. Thus, FCIC determined that adjustment for deficient quality

best meets the risk management needs of onion producers.

Comment: A reinsured company and an insurance service organization

recommended that optional units be made available by legal description

(sections, etc), as is the case with similar crops.

Response: The rule authorizes optional units by irrigated and non-

irrigated practice and by type. The only types allowed to be separated

into optional units are those identified in the Special Provisions and

include white, yellow, and red storage onions and two or more types of

non-storage onions based on regional differences. Additional unit

division by section or legal description would require further record

keeping that may not be readily available based on past practices,

increase producer premium, and further complicate the insurance program

for onions. Therefore, the recommendation is not adopted in the final

rule.

Comment: A reinsured company recommended that the percent of

coverage for each stage be uniform nationwide and that it be included

in section 3 of the crop provisions rather than being placed in the

Special Provisions.

Response: The percentage of coverage for each stage is uniform

nationwide. The term ``production guarantee'' is defined in section 1

and includes the percentages for each stage. The definition will remain

in section 1. However, for clarity purposes the percentages have been

added to the stages defined in section 3.

Comment: An insurance service organization commented that the

language in section 3 describes the first stage as being ``* * * until

the emergence of the third leaf * * *'', while the second stage is

described as ``* * * extends from emergence of the fourth leaf * * *''

Commenters believe that the language leaves a gap between stage 1 and

stage 2 and that the language in the first stage should be modified to

read ``* * * through emergence of the third leaf.''

Response: FCIC agrees with the comment, and has amended provisions

in section 3 accordingly.

Comment: An FCIC RSO suggested that the proposed three stages may

be difficult to distinguish and would require extra effort to

administer. The commenter recommended that two stages be used: (1)

Prior to topping and lifting or digging, and (2) From topping and

lifting or digging to the end of the insurance period.

Response: The three stages as defined in the proposed rule reflect

the inputs through each stage of crop development. Transplants, for

example, are immediately placed in the second stage based on producer

inputs. The leaf count method of appraisal for onions is similar to

appraisal methods for many other crops. Thus onion loss adjustment

should not require significantly greater time to administer or be

unduly difficult. Therefore, no change has been made.

Comment: An insurance service organization commented that it is

confusing to have no first stage for transplanted onions, only a second

and final stage. The industry suggested that it might be less confusing

to have separate stage definitions for direct-seeded and for

transplanted onions.

Response: Crops are divided into stages primarily to reflect

insured's expenses in producing the crop and appropriate insurer

liability. Transplanted onions are immediately placed in the second

stage due to the additional cost incurred in purchasing the

transplants, and the cost of transplanting. It would actually be more

confusing to have two different stages, one for seed onions and one for

transplanted onions. Therefore, no change has been made.

Comment: An insurance service organization commented that a

contract change date 60 days before the sales closing date, as shown in

section 4, may not provide sufficient time for producers to make

informed risk management decisions. They contend that the companies

will not have adequate time to make operational changes, to develop

training materials, or to train agents. Even a contract change date

three months ahead of the sales closing creates problems in getting

necessary information to insureds on a timely basis.

Response: While FCIC is sensitive to the industry's concerns for

timely information, FCIC believes that a contract change date 60 days

prior to the sales closing date allows the companies adequate time to

perform all required tasks in a timely manner. Furthermore, major

changes in the crop provisions are published in the Federal Register

prior to the contract change date. This provides companies additional

lead time to begin implementing changes. The June 30 and November 30

contract change dates contained in section 4 are consistent with other

crops. For these reasons, no change has been made.

Comment: One commenter from a reinsured company questioned if 70

days, as listed in section 7, provides sufficient time to harvest wheat

interplanted with onions to function as a windbreak in the Pacific

Northwest where this is a common practice.

Response: Wheat planted for this purpose is only a windbreak and is

not intended for harvest. Harvesting wheat grown with an insured onion

crop will violate the onion contract.

Comment: One commenter from a reinsured company suggested that FCIC

consider changing the provisions in section 8 which address crop

rotation requirements. They maintained that onion growers in the

Vidalia region plant onions following onions year after year,

apparently with no adverse effect on yields. Current language requires

producers to request written agreements every year unless the Special

Provisions provide different rotation requirements. The commenter noted

that they did not know what information will be provided in the Special

Provisions. However, for the Vidalia region FCIC must allow different

rotation requirements without requiring additional paperwork.

Response: In most areas of the country, rotating onion acreage to

control disease and insects is a good farming practice. Consequently,

standard rotation requirements were placed in the crop provisions. The

Special Provisions contain the requirements that are specific for the

county and are received by the insured with the other policy documents.

