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: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes

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.

EFFECTIVE DATE: October 30, 1997.

FOR FURTHER INFORMATION CONTACT: Linda Williams, Insurance Management

Specialist, Research and Development, Product Development Division,

Federal Crop Insurance Corporation, United States Department of

Agriculture, 9435 Holmes Road, Kansas City, MO 64313, telephone (816)

926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

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

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

therefore, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

Following publication of the proposed rule, the public was afforded

60 days to submit written comments and opinions on information

collection requirements currently being reviewed by OMB pursuant to the

Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) under OMB

control number 0563-0053. 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. Therefore,

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. The amount of work required of

insurance companies will not increase because the information used to

determine eligibility is already maintained at their office. The other

information required is already being gathered as a result of the

present policy. No additional requirements are imposed on the producer

or reinsured company as a result of this regulation. Additionally, the

regulation does not impose any burden on small entities than it does on

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 No. 12988

This 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 Thursday, July 10, 1997, FCIC published a proposed rule in the

Federal Register at 62 FR 37000 to add to the Common Crop Insurance

Regulations (7 CFR part 457) a new section, 7 CFR 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 amends 7 CFR part 450 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 13 comments

were received from the reinsured companies and an insurance service

organization. The comments received and FCIC's responses are as

follows:

Comment: An insurance service organization recommended that several

definitions common to most crops be put into the Basic Provisions.

Response: The Basic Provisions, which are currently in the

regulatory review process, will include definition of commonly used

terms and this rule will be revised to delete those definitions when

the Basic Provisions are published as a final rule.

Comment: A reinsured company and an insurance service organization

expressed concern with the definition of ``good farming practice,''

which states

[[Page 58629]]

``* * * recognized by the Cooperative State Research, Education, and

Extension Service as compatible * * *'' since there may be accepted

practices not so recognized. The commenters suggested revising the

language to state ``generally recognized * * *'' and changing the term

``county'' to ``area.''

Response: The Cooperative State Research, Education, and Extension

Service (CSREES) recognizes farming practices that are considered

acceptable for producing prunes. If a producer is following practices

currently not recognized as acceptable by the CSREES, such recognition

can be sought by interested parties. Use of the term ``generally

recognized'' will only make the policy more difficult to administer.

Although the cultural practices recognized by CSREES may only pertain

to specific areas within a county, actuarial documents are on a county

basis. Therefore, no change has been made.

Comment: A reinsured company recommended that in the definition of

``irrigated practice,'' the words ``and quality'' should be added after

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

Response: There are no established criteria regarding the quality

of water necessary to produce a crop. The highly variable factors

involved would make such criteria difficult to develop and administer.

The provisions regarding good farming practices can be applied in

situations in which the insured person failed to exercise due care and

diligence. Therefore, no change has been made to the definition.

Comment: An insurance service organization and a reinsured company

questioned whether the references in section 2(e)(2) to ``measurement

of stored production'' is applicable to prunes. The commenter stated it

was not a common practice to store prunes.

Response: FCIC agrees measurement of stored production does not

apply to prunes. The provisions have been amended accordingly.

Comment: An insurance service organization expressed concern in

discrepancies regarding the provisions contained in section 2(e)(3).

The commenter indicated that the proposed rule summary of changes

stated section 2(e) contained changes in the provisions to allow

optional units on non-contiguous land and for land located in separate

sections. The commenter stated 2(e)(3) refers to ``one or more of the

following criteria,'' but 2(e)(3)(ii) states that optional units by

non-contiguous land are in lieu of establishing optional units by

section, section equivalent or FSA Farm Serial Number. The commenter

also stated policyholders will need to understand they must qualify for

separate optional units and could lose optional units if production was

commingled.

