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

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 441 and 457

General Crop Insurance Regulations; Table Grape Crop Insurance

Regulations and Common Crop Insurance Regulations; Table Grape 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 table grapes. The

provisions will be used in conjunction with the Common Crop Insurance

Policy Basic Provisions, which contain standard terms and conditions

common to most crops. The intended effect of this action is to provide

policy changes to better meet the needs of the insured, include the

current table grape crop insurance regulations under the Common Crop

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

restrict the effect of the current table grape crop insurance

regulations to the 1997 and prior crop years.

EFFECTIVE DATE: October 14, 1997.

FOR FURTHER INFORMATION CONTACT: John Meyer, Insurance Management

Specialist, Product Development Division, Policy Development and

Standards Branch, Federal Crop Insurance Corporation, United States

Department of Agriculture, 9435 Holmes Road, Kansas City, MO, 64131,

telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

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

to be exempt for the purposes of Executive Order No. 12866, and,

therefore, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

Following publication of the proposed rule, 62 FR 2059, the public

was afforded 60 days to submit written comments on information

collection requirements currently being reviewed by OMB under OMB

control number 0563-0003. No public comments were received.

Unfunded Mandates Reform Act of 1995

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

L. 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 economic impact on a

substantial number of small entities. New provisions included in this

rule will not impact small entities to a greater extent than large

entities. Under the current regulations, all producers are required to

complete an application and acreage report. If the crop is damaged or

destroyed, insureds are required to give notice of loss and provide the

necessary information to complete a claim for indemnity. 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 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

On Wednesday, January 15, 1997, FCIC published a proposed rule in

the Federal Register at 62 FR 2059 to add to the Common Crop Insurance

Regulations (7 CFR part 457), a new section, 7 CFR 457.149, (Table

Grape Crop Insurance Provisions). The new provisions will replace and

supersede the current provisions for insuring table grapes found at 7

CFR part 441 and will

[[Page 47746]]

be effective for the 1998 and succeeding crop years.

Following publication of the proposed rule, the public was afforded

60 days to submit written comments. A total of 14 comments were

received from reinsured companies and an insurance service

organization. The comments received, and FCIC's responses, follow:

Comment: A reinsured company questioned the need to define ``FSA''

and recommended it be deleted.

Response: FCIC agrees with the comment and has deleted the

definition.

Comment: A reinsured company suggested that in the definition of

``Good farming practices,'' the phrase ``* * * by the Cooperative State

Research, Education, and Extension Service'' be deleted since some

producers carry out practices that are compatible but not ``generally''

recognized by the Extension Service.

Response: FCIC has removed the word ``generally'' from this part of

the definition. However, FCIC believes that the Cooperative State

Research, Education, and Extension Service (CSREES) recognizes farming

practices that are considered acceptable for producing table grapes. If

a producer is following practices currently recognized as acceptable by

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

interested parties. CSREES pertains only to specific areas within a

county. Such limitations would be considered by FCIC.

Comment: A reinsured company suggested that in the definition of

``Irrigated practice,'' the words ``and quality'' be added after the

words ``* * * providing the quantity.''

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

However, since no standards or procedures have been developed to

measure water quality for insurance purposes, quality cannot be

included in the definition. Therefore, no change will be made.

Comment: An insurance service organization questioned whether the

change in the number of pounds of table grapes in a lug will require a

recalculation of previously certified production history to bring it

up-to-date, or does the change only apply to future production history.

Response: For 1996 and prior years, the certified actual production

history must be adjusted by use of a factor to conform with the new

weight standard for lugs. For all California districts and Arizona, the

adjustment factor is 1.1000.

Comment: An insurance service organization stated that the language

in section 2(a) ``A unit * * * will be divided into basic units * * *''

may be confusing since unit division usually deals with optional units

(as in section 2.(b)). It was suggested this be rewritten to read,

``Basic units as defined in section 1 * * * will be established for

each table grape variety you insure.''

Response: FCIC agrees the provisions may be confusing and has

clarified this section.

Comment: An insurance service organization indicated that section

2(f)(3) states that non-contiguous land qualifies for separate optional

units and that basic units by non-contiguous land are allowed by

current provisions. It was suggested that this policy change be

identified in the Summary of Changes so agents and policyholders are

made aware of the change and can make necessary adjustments.

Response: FCIC agrees that the change from basic to optional unit

status should have been identified in the Summary of Changes. FCIC will

describe this change to insurance providers when the policy is released

for use.

Comment: A reinsured company suggested including the acreage

reporting date in section 6 of the crop provisions.

