Sweet Corn Insurance Regulations; and Common Crop Insurance Regulations, Processing Sweet Corn Crop Insurance Provisions
Federal RegisterDec 12, 1997
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 437 and 457
Sweet Corn Insurance Regulations; and Common Crop Insurance
Regulations, Processing Sweet Corn 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 processing sweet corn.
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 sweet corn 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 sweet corn crop insurance
regulations to the 1997 and prior crop years.
DATES: Effective December 12, 1997.
FOR FURTHER INFORMATION CONTACT: Stephen Hoy, Insurance Management
Specialist, Research and Development, Product Development Division,
Federal Crop Insurance Corporation, United States Department of
Agriculture, 9435 Holmes Road, Kansas City, MO 64131, telephone (816)
926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order No.12866
The Office of Management and Budget (OMB) has determined this rule
to be exempt for the purposes of Executive Order No. 12866, and,
therefore, this rule has not been reviewed by OMB.
Paperwork Reduction Act of 1995
Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507),
those collections of information have been approved by the Office of
Management and Budget (OMB) under control number 0563-0053.
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 and the
other information required is already being gathered as a result of the
present policy. No additional actions are required as a result of this
action on the part of either the producer or the reinsured company.
Additionally, the regulation does not require any action on the part of
the small entities than is required on the part of the 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 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. 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
[[Page 65339]]
exhausted before action against FCIC 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, May 1, 1997, FCIC published a proposed rule in the
Federal Register at 62 FR 23690-23695 to add to the Common Crop
Insurance Regulations (7 CFR part 457), a new section, 7 CFR 457.154,
Processing Sweet Corn 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 sweet corn found at 7 CFR part 437 (Sweet Corn Crop Insurance
Regulations). FCIC also amends 7 CFR part 437 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, data, and opinions. A total of 30
comments were received from an insurance service organization, a
reinsured company, and a crop insurance agent. 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 include definitions of commonly used
terms, and we have revised this rule to remove the definitions of
``approved yield,'' ``days,'' ``FSA,'' ``final planting date,''
``interplanted,'' ``irrigated practice,'' ``production guarantee (per
acre),'' ``replanting,'' ``timely planted,'' and ``written agreement.''
The definition of ``planted acreage'' is amended to remove language
that is contained in the Basic Provisions.
Comment: An insurance service organization recommended that the
sentence in the definition of ``bypassed acreage'' that states
``Bypassed acreage on which an indemnity is payable will be considered
to have a zero yield for Actual Production History (APH) purposes'' be
deleted since it is addressed elsewhere and does not belong in the
definition.
Response: FCIC has deleted, as unnecessary, the second sentence of
the definition of bypassed acreage. A provision addressing when acreage
will be considered to have a zero yield for APH purposes is included in
section 3 (Insurance Guarantees, Coverage Levels, and Prices for
Determining Indemnities).
Comment: An insurance service organization and a reinsured company
expressed concern with the definition of ``good farming practices''
which makes reference to ``cultural practices generally in use in the
county * * * recognized by the Cooperative State Research, Education,
and Extension Service as compatible with agronomic and weather
conditions in the county.'' The commenters questioned whether cultural
practices that are not explicitly recognized (or possibly known) by the
Cooperative State Research, Education, and Extension Service might
exist. The commenters indicated that the term ``county'' in the
definition of ``good farming practice'' should be changed to ``area.''
The insurance service organization also recommended adding the word
``generally'' before ``recognized by the Cooperative State Research,
Education, and Extension Service * * *''
Response: The Cooperative State Research, Education, and Extension
Service (CSREES) recognizes farming practices that are considered
acceptable for producing sweet corn. If a producer is following
practices currently not recognized as acceptable by CSREES, such
recognition can be sought by interested parties. Use of the term
``generally'' will only create an ambiguity and make the definition
more difficult to administer. Although the cultural practices
recognized by CSREES may only pertain to specific areas within a
county, the actuarial documents are on a county basis. Therefore, no
change has been made.
Comment: An insurance service organization recommended that the
definition of ``replanting'' be clarified by inserting ``sweet corn''
between the last two words (``successful'' and ``crop'') of the
sentence.
Response: This definition is contained in the Basic Provisions, and
is, therefore, removed from these crop provisions.
Comment: An insurance service organization recommended that section
2(b) of the proposed rule clarify whether optional units are available
if the processor contract stipulates the number of contracted acres, or
only if the contract does not specify an amount of production.
