Macadamia Nut Crop Insurance Regulations; and Common Crop Insurance Regulations, Macadamia Nut Crop Insurance Provisions

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 455 and 457

Macadamia Nut Crop Insurance Regulations; and Common Crop

Insurance Regulations, Macadamia Nut 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 macadamia nuts. 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 macadamia nut crop insurance regulations with the Common Crop

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

restrict the effect of the current macadamia nut crop insurance

regulations to the 1997 and prior crop years.

EFFECTIVE DATES: July 2, 1997.

FOR FURTHER INFORMATION CONTACT: Stephen Hoy, 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, 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 and opinions on information

collection requirements previously approved by OMB under OMB control

number 0563-0053 through September 30, 1998. No public comments were

received.

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. The 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 previous

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years production if adequate records are available to support the

certification. The producer must maintain the production records to

support the certified information for at least three years. This

regulation does not alter those requirements. The amount of work

required of the insurance companies delivering and servicing these

policies will not increase significantly from the amount of work

currently required. This rule does not have any greater or lesser

impact on the producer. Therefore, this action is determined to be

exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C.

605), and no Regulatory Flexibility Analysis was prepared.

Federal Assistance Program

This program is listed in the Catalog of Federal Domestic

Assistance under No. 10.450.

Executive Order No. 12372

This program is not subject to the provisions of Executive Order

No. 12372, which require intergovernmental consultation with State and

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

published at 48 FR 29115, June 24, 1983.

Executive Order No. 12988

This final rule has been reviewed in accordance with Executive

Order No. 12988. 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

On Friday, April 18, 1997, FCIC published a proposed rule in the

Federal Register at 62 FR 19063-19067 to add to the Common Crop

Insurance Regulations (7 CFR part 457), a new section, 7 CFR 457.131,

Macadamia Nut Crop Insurance Provisions. The new provisions will be

effective for the 1999 and succeeding crop years. These provisions will

replace and supersede the current provisions for insuring macadamia

nuts found at 7 CFR part 455 (Macadamia Nut Crop Insurance

Regulations). FCIC also amends 7 CFR part 455 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 and opinions. A total of 14 comments

were received from reinsured companies, a crop insurance agent, an

insurance service organization, and an FCIC Regional Service Office

(RSO). The comments received and FCIC's responses are as follows:

Comment: An insurance service organization and a reinsured company

recommended that the word ``field'' in the last line of the definition

of ``Direct marketing'' be replaced by the word ``orchard.''

Response: FCIC agrees and has revised the definition accordingly.

Comment: An insurance service organization and a reinsured company

expressed concern with the definition of ``Good farming practices,''

which makes reference to ``cultural practices generally in use in the

county * * * recognized by the Cooperative State Research, Education,

and Extension Service as compatible with agronomic and weather

conditions in the county.'' The commenter questioned whether cultural

practices exist that are not necessarily recognized (or possibly known)

by the Cooperative State Research, Education, and Extension Service.

The commenter also indicated that the term ``county'' in the definition

of ``Good farming practices'' should be changed to ``area.''

Response: FCIC believes that the Cooperative State Research,

Education, and Extension Service (CSREES) recognizes farming practices

that are considered acceptable for producing macadamia nuts. If a

producer is following practices currently not recognized as acceptable

by the CSREES, there is no reason why such recognition cannot be sought

by interested parties. The cultural practices recognized by the CSREES

may pertain only to specific areas within a county. Such limitation

would be considered by FCIC; therefore, no change has been made. FCIC

agrees with the recommendation to change the term ``county'' to

``area'' in the definition of ``Good farming practice'' and has revised

the definition accordingly.

Comment: An insurance service organization recommended that the

summary of changes in the proposed rule should have indicated that the

definition of ``Harvest'' in section 1 had been changed from the

definition in the insurance service organization's policy which defines

``Harvest'' as ``The removal of the macadamia nuts from the orchard.''

Response: The summary of changes in the proposed rule addressed

substantive changes between the proposed provisions and the current

Macadamia Nut Crop Insurance Policy issued by FCIC. No comparison was

made to the insurance service organization's policy.