If a different rotation practice is appropriate for any area, FCIC will

allow that rotation practice in the Special Provisions. Therefore, no

change has been made.

Comment: An insurance service organization commented that the State

of Washington was listed in section 9 with a July 31 end of insurance

period, but was not listed in item 10 of the summary of changes. The

industry questioned whether Washington was inadvertently omitted from

the summary.

Response: FCIC inadvertently omitted the state of Washington from

item 10 of the summary. The reference in section 9 is correct.

Comment: An insurance service organization commented that, under

section 9, the end of the insurance period for Colorado would be

October 15. The summary of changes states that this is a date change

for Colorado, but the Automated Date Table already shows October 15 for

the 1997 crop year.

[[Page 28612]]

Response: The date table published for the 1997 crop year is

incorrect. The regulations at Sec. 401.126 specify the end of insurance

date for Colorado is September 30. Therefore, the summary of changes is

correct.

Comment: An FCIC RSO recommended two changes in section 9: (1) That

the term ``fall planted'' be changed to ``fall direct seeded'' or

``winter transplanted'', and (2) the end of the insurance period be

changed from June 15 to June 1 for the State of Georgia. The commenter

stated that the date change recommendation resulted from consultation

with extension personnel, and the commenter stated that the additional

14 days increases the risk of heat damage to Georgia onions not

harvested by June 1.

Response: FCIC has determined that the terms are production

practices that should properly be defined in the Special Provisions.

The recommended change to the end of insurance period for Georgia is

adopted.

Comment: An FCIC RSO commented that the time allowed after lifting

or digging of non-storage onions until the end of the insurance period

was too short. A maximum of 14 days was recommended versus the

presently allowed 2 days after lifting or digging.

Response: Based on additional research, FCIC agrees with the

recommendation and has made the change accordingly.

Comment: An insurance service organization recommended that the

words ``for the type'' be added to section 11 after the words ``by your

price election'' to clarify the price used in determining the maximum

amount of the replanting payment per acre.

Response: FCIC agrees with the recommendation and has amended the

language accordingly.

Comment: A reinsured company recommended that the maximum amount of

replant payment in section 11 be changed from ``* * * the lesser of 7

percent of the final stage production guarantee or 18 hundredweight * *

*'' to ``* * * the lesser of 10 percent of the final stage production

guarantee or 20 hundredweight.'' The commenter reasoned that since most

guarantees exceed 200 hundredweight, these recommendations will provide

a more equitable replant payment.

Response: A replanting payment equal to the lesser of 7 percent or

18 hundredweight was based on extensive research of the actual cost of

replanting. These costs do not differ materially if the crop yields 200

or 500 hundredweight. Therefore, no change has been made.

Comment: An insurance service organization stated that they did not

understand the intent of the language in section 13(c)(1)(vi)(C) and

how it related to items 13(c)(1)(vi)(A) and 13(c)(1)(vi)(B). They noted

that they previously took exception with allowing the insured to wait

for a later, probably lower appraisal. They did not believe that the

language in section 13(c)(1)(vi)(C) resolved the issue.

Response: After further review, FCIC agrees that the language in

section 13(c)(1)(vi)(C) does not relate well to sections

13(c)(1)(vi)(A) and 13(c)(1)(vi)(B) and does not further clarify

section 13(c)(1)(vi)(A) as was intended. Therefore, FCIC has been

deleted 13(c)(1)(vi)(C).

Comment: A reinsured company and an insurance service organization

expressed concern that the language in section 13(d) seemed to address

only unharvested production and questioned the meaning of the clause

``* * * no production will be counted if the appraised percent of

damage exceeds the percentage shown in the Special Provisions.''

Response: FCIC agrees that the language was unclear and has

modified the language to read ``If the percent of damaged onion

production, harvested or unharvested, is determined to exceed the

percentage shown by type in the Special Provisions * * *'' to clearly

specify both harvested and unharvested onion production that is

damaged. Thus, for example, if the percentage shown on the Special

Provisions is 50 percent for non-storage type onions, and the percent

of actual damage exceeds 50 percent, then the production to count would

be zero for that acreage. Onions with a high percent of damage

generally have no value.

Comment: An FCIC RSO recommended that the percentage factors

referenced in section 13(d) be uniform nationwide and be placed in the

Crop Provisions rather than in the Special Provisions. This person

recommended a graduated system in which an appraised percent of damage

between 0 and 30 percent resulted in no damage, but the amount of

production would be reduced by five percent for each 1 percent of

damage between 31 percent and 50 percent. Damage in excess of 50

percent would result in no production to count.

