Tobacco (Guaranteed Plan) Endorsement; and Common Crop Insurance Regulations, Guaranteed Tobacco Crop Insurance Provisions

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 401 and 457

Tobacco (Guaranteed Plan) Endorsement; and Common Crop Insurance

Regulations, Guaranteed Tobacco Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes

specific crop provisions for the insurance of guaranteed tobacco. 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 tobacco (guaranteed plan) endorsement with the Common Crop

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

restrict the effect of the current tobacco (guaranteed plan)

endorsement to the 1997 and prior crop years.

DATES: Written comments and opinions on this proposed rule will be

accepted until close of business July 16, 1997 and will be considered

when the rule is to be made final.

ADDRESSES: Interested persons are invited to submit written comments to

the Director, Product Development Division, Federal Crop Insurance

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

Kansas City, MO 64131.

FOR FURTHER INFORMATION CONTACT: Gary Johnson, Insurance Management

Specialist, Research and Development, Product Development Division,

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

listed above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

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

to be exempt for the purpose of Executive Order 12866, and, therefore,

this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

The amendments set forth in this proposed rule contains information

collection that requires clearance by OMB under the provisions of 44

U.S.C. chapter 35.

The title of this information collection is ``Multiple Peril Crop

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

application and 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 guaranteed tobacco 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 1,755,000

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

collection is 2,676,932 hours.

FCIC is requesting comments on 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.

OMB is required to make a decision concerning the collections of

information contained in these proposed regulations between 30 and 60

days after submission to OMB. Therefore, a comment to OMB is best

assured of having full effect if OMB receives it within 30 days of

publication. This does not affect the deadline for the public to

comment on the proposed regulation.

Unfunded Mandates Reform Act of 1995

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

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

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

governments and the private sector. This rule contains no Federal

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

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

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

UMRA.

Executive Order 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 insured

must also annually certify to the previous years production if adequate

records are available to support the certification. The producer must

maintain the

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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 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 12988

This proposed rule has been reviewed in accordance with Executive

Order No. 12988 on civil justice reform. 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 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

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

CFR part 457), a new section, 7 CFR 457.136, Guaranteed Tobacco 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 guaranteed tobacco found at 7 CFR

401.129 (Tobacco (Guaranteed Plan) Endorsement). FCIC also proposes to

amend 7 CFR 401.129 to limit its effect to the 1997 and prior crop

years. This rule makes minor editorial and format changes to improve

the Tobacco (Guaranteed Plan) Endorsement's compatibility with the

Common Crop Insurance Policy. In addition, FCIC is proposing

substantive changes in the provisions for insuring guaranteed tobacco

as follows:

1. The Late Planting Agreement Option (LPAO) has been discontinued

because the final planting date is late enough to allow anyone with

tobacco plants to timely transplant them, and the reduction in

guarantee under the LPAO is not sufficient to cover the increased risks

of a shorter growing season.

2. Section 1--Add definitions for terms ``adequate stand,''

``approved yield,'' ``average value per pound,'' ``carryover tobacco,''

``days,'' ``discount variety,'' ``FSA,'' ``fair market value,'' ``final

planting date,'' ``good farming practices,'' ``harvest,'' ``irrigated

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

``production guarantee,'' ``replanting,'' ``season average market

price,'' ``support price per pound,'' ``tobacco bed,'' ``USDA,'' and

``written agreement'' for clarification. The definition of ``harvest''

was revised to remove the requirement that 20 percent of the production

guarantee per acre must be cut from each acre in order for the unit to

be considered harvested. Since the harvest incentive of 35 percent of

the guarantee has been deleted, this provision is no longer necessary.

Added the definition of ``hydroponic plants'' to identify seedlings

grown in a liquid nutrient solution.

3. Section 3(b)--Allow the use of actual production history to

determine the approved yield for insurance purposes. The most accurate

determination of the yield for the unit uses insured's records of

production.