Response: FCIC believes the acreage reporting date should remain in

the Special Provisions because it could vary by region. Therefore, no

changes have been made to these provisions.

Comment: A reinsured company recommended a new paragraph (7(b)(3))

be added to the policy to read as follows: ``That, after grafting over,

have reached the third growing season or produced at least 150 lugs per

acre, whichever occurs first.''

Response: FCIC agrees that mature grapes ``grafted over'' to

produce a variety other than originally grown tend to produce faster

than normal rootstock that is set out; however, occasionally grafts do

not ``take'' and the vines may never produce 150 lugs per acre. Table

grapes must have produced 150 lugs per acre before they are insurable.

Therefore, no change has been made.

Comment: A reinsured company suggested that the first sentence in

section 9(a)(1) be shortened to read, ``Coverage begins on February 1

of each crop year.'' The industry believes the additional wordage only

adds confusion and suggests a poor producer could avoid an inspection

by sending an application in early. Also, they questioned whether 10

days was sufficient time for insurance providers to send adjusters out

to inspect every table grape vineyard, and stated that section 7(a)(4)

already specifies that the vineyard must be acceptable to the insurance

provider.

Response: The provisions were revised to clarify that late-filed

applications are not allowed. The ten day waiting period is necessary

to prevent insurance against an immediate cause of loss and avoid

unnecessary exposure to uninsured causes of loss. The insurance

provider must expedite its review of the application and any supporting

documentation filed by the producer, determine if a visual inspection

is necessary, and perform any necessary inspections 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. Section 7(a)(4) does

not require an inspection, it just states, that if there is an

inspection, the orchard must be acceptable. This is unrelated to the

requirement for an inspection during the 10 day period to determine

whether the producer is attempting to insure an existing or probable

loss. Therefore, no change has been made.

Comment: A reinsured company suggested that section 9(a)(2) be

changed to read, ``This policy is continuous after the first year of

application, except the calendar date for the end of the insurance

period (as specified in the Special Provisions) for each crop year, is

the date during the calendar year in which the grapes are normally

harvested.''

Response: Section 2(a) of the Basic Provisions states that the

policy is continuous. Therefore, it is not necessary to repeat this

provision in the Crop Provisions.

Comment: A reinsured company recommended removing the ``end of

insurance period dates'' from the policy since they are currently

listed in the Special Provisions. This would allow the addition of

dates for new varieties or revisions of existing dates to be

accomplished more quickly.

Response: FCIC agrees with this recommendation and has amended the

provisions accordingly.

Comment: A reinsured company stated that phylloxera should not be

excluded as a cause of loss, but should be included under ``Disease or

insect infestation'' referenced in section 10(b)(1). The comment also

stated that it is impossible to determine the amount of loss or damage

attributable specifically to phylloxera and that implementation would

be a loss adjusting nightmare and impossible to audit.

Response: It is widely accepted that Type B phylloxera will

ultimately destroy nearly all vineyards that were planted on non-

resistant root stock. The wine industry has done extensive research and

worked with producers to develop plans to destroy and replace non-

resistant vineyards and some

[[Page 47747]]

vineyards have been destroyed immediately after finding infestations.

Providing coverage for phylloxera related losses may inhibit the

efforts being made to stop the spread of this pest and may be

considered to promote poor pest management practices. Attributing

losses to phylloxera should be no more difficult than attributing

losses to any other uninsurable cause of loss. Therefore, no changes

have been made.

Comment: An insurance service organization suggested combining the

provisions contained in section 13(e) with the provisions in section

13(a).

Response: The requirement that requests for written agreement be

executed by the sales closing date is intended to be the rule and the

application submitted after the sales closing date will only be an

exception to this rule in limited circumstances. Therefore, no change

will be made.

Comment: Two reinsured companies and an insurance service

organization suggested the provision in section 13(d) stating ``Each

written agreement will only be valid for one year'' be deleted. The

valid period should be stated in the wording of the agreement. In most

cases, written agreements should be continuous, like policies. Limiting

written agreements to one year only increases administrative cost,

complexity and opportunity for misunderstanding and error.

Response: Written agreements are intended to change policy terms or

permit insurance in unusual or previously unknown situations. If such

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

policy or Special Provisions. It is important to keep non-uniform

exceptions to the minimum and to insure that the insured is well aware

of the specific terms of the policy. Therefore, no change will be made.

In addition to the changes indicated above, FCIC has made the

following changes:

1. Preamble--Include the Catastrophic Risk Protection Endorsement

for clarification.

