Prune Crop Insurance Regulations; and Common Crop Insurance Regulations, Prune Crop Insurance Provisions

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 450 and 457

Prune Crop Insurance Regulations; and Common Crop Insurance

Regulations, Prune 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 prunes. 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 Prune 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

Prune Crop Insurance Regulations to the 1997 and prior crop years.

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

accepted until close of business August 11, 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: Linda Williams, 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 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

The information collection requirements contained in these

regulations are being reviewed by OMB pursuant to the Paperwork

Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB control number

0563-0053.

Section 7 of the proposed 1998 Prune Crop Provisions adds

interplanting as an insurable farming practice as long as it is

interplanted with another perennial crop and does not adversely affect

the insured crop. This practice was not insurable under the previous

Prune Crop Insurance Policy. Consequently, interplanting information

will need to be collected using the FCI-12-P Pre-Acceptance Perennial

Crop Inspection Report form for approximately two percent of the

insureds who interplant their prune crop. Standard interplanting

language has been added to most perennial crops to make insurance

available for more perennial crop producers and reduce the acreage that

will need to be placed into the noninsured crop disaster assistance

program (NAP).

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

Insurance.''

The information to be collected includes a crop insurance

application and an acreage report. Information collected from the

application and acreage report is electronically submitted to FCIC by

the reinsured companies. Potential respondents to this information

collection are producers of prunes 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.

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

Insurance.''

The burden associated with the written agreement is estimated at 19

minutes per response from approximately 4,864 respondents each year for

a total number of 1,571 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 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

[[Page 37001]]

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.

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 12988

This proposed rule has been reviewed under the provisions of

Executive Order 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 against

FCIC.

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 Sec. 457.133, Prune 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 prunes found at 7 CFR part 450 (Prune

Crop Insurance Regulations). FCIC also proposed to amend 7 CFR part 450

to limit its effect to the 1997 and prior crop years. FCIC will later

publish a regulation to remove and reserve part 450.

This rule makes minor editorial and format changes to improve the

Prune Crop Insurance Regulations' compatibility with the Common Crop

Insurance Policy. In addition, FCIC is proposing substantive changes in

the provisions for insuring prunes as follows:

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

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

``irrigated practice,'' ``non-contiguous land,'' ``production

guarantee,'' ``ton,'' ``written agreement,'' and change the definition

of ``prunes'' for clarification.

2. Section 2(e)--Change provisions to allow optional units on non-

contiguous land and for land located in separate sections. Previous

regulations provided basic units for land located on contiguous land.

This change will standardize these provisions with the provisions

contained in other perennial crop policies.

3. Section 3(a)--Specify that the insured may select only one price

election for all the prunes in the county insured under the policy,

unless the Special Provisions provide different price elections by

varietal group, in which case the insured may select one price election

for each prune varietal group designated in the Special Provisions.

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

removal of trees, change in practices or any other circumstance that

may reduce yields. The insured must also report, for the first year of

insurance for acreage interplanted with another perennial crop and

anytime the planting pattern of such acreage is changed, the age and

varietal group, if applicable, of any interplanted crop, its planting

pattern, and any other information that the insurer requests in order

to establish the yield upon which the production guarantee is based. If

the insured fails to notify the insurer of any circumstance that may

reduce yields from previous levels, the insurer will reduce the

production guarantee at any time the insurer becomes aware of the

circumstance. Current regulations provide that production guarantees

will be reduced when the number of bearing trees has been reduced by

more than 10 percent from the preceding year. This change will

standardize these provisions with provisions contained in other

perennial crop policies.

5. Section 6(c)--Clarify that the insured crop must be grown on

prune tree varieties that were commercially available when the trees

were set out and on rootstock that is adapted to the area.

