Common Crop Insurance Regulations, Onion Crop Insurance Provisions; and Onion Endorsement

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 401 and 457

Common Crop Insurance Regulations, Onion Crop Insurance

Provisions; and Onion Endorsement

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes

specific crop provisions for the insurance of onions. 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 onion

endorsement with the Common Crop Insurance Policy for ease of use and

consistency of terms, and to restrict the effect of the current Onion

Endorsement to the 1997 and prior crop years.

DATES: Written comments, data, and opinions on this proposed rule will

be accepted until close of business March 17, 1997, and will be

considered when the rule is to be made final. The comment period for

information collections under the Paperwork Reduction Act of 1995

continues through April 14, 1997.

ADDRESSES: Interested persons are invited to submit written comments to

the Chief, Product Development Branch, Federal Crop Insurance

Corporation, United States Department of Agriculture, 9435 Holmes Road,

Kansas City, MO 64131. Written comments will be available for public

inspection and copying in room 0324, South Building, United States

Department of Agriculture, 14th and Independence Avenue, SW.,

Washington, DC., 8:15-4:45, est, Monday through Friday, except

holidays.

FOR FURTHER INFORMATION CONTACT: Bill Klein, Program Analyst, Research

and Development Division, Product Development Branch, Federal Crop

Insurance Corporation, at the Kansas City, MO, address listed above,

telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

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

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

therefore, has not been reviewed by OMB.

Paperwork Reduction Act of 1995

The title of this information collection is ``Catastrophic Risk

Protection Plan and Related Requirements including, Common Crop

Insurance Regulations; Onion Crop Insurance Provisions.'' The

information to be collected includes a crop insurance application and

an acreage report. Information collected from the application and

acreage report is electronically submitted to FCIC by the reinsured

companies. Potential respondents to this information collection are

producers of onions that are eligible for Federal crop insurance.

The information requested is necessary for the insurance company

and FCIC to provide insurance and reinsurance, determine eligibility,

determine the correct parties to the agreement or contract, determine

and collect premiums or other monetary amounts, and pay benefits.

All information is reported annually. The reporting burden for this

collection of information is estimated to average 16.9 minutes per

response for each of the 3.6 responses from approximately 1,242,510

respondents. The total annual burden on the public for this information

collection is 1,889,363 hours.

FCIC is requesting comments on the following: (a) Whether the

proposed collection of information is necessary for the proper

performance of the functions of the agency, including whether the

information shall have practical utility; (b) the accuracy of the

agency's estimate of the burden of the proposed collection of

information; (c) ways to enhance the quality, utility, and clarity of

the information to be

[[Page 6740]]

collected; and (d) ways to minimize the burden of the collection of

information on respondents, including through the use of automated

collection techniques or other forms of information gathering

technology.

Comments regarding paperwork reduction should be submitted to the

Desk Officer for Agriculture, Office of Information and Regulatory

Affairs, Office of Management and Budget, Washington, DC. 20503.

The Office of Management and Budget (OMB) is required to make a

decision concerning the collections of information contained in these

proposed regulations between 30 and 60 days after submission to OMB.

Therefore, a comment to OMB is best assured of having full effect if

OMB receives it within 30 days of publication. This does not affect the

deadline for the public to comment on the proposed regulation.

Unfunded Mandates Reform Act of 1995

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

Law 104-4, establishes requirements for Federal agencies to assess the

effects of their regulatory actions on state, local, and tribal

governments and the private sector. This rule contains no Federal

mandates (under the regulatory provisions of Title II of the UMRA) for

State, local, and tribal governments or the private sector. Thus, this

rule is not subject to the requirements of sections 202 and 205 of the

UMRA.

Executive Order No. 12612

It has been determined under section 6(a) of Executive Order No.

12612, Federalism, that this rule does not have sufficient federalism

implications to warrant the preparation of a Federalism Assessment. The

provisions contained in this rule will not have a substantial direct

effect on states or their political subdivisions, or on the

distribution of power and responsibilities among the various levels of

government.