Response: FCIC agrees and has amended section 2 to specify that for
processor contracts that stipulate a specific amount of production to
be delivered, the basic unit will consist of all the acreage planted to
the insured crop in the county that will be used to fulfill contracts
with each processor, and optional units will not be established for
production based processor contracts. The language in section 2 has
also been revised and reformatted to clearly state the requirements for
both the acreage-based and production-based processor contracts. In
addition, language in this section that is common with other crop
provisions has been removed since it is contained in the Basic
Provisions.
Comment: An insurance service organization questioned whether
verification of production from an optional unit using ``measurement of
stored production,'' as specified in section 2(e)(3) of the proposed
rule applies to processing sweet corn.
Response: Sweet corn is not put into storage before processing.
Therefore, FCIC has removed this provision.
Comment: An insurance service organization recommended removal of
the opening phrase in section 2(e)(4)(ii) of the proposed rule that
states ``In addition to, or instead of, establishing optional units by
section, section equivalent, or FSA Farm Serial Number, * * *'' since
section 2(e)(4) of the proposed rule specifies that ``Each optional
unit must meet one or more of the following criteria, * * *''
Response: The unit division provisions for any processor contract
that stipulates the number of acres to be planted have been removed
from these provisions, since the provisions are contained in the Basic
Provisions.
Comment: An insurance service organization stated that the language
in section 3(a), which provides guidelines for selection of price
elections, should be moved to the Basic Provisions.
Response: The requirement that the price election (for each type,
varietal group, etc.) have the same percentage relationship to the
maximum price does not apply to all crop policies. Therefore, section 3
should not be part of the Basic Provisions.
Comment: An insurance service organization questioned whether the
sentence ``Any other measured production will be converted to an
unhusked ear weight equivalent'' is needed in section 3(b) since it is
stated in section 12(c)(2).
Response: Section 3(b) addresses the insurance guarantee while
section
[[Page 65340]]
12(c)(2) addresses production to count. The provisions clarify that
both are expressed as unhusked ear weight, and any other measured
production will be converted to unhusked ear weight. Therefore, no
change has been made.
Comment: An insurance service organization stated that requiring
the producer to provide a copy of the processor contract no later than
the acreage reporting date could provide a loophole by allowing
producers to wait until acreage reporting time to decide if they want
coverage.
Response: There is no evidence that allowing the producer to
provide a copy of the processor contract as late as the acreage
reporting date has resulted in producers waiting to decide until the
acreage reporting date if they want coverage. Sweet corn producers
usually have a processor contract in-force by the final planting date.
The requirement to provide a copy of the processor contract with the
acreage report is convenient for the producer. Therefore, no change has
been made.
Comment: An insurance service organization questioned whether any
processor contract would allow interplanted sweet corn or sweet corn
planted into an established grass or legume. The commenter further
indicated that consideration should be given to inserting the language
in section 7(a)(4) of the proposed rule into the Basic Provisions.
Response: FCIC agrees that processing sweet corn has seldom, if
ever, been interplanted with another crop or planted into an
established grass or legume. However, production practices are
constantly evolving. FCIC chooses to retain the provisions of section
7(a)(3) of the final rule to accommodate such developments if they
should occur. In addition, the interplanted language is not consistent
among the crop policies and, therefore, will be retained in the crop
provisions.
Comment: An insurance service organization indicated that language
in section 7(b) that states ``You will be considered to have a share in
the insured crop if, under the processor contract, you retain
possession of the acreage on which the sweet corn is grown * * *''
suggests that only a landlord would have a share in the insured crop.
The commenter questioned whether the provision in section 7(b) is
already covered in sections 7(a)(1) and (3) of the proposed rule.
Response: The language in section 7(b) was intended to cover
producers who have a crop share agreement, rent, or own acreage. The
word ``possession'' has been changed to ``control'' for clarification.
Section 7(a) specifies requirements for insurance coverage on the crop,
while section 7(b) specifies requirements for an insurable share in the
crop. Therefore, both provisions are necessary.