4. Section 4--Change the contract date from December 31 to November

30 in order to maintain an adequate time period between this date and

the sales closing or cancellation date to permit the insured to make

informed insurance decisions.

5. Section 5--Change the cancellation and termination dates to

March 15. This conforms to the required movement of the spring planted

crop sales closing dates 30 days earlier by the Federal Crop Insurance

Reform Act of 1994.

6. Section 7(d)--Clarify that any acreage damaged prior to the

final planting date must be replanted unless replanting is not

practical to replant.

7. Section 9 (c) and (d)--Clarify that insects and plant disease

are insurable causes of loss, but not if damage was due to insufficient

or improper application of pest or disease control measures.

8. Section 10(a)--Require the producer to leave, until the earlier

of insurer's inspection or 15 days after harvest, representative

samples of each unharvested tobacco types of at least 5 feet wide,

(instead of 10 feet wide) the entire length of each field in the unit.

The smaller sample size is reasonable given the small acreage

allotments of tobacco.

9. Section 11(d)--Clarify that quality adjustment for mature

tobacco damaged by insurable causes and yielding an average value per

pound less than the market price will be based on USDA Official

Standard Grades for the insured type.

10. Section 11(h)--Require that once the insurance provider agrees

that any current year's or carryover tobacco has no market value, the

insured must destroy it. This eliminates the opportunity to falsely

report carryover and current year's tobacco as of no value to increase

indemnity payments. This provision is consistent with FSA's requirement

that tobacco that having no value must be destroyed.

11. Section 12--Provide insurance coverage by written agreement.

FCIC has a long standing policy of permitting certain modifications of

insurance contracts by written agreement for some policies. This

amendment allows FCIC to tailor the policy to a specific insured in

certain instances. The new section will cover the procedures for, and

duration of, written agreements.

Good cause is shown to allow 30 days for comments after this rule

is published in the Federal Register. This rule improves guaranteed

tobacco crop insurance coverage and brings it under the Common Crop

Insurance Policy Provisions for consistency among policies. Although,

the contract change date is December 31, 1997, the final rule must be

published by July 7, 1997. Publication is required by this date to

achieve revision and timely distribution of the actuarial documents

thereby allowing the reinsured companies and insureds sufficient time

to implement the new provisions. Therefore, public interest requires

the agency to act immediately to make these provisions available for

the 1988 crop year.

[[Page 32546]]

List of Subjects in 7 CFR Parts 401 and 457

Crop insurance, Guaranteed tobacco, Tobacco (guaranteed plan)

endorsement.

Proposed Rule

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

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

457, as follows:

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

1988 AND SUBSEQUENT CONTRACT YEARS

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

follows:

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

2. Section 401.129 introductory paragraph is revised to read as

follows:

Sec. 401.129 Tobacco (guaranteed plan) endorsement.

The provisions of the Tobacco (Guaranteed Plan) Endorsement for the

1990 through the 1997 crop years are as follows:

* * * * *

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

1994 AND SUBSEQUENT CONTRACT YEARS

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

follows:

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

5. Section 457.136 is added to read as follows:

Sec. 457.136 Guaranteed tobacco crop insurance provisions.

The Guaranteed Tobacco Crop Provisions for the 1998 and succeeding

crop years are follows:

FCIC policies:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Reinsured policies

(Appropriate title for insurance provider)

Both FCIC and reinsured policies:

Guaranteed Tobacco Crop Provisions

If a conflict exists between 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

Adequate stand. A population of live plants per unit of acreage

which will produce at least the yield used to establish your

production guarantee.

Approved yield. The yield calculated in accordance with 7 CFR

part 400, subpart G.

Average value. The total value of all production harvested from

the unit divided by the harvested pounds.

Carryover tobacco. Any tobacco produced on the FSA Farm Serial

Number in previous years that remained unsold at the end of the most

recent marketing year.

Days. Calendar days.

Discount variety. Tobacco defined as such under the provisions

of the United States Department of Agriculture tobacco price support

program.

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

Department of Agriculture, or a successor agency.