Comment: Comments received from reinsured companies, a crop

insurance agent, an insurance service organization, and an FCIC RSO

expressed concern that the provisions for an optional unit in section

2(e) (3) and (4), as proposed, would require each unit to contain at

least 80 acres of bearing macadamia trees and be located on non-

contiguous land. Optional unit division guidelines currently require at

least 80 acres of bearing macadamia trees. Requiring both minimum

acreage and non-contiguous land would severely limit the number of

units allowed, particularly for growers with large, contiguous

orchards. The majority of commenters recommended that the word ``and''

be replaced with ``or'' so that the provisions require each optional

unit to be at least 80 acres of bearing macadamia trees or be located

on non-contiguous land.

Response: FCIC agrees and has revised the requirements accordingly.

Comment: A reinsured company questioned the reason for the ``10-day

period'' to inspect the acreage as specified in section 8(a)(1). The

commenter indicated that the period limits their ability to reject an

unacceptable orchard. In addition, an insurance service organization

recommended that a specific date (by which an application must be

received for insurance to attach on January 1) should not be listed.

Instead of a date, this section should state ``if your application is

received less than ten days before the sales closing date.''

Response: FCIC believes that the insurance provider must expedite

its review of the application and any supporting documentation filed by

the producer, determine if a visual inspection of the orchard is

necessary, and perform any inspection within the 10-day period. The

period of 10 days is believed appropriate to meet the needs of both the

producer and the insurance provider. Listing the date by which an

application must be received for insurance to attach on January 1 is

more specific, avoids possible confusion, and

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is consistent with other perennial crop policies. No change has been

made to these provisions.

Comment: An insurance service organization stated that section

11(c)(1)(iv) should not allow the insured to defer settlement and wait

for a later, generally lower, appraisal, especially on crops that have

a short ``shelf life.''

Response: A later appraisal will only be necessary if the insurance

provider agrees that such an appraisal would result in a more accurate

determination and if the producer continues to care for the crop. If

the producer does not continue to care for the crop, the original

appraisal will be used. No change will be made to these provisions.

Comment: An insurance service organization and a reinsured company

recommended removal of the requirement for a written agreement to be

renewed each year. If no substantive changes occur from one year to the

next, allow the written agreement to be continuous.

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, FCIC has made the

following editorial changes to the Macadamia Nut Provisions:

1. Section 2(e)--Modified the language to clarify optional unit

requirements. For each optional unit, the producer must have provided

records of acreage and production by the production reporting date and

maintain records of marketed production or measurement of stored

production for each crop year. Each optional unit must also meet

specific criteria unless otherwise specified by written agreement.

2. Section 3(c)--Added to clarify that the producer's production

guarantee will be determined according to the APH regulations unless

damage or changes to the orchard or trees require establishment of the

yield by another method.

3. Section 3(d)--Added to clarify that instead of reporting the

previous year's production, a one year lag period will occur and the

producer will report production from two crop years ago.

4. Section 8(a)--Clarified that the calendar date for the end of

the insurance period is the second June 30th after insurance attaches.

5. Section 10(c)--Clarified that the producer must not destroy the

damaged crop until after the insurance provider has given written

consent to do so.

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

the Federal Register. This rule improves the macadamia nut insurance

coverage and brings it under the Common Crop Insurance Policy Basic

Provisions for consistency among policies. The current regulations are

not continuous, and actuarial filing date for the 1999 crop year is

August 31, 1997. It is, therefore, imperative that these provisions be

made final before that date so that the reinsured companies may have

sufficient time to implement these changes. Therefore, public interest

requires the agency to act immediately to make these provisions

available for the 1999 crop year.

List of Subjects in 7 CFR Parts 455 and 457

Crop insurance, Macadamia nuts.

Final Rule

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

Crop Insurance Corporation hereby amends 7 CFR parts 455 and 457, as

follows:

PART 455--MACADAMIA NUT CROP INSURANCE REGULATIONS FOR THE 1988

THROUGH THE 1997 CROP YEARS

1. The authority citation for 7 CFR part 455 is revised to read as

follows:

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

2. The part heading is revised to read as set forth above.

3. The subpart heading ``Subpart--Regulations for the 1988 and

Succeeding Crop Years'' is removed.