Response: Allowable damage differs by region and type. Listing the

percentage in the Special Provisions permits recognition of these

differences. Therefore, no change has been made.

Comment: An insurance service organization communicated an

anticipation that the substitute crop provision in section 14 under the

prevented planting coverage will be eliminated for the 1998 crop year.

Response: FCIC is currently working on a regulation that will

propose numerous revisions to the prevented planting coverage. The

substitute crop provision is among those revisions. Until that rule is

finalized, the current prevented planting coverage will continue.

Comment: An insurance service organization commented that some

recently revised crop provisions have deleted the reference to base

acres for non-program crops. Although the comment did not specifically

recommend removal of these provisions from the onion crop provisions,

this was clearly the intent.

Response: FCIC agrees with the comment and is currently working on

a regulation that proposes to delete reference to base acres.

Comment: A reinsured company recommended reducing the prevented

planting percentages in section 14 from 40 percent to 35 percent for

unplanted acreage, and from 20 percent to 17.5 percent for acreage

planted to a substitute crop. The commenter reasoned that the

recommended percentages would be more consistent with other policies

(such as cotton, rice, and sugar beets) that insure high-value crops.

Response: After additional study, FCIC agrees with the comment and

has amended section 14 to read 35 percent for unplanted acreage and

17.5 percent for acreage planted to a substitute crop.

Comment: An insurance service organization commented that the

language in section 14 refers to double-cropping in ``* * * each of the

last 4 years in which the insured crop was grown on the acreage.''

Earlier crop provisions required a history of double-cropping in each

of the last 4 years, which was interpreted to mean the last 4

consecutive calendar years, not APH crop years. The commenter observed

that this is a significant change and questioned if it had been

discussed in recent meetings where prevented planting was a topic.

Response: Initial crop policies converted to the Common Crop

Insurance Policy contained language appropriately interpreted to mean

the last 4 consecutive calendar years. More recent crop provisions

contain language that specifies each of the last 4 years in which the

insured crop was grown on the acreage. This issue has been discussed in

a number of recent prevented planting meetings at which industry

representatives were present. The restriction that limited eligibility

to

[[Page 28613]]

4 calendar years is unduly restrictive because it does not recognize

normal practices on a typical farm that employs a double-cropping

practice.

Comment: An FCIC RSO recommended deleting language in section 14

that refers to participation in USDA programs that limit the number of

acres planted for the crop year to base acres, and to nonparticipation

in USDA programs, because these provisions do not apply to onions.

Response: FCIC agrees with the comment and is currently working on

a regulation that proposes to delete these references. However, this

language will not be deleted from Crop Provisions until that regulation

has become a final rule. This provides consistency among policies.

Therefore, no change has been made.

Comment: An insurance service organization suggested combining the

provisions contained in section 15(e) with the provisions in section

15(a).

Response: The requirement that a written agreement be requested on

or before the sales closing date is intended to be the rule. The

exception provided in section 15(e) is only available in specific

limited circumstances. Therefore, no change will be made.

Comment: A reinsured company and an insurance service organization

recommended removal of the requirement in section 15 that a written

agreement be renewed each year. The terms should be stated in the

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

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

agreement should be continuous. Limiting written agreements to one year

only increases administrative cost, complexity, and the opportunities

for misunderstanding and error.

Response: Written agreements are intended to supplement policy

terms or permit insurance in unusual situations that require

modification of the otherwise standard insurance provisions. If such

practices continue year to year, they should be incorporated into the

policy or Special Provisions. It is not intended that written

agreements be so numerous that they would significantly increase

administrative costs and cause producer misunderstanding. It is

important to minimize written agreement exceptions to assure that the

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

no change will be made.

In addition to the changes described above, and minor reformatting

and word changes for clarity, FCIC has made the following changes:

1. Changed the term ``third stage'' to ``final stage'' throughout

the text for clarification.

2. Section 1--Amend the terms ``onion production'' and production

guarantee (per acre) and added the term ``damaged onion production'' in

order to standardize the guidelines to be used in determining damaged

onions.

3. Section 3(b)--Modified the language to read ``the stages are for

any acreage in the unit * * *'' that qualify for a specific stage.

Previously the language describing stages 2 and 3 read ``* * * 25

percent of the acreage in the unit * * * .'' Stages are now on an acre

basis rather than a unit basis.

4. Section 13--Deleted section 13(c)(1)(vi)(C) based on proposed

rule comments that the provision did not relate well to sections

13(c)(1)(vi)(A) and 13(c)(1)(vi)(B) and that it did not further clarify

section 13(c)(1)(vi)(A) as was intended.