Regulatory Flexibility Act

This regulation will not have a significant impact on a substantial

number of small entities. New provisions included in this rule will not

impact small entities to a greater extent than large entities. Under

the current regulations, a producer is required to complete an

application and acreage report. If the crop is damaged or destroyed,

the insured is required to give notice of loss and provide the

necessary information to complete a claim for indemnity. The insured

must also annually certify to the number of acres and the previous

years production, if adequate records are available to support the

certification, or receive a transitional yield. The producer must

maintain the production records to support the certification

information for at least three years. This regulation does not alter

those requirements. The amount of work required of the insurance

companies delivering and servicing these policies will not increase

significantly from the amount of work currently required. This rule

does not have any greater or lesser impact on the producer. Therefore,

this action is determined to be exempt from the provisions of the

Regulatory Flexibility Act (5 U.S.C. 605), and no Regulatory

Flexibility Analysis was prepared.

Federal Assistance Program

This program is listed in the Catalog of Federal Domestic

Assistance under No. 10.450.

Executive Order No. 12372

This program is not subject to the provisions of Executive Order

No. 12372, which require intergovernmental consultation with state and

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

published at 48 FR 29115, June 24, 1983.

Executive Order No. 12778

The Office of the General Counsel has determined that these

regulations meet the applicable standards provided in sections 2(a) and

2(b)(2) of Executive Order No. 12778. The provisions of this rule will

not have 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

FCIC proposes to add to the Common Crop Insurance Regulations (7

CFR part 457), a new section, 7 CFR 457.135, Onion 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 onions found at 7 CFR 401.126. FCIC

also proposes to amend 401.126 to limit its effect to the 1997 and

prior crop years. FCIC will later publish a regulation to remove and

reserve Sec. 401.126

This rule makes minor editorial and format changes to improve the

Onion Endorsement's compatibility with the Common Crop Insurance

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

provisions for insuring onions as follows:

1. Section 1--Add definitions for the terms ``crop year,''

``days,'' ``direct marketing,'' ``FSA,'' ``final planting date,''

``good farming practices,'' ``hundredweight,'' ``interplanted,''

``irrigated practice,'' ``late planted,'' ``late planting period,''

``lifting or digging,'' ``non-storage onions,'' ``planted acreage,''

``practical to replant,'' ``prevented planting,'' ``production

guarantee (per acre),'' ``replanting,'' ``storage onions,'' ``timely

planted,'' ``topping,'' ``type,'' and ``written agreement,'' for

clarification. Add the definition of ``onion production'' to clearly

identify production to count for harvested and unharvested onions.

Current provisions do not provide this definition.

2. Section 3(b)--Add provisions that allow insurance for the onion

crop in three stages and provide the percentage of coverage and the

qualifications for each stage. Guarantees by stage will reduce

indemnities to reflect lower out-of-pocket production costs when a crop

loss occurs early in the growing season.

3. Section 4--Add a June 30 contract change date for states and

counties with an August 31 cancellation date and change the contract

change date to November 30 preceding the cancellation date for the

other states and counties. This maintains an adequate time period

between this date and the cancellation date revised to correspond to

the change in the sales closing date and comply with the Federal Crop

Insurance Reform Act of 1994, and allows producers sufficient time to

make informed risk management decisions. The current contract change

date is December 31.

4. Section 5--Add an August 31 cancellation and termination date

for states and counties with fall seeded non-storage type onions. The

cancellation and termination dates have been changed to February 1 for

all other onions in all states and counties. These changes are intended

to minimize program vulnerabilities which may exist

[[Page 6741]]

because insureds may be able to anticipate unfavorable growing

conditions and obtain indemnities to which they might otherwise not be

entitled.

5. Section 6--Revise the annual premium section to clarify that the

premium is based on the third stage production guarantee.

6. Section 7(b)--Add non-storage type onions as an insured crop to

provide crop insurance protection for producers of this commodity.

7. Section 7(c) (1) and (2)--Add provisions allowing insurance for

onions interplanted with a windbreak crop to protect the onion plants

when they are small and tender. This is a standard practice in certain

areas of the country which have sandy soils and frequently experience

strong winds. This section also allows insurance for onions

interplanted into a grass or legume provided this practice would not

adversely affect the amount or quality of the production.