Comment: An insurance service organization and a reinsured company
questioned whether the provision in section 9(b), which states that the
insurance period ceases on the date sufficient production is harvested
to fulfill the producer's processor contract, conflicts with the
provision in section 12(a) that states ``We will determine your loss on
a unit basis.'' The commenters questioned whether production to count
from an appraisal prior to harvest would be included when determining
fulfillment of the processor contract. The insurance service
organization questioned whether the insured would know when enough
production is harvested to fulfill the processor contract. This
commenter asked if production exceeding the contracted amount is
considered production to count for APH or loss adjustment or whether
the processor settlement sheet is the only acceptable record. The
insurance service organization suggested that the provisions in section
9(b) state ``* * * the insurance period ends when the production
delivered to the processor equals the amount of production stated in
the sweet corn contract.'' However, the commenter also questioned
whether ``delivered to'' is the same as ``accepted by'' the processor.
Response: Section 9(b) does not conflict with section 12(a). For
processor contracts based on a stated amount of production, FCIC is
only insuring the contract amount, and the producer can only obtain a
basic unit by processor contract. Therefore, once the contract is
fulfilled, insurance ceases on the unit and there is no payable loss.
If the contract is not fulfilled and there is still unharvested
production, any insurable cause of loss is covered. With respect to the
issue of production from appraised acreage, such production will not
count toward fulfillment of the processor contract, although it will be
used to determine production to count for the unit or the producer's
approved yield if the acreage is not bypassed due to an insurable cause
of loss that renders such production unacceptable to the processor.
With respect to whether the producer will know when the processor
contract is fulfilled, records are kept as production is delivered to
the processor. Therefore, the producer can determine when the contract
is fulfilled. All production from the unit, including any excess of the
amount stated in the contract, will be considered as production to
count when determining the producer's approved yield. For the purposes
of loss adjustment, the amount shown on the settlement sheet, plus any
appraised production that was not bypassed due to an insurable cause
that rendered the production unacceptable to the processor, will be
included as production to count. FCIC has revised section 9(b) to
clarify that insurance ceases when the contract is fulfilled if the
processor contract stipulates a specific amount of production.
Comment: An insurance service organization questioned the provision
in section 10(a)(4), which states that insurance is provided against
``Plant disease on acreage not planted to sweet corn the previous crop
year * * *.'' The commenter assumed this would apply even if a rotation
requirement was not specified in the Special Provisions.
Response: FCIC agrees that if a rotation requirement is not
specified in the Special Provisions, insurance coverage should be
provided against plant disease if sweet corn was planted the previous
crop year. Section 10(a)(4) has been revised accordingly.
Comment: An insurance service organization suggested changing the
wording in section 10(a)(8) to eliminate the reference to 10(a)(1)
through (7) and state ``Failure of the irrigation water supply, if due
to an insured cause of loss.''
Response: Referencing 10(a)(1) through (7) makes it clear that
failure of the irrigation water supply must be due to these specific
causes of loss. Therefore, no change has been made.
Comment: An insurance service organization questioned how the
provision in section 10(b)(1)(ii), which states that insurance coverage
is not provided if acreage is bypassed based on the availability of a
crop insurance payment, is to be enforced.
Response: The adjuster should be able to make this determination
based on various factors such as if a harvest pattern exists that
clearly indicates the processor is bypassing producers with crop
insurance coverage in favor of producers without crop insurance even
though the quality of the crop is similar. Language has been added to
state that an indemnity will be denied or have to be repaid if it is
determined that bypassed acreage was due to the availability of a crop
insurance payment.
Comment: An insurance service organization questioned a discrepancy
between section 9(b) of the proposed rule, which states that insurance
ceases on ``The date you harvest sufficient production to fulfill your
processor
[[Page 65341]]
contract,'' and section 10(b)(5) of the proposed rule, which states
that loss of production will not be insured if ``Due to damage that
occurs to unharvested production after you deliver the production
required by the processor contract.'' The commenter indicated that this
provision is not necessary since any damage occurring after delivery
would be outside the insurance period as indicated in section 9(b).
Response: FCIC agrees and has deleted section 10(b)(5).
Comment: An insurance service organization stated that the language
in section 11(c) does not address timely notice if damage is discovered
less than 15 days prior to harvest.
Response: FCIC agrees and has revised section 11(c) to clarify that
an immediate notice of loss is required if damage is discovered within
15 days prior to harvest or during harvest.
Comment: An insurance service organization stated that section
12(b), which explains how a claim is settled, is too wordy and
difficult to follow.
Response: This section has been revised to clarify the settlement
of claims calculation, including the addition of an example.