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

the Federal Register. This rule improves the onion insurance coverage

and brings it under the Common Crop Insurance Policy Basic Provisions

for consistency among the policies. The earliest contract change date

that can be met for the 1998 crop years is June 30, 1997. It is

therefore, imperative that these provisions be made final before that

date so that the reinsured companies and insureds may have sufficient

time to implement these changes. Therefore, public interest requires

the agency to make the rules effective upon publication.

List of Subjects in 7 CFR Parts 401 and 457

Crop insurance, Onion crop insurance regulations, Onions.

Final Rule

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

Crop Insurance Corporation hereby amends 7 CFR parts 401 and 457

effective for the 1998 and succeeding crop years to read as follows:

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

1988 AND SUBSEQUENT CONTRACT YEARS

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

follows:

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

2. In Sec. 401.126 the introductory paragraph is revised to read as

follows:

Sec. 401.126 Onion endorsement.

The provisions of the Onion Endorsement for the 1988 through the

1997 crop years are as follows:

* * * * *

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

1994 AND SUBSEQUENT CONTRACT YEARS

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

follows:

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

4. Section 457.135 is added to read as follows:

Sec. 457.135 Onion Crop Insurance Provisions.

The Onion Crop Insurance Provisions for the 1998 and succeeding

crop years are as follows:

FCIC policies:

United States Department of Agriculture

Federal Crop Insurance Corporation

Reinsured policies:

(Appropriate title for insurance provider)

Both FCIC and reinsured policies:

Onion Crop Provisions

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

these Crop Provisions, and the Special Provisions; the Special

Provisions will control these Crop Provisions and the Basic

Provisions; and these Crop Provisions will control the Basic

Provisions.

1. Definitions.

Crop year. The period of time in which the onions are normally

grown and designated by the calendar year in which the onions are

normally harvested.

Damaged onion production. Storage type onions that do not grade

U.S. No. 1 or do not satisfy any other standards that may be

contained in the Special Provisions; or non-storage type onions

which do not satisfy standards contained in any applicable marketing

order or other standards that may be contained in the Special

Provisions.

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 harvesting 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.

Final planting date. The date contained in the Special

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

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

Good farming practices. The cultural practices generally in use

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

and produce at least the yield used

[[Page 28614]]

to determine the production guarantee and are those recognized by

the Cooperative State Research, Education, and Extension Service as

compatible with agronomic and weather conditions in the county.

Harvest. Removal of the onions from the field after topping and

lifting or digging.

Hundredweight. 100 pounds avoirdupois.

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

a manner that does not permit separate agronomic maintenance or

harvest of the insured crop.

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

is artificially applied during the growing season by appropriate

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

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

establish the irrigated production guarantee on the irrigated

acreage planted to the insured crop.

Late planted. Acreage planted to the insured crop during the

late planting period.

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

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

final planting date.

Lifting or digging. A pre-harvest process in which the onion

roots are severed from the soil and the onion bulbs laid on the

surface of the soil for drying in the field.

Non-storage onions. Generally of a Bermuda, Granex, or Grano

variety, or hybrids developed from these varieties, that are

harvested as a bulb and dried only a short time, and consequently

have a higher moisture content. They are thinner skinned, contain a

higher sugar content, and are generally milder in flavor than

storage onions. Due to a higher moisture and sugar content, they are

subject to deterioration both on the surface and internally if not

used shortly after harvest.

Onion production. Onions of recoverable size and condition, with

excess dirt and foliage material removed and that are not considered

damaged onion production.

Planted acreage. Land in which onion seed has been placed by a

machine appropriate for the insured crop and planting method, or in

which onion plants or sets have been transplanted by machine or by

hand, at the correct depth, into a seedbed that has been properly

prepared for the planting method and production practice. Onions

must initially be planted in rows to be considered planted.

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

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

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

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

but not limited to moisture availability, condition of the field,

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

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

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

considered practical to replant after the end of the late planting

period unless replanting is generally occurring in the area.

Prevented planting. Inability to plant the insured crop with

proper equipment by the final planting date designated in the

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

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

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

majority of producers in the surrounding area from planting the same

crop.

Production guarantee (per acre):

(a) First stage production guarantee--Thirty-five percent (35%)

of the final stage production guarantee.

(b) Second stage production guarantee--Sixty percent (60%) of

the final stage production guarantee.

(c) Final stage production guarantee--The quantity of onions (in

hundredweight) determined by multiplying the approved yield per acre

by the coverage level percentage you elect.

Replanting. Performing the cultural practices necessary to

replace the onion seed or onion transplants, and then replacing the

onion seed or onion transplants in the insured acreage with the

expectation of growing a crop that will produce at least the yield

used to determine the production guarantee.