4. Section 455.7 is amended by revising the introductory text of

paragraph (d) to read as follows:

Sec. 455.7 The application and policy.

* * * * *

(d) The application is found at subpart D of part 400, General

Administrative Regulations (7 CFR 400.37, 400.38). The provisions of

the Macadamia Nut Crop Insurance Policy for the 1988 through 1997 crop

years are as follows:

* * * * *

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

1994 AND SUBSEQUENT CONTRACT YEARS

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

follows:

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

6. Section 457.131 is added to read as follows:

Sec. 457.131 Macadamia nut crop insurance provisions.

The Macadamia Nut Crop Insurance Provisions for the 1999 and

succeeding crop years are as follows:

FCIC policies:

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Reinsured policies:

(Appropriate title for insurance provider)

Both FCIC and reinsured policies:

Macadamia Nut 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.

Age. The number of complete 12-month periods that have elapsed

since the month the trees were set out or were grafted, whichever is

later. An age determination will be made for each unit, or portion

thereof, as of January 1 of each crop year.

Crop year. A period beginning with the date insurance attaches

to the macadamia nut crop and extending through the normal harvest

time. The crop year is designated by the calendar year in which the

insurance period ends.

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

orchard for the purpose of picking all or a portion of the crop.

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 area.

Graft. The uniting of a macadamia shoot to an established

macadamia tree rootstock for future production of macadamia nuts.

Harvest. Picking of mature macadamia nuts from the ground.

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

any form of alternating or mixed pattern.

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

is artificially applied

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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.

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

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

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

be considered as contiguous.

Pound. A unit of weight equal to 16 ounces avoirdupois.

Production guarantee (per acre). The number of wet, in-shell

pounds determined by multiplying the approved APH yield per acre by

the coverage level percentage you elect.

Rootstock. The root and stem portion of a macadamia tree to

which a macadamia shoot can be grafted.

Wet in-shell. The weight of the macadamia nuts as they are

removed from the orchard with the nut meats in the shells after

removal of the husk but prior to being dried.

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),

(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 for the units combined.

(d) All 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 acreage and production

for each optional unit for at least the last crop year used to

determine your production guarantee;

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

measurement of stored production from each optional unit must be

maintained in such a manner that permits us to verify the production

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

kept separate until loss adjustment is completed by us;

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

criteria, as applicable, unless otherwise specified by written

agreement:

(i) Contain at least 80 acres of bearing macadamia trees; or

(ii) Be located on non-contiguous land.

3. Insurance Guarantees, Coverage Levels, and Prices for

Determining Indemnities.

In addition to the requirements of section 3 (Insurance

Guarantees, Coverage Levels, and Prices for Determining Indemnities)

of the Basic Provisions (Sec. 457.8):

(a) You may select only one price election for all the macadamia

nuts 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 macadamia nut 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) You must report, by the production reporting date designated

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

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

type if applicable:

(1) Any damage, removal of trees, change in practices, or any

other circumstance that may reduce the expected yield below the

yield upon which the insurance guarantee is based and the number of

affected acres;

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

acreage;

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

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

with another perennial crop, and anytime the planting pattern of

such acreage is changed:

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

(ii) The planting pattern; and

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

establish your approved yield.

We will reduce the yield used to establish your production

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

following: interplanted perennial crop; removal of trees; damage;

change in practices and any other circumstance on the yield

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

circumstance that may reduce your yields from previous levels, we

will reduce your production guarantee as necessary at any time we

become aware of the circumstance.

(c) The yield used to compute your production guarantee will be

determined in accordance with Actual Production History (APH)

regulations, 7 CFR part 400, subpart G, and applicable policy

provisions unless damage or changes to the orchard or trees require

establishment of the yield by another method. In the event of such

damage or changes, the yield will be based on our appraisal of the

potential of the insured acreage for the crop year.

(d) Instead of reporting your macadamia nut production for the

previous crop year, as required by section 3 of the Basic Provisions

(Sec. 457.8), there is a one year lag period. Each crop year you

must report your production from two crop years ago, e.g., on the

2001 crop year production report, you will provide your 1999 crop

year production.

4. Contract Changes.

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

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

preceding the cancellation date.