Fair market value. The current year's tobacco growing season

average price for the applicable type of tobacco obtained from the

sale of the tobacco through a market other than an auction

warehouse.

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 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. Cutting or priming and removing all insured tobacco

from the field in which it was grown.

Hydroponic plants. Seedlings grown in liquid nutrient solutions.

Market price:

(a) For types 11, 12, 13, 14, 21, 22, 23, 31, 35, 36, 37, 42,

44, 54, and 55 the following price is:

(1) The support price per pound for the insured type of tobacco

as announced by the USDA for its tobacco price support program or;

(2) If for any crop year a tobacco price support program is not

in effect, the current year's season average market price, if

available; if not available, the previous year's season average

market price for the applicable insured type tobacco grown in the

area.

(b) For types 32, 41, 51, 52, and 61, the current year's season

average market price, if available; if not available, the previous

year's season average market price for the applicable insured type

of tobacco grown in the area.

Planted acreage. Land in which tobacco seedlings, including

hydroponic plants, have been transplanted by hand or machine from

the tobacco bed to the field.

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 final planting date.

Priming. A method of harvesting tobacco by picking the leaves

from the stalk as they mature.

Production guarantee (per acre). Either the number of pounds of

tobacco for the tobacco type and classification shown on the county

actuarial table or the approved yield, as provided in the Special

Provisions, multiplied by the coverage level percentage you elect.

Replanting. Performing the cultural practices necessary to

replace the tobacco plant, and then replacing the tobacco plant in

the insured acreage with the expectation of growing a successful

crop.

Season average market price. The average price paid by buyers

for a tobacco type for all days tobacco sales occur at public

markets during the tobacco sales season in the area in which the

farm is located.

Support price. The average price per pound for the type of

tobacco as announced by the USDA under its tobacco price support

program.

Tobacco bed. An area protected from adverse weather, in which

tobacco seeds are sown and seedlings are grown until transplanted

into the tobacco field by hand or machine.

USDA. United States Department of Agriculture.

Written agreement. A written document that alters designated

terms of this policy in accordance with section 12.

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),

will be further divided into basic units by type of tobacco. Basic

units 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 including, but not limited to, production practice, type,

variety, and planting period, 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 premium

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

you for the units combined.

(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 provided records, by the production reporting

date, 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

[[Page 32547]]

in the planting pattern at the boundaries of each optional unit;

(3) For each crop year, records of marketed production or

measurement of stored production from each optional unit must be

maintained in such manner that permits us to verify the production

from each optional unit, or the production from each unit must be

kept separate until loss adjustment is completed by us; and

(4) Each optional unit must be located in a separate farm

identified by a FSA Farm Serial Number.

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

Indemnities

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

Guarantees, Coverage Levels, and Prices for Determining Indemnities)

of the Basic Provisions (Sec. 457.8):

(a) You must select only one price election and coverage level

for each guaranteed tobacco type designated in the Special

Provisions that you elect to insure.

(b) You may be required to file an annual production report to

us, if required by the Special Provisions, to establish an approved

yield in lieu of the classification published in the actuarial

table. If we require you to file an annual production report, you

must do so in accordance with section 3(c) (Insurance Guarantees,

Coverage Levels, and Prices for Determining Indemnities) of the

Basic Provisions (Sec. 457.8).

4. Contract Changes

In accordance with section 4 (Contract Changes) in the Basic Provisions

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

cancellation date.

5. Report of Acreage

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

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

tobacco from previous years on the acreage report.

6. 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 March 15.

7. Insured Crop

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

Provisions (Sec. 457.8), the crop insured will be one or more of the

tobacco types designated in the Special Provisions, in which you

have a share, that you elect to insure, and for which a premium rate

is provided by the actuarial table.

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:

(a) Planted to a discount variety;

(b) Planted to a tobacco type for which no premium rate is

provided by the actuarial table;

(c) Planted in any manner other than provided in definition of

``planted acreage'' in section 1 of the these crop provisions,

unless otherwise provided by the Special Provisions or by written

agreement; or

(d) 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, unless such crop is replanted or we agree that

replanting is not practical.