Storage onions. Onions other than a Bermuda, Granex, or Grano

variety, or hybrids developed from these varieties that are

harvested as a bulb and dried to a lower moisture content, are

firmer, have more outer layers of paper-like skin, and are darker in

color than non-storage onions. They are generally more pungent, have

a lower sugar content, and can normally be stored for several months

under proper conditions prior to use without deterioration.

Timely planted. Planted on or before the final planting date

designated in the Special Provisions for the insured crop in the

county.

Topping. A pre-harvest process to initiate curing, in which

onion foliage is removed or bent over.

Type. A category of onions as identified in the Special

Provisions.

Written agreement. A written document that alters designated

terms of this policy in accordance with section 15.

2. Unit Division.

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

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

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

optional unit you meet all the conditions of this section.

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

basis other than as described in this section.

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

combine all optional units that are not in compliance with these

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

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

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

these provisions is determined to be inadvertent, and the optional

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

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

refunded to you.

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

identified on the acreage report for that crop year.

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

unit:

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

of planted acreage and production for each optional unit for at

least the last crop year used to determine your production

guarantee;

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

and discernable break in the planting pattern at the boundaries of

each optional unit;

(3) You must have records of marketed production or measurement

of stored production from each optional unit maintained in such a

manner that permits us to verify the production from each optional

unit, or the production from each unit must be kept separate until

after loss adjustment is completed by us; and

(4) Optional units meet one or more of the following, as

applicable, unless otherwise provided by written agreement:

(i) Optional Units Based on Irrigated Acreage or Non-Irrigated

Acreage: To qualify as separate irrigated and non-irrigated optional

units, the non-irrigated acreage may not continue into the irrigated

acreage in the same rows or planting pattern. The irrigated acreage

may not extend beyond the point at which the irrigation system can

deliver the quantity of water needed to produce the yield on which

your guarantee is based, except the corners of a field in which a

center-pivot irrigation system is used will be considered as

irrigated acreage if separate acceptable records of production from

the corners are not provided. If the corners of a field in which the

center pivot irrigation system is used do not qualify as a separate

non-irrigated optional unit, they will be a part of the unit

containing the irrigated acreage. However, non-irrigated acreage

that is not a part of a field in which a center pivot irrigation

system is used may qualify as a separate optional unit provided all

requirements of this section are met; or

(ii) Optional Units Based on Onion Type: To qualify for a

separate optional unit by type, that type of onion must be

designated in the Special Provisions.

3. Insurance Guarantees, Coverage Levels, and Prices for

Determining Indemnities.

(a) In addition to the requirements of section 3 (Insurance

Guarantees, Coverage Levels, and Prices for Determining Indemnities)

of the Basic Provisions (Sec. 457.8), you may select only one price

election for all the onions in the county insured under this policy

unless the Special Provisions provide different price elections by

type, in which case you may select one price election for each onion

type designated in the Special Provisions. The price elections you

choose for each type must have the same percentage relationship to

the maximum price offered by us for each type. For example, if you

choose 100 percent of the maximum price election for one type, you

must also choose 100 percent of the maximum price election for all

other types.

(b) Your production guarantee progresses, in stages, to the

final stage production guarantee. Stages will be determined on an

acre basis and at least 75% of the plants on such acreage must be at

the same stage to qualify for the applicable stage guarantee. The

stages are as follows:

(1) First stage extends from planting through the emergence of

the third leaf for

[[Page 28615]]

direct seeded onions, and has a guarantee of 35 percent of the final

stage production guarantee.

(2) Second stage extends from emergence of the fourth leaf for

direct seeded onions, or from transplanting of onion plants or sets,

until the acreage has been subjected to topping and lifting or

digging, and has a guarantee of 60 percent of the final stage

production guarantee.

(3) Final stage extends from the completion of topping and

lifting or digging on the acreage until the end of the insurance

period, and is the quantity of onions (in hundredweight) determined

by multiplying the approved yield per acre by the coverage level

percentage elected.

(c) Any acreage of onions damaged in the first or second stage,

to the extent that producers in the area would not normally further

care for the onions, will be deemed to have been destroyed even

though you may continue to care for the onions. The production

guarantee for such acreage will not exceed the production guarantee

for the stage in which the damage occurred.

4. Contract Changes.

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

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

preceding the cancellation date for counties with an August 31

cancellation date, and November 30 preceding the cancellation date

for all other counties.

5. Cancellation and Termination Dates.

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

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

cancellation and termination dates are:

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

Cancellation and

State and county termination date

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

All Georgia Counties; Umatilla County, Oregon; Aug. 31.