6. Section 7--Add provisions to make interplanted prunes insurable

if planted with another perennial crop unless the insurance provider

inspects the acreage and determines it does not qualify to be accepted

for insurance coverage. This provision was added to provide insurance

coverage to the maximum extent to all prune producers, and to reduce

the number of acres that would require coverage under the Non-insured

Assistance Program (NAP).

7. Section 8--Add provisions to clarify the procedure when an

insurable share is acquired or relinquished on or before the acreage

reporting date.

8. Section 9(a)--Remove direct Mediterranean Fruit Fly damage as an

insured cause of loss. Effective control measures are now available;

therefore, damage due to Mediterranean Fruit Fly is no longer needed as

a separate cause of loss.

9. Section 9(b)(1)--Add disease and insect infestation to the

excluded causes of loss unless adverse weather prevents the proper

application of control measures, causes control measures to be

ineffective when properly applied, or no effective control mechanism is

available for such disease or insect infestation. These exclusions need

to be added for clarification so that insurance coverage is not

provided for causes of loss that could be prevented.

10. Section 9(b)(2)--Clarify that insurance is not provided against

damage or loss of production due to the inability to market the prunes

for any reason other than actual physical damage to the prunes from an

insurable cause.

11. Section 10(a)--Require that the insured give notice of loss

within 3 days of the date harvest should have started if the crop is

not to be harvested. Previous regulations required written notice if

during the period before harvest, any prunes would not be harvested or

further cared for. This change will standardize the notice of loss

requirements utilized in other perennial crops.

12. Section 10(b)--Require notice of loss be provided at least 15

days prior to harvest if production will be sold by direct marketing or

sold as fresh fruit. This change will assure that a timely notice of

loss is provided so that a pre-harvest inspection can be made to

determine the total amount of production to count when the prunes

[[Page 37002]]

will be harvested for direct marketing or fresh fruit.

13. Section 10(c)--Change the notice of loss requirements when the

insured intends to claim an indemnity. Require that notice of loss be

provided at least 15 days prior to the beginning of harvest or

immediately if damage is discovered during harvest. Previous prune

regulations required notice of loss not later than 10 days after

harvest or the end of the insurance period. This change will

incorporate and standardize the notice of loss requirements utilized

for other perennial crops.

14. Section 10(d)--Specifies that the insured cannot destroy the

damaged crop until we have given written consent to do so. However, the

insured may sell or dispose of the damaged crop if there is a market

for it. Previous regulations required written consent before the

insured destroyed any of the prunes which were not to be harvested.

This change conforms with the requirements contained in other crop

policies.

15. Section 11(c)(1)(i)(B)--Specify that production to count will

not be less than the production guarantee per acre for any acreage that

is marketed directly to consumers or sold as fresh fruit if the

producer fails to meet the notification requirements contained in

section 10.

16. Section 11(c)(1)(iv)--Require the insured to continue to

provide sufficient care for the insured crop when the insured does not

agree with the appraisal on that acreage. Production to count for such

acreage will be determined using the harvested production if the crop

is harvested, or our reappraisal if the crop is not harvested.

17. Section 11(d)--Clarify that the total harvested production to

count will include prune production harvested for fresh fruit. Such

fresh fruit production will be converted to a dried prune weight basis

by dividing the total amount of fresh fruit production by 3.1.

18. Section 12--Add provisions for providing insurance coverage by

written agreement. FCIC has a long standing policy of permitting

certain modifications of the insurance contract by written agreement

for some policies. This amendment allows FCIC to tailor the policy to a

specific insured in certain instances. The new section will cover the

procedures for, and duration of, written agreements.

19. Remove the date for submitting an acreage report. In accordance

with the Common Crop Insurance Policy, Basic Provisions, the acreage

reporting date instead will be contained in the Special Provisions.

This change conforms the prune crop provisions to other crop

provisions.

List of Subjects in 7 CFR Parts 450 and 457

Crop insurance, Prunes.