2. Section 1--Add a definition for ``adapted'' to clarify the

provisions that identify the insured crop (section 7(a)), and change

the lug (box) weight in Arizona from 22 pounds to 20 pounds to be

consistent with comparable marketing areas in Riverside and Imperial

Counties, California (Coachella Valley).

3. Section 2--Clarify that written agreements may only be used to

obtain optional units on other than non-contiguous land.

4. Section 11(c)--Clarify that the damaged crop must not be

destroyed until the earlier of 15 days from the date notice of loss was

given or after the insurance provider gives written consent to do so.

Failure to meet this requirement will result in all such production to

be considered undamaged and included as production to count.

List of Subjects in 7 CFR Parts 441 and 457

Crop insurance, Table grape, Table grape crop insurance

regulations.

Final Rule

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

Crop Insurance Corporation hereby amends 7 CFR parts 441 and 457, as

follows:

PART 441--TABLE GRAPE CROP INSURANCE REGULATIONS FOR THE 1987

THROUGH 1997 CROP YEARS

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

follows:

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

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

3. Subpart heading ``Subpart--Regulations for the 1987 and

Succeeding Crop Years'' is removed.

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

paragraph (d) to read as follows:

Sec. 441.7 The application and policy.

* * * * *

(d) The application for the 1987 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 Table Grape Insurance Policy for

the 1987 through 1997 crop years are as follows:

* * * * *

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

1994 AND SUBSEQUENT CONTRACT YEARS

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

follows:

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

5. Section 457.149 is added to read as follows:

Sec. 457.149 Table grape crop insurance provisions.

The Table Grape Crop Insurance Provisions for the 1998 and

succeeding crop years are as follows:

For FCIC policies:

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

For reinsured policies:

(Insurance provider's name or other appropriate heading)

For both FCIC and reinsured policies:

TABLE GRAPE CROP PROVISIONS

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

these Crop Provisions, the Special Provisions, and the Catastrophic

Risk Protection Endorsement, if applicable, the Special Provisions

will control these Crop Provisions and the Basic Provisions; and

these Crop Provisions will control the Basic Provisions. The

Catastrophic Risk Protection Endorsement, if applicable, will

control all other provisions.

1. Definitions

Adapted. Varieties that are recognized by the Cooperative State

Research, Education, and Extension Service as compatible with

agronomic and weather conditions in the county.

Cluster thinning and removal. Removing parts of an immature

cluster or the entire cluster of grapes.

Days. Calendar days.

Direct marketing. Sale of the insured crop directly to consumers

without the intervention of an intermediary such as a wholesaler,

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

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

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

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

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 area.

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

existing vine in accordance with recommended practices to form a

living union.

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

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

any form of alternating or mixed pattern.

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

is artificially applied during the growing season by appropriate

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

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

establish the irrigated production guarantee on the irrigated

acreage planted to the insured crop.

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

California district; 21 pounds in all other California districts;

and 20 pounds in Arizona.

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

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

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

will be considered as contiguous.

[[Page 47748]]

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

determined by multiplying the approved APH yield per acre by the

coverage level percentage you elect.

Set out. Physically planting the grape plant in the vineyard.

Table grapes. Grapes that are grown for commercial sale for

human consumption as fresh fruit on acreage where the cultural

practices to produce fresh marketable grapes are carried out.

Written agreement. A written document that alters designated

terms of this policy in accordance with section 13.

2. Unit Division

(a) In addition to the provisions of crop definition of unit

contained in section 1 (Definitions) of the Basic Provisions

(Sec. 457.8), a basic unit will also be established for each table

grape variety you insure.

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

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

meet all the conditions of this section.

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

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

variety, other than as described in this section.

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

combine all optional units that are not in compliance with these

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

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

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

these provisions is determined to be inadvertent, and the optional

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

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

you for the units combined.

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

acreage report for that crop year.

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

unit:

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

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

last crop year used to determine your production guarantee;

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

of stored production from each optional unit maintained in such a

manner that permits us to verify the production from each optional

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

loss adjustment is completed by us; and

(3) Unless otherwise allowed by a written agreement, each

optional unit must be located on non-contiguous land.

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

Indemnities

In addition to the requirements of section 3 (Insurance

Guarantees, Coverage Levels, and Prices for Determining Indemnities)

of the Basic Provisions (Sec. 457.8):

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

for each table grape variety in the county insured under this

policy.