Response: FCIC agrees that the provisions in section 2(e)(3) were

confusing and that the proposed rule summary of changes did not

accurately describe the changes in section 2(e)(3). FCIC has amended

the wording contained in section 2(e)(3) to clarify that each optional

unit ``must also meet one of the following criteria as applicable * *

*'' In addition, section 2(e)(3)(ii) has been amended to remove

language which stated ``In lieu of establishing optional units by

section, section equivalent or FSA Farm Serial Number.'' These changes

will clarify that optional unit may be established if each optional

unit meets one of the following criteria: (1) by section, FSA Farm

Serial Number, or their equivalent; or (2) by non-contiguous land.

Comment: An insurance service organization stated that the language

in section 10(c) does not address timely notice if damage is discovered

less than 15 days prior to harvest.

Response: Section 10(c) provides the notice requirements in the

event the insured intends to file a claim for indemnity. Section 10(c)

states that notice must be given 15 days prior to the beginning of

harvest or immediately if damage is discovered during harvest. In

addition, Section 10 states that the requirements contained in section

14 of the Basic Provisions, which requires notice of loss within 72

hours of initial discovery of damage, are applicable. Therefore, no

change has been made.

Comment: An insurance service organization stated that it seems

unnecessary to refer to previous items by number in section 11. All

references make it difficult to follow the calculation sequence.

Response: This section has been explicitly worded to eliminate any

misunderstanding or confusion. However, to provide clarification in the

calculations, an example of the indemnity calculation has been

included.

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.

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. Therefore, no change has been made.

Comment: An insurance service organization and two reinsured

companies recommended removal of the requirement that written

agreements be renewed each year if there are no significant changes to

the farming operation. One reinsured company suggested that the written

agreement should contain the effective period for each specific

agreement because limiting the effective period to one year only

increases administrative cost, complexity and the opportunity for

misunderstanding.

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 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 minor

editorial changes and has amended the following provisions:

1. Amended the paragraph preceding section 1 to include the

Catastrophic Risk Protection Endorsement for the purpose of

clarification.

2. Section 2(e)(3)(i)--Revised the language for clarification.

3. Section 9(a)(3)--Clarified wildlife as a cause of loss by

deleting the language ``unless proper measures to control wildlife have

not been taken.''

4. Section 9(a)(6)--To be consistent with causes of loss in other

Crop Provisions, clarified that failure of the irrigation water supply

must be ``due to a cause specified in section 9(a)(1) through (5).''

5. Section 11(d)--Clarify 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 3.0. Evidence

compiled by FCIC after publication of the proposed rule indicated that

3.0 is a more accurate conversion factor than the value 3.1 contained

in the proposed rule.

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

the Federal Register. This rule improves the prune crop insurance

coverage and brings it under the Common Crop Insurance Policy Basic

Provisions for consistency among policies. The earliest contract change

date that can be met for the 1998 crop year is October 31, 1997, and

the final rule must be published as soon as possible. It is therefore,

imperative that these provisions be

[[Page 58630]]

made final so that the reinsured companies may have sufficient time to

implement these changes. Therefore, public interest requires the agency

to make the rules effective upon publication.

List of Subjects in 7 CFR Parts 450 and 457

Crop insurance, Prunes.

Final Rule

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

Crop Insurance Corporation, hereby amends 7 CFR parts 450 and 457, as

follows:

PART 450--PRUNE CROP INSURANCE REGULATIONS FOR THE 1996 AND

SUCCEEDING CROP YEARS

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. The Subpart Heading ``Subpart-Regulations for the 1986 and

Succeeding 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

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

follows:

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

6. 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:

UNITED STATES 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 policy provisions, the order of

priority is as follows: (1) the Catastrophic Risk Endorsement, if

applicable; (2) the Special Provisions; (3) these Crop Provisions;

and (4) the Basic Provisions (Sec. 457.8); with (1) controlling (2)

etc.

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 is 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 Fresh Plums and 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.

Ton. Two thousand (2,000) 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 of the Basic Provisions, (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 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 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 such as Spanish grants, as

the equivalent of sections for unit purposes. In areas that have not

been surveyed using sections or their equivalent, or in areas where

such systems exist 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:

Optional units may be established if each optional unit is located

on non-contiguous land.