5. Cancellation and Termination Dates.

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

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

and termination dates are December 31.

6. Insured Crop.

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

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

in the county for which a premium rate is provided by the actuarial

table:

(a) In which you have a share;

(b) That are grown on tree varieties that:

(1) Were commercially available when the trees were set out;

(2) Are adapted to the area; and

(3) Are grown on a rootstock that is adapted to the area.

(c) That are grown in an orchard that, if inspected, is

considered acceptable by us;

(d) That are grown on trees that have reached at least the fifth

growing season after being set out or grafted. However, we may agree

in writing to insure acreage that has not reached this age if it has

produced at least 200 pounds of (wet, in-shell) macadamia nuts per

acre in a previous crop year; and

(e) That are produced from blooms that normally occur during the

calendar year in which insurance attaches and that are normally

harvested prior to the end of the insurance period.

7. Insurable Acreage.

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

the Basic Provisions (Sec. 457.8), that prohibit insurance attaching

to a crop planted with another crop, macadamia nuts interplanted

with another perennial crop are insurable unless we inspect the

acreage and determine that it does not meet the requirements

contained in your policy.

8. Insurance Period.

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

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

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

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

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

10th day after your properly completed application is received in

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

period and determine that it does not meet insurability

requirements. You must provide any information that we require for

the crop or to determine the condition of the orchard.

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

each crop year is the second June 30th after insurance attaches.

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

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

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

after coverage begins but on or before the acreage reporting date

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

acceptable, insurance will be considered to have attached to such

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acreage on the calendar date for the beginning of the insurance

period.

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

acreage of macadamia nuts on or before the acreage reporting date

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

to, and no premium or indemnity will be due for such acreage for

that crop year unless:

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

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

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

transfer on or before the acreage reporting date; and

(iii) The transferee is eligible for crop insurance.

9. Causes of loss.

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

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

only against the following causes of loss that occur during the

insurance period:

(1) Adverse weather conditions;

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

been controlled or pruning debris has not been removed from the

orchard;

(3) Earthquake;

(4) Volcanic eruption;

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

not been taken; or

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

peril that occurs during the insurance period.

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

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

insure against damage or loss of production due to:

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

(i) Prevents the proper application of control measures or

causes properly applied control measures to be ineffective; or

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

control mechanism is available;

(2) Inability to market the macadamia nuts for any reason other

than actual physical damage from an insurable cause specified in

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

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

person to accept production.

10. Duties in the Event of Damage or Loss.

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

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

following will apply:

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

have started if the crop will not be harvested.

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

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

appraisal that will be used to determine your production to count

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

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

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

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

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

appraised amount of production to count of not less than the

production guarantee per acre if such failure results in our

inability to make the required appraisal.

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

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

immediately if damage is discovered during harvest, so that we may

inspect the damaged production. You must not destroy the damaged

crop until after we have given you written consent to do so. If you

fail to meet the requirements of this section and such failure

results in our inability to inspect the damaged production, we may

consider all such production to be undamaged and include it as

production to count.

11. 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 for each type, if

applicable, by its respective production guarantee;

(2) Multiplying each result in section 11(b)(1) by the

respective price election for each type, if applicable;

(3) Totaling the results in section 11(b)(2);

(4) Multiplying the total production to be counted of each type,

if applicable, (see section 11(c)) by the respective price election;

(5) Totaling the results in section 11(b)(4);

(6) Subtracting the results in section 11(b)(5) from the results

in section 11(b)(3); and

(7) Multiplying the result in section 11(b)(6) by your share.

(c) The total production to count (wet, in-shell pounds) from

all insurable acreage on the unit will include:

(1) All appraised production as follows:

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

(A) That is abandoned;

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

requirements contained in section 10;

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

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

(ii) Production lost due to uninsured causes;

(iii) Unharvested production; and

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

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

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

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

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

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

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

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

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

appraisal made prior to deferring the claim will be used to

determine the production to count; and

(2) All harvested production from the insurable acreage.

12. Written Agreements.

Terms of this policy that are specifically designated for the

use of written agreement 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 26, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 97-17354 Filed 7-1-97; 8:45 am]

BILLING CODE 3410-08-P