9. Insurance Period

In accordance with the provisions of section 11 (Insurance

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

earliest of:

(a) Destruction of the tobacco;

(b) Weighing-in at the tobacco warehouse;

(c) Removal of the tobacco from the unit (except for curing,

grading, packing, or immediate delivery to the tobacco warehouse);

or

(d) The calendar date for the end of the insurance period, which

is:

(1) Types 11 and 12--November 30;

(2) Type 13--October 31;

(3) Type 14--October 15;

(4) Types 31 & 36--February 28;

(5) Types 21, 35 and 37--March 15;

(6) Types 22 and 23--April 15;

(7) Type 32--May 15;

(8) All other types--April 30.

10. Causes of Loss

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:

(a) Adverse weather conditions;

(b) Fire;

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

application of pest control measures;

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

improper application of disease control measures;

(e) Wildlife, unless proper measures to control wildlife have

not been taken;

(f) Earthquake;

(g) Volcanic eruption; or

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

peril that occurs during the insurance period.

11. 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 we may require of each unharvested

tobacco type must be at least 5 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) If tobacco types 11, 12, 13, or 14 are insured and you have

filed a notice of damage, you also must leave all tobacco stalks and

stubble intact for our inspection. The stalks and stubble must not

be destroyed until we give you written consent to do so or until 30

days after the end of the insurance period whichever is earlier.

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 units, we will combine all optional units

for which such 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 in section 11(b)(1) by the

respective price election;

(3) Subtracting the value of the total production to be counted

from section 11(c) from the total in section 11(b)(2); and

(4) Multiplying the result of section 11(b)(3) by your share.

(c) The value of the total production to count (pounds of

production appraised or harvested multiplied by the applicable

price) for 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) Put to another use without our consent;

(C) That is damaged solely by uninsured causes;

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

or

(E) Of types 11, 12, 13, or 14 when the stalks and stubble have

been destroyed without our consent;

(ii) Production lost due to uninsured causes;

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

put to another use or abandon with our consent, if you and we agree

on the appraised amount of production. Upon such agreement, the

insurance period for that acreage will end when you put the acreage

to another use or abandon the crop. If agreement on the appraised

amount of production is not reached:

(A) 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

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

production, or our reappraisal if additional damage occurs and the

crop is not harvested; and

(2) All harvested production from insurable acreage.

(d) Mature tobacco production that is damaged by insurable

causes will be adjusted for quality based on the USDA Official

Standard Grades for the insured type if it has an average value per

pound less than the market price in the following manner:

(1) Dividing the average value of the damaged harvested

production by the market price;

(2) Multiplying the result in section 11(d)(1) (not to exceed

1.0) by the number of pounds of damaged harvested tobacco; and

[[Page 32548]]

(3) Multiplying the product by your price election.

If no market price has been established for the grade of the

damaged tobacco, its value will be determined by reducing the lowest

market price available by 20 percent for each grade that the

production falls below the grade for which the lowest price is

available.

(e) To enable us to determine the fair market value of tobacco

not sold through auction warehouses, we must be given the

opportunity to inspect such tobacco before it is sold, contracted to

be sold, or otherwise disposed of; failure to provide us the

opportunity to inspect such tobacco may result in rejection of any

claim for indemnity.

(f) If the best offer you receive for any such tobacco is

considered by us to be inadequate, we may obtain additional offers

on your behalf.

(g) Once we agree that any carryover or current year's tobacco

has no market value due to insured causes, you must destroy it. If

you refuse to destroy the tobacco with no value, we will determine

the value and include it as production to count.

13. Written Agreements

Terms of this policy that are specifically designated for the

use of written agreements 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

12(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, D.C., on June 10, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation

[FR Doc. 97-15715 Filed 6-13-97; 8:45 am]

BILLING CODE 3410-08-P