Comment: An insurance service organization indicated that payments
by the processor for bypassed acreage should be considered to have
value to count as is done with salvaged grains.
Response: There is nothing in this policy which precludes a
producer from obtaining any other form of insurance against losses as
long as such insurance is not under the Federal Crop Insurance Act.
Since the producer contributes to the unharvested acreage pool, such
payment will not be considered when determining production to count.
Comment: An insurance service organization stated that section
12(c)(1)(iii) of the proposed rule should not allow the insured to
defer settlement and wait for a later, generally lower, appraisal,
especially on crops that have a short ``shelf life.''
Response: A later appraisal will only be necessary if the company
and the insured do not agree on the appraisal or if the company
believes that the crop needs to be carried further. The producer must
continue to care for the crop in accordance with recognized good
farming practices 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 commented on section
12(c)(2) of the proposed rule which includes the statement ``* * *
production will be determined by dividing the dollar amount as required
by the contract for the quality and quantity of sweet corn delivered to
the processor by the base contract price per ton.'' The commenter did
not oppose this method but requested to know why it was used to
determine production to count.
Response: FCIC has revised section 12(c)(2) to specify that
production to count of harvested sweet corn should be determined from
the usable tons specified on the processor settlement sheet. In
addition, FCIC has amended the language in section 12(c) to clarify
that, in the absence of a processor settlement sheet, production to
count is determined by dividing the dollar amount paid, payable, or
which should have been paid under the terms of the processor contract
for the quantity of sweet corn delivered to the processor by the base
contract price per ton. Since premiums or discounts for quality are not
normally included in processor contracts for sweet corn, the term
``quality'' was removed from this provision.
Comment: A crop insurance agent stated that late planting
provisions should be available for processing sweet corn since some
sweet corn is planted late in most years. The insurance agent stated
that late planting provisions will not affect the processor's ability
to timely harvest and process the sweet corn. A reinsured company asked
if provisions will be available for late and prevented planting. An
insurance service organization expressed support for eliminating the
late planting option and asked if prevented planting would be
available.
Response: FCIC agrees that a late planting period for processing
sweet corn may be appropriate for some growing areas. Therefore,
section 13 is revised to provide a late planting period if allowed by
the Special Provisions and if the producer provides written approval
from the processor by the acreage reporting date that it will accept
the production from the late planted acreage. Section 14 provides a
prevented planting coverage of 40 percent of the producers production
guarantee for timely planted acreage. If the producer has limited or
additional coverage and pays an additional premium, the prevented
planting coverage may be increased to the levels specified in the
actuarial documents.
Comment: An insurance service organization and a reinsured company
recommended removal of the requirement that written agreements be
renewed each year if there are no significant changes to the farming
operation. The insurance service organization stated that section 14(d)
should perhaps refer to the date specified in the agreement instead of
limiting the agreement for one year. An insurance service organization
recommended that section 14 be put into the Basic Provisions.
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 to the
requirement that written agreements be renewed each year. The written
agreement provisions are contained in the Basic Provisions and,
therefore, have been removed from these crop provisions.
In addition to the changes described above, FCIC has made minor
editorial changes and has amended the following Processing Sweet Corn
Provisions:
1. Amended and clarified the paragraph preceding section 1 to
include the Catastrophic Risk Protection Endorsement.
2. Section 1--Amended the definitions of ``base contract price,''
``bypassed acreage,'' and ``processor'' for clarity. The definition of
``practical to replant'' is amended to clarify that it will not be
considered practical to replant unless the acreage can produce at least
75 percent of the approved yield and the processor agrees in writing
that it will accept the production from the replanted acreage. The
definition of processor contract is amended to clarify that multiple
contracts with the same processor that specify amounts of production
will be considered as a single processor contract. This provision
guards against the situation where a loss is claimed under one
contract, but a surplus is grown under the other contract for the same
crop. The definition of ``usable tons'' is amended to clarify that the
amount includes the quantity of sweet corn for which the producer is
compensated or should have been compensated by the processor.
3. Section 3(b)--Clarified that the insurance guarantee per acre is
expressed as tons of unhusked ear weight.
4. Section 3(c)--Added a provision to clarify that appraised
production on bypassed acreage that is not bypassed due to an insurable
cause of loss will be
[[Page 65342]]
considered when determining the producer's approved yield.