Kinney, Uvalde, Medina, Bexar, Wilson, Karnes,

Bee, and San Patricio, Counties, Texas, and all

Texas Counties lying south thereof; Walla Walla

County, Washington.

All other states and counties.................... Feb. 1.

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

6. Annual Premium.

In lieu of the provisions of section 7(c) (Annual Premium) of

the Basic Provisions (Sec. 457.8), the annual premium amount is

computed by multiplying the final stage production guarantee by the

price election, the premium rate, the insured acreage, your share at

the time of planting, and any applicable premium adjustment factors

contained in the Actuarial Table.

7. Insured Crop.

In accordance with section 8 (Insured Crop of the Basic

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

and non-storage onions (excluding green (bunch) or seed onions,

chives, garlic, leeks, and scallions) in the county for which a

premium rate is provided by the Actuarial Table:

(a) In which you have a share;

(b) That are planted for harvest as either storage onions or

non-storage onions;

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

written agreement):

(1) Interplanted with another crop, unless the onions are

interplanted with a windbreak crop and the windbreak crop is

destroyed within 70 days after completion of seeding or

transplanting; or

(2) Planted into an established grass or legume.

8. Insurable Acreage.

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

of the Basic Provisions (Sec. 457.8), we will not insure any acreage

of the insured crop that:

(a) Was planted the previous year to storage or non-storage

onions, green (bunch) onions, seed onions, chives, garlic, leeks,

shallots, or scallions unless different rotation requirements are

specified in the Special Provisions or we agree in writing to insure

such acreage; or

(b) Is damaged before the final planting date to the extent that

the majority of producers in the area would normally not further

care for the crop and is not replanted, unless we agree that it is

not practical to replant.

9. Insurance Period.

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

Period) of the Basic Provisions (Sec. 457.8), the acreage must be

planted on or before the final planting date designated in the

Special Provisions except as allowed in section 14(c).

(b) The insurance period ends at the earliest of:

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

follows:

(i) June 1 for Vidalia, and any other non-storage onions planted

in the State of Georgia;

(ii) July 15 for 1015 Super Sweets, and any other non-storage

onions in the State of Texas;

(iii) July 31 for Walla Walla Sweets, and any other non-storage

onions in the states of Oregon and Washington;

(iv) August 31 for all non-storage onions in any other state;

and

(v) October 15 for all storage onions; or

(2) The following event for each unit or portion of a unit:

(i) Removal of the onions from the field; or

(ii) Fourteen days after lifting or digging.

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 within the

insurance period:

(1) Adverse weather conditions;

(2) Fire;

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

application of pest control measures;

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

improper application of disease control measures;

(5) Wildlife, unless control measures have not been taken;

(6) Earthquake;

(7) Volcanic eruption; or

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

insured peril that occurs during the insurance period.

(b) In addition to the causes of loss not insured against as

listed in section 12 (Causes of Loss) of the Basic Provisions

(Sec. 457.8), we will not insure against any loss of production due

to damage that occurs or becomes evident after the end of the

insurance period, including, but not limited to, loss of production

that occurs after onions have been placed in storage.

11. Replanting Payment.

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

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

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

the remaining stand will not produce at least 90 percent of the

final stage production guarantee for the acreage and we determine

that it is practical to replant.

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

be the lesser of 7 percent of the final stage production guarantee

or 18 hundredweight multiplied by your price election for the type

and by your insured share.

(c) When onions are replanted using a practice that is

uninsurable as an original planting, the liability for the unit will

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

amount will not be reduced.

12. Duties in the Event of Damage or Loss.

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

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

any representative samples of the unharvested crop that may be

required must be at least 10 feet wide and extend the entire length

of each field in the unit. The samples must not be harvested or

destroyed until the earlier of our inspection or 15 days after

harvest of the balance of the unit is completed.

(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 that is not less than the

production guarantee per acre if such failure results in our

inability to make the required appraisal.

[[Page 28616]]

13. 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 units, we will combine all optional units

for which acceptable production records were not provided; or

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

production to such units in proportion to our liability on the

harvested acreage for the units.

(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 each result of section 13(b)(1) by the

respective price election;

(3) Totaling the results in section 13(b)(2);

(4) Multiplying the total production to be counted (see section

13(c)) by the respective price elections you chose;

(5) Totaling the results of section 13(b)(4);

(6) Subtracting the result in section 13(b)(5) from the result

in 13(b)(3); and

(7) Multiplying the result in section 13(b)(6) by your share.