Proposed Rule

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

Crop Insurance Corporation hereby proposes to amend 7 CFR parts 450 and

457 as follows:

PART 450--PRUNE CROP INSURANCE REGULATIONS

1. The authority citation for 7 CFR part 450 is revised to read as

follows:

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

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

3. Subpart Heading ``Subpart--Regulations for the 1986 through the

1997 Crop Years'' is removed.

4. Section 450.7 is amended by revising the introductory text of

paragraph (d) to read as follows:

Sec. 450.7 The application and policy.

* * * * *

(d) The application for the 1986 and succeeding crop years is found

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

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

1986 through 1997 crop years are as follows:

* * * * *

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

1994 AND SUBSEQUENT CONTRACT YEARS

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

follows:

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

5. Section 457.133 is added to read as follows:

Sec. 457.133 Prune crop insurance provisions.

The Prune Crop Insurance Provisions for the 1998 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:

Prune 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

Days. Calendar days.

Direct marketing. Sale of the insured crop directly to consumers

without the intervention of an intermediary such as a wholesaler,

retailer, packer, processor, shipper or buyer. Examples of direct

marketing include: selling through an on-farm or roadside stand,

farmer's market, and permitting the general public to enter the

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

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

Department of Agriculture, or a successor agency.

Good farming practices. The cultural practices generally in use

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

and produce at least the yield used to determine the production

guarantee, and recognized by the Cooperative State Research,

Education, and Extension Service as compatible with agronomic and

weather conditions in the county.

Harvest. Picking of mature prunes from the trees or ground

either by hand or machine.

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

any form of alternating or mixed pattern.

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

is artificially applied during the growing season by appropriate

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

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

establish the irrigated production guarantee on the irrigated

acreage planted to the insured crop.

Market price for standard prunes. The price per ton shown on the

processor's settlement sheet for each size count of standard prunes.

Natural condition prunes. The condition of prunes in which they

are normally delivered from a dehydrator or dry yard.

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

boundaries do not touch at any point, except that land separated

only by a public or private right-of-way, waterway, or an irrigation

canal will be considered as contiguous.

Production guarantee (per acre). The number of tons determined

by multiplying the approved APH yield per acre by the coverage level

percentage you elect.

Prunes. Any type or variety of plums that are grown in the area

for the production of prunes and that meets the requirements defined

in the applicable Federal Marketing Agreement Dried Prune Order.

Standard prunes. Any natural condition prunes:

(a) That grade ``C'' or better in accordance with the United

States Standards for grades of prunes; or

(b) That meet or exceed the grading standards in effect for the

crop year, if a Federal Marketing Agreement Dried Prune Order has

been established for the area in which the insured crop is grown.

Substandard prunes. Any natural condition prunes failing to meet

the applicable grading specifications for standard prunes.

[[Page 37003]]

Ton. Two thousand (2000) pounds avoirdupois.

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 premium

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

you for the units combined.

(d) All optional units established for a 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, that 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, you must have records of marketed

production or measurement of stored production from each optional

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

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

must be kept separate until loss adjustment is completed by us;

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

following criteria as applicable unless otherwise allowed by a

written agreement:

(i) Optional units by Section, Section Equivalent, or FSA Farm

Serial Number: Optional units may be established if each optional

unit is located in a separate legally identified section. In the

absence of sections, we may consider parcels of land legally

identified by other methods of measure including, but not limited to

Spanish grants, railroad surveys, leagues, labors, or Virginia

Military Lands, as the equivalent of sections for unit purposes. In

areas that have not been surveyed using the systems identified

above, or another system approved by us, or in areas where such

systems exists but boundaries are not readily discernable, each

optional unit must be located in a separate farm identified by a

single FSA Farm Serial Number; or

(ii) Optional Units on Acreage Located on Non-Contiguous Land:

In lieu of establishing optional units by section, section

equivalent or FSA Farm Serial Number, optional units may be

established if each optional unit is located on non-contiguous land.