5. Section 7--Removed section 7(a)(2) in the proposed rule. This
provision is not necessary since section 7(a)(3) of the proposed rule
stated that the sweet corn must be grown under, and in accordance with,
the requirements of a processor contract. If grown under a processor
contract, the sweet corn will be canned or frozen. Section 7(c) is
amended for clarity.
6. Section 10--Amended section 10(a) for clarity. Section 10(b) is
reformatted and amended for clarity. Also, removed section 10(b)(3) of
the proposed rule. Assuming the acreage is not intentionally bypassed,
FCIC believes that processors make sound harvesting decisions based on
the condition and economic value of the crop as a whole. Therefore,
FCIC believes that section 10(b)(3) is unnecessary and adds no value to
these provisions.
7. Section 11(b)--Clarified that the insured must give a notice of
loss within 3 days after the date harvest should have started if the
acreage will not be harvested unless the acreage was previously
released. The insured must also provide documentation stating why the
acreage was bypassed.
8. Section 12--Deleted section 12(c)(1)(i)(E) of the proposed rule,
and inserted amended language as a new section 12(c)(1)(iii) of the
final rule to clarify when appraised production will include production
on bypassed acreage. A new section 12(c)(3) of the final rule is added
to clarify that appraised production will include all harvested
production from any other insurable units that have been used to fill
the processor contract for a unit. Section 12(d) of the proposed rule
is deleted because of duplication with section 12(c)(2).
Good cause is shown to make this rule effective upon publication in
the Federal Register. This rule improves the processing sweet corn
insurance coverage and brings it under the Common Crop Insurance Policy
Basic Provisions for consistency among policies. The contract change
date for the 1998 crop year is December 31, 1997. It is, therefore,
imperative that these provisions be made final before that date so that
the reinsured companies and insureds may have sufficient time to
implement the new provisions. Therefore, public interest requires the
agency to act immediately to make these provisions available for the
1998 crop year.
List of Subjects in 7 CFR Parts 437 and 457
Crop insurance, Processing sweet corn, Sweet corn crop insurance
regulations.
Final Rule
Accordingly, for the reasons set forth in the preamble, the Federal
Crop Insurance Corporation hereby amends 7 CFR parts 437 and 457, as
follows:
PART 437--SWEET CORN CROP INSURANCE REGULATIONS FOR THE 1985
THROUGH 1997 CROP YEARS
1. The authority citation for 7 CFR part 437 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 1985 and
Succeeding Crop Years'' is removed.
4. Section 437.7 is amended by revising the introductory text of
paragraph (d) to read as follows:
Sec. 437.7 The application and policy.
* * * * *
(d) The application is found at subpart D of part 400, General
Administrative Regulations (7 CFR 400.37, 400.38). The provisions of
the Sweet Corn Insurance Policy for the 1985 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 457.154 is added to read as follows:
Sec. 457.154 Processing sweet corn crop insurance provisions.
The Processing Sweet Corn 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:
Processing Sweet Corn Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) the Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these
Crop Provisions; and (4) the Basic Provisions with (1) controlling
(2), etc.
1. Definitions.
Base contract price. The price stipulated on the processor
contract without regard to discounts or incentives that may apply.
Bypassed acreage. Land on which production is ready for harvest
but the processor elects not to accept such production so it is not
harvested.
Good farming practices. The cultural practices generally in use
in the county for the crop to make normal progress toward maturity
and produce at least the yield used to determine the production
guarantee and are those required by the sweet corn processor
contract with the processing company, and recognized by the
Cooperative State Research, Education, and Extension Service as
compatible with agronomic and weather conditions in the county.
Harvest. The removal of the ears from the stalks for the purpose
of delivery to the processor.
Planted acreage. In addition to the definition contained in the
Basic Provisions, sweet corn must initially be placed in rows far
enough apart to permit mechanical cultivation. Acreage planted in
any other manner will not be insurable unless otherwise provided by
the Special Provisions or by written agreement.
Practical to replant. In lieu of the definition of Practical to
replant contained in section 1 of the Basic Provisions, practical to
replant is defined as our determination, after loss or damage to the
insured crop, based on factors including, but not limited to,
moisture availability, condition of the field, time to crop
maturity, and marketing window, that replanting the insured crop
will allow the crop to attain maturity prior to the calendar date
for the end of the insurance period. It will not be considered
practical to replant unless the replanted acreage can produce at
least 75 percent of the approved yield, and the processor agrees in
writing that it will accept the production from the replanted
acreage.