(c) The total production (in hundredweight) to count from all

insurable acreage on the unit will include:

(1) All appraised production as follows:

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

(A) That is abandoned;

(B) That is direct marketed to consumers if you fail to meet the

requirements contained in section 12;

(C) Put to another use without our consent;

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

(E) For which you fail to provide production records that are

acceptable to us;

(ii) Production lost due to uninsured causes;

(iii) Unharvested onion production (mature unharvested

production may be adjusted based on the percent of damaged onion

production in accordance with section 13(d));

(iv) The appraised production that exceeds the difference

between the first or second stage (as applicable) and the final

stage production guarantee for acreage that does not qualify for the

final stage guarantee, if such acreage is not subject to section

13(c)(1) (i) and (ii); and

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

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

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

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

abandon the crop.

(vi) If agreement on the appraised amount of production is not

reached:

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

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

leave intact, and provide sufficient care for, representative

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

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

onion production or appraisals from the samples at the time harvest

should have occurred. If you do not leave the required samples

intact, or fail to provide sufficient care for the samples, our

appraisal made prior to giving you consent to put the acreage to

another use will be used to determine the amount of production to

count); or

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

production to count for the acreage will be the harvested onion

production, or our reappraisal if additional damage occurs and the

crop is not harvested.

(2) All harvested onion production from the insurable acreage.

(d) If the damage to onion production (harvested or unharvested)

exceeds the percentage shown by type in the Special Provisions, no

production will be counted for that unit or portion of a unit unless

the damaged onion production from that acreage is subsequently sold.

(e) The extent of any damaged onion production must be

determined not later than the time onions are placed in storage if

the production is stored prior to sale, or the date the onions are

delivered to a packer, processor, or other handler if production is

not stored.

14. Late Planting and Prevented Planting.

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

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

planting date and the applicability of a Late Planting Agreement

Option, insurance will be provided for acreage planted to the

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

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

coverages provide reduced production guarantees. The premium amount

for late planted acreage and eligible prevented planting acreage

will be the same as that for timely planted acreage. If the amount

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

for late planted acreage or prevented planting acreage exceeds the

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

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

such acreage.

(b) If you were prevented from planting, you must provide

written notice to us not later than the acreage reporting date.

(c) Late Planting

(1) For onion acreage planted during the late planting period,

the production guarantee for each acre will be reduced for each day

planted after the final planting date by:

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

and

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

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

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

dates the acreage is planted within the late planting period.

(3) If planting of onions continues after the final planting

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

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

(i) The acreage reporting date contained in the Special

Provisions for the insured crop; or

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

(d) Prevented Planting (Including Planting After the Late

Planting Period)

(1) If you were prevented from timely planting onions, you may

elect:

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

production guarantee for such acreage will be determined in

accordance with section 14(c)(1);

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

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

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

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

guarantee for timely planted acres. For example, if your production

guarantee for timely planted acreage is 300 hundredweight per acre,

your prevented planting production guarantee would be 105

hundredweight per acre (300 hundredweight multiplied by 0.35). If

you elect to plant the insured crop after the late planting period,

production to count for such acreage will be determined in

accordance with section 13; or

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

for harvest, in which case:

(A) No prevented planting production guarantee will be provided

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

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

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

stage production guarantee for timely planted acres will be provided

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

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

elected the Catastrophic Risk Protection Endorsement or excluded

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

coverage will be provided. For example, if your production guarantee

for timely planted acreage is 300 hundredweight per acre, your

prevented planting production guarantee would be 52.5 hundredweight

per acre (300 hundredweight multiplied by 0.17.5). You may elect to

exclude prevented planting coverage when a substitute crop is

planted for harvest and receive a reduction in the applicable

premium rate. If you wish to exclude this coverage, you must so

indicate, on or before the sales closing date, on your application

or on a form approved by us. Your election to exclude this coverage

will remain in effect from year to year unless you notify us in

writing on our form by the applicable sales closing date for the

crop year for which you wish to include this coverage. All acreage

of the crop insured under this policy will be subject to this

exclusion.

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

planting acreage within a unit will be combined to determine the

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

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

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

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

acres were not planted but are eligible for a prevented planting

production guarantee. The production guarantee for the unit will be

computed as follows:

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

production guarantee for timely planted acreage by the 50 acres

planted timely;

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

production guarantee for timely

[[Page 28617]]

planted acreage by 93 percent and multiply the result by the 50

acres planted late; and

(iii) For prevented planting acreage, multiply the per acre

production guarantee for timely planted acreage by:

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

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

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

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

planting compensation hereunder will not be denied because the cover

crop is hayed or grazed; or

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

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

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

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

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

applicable, and prevented planting coverage is not available under

these crop provisions, if you elected the Catastrophic Risk

Protection Endorsement or you elected to exclude prevented planting

coverage when a substitute crop is planted (see section

14(d)(1)(iii)).)