8. Section 8(a)--Clarify that acreage of the onion crop is not

insurable if it does not meet the stated rotation requirements, unless

different rotational requirements are shown on the Special Provisions

or we agree in writing to insure the acreage.

9. Section 8(b)--Clarify that any acreage damaged prior to the

final planting date must be replanted unless the insurance provider

agrees that it is not practical to replant.

10. Section 9(b)(1)--Add dates for the end of insurance period for

fall planted non-storage onions in Georgia, Oregon, and Texas, and for

spring planted non-storage onions. The date for the end of insurance

period in Colorado was changed from September 30 to October 15, since

it is a normal practice to harvest onions after September 30.

11. Section 9(b)(2)--Specify the end of insurance period as 2 days

after lifting or digging of non-storage onions and 14 days after

lifting or digging of storage type onions to allow appropriate time for

field drying without creating an unacceptable risk to the insurance

provider.

12. Section 10(a) (3)and (4)--Add provisions to clarify that any

losses caused by insufficient or improper application of pest or

disease control measures are not an insured cause of loss.

13. Section 10(b)--Add provisions to clarify that we do not insure

against any loss of production due to damage that occurs or becomes

evident after the end of the insurance period, including, but not

limited to, damage that occurs after the onions have been placed in

storage.

14. Section 11--Add provisions to allow producers to receive a

replanting payment when it is considered practical to replant.

Provisions are also added which provide that replanting with a practice

that is uninsurable as an original planting will cause the liability

for the unit to be reduced by the amount of the replanting payment.

15. Section 12(b)--Require the producer to give notice at least 15

days prior to harvest so a preharvest inspection can be made if

production is to be sold by direct marketing. This appraisal may be

used to determine the amount of production to count.

16. Section 13(b)--Remove the provision that required multiplying

the total production to be counted by the greater of the local market

price at the time the onions are appraised or by the respective price

election. When the onion insurance was originally offered this language

was considered necessary due to the extreme swings in the market price.

The market appears to be less volatile today, and the ``greater of''

language can result in a hardship to producers when they have appraised

production that is valued at the local market price, and that price is

considerably higher than their price election. The new provision

requires multiplying the total production to be counted of each type,

if applicable, by the respective price election the producer chose.

17. Section 13(d)--Add provisions that allow for no production to

be counted for the unit or portion of a unit if the appraised percent

of damage exceeds the percentage shown by type in the Special

Provisions, unless onions from that acreage are subsequently harvested

and sold.

18. Section 13(e)--Add provisions to clarify that the extent of

damage must be determined not later than the time onions are placed in

storage, if the production is stored prior to sale, or the date they

are delivered to a packer, processor, or other handler if the

production is not stored.

19. Section 14--Add late and prevented planting provisions to the

policy. This insurance coverage was previously only provided by the

execution of a separate Late Planting Agreement Option. To ease the

administrative burden, this coverage is now included in the policy and

the premium included in the premium owed for the unit.

20. Section 15--Add provisions for providing insurance coverage by

written agreement. FCIC has a long standing policy of permitting

certain modifications of the insurance contract by written agreement

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

specific insured in certain instances. The new section will cover

application for and duration of written agreements.

List of Subjects in 7 CFR Parts 401 and 457

Crop Insurance, Onion Endorsement, Onion.

Proposed Rule

For the reasons set forth in the preamble, the Federal Crop

Insurance Corporation hereby proposes to amend 7 CFR parts 401 and 457,

as follows:

PART 401--GENERAL CROP INSURANCE REGULATIONS--REGULATIONS FOR THE

1988 AND SUBSEQUENT CONTRACT YEARS

1. The authority citation for 7 CFR part 401 continues to read as

follows:

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

2. The introductory text of Sec. 401.126 is revised to read as

follows:

Sec. 401.126 Onion Endorsement.

The provisions of the Onion Endorsement for the 1988 through 1997

crop years are as follows:

* * * * *

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

1994 AND SUBSEQUENT CONTRACT YEARS

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

follows:

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

4. Section 457.135 is added to read as follows:

Sec. 457.135 Onion Crop Insurance Provisions.