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

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

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

variety if applicable:

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

or any other circumstance that may reduce the expected yield below

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

number of affected acres;

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

acreage;

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

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

with another perennial crop, and any time 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: Interplanting perennial crop, removal of vines, damage,

change in practices and any other circumstance that may affect the

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

circumstance that may reduce your yields from previous levels, we

will reduce your production guarantee as necessary at any time we

become aware of the circumstance.

4. Contract Changes

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

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

preceding the cancellation date.

5. Cancellation and Termination Dates

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

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

and termination dates are January 31.

6. Report of Acreage

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

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

table grapes in the county by variety.

7. Insured Crop

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

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

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

premium rate is provided by the actuarial table:

(1) In which you have a share;

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

(3) That are adapted to the area; and

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

considered acceptable by us.

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

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

insure any table grapes grown on vines:

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

number of growing seasons designated by the Special Provisions; or

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

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

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

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

this amount.

8. Insurable Acreage

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

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

to a crop planted with another crop, table grapes interplanted with

another perennial crop are insurable unless we inspect the acreage

and determine that it does not meet the requirements contained in

your policy.

9. Insurance Period

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

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

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

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

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

10th day after your properly completed application is received in

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

period and determine that it does not meet insurability

requirements. You must provide any information that we require for

the crop or to determine the condition of the vineyard.

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

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

grapes are normally harvested or contained in the Special Provisions

as provided to you on or before the contract change date.

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

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

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

after coverage begins but on or before the acreage reporting date

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

acceptable, insurance will be considered to have attached to such

acreage on the calendar date for the beginning of the insurance

period.

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

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

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

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

that crop year unless:

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

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

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

transfer on or before the acreage reporting date; and

(iii) The transferee is eligible for crop insurance.

10. Causes of Loss

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

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

only against the following causes of loss that occur during the

insurance period:

(1) Adverse weather conditions;

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

been controlled or pruning debris has not been removed from the

vineyard;

(3) Wildlife;

(4) Earthquake;

(5) Volanic eruption; or

[[Page 47749]]

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

cause of loss ((a)(1) through (5) of this section) that occurs

during the insurance period.

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

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

insure against damage or loss of production due to:

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

(i) Prevents the proper application of control measures or

causes properly applied control measures to be ineffective; or

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

control mechanism is available;

(2) Phylloxera, regardless of cause; or

(3) Inability to market the table grapes for any reason other

than actual physical damage from an insurable cause specified in

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

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

person to accept production.

11. Duties In the Event of Damage or Loss

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

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

following will apply:

(a) You must notify us within 3 days after 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 the crop has been damaged during the growing season, you

must provide notice at least 15 days prior to the beginning of

harvest if you intend to claim an indemnity as a result of the

damage previously reported. You must not destroy the damaged crop

until the earlier of 15 days from the date you gave notice of loss,

or our written consent to do so. If you fail to meet the

requirements of this section all such production will be considered

undamaged and included as production to count.

12. Settlement of Claim

(a) We will determine your loss on a unit basis. In the event

you are unable to provide separate acceptable production records:

(1) For any optional unit, we will combine all optional units

for which such production records were not provided; or

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

production to such units in proportion to our liability on the

harvested acreage for each unit.

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

will settle your claim by:

(1) Multiplying the insured acreage by its respective production

guarantee;

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

price election for the variety;

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

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

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

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

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

in section 12(b)(3); and

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

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

acreage on the unit will include:

(1) All appraised production as follows:

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

(A) That is abandoned;

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

requirements in section 11(b);

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

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

(ii) Production lost due to uninsured causes;

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

properly handled, the California Department of Food and Agriculture

minimum standards for table grapes; and

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

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

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

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

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

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

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

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

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

appraisal made prior to deferring the claim will be used to

determine the production to count; and

(2) All harvested production from insurable acreage regardless

of condition or disposition. The quantity of production to count for

table grape production damaged by insurable causes within the

insurance period that is marketed for any use other than table

grapes will be determined by multiplying the greater of (1) the

value of the table grapes per ton or (2) $50, by the number of tons

and dividing that result by the highest price election available for

the insured unit. This result will be the number of lugs to count.

13. Written Agreement

Terms of this policy which are specifically designated as

allowing the use of a 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

13(e);

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

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

effect if the written agreement is not approved;

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

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

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

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

the written agreement is not specifically renewed the following

year, insurance coverage for subsequent crop years will be in

accordance with the printed policy); and

(e) An application for a written agreement submitted after the

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

of the acreage, it is determined that no loss has occurred and the

crop is insurable in accordance with the policy and written

agreement provisions.

Signed in Washington, DC, on September 4, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 97-23906 Filed 9-10-97; 8:45 am]

BILLING CODE 3410-08-P