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

Indemnities

In addition to the requirements of section 3 (Insurance

Guarantees, Coverage Levels, and Prices for Determining Indemnities)

of the Basic Provisions (Sec. 457.8):

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

the county insured under this policy unless the Special Provisions

provide different price elections by varietal group, in which case

you may select one price election for each prune varietal group

designated in the Special Provisions. The price elections you choose

for each varietal group must have the same percentage relationship

to the maximum price offered by us for each varietal group. For

example, if you choose 100 percent of the maximum price election for

one varietal group, you must also choose 100 percent of the maximum

price election for all other varietal groups.

(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

varietal group if applicable:

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

other circumstance that may reduce the expected yields 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 varietal group 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 that may affect the

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

circumstance that may reduce your yields from previous levels, we

will reduce your production guarantee at any time we become aware of

the circumstance.

4. Contract Changes

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

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

preceding the cancellation date.

5. Cancellation and Termination Dates

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

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

and termination dates are January 31.

6. Insured Crop

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

Provisions (Sec. 457.8), the crop insured will be all the prunes 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 for the production of natural condition

prunes;

(c) That are grown on tree varieties that:

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

(2) Are adapted to the area;

(3) Are grown on rootstock that is adapted to the area; and

(4) Are irrigated (except where otherwise provided in the

Special Provisions);

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

considered acceptable by us; and

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

seventh growing season after being set out.

7. Insurable Acreage

As an exception to 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, prunes

interplanted with another perennial crop are insurable unless we

inspect the acreage and determine that it does not meet the

insurability 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 for each crop year on March 1.

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

each crop year is:

(i) October 1 for California; or

(ii) October 15 for Oregon.

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

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

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

after coverage begins but on or before the acreage reporting date

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

acceptable, insurance will be considered to have attached to such

acreage on the calendar date for the beginning of the insurance

period.

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

acreage of prunes on or before the acreage reporting date for the

crop year and if the acreage was insured by you the previous 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 undergrowth have not been controlled

or pruning debris has not been removed from the orchard;

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

[[Page 37004]]

(4) Earthquake;

(5) Volcanic eruption; or

(6) 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 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; or

(2) Inability to market the prunes 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 or sold as fresh

fruit. We will conduct an appraisal that will be used to determine

your production to count for production that is sold by direct

marketing or is sold as fresh fruit production. 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 or sold as fresh

fruit 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.

(d) 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, all such production

will be considered undamaged and included 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 unit, 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 each unit.

(b) In the event of loss or damage covered by this policy, we

will settle your claim by:

(1) Multiplying the insured acreage for each varietal group, if

applicable, by its respective production guarantee;

(2) Multiplying the result in 11(b)(1) by the respective price

election for each varietal group, if applicable;

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

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

varietal group, if applicable, (see sections 11 (c) through (e)) by

the respective price election;

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

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

in section 11(b)(3); and

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

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

acreage on the unit will include all harvested and appraised

production of natural condition prunes that grade substandard or

better and any production that is harvested and intended for use as

fresh fruit. The total production to count 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 or sold as fresh fruit 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 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.

(d) Any prune production harvested for fresh fruit will be

converted to a dried prune weight basis by dividing the total amount

(in tons) of fresh fruit production by 3.1.

(e) Any production of substandard prunes resulting from damage

by insurable causes will be adjusted based on the average size count

as indicated on the applicable Dried Fruit Association (DFA)

Inspection Report and Certification Form. Any insurable damage will

be adjusted by:

(i) Dividing the value per ton of such substandard prunes by the

market price per ton for standard prunes (of the same size count);

and

(ii) Multiplying the result by the number of tons of such

prunes.

12. Written Agreements

Terms of this policy which 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

varietal group, 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 July 3, 1997.

Suzette Dittrich,

Deputy Manager, Federal Crop Insurance Corporation.

[FR Doc. 97-18060 Filed 7-9-97; 8:45 am]

BILLING CODE 3410-08-P