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

acre production guarantee for timely planted acreage by the 150

acres in the unit.

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

intended crop with the expectation of at least producing the

production guarantee. Proof that these inputs were available may be

required.

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

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

for prevented planting coverage begins:

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

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

application for insurance is accepted; or

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

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

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

If you make application and purchase insurance for onions for the

1998 crop year, prevented planting coverage will begin on the 1998

sales closing date for onions in the county. If the onion coverage

remains in effect for the 1999 crop year (is not terminated or

canceled during or after the 1998 crop year) prevented planting

coverage for the 1999 crop year began on the 1998 sales closing

date. Cancellation for the purposes of transferring the policy to a

different insurance provider when there is no lapse in coverage will

not be considered terminated or canceled coverage for the purpose of

the preceding sentence.

(5) The acreage to which prevented planting coverage applies

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

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

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

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

(i) If you participate in any program administered by the United

States Department of Agriculture that limits the number of acres

that may be planted for the crop year, the acreage eligible for

prevented planting coverage will not exceed the total acreage

permitted to be planted to the insured crop.

(ii) If you do not participate in any program administered by

the United States Department of Agriculture that limits the number

of acres that may be planted, and unless we agree in writing on or

before the sales closing date, eligible acreage will not exceed the

greater of:

(A) The FSA base acreage for the insured crop, including acres

that could be flexed from another crop, if applicable;

(B) The number of acres planted to onions on the FSA Farm Serial

Number during the previous crop year; or

(C) One-hundred percent of the simple average of the number of

acres planted to onions during the crop years that you certified to

determine your yield.

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

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

irrigation facilities prior to the insured cause of loss which

prevented you from planting.

(iv) A prevented planting production guarantee will not be

provided for any acreage:

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

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

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

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

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

available before the final planting date to plant and produce

another insured crop on the acreage);

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

rate unless a written agreement designates such premium rate;

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

unplanted under any program administered by the United States

Department of Agriculture;

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

you have already received a prevented planting indemnity, guarantee

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

unless you provide adequate records of acreage and production

showing that the acreage has a history of double-cropping in each of

the last 4 years in which the insured crop was grown on the acreage;

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

if any other crop is planted and fails, or is planted and harvested,

hayed or grazed on the same acreage in the same crop year (other

than a cover crop as specified in section 14 (d)(2)(iii)(A) or a

substitute crop allowed in section 14 (d)(2)(iii)(B)), unless you

provide adequate records of acreage and production showing that the

acreage has a history of double-cropping in each of the last 4 years

in which the insured crop was grown on the acreage;

(F) When coverage is provided under the Catastrophic Risk

Protection Endorsement if you plant another crop for harvest on any

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

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

Risk Protection Endorsement and receive a prevented planting

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

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

only receive the prevented planting indemnity, guarantee, or amount

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

guarantee, or amount of insurance is received; or

(G) For which planting history or conservation plans indicate

that the acreage would have remained fallow for crop rotation

purposes.

(v) For the purpose of determining eligible acreage for

prevented planting coverage, acreage for all units will be combined

and be reduced by the number of onion acres timely planted and late

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

prevented planting coverage in which you have a 100 percent share.

The acreage is located in a single FSA Farm Serial Number which you

insure as two separate optional units consisting of 50 acres each.

If you planted 60 acres of onions on one optional unit and 40 acres

of onions on the second optional unit, your prevented planting

eligible acreage would be reduced to zero (i.e., 100 acres eligible

for prevented planting coverage minus 100 acres planted equals

zero).

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

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

unit any insurable acreage that you were prevented from planting.

This report must be submitted on or before the acreage reporting

date. For the purpose of determining acreage eligible for a

prevented planting production guarantee, the total amount of

prevented planting and planted acres cannot exceed the maximum

number of acres eligible for prevented planting coverage. Any

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

prevented planting coverage, or that exceeds the number of eligible

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

acreage report.

15. Written Agreements.

Designated terms of this policy may be altered by written

agreement in accordance with the following:

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

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

15(e);

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

of the contract between the insurance provider and the insured that

will be in effect if the written agreement is not approved;

(c) If approved by us, 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 written agreement submitted after the

sales closing date may be approved if, after a physical inspection

of the

[[Page 28618]]

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, D.C., on. May 19, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 97-13801 Filed 5-23-97; 8:45 am]

BILLING CODE 3410-08-P