[[Page 58631]]

3. Insurance Guarantees, Coverage Levels, and Prices for

Determining Indemnities

In addition to the requirements of section 3 of the Basic

Provisions:

(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 of the Basic Provisions, 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 any time 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

interplanting the perennial crop; removal of trees; damage; a 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 of the Basic Provisions, the

contract change date is October 31 preceding the cancellation date.

5. Cancellation and Termination Dates

In accordance with section 2 of the Basic Provisions, the

cancellation and termination dates are January 31.

6. Insured Crop

In accordance with section 8 of the Basic Provisions, 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

In lieu of the provisions in section 9 of the Basic Provisions

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 of the Basic

Provisions:

(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 of the Basic

Provisions:

(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 of the Basic

Provisions, 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;

(4) Earthquake;

(5) Volcanic eruption; or

(6) Failure of the irrigation water supply, if due to a cause

specified in section 9(a)(1) through (5) that occurs during the

insurance period.

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

the Basic Provisions, 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 of the Basic

Provisions, 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 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 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 of 11(b)(1) by the respective price

election for each varietal group, if applicable;

[[Page 58632]]

(3) Totaling the results of section 11(b)(2) if there is more

than one varietal group;

(4) Multiplying the total production to count (see section

11(c)), of each varietal group if applicable, by its respective

price election;

(5) Totaling the results of section 11(b)(4) if there is more

than one varietal group;

(6) Subtracting the result of section 11(b)(4) from the result

of section 11(b)(2) if there is only one varietal group or

subtracting the result of section 11(b)(5) from the result of

section 11(b)(3) if there is more than one varietal group; and

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

For Example

You have a 100 percent share in 50 acres of varietal group A

prunes in the unit, with a guarantee of 2.5 tons per acre and a

price election of $630.00 per ton. You are only able to harvest 10.0

tons. Your indemnity would be calculated as follows:

(1) 50 acres x 2.5 tons = 125.0 ton guarantee;

(2) 125.0 tons x $ 630.00 price election = $78,750.00 value of

guarantee;

(4) 10.0 tons x $630.00 price election = $6,300.00 value of

production to count;

(6) $78,750.00-$6,300.00 = $72,450.00 loss; and

(7) $72,450.00 x 100 percent = $72,450 indemnity payment.

You also have a 100 percent share in 50 acres of varietal group

B prunes in the same unit, with a guarantee of 2.0 ton per acre and

a price election of $550.00 per ton. You are only able to harvest

5.0 tons. Your total indemnity for both varietal groups A and B

would be calculated as follows:

(1) 50 acres x 2.5 tons = 125.0 ton guarantee for varietal group A

and 50.0 acres x 2.0 tons = 100.0 ton guarantee for varietal group

B;

(2) 125.0 ton guarantee x $630.00 price election = $78,750.00

value of guarantee for varietal group A and 100.0 ton guarantee x

$550.00 price election = $55,000.00 value guarantee for varietal

group B;

(3) $78,750.00 + $55,000.00 = $133,750.00 total value guarantee;

(4) 10.0 tons x $630.00 price election = $6,300.00 value of

production to count for varietal group A and 5.0 tons x $550.00

price election = $2,750.00 value of production to count for varietal

group B;

(5) $6,300.00 + $2,750.00 = $9,050.00 total value of production to

count;

(6) $133,750.00-$9,050.00 = $124,700.00 loss; and

(7) $124,700.00 loss x 100 percent = $124,700 indemnity payment.

(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 3.0.

(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:

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

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

and

(2) 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 October 27, 1997.

Suzette M. Dittrich,

Deputy Manager, Federal Crop Insurance Corporation.

[FR Doc. 97-28772 Filed 10-29-97; 8:45 am]

BILLING CODE 3410-08-P