Processor. Any business enterprise regularly engaged in canning
or freezing processing sweet corn for human consumption, that
possesses all licenses and permits for processing sweet corn
required by the state in which it operates, and that possesses
facilities, or has contractual access to such facilities, with
enough equipment to accept and process contracted processing sweet
corn within a reasonable amount of time after harvest.
Processor contract. A written agreement between the producer and
a processor, containing at a minimum:
(a) The producer's commitment to plant and grow sweet corn, and
to deliver the sweet corn production to the processor;
(b) The processor's commitment to purchase all the production
stated in the processor contract; and
(c) A base contract price.
Multiple contracts with the same processor that specify amounts
of production will be considered as a single processor contract.
Ton. Two thousand (2,000) pounds avoirdupois.
[[Page 65343]]
Unhusked ear weight. Weight of the seed-bearing spike of sweet
corn including the membranous or green outer envelope.
Usable tons. The quantity of sweet corn for which the producer
is compensated or should have been compensated by the processor.
2. Unit Division.
(a) For processor contracts that stipulate the amount of
production to be delivered:
(1) In lieu of the definition contained in the Basic Provisions,
a basic unit will consist of all acreage planted to the insured crop
in the county that will be used to fulfill contracts with each
processor;
(i) There will be no more than one basic unit for all production
contracted with each processor contract;
(ii) In accordance with section 12, all production from any
basic unit in excess of the amount under contract will be included
as production to count if such production is applied to any other
basic unit for which the contracted amount has not been fulfilled;
and
(2) Provisions in the Basic Provisions that allow optional units
by section, section equivalent, or FSA farm serial number and by
irrigated and non-irrigated practices are not applicable.
(b) For any processor contract that stipulates the number of
acres to be planted, the provisions contained in section 34 of the
Basic Provisions will apply.
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
processing sweet corn in the county insured under this policy unless
the Special Provisions provide different price elections by type.
The percentage of the maximum price elections you choose for one
type will be applicable to all other types insured under this
policy.
(b) The insurance guarantee per acre is expressed as tons of
unhusked ear weight. Any other measured production will be converted
to an unhusked ear weight equivalent.
(c) The appraised production from bypassed acreage that could
have been accepted by the processor will be included when
determining your approved yield.
(d) Acreage that is bypassed because it was damaged by an
insurable cause of loss will be considered to have a zero yield when
determining your approved yield.
4. Contract Changes.
In accordance with section 4 of the Basic Provisions, the
contract change date is November 30 preceding the cancellation date.
5. Cancellation and Termination Dates.
In accordance with section 2 of the Basic Provisions, the
cancellation and termination dates are March 15.
6. Report of Acreage.
In addition to the provisions of section 6 of the Basic
Provisions, you must provide a copy of all processor contracts to us
on or before the acreage reporting date.
7. Insured Crop.
(a) In accordance with section 8 of the Basic Provisions, the
crop insured will be all the processing sweet corn in the county for
which a premium rate is provided by the actuarial documents:
(1) In which you have a share;
(2) That is grown under, and in accordance with, the
requirements of a processor contract executed on or before the
acreage reporting date and not excluded from the processor contract
at any time during the crop year; and
(3) That is not (unless allowed by the Special Provisions or by
written agreement):
(i) Interplanted with another crop; or
(ii) Planted into an established grass or legume.
(b) You will be considered to have a share in the insured crop
if, under the processor contract, you retain control of the acreage
on which the sweet corn is grown, you are at risk of loss, and the
processor contract provides for delivery of sweet corn under
specified conditions and at a stipulated base contract price.
(c) A commercial sweet corn producer who is also a processor may
establish an insurable interest if the following requirements are
met:
(1) The producer must comply with these Crop Provisions;
(2) Prior to the sales closing date, the Board of Directors or
officers of the processor must execute and adopt a resolution that
contains the same terms as an acceptable processor contract. Such
resolution will be considered a processor contract under this
policy; and
(3) Our inspection reveals that the processing facilities comply
with the definition of a processor contained in these Crop
Provisions.
8. Insurable Acreage.
In addition to the provisions of section 9 of the Basic
Provisions:
(a) Any acreage of the insured crop that is damaged before the
final planting date, to the extent that the majority of producers in
the area would normally not further care for the crop, must be
replanted unless we agree that it is not practical to replant; and
(b) We will not insure any acreage that does not meet the
rotation requirements, if applicable, contained in the Special
Provisions.
9. Insurance Period.
In lieu of the provisions contained in section 11 of the Basic
Provisions, regarding the end of the insurance period, insurance
ceases at the earlier of:
(a) The date the sweet corn:
(1) Was destroyed;
(2) Should have been harvested but was not harvested;
(3) Was abandoned; or
(4) Was harvested;
(b) The date you harvest sufficient production to fulfill your
processor contract if the processor contract stipulates a specific
amount of production to be delivered;
(c) Final adjustment of a loss; or
(d) Unless otherwise agreed to in writing, the calendar date for
the end of the insurance period in which the sweet corn would
normally be harvested as follows:
(1) September 30 in Malheur County, Oregon, all Idaho counties,
and all Iowa counties;
(2) October 20 in all other Oregon counties, and in all
Washington counties; or
(3) September 20 in all other states.
10. Causes of Loss.
In accordance with the provisions of section 12 of the Basic
Provisions:
(a) Insurance is provided only against the following causes of
loss that occur during the insurance period:
(1) Adverse weather conditions, including:
(i) Excessive moisture that prevents harvesting equipment from
entering the field or that prevents the timely operation of
harvesting equipment; and
(ii) Abnormally hot or cold temperatures that cause an
unexpected number of acres over a large producing area to be ready
for harvest at the same time, affecting the timely harvest of a
large number of such acres or the processing of such production is
beyond the capacity of the processor, either of which causes the
acreage to be bypassed.
(2) Fire;
(3) Insects, but not damage due to insufficient or improper
application of pest control measures;
(4) Plant disease, but not damage due to insufficient or
improper application of disease control measures or as otherwise
limited by the Special Provisions;
(5) Wildlife;
(6) Earthquake;
(7) Volcanic eruption; or
(8) Failure of the irrigation water supply, if due to a cause of
loss listed in section 10(a)(1) through (7) 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 any loss of production due
to:
(1) Bypassed acreage because of:
(i) The breakdown or non-operation of equipment or facilities;
or
(ii) The availability of a crop insurance payment. We may deny
any indemnity immediately in such circumstance or, if an indemnity
has been paid, require you to repay it to us with interest at any
time acreage was bypassed due to the availability of a crop
insurance payment; or
(2) Your failure to follow the requirements contained in the
processor contract.
11. Duties In The Event of Damage or Loss.
In addition to the requirements of section 14 of the Basic
Provisions, you must give us notice:
(a) Not later than 48 hours after:
(1) Total destruction of the sweet corn on the unit; or
(2) Discontinuance of harvest on a unit on which unharvested
production remains.
(b) Within 3 days after the date harvest should have started on
any acreage that will not be harvested unless we have previously
released the acreage. You must also provide acceptable documentation
of the reason the acreage was bypassed. Failure to provide such
documentation will result in our determination that the acreage was
bypassed due to an uninsured cause of loss. If the crop will not be
harvested and you wish to destroy the crop, you must leave
representative samples of the unharvested crop for our inspection.
The samples must be at least 10 feet wide and extend the entire
length of each field in each unit. The samples must not be destroyed
until the earlier of our inspection or 15 days after notice is given
to us; and
[[Page 65344]]
(c) At least 15 days prior to the beginning of harvest if you
intend to claim an indemnity on any unit, or immediately if damage
is discovered during the 15 day period or during harvest, so that we
may inspect any damaged production. If you fail to notify us and
such failure results in our inability to inspect the damaged
production, we will consider all such production to be undamaged and
include it as production to count. You are not required to delay
harvest.
12. Settlement of Claim.
(a) We will determine your loss on a unit basis. In the event
you are unable to provide separate, acceptable production records:
(1) For any optional units, we will combine all optional units
for which such production records were not provided; or
(2) For any basic units, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for the units.
(b) In the event of loss or damage covered by this policy, we
will settle your claim by:
(1) Multiplying the insured acreage by its respective production
guarantee, by type if applicable;
(2) Multiplying each result of section 12(b)(1) by the
respective price election, by type if applicable;
(3) Totaling the results of section 12(b)(2) if there are more
than one type;
(4) Multiplying the total production to count (see section
12(c)), for each type if applicable, by its respective price
election;
(5) Totaling the results of section 12(b)(4) if there are more
than one type;
(6) Subtracting the results of section 12(b)(4) from the results
of section 12(b)(2) if there is only one type or subtracting the
results of section 12(b)(5) from the result of section 12(b)(3) if
there are more than one type; and
(7) Multiplying the result of section 12(b)(6) by your share.
For example:
You have a 100 percent share in 100 acres of type A processing
sweet corn in the unit, with a guarantee of 3.0 tons per acre and a
price election of $50.00 per ton. You are only able to harvest 200
tons. Your indemnity would be calculated as follows:
(1) 100 acres x 3.0 tons=300 tons guarantee;
(2) 300 tons x $50.00 price election=$15,000.00 value of guarantee;
(4) 200 tons x $50.00 price election=$10,000.00 value of production
to count;
(6) $15,000.00-$10,000.00=$5,000.00 loss;
(7) $5,000.00 x 100 percent=$5,000.00 indemnity payment.
You also have a 100 percent share in 100 acres of type B
processing sweet corn in the same unit, with a guarantee of 4.0 tons
per acre and a price election of $45.00 per ton. You are only able
to harvest 350 tons. Your total indemnity for both types A and B
would be calculated as follows:
(1) 100 acres x 3.0 tons=300 tons guarantee for type A, and
100 acres x 4.0 tons=400 tons guarantee for type B;
(2) 300 tons x $50.00 price election=$15,000.00 value of guarantee
for type A, and
400 tons x $45.00 price election=$18,000.00 value of guarantee
for type B;
(3) $15,000.00 + $18,000.00=$33,000.00 total value of guarantee;
(4) 200 tons x $50.00 price election=$10,000.00 value of production
to count for type A, and
350 tons x $45.00 price election=$15,750.00 value of production
to count for type B;
(5) $10,000.00+$15,750.00=$25,750.00 total value of production to
count;
(6) $33,000.00-$25,750.00=$7,250.00 loss;
(7) $7,250.00 loss x 100 percent=$7,250.00 indemnity payment.
(c) The total production to count, specified in tons of unhusked
ear weight, from all insurable acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
(A) That is abandoned;
(B) That is put to another use without our consent;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide production records that are
acceptable to us.
(ii) Production lost due to uninsured causes.
(iii) Production on acreage that is bypassed unless the acreage
was bypassed due to an insured cause of loss which resulted in
production which would not be acceptable under the terms of the
processor contract.
(iv) Potential production on insured acreage that you intend to
put to another use or abandon, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for
that acreage will end when you put the acreage to another use or
abandon the crop. If agreement on the appraised amount of production
is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to
leave intact, and provide sufficient care for, representative
samples of the crop in locations acceptable to us (The amount of
production to count for such acreage will be based on the harvested
production or appraisals from the samples at the time harvest should
have occurred. If you do not leave the required samples intact, or
fail to provide sufficient care for the samples, our appraisal made
prior to giving you consent to put the acreage to another use will
be used to determine the amount of production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested
production, or our reappraisal if additional damage occurs and the
crop is not harvested.
(2) All harvested processing sweet corn production from the
insurable acreage. The amount of such production will be:
(i) The usable tons of processing sweet corn shown on the
processor settlement sheet, if available; or
(ii) Determined by dividing the dollar amount paid, payable, or
which should have been paid under the terms of the processor
contract for the quantity of the sweet corn delivered to the
processor by the base contract price per ton; and
(3) All harvested processing sweet corn production from any
other insurable units that have been used to fulfill your processor
contract for this unit.
The total production to count will be expressed as an unhusked
ear weight. Any other measure of production will be converted to an
unhusked ear weight equivalent.
13. Late Planting.
A late planting period is not applicable to processing sweet
corn unless allowed by the Special Provisions and you provide
written approval from the processor by the acreage reporting date
that it will accept the production from the late planted acres when
it is expected to be ready for harvest.
14. Prevented Planting.
Your prevented planting coverage will be 40 percent of your
production guarantee for timely planted acreage. If you have limited
or additional levels of coverage, as specified in 7 CFR part 400,
subpart T, and pay an additional premium, you may increase your
prevented planting coverage to the levels specified in the actuarial
documents.
Signed in Washington, D.C., on December 5, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-32493 Filed 12-11-97; 8:45 am]
BILLING CODE 3410-08-P
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.