The Onion 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:

ONION CROP PROVISIONS

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

these Crop Provisions, and the Special Provisions, the Special

Provisions will control these Crop Provisions and the Basic

Provisions, and these Crop Provisions will control the Basic

Provisions.

1. Definitions

Crop year--The time period in which the onions are normally

grown and designated by the calendar year in which the onions are

normally harvested.

[[Page 6742]]

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 harvesting 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.

Final planting date--The date contained in the Special

Provisions for the insured crop by which the crop must initially be

planted in order to be insured for the full production guarantee.

Good farming practices--The cultural practices generally in use

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

and produce at least the yield used to determine the production

guarantee and are those recognized by the Cooperative State

Research, Education, and Extension Service as compatible with

agronomic and weather conditions in the county.

Harvest--Removal of the onions from the field after topping and

lifting or digging.

Hundredweight--100 pounds avoirdupois.

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

a manner that does not permit separate agronomic maintenance or

harvest of the insured crop.

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.

Late planted--Acreage planted to the insured crop during the

late planting period.

Late planting period--The period that begins the day after the

final planting date for the insured crop and ends 25 days after the

final planting date.

Lifting or digging--A pre-harvest process in which the onion

roots are severed from the soil and the onion bulbs laid on the

surface of the soil for drying in the field.

Non-storage onions--Generally of a Bermuda, Granex, or Grano

variety, or hybrids developed from these varieties, which are dried

only a short time, and consequently have a higher moisture content.

They are thinner skinned, contain a higher sugar content, and are

generally milder in flavor than storage type onions. Due to a higher

moisture and sugar content, they are subject to deterioration both

on the surface and internally if they are not used shortly after

harvest.

Onion production--All onions of recoverable size and condition,

with excess dirt and foliage material removed, and of storable or

marketable condition, commonly called ``first net weight.'' In

addition to small onions lost during harvesting and initial

cleaning, the Special Provisions may specify a minimum onion size,

based on the ``U.S. or other Standards for Repacked Onions,'' to be

used to determine onion production to count.

Planted acreage--Land in which seed or onion plants have been

placed by a machine appropriate for the insured crop and planting

method, or in which onion plants have been transplanted by hand, at

the correct depth, into a seedbed that has been properly prepared

for the planting method and production practice. Onions must

initially be planted in rows to be considered planted.

Practical to replant--In lieu of the definition of ``Practical

to replant'' contained in section 1 of the Basic Provisions

(Sec. 457.8), 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 after the end of the late planting

period unless replanting is generally occurring in the area.

Prevented planting--Inability to plant the insured crop with

proper equipment by the final planting date designated in the

Special Provisions for the insured crop in the county or the end of

the late planting period. You must have been unable to plant the

insured crop due to an insured cause of loss that has prevented the

majority of producers in the surrounding area from planting the same

crop.

Production guarantee (per acre):

(a) First stage production guarantee--Thirty-five percent of the

third stage production guarantee.

(b) Second stage production guarantee--Sixty percent of the

third stage production guarantee.

(c) Third stage production guarantee--The quantity of onions (in

hundredweight) determined by multiplying the approved yield per acre

by the coverage level percentage you elect.

Replanting--Performing the cultural practices necessary to

replace the onion seed or onion transplants, and then replacing the

onion seed or onion transplants in the insured acreage with the

expectation of growing a successful crop.

Storage onions--Onions other than a Bermuda, Granex, or Grano

variety, or hybrids developed from these varieties which are dried

to a lower moisture content, are firmer, have more outer layers of

paper-like skin, and are darker in color than non-storage onions.

They are generally more pungent, have a lower sugar content, and can

normally be stored for several months under proper conditions prior

to use without deterioration.

Timely planted--Planted on or before the final planting date

designated in the Special Provisions for the insured crop in the

county.

Topping--A pre-harvest process to initiate curing, in which

onion foliage is removed or bent over.

Type--A category of onions as identified in the Special

Provisions.

Written agreement--A written document that alters designated

terms of this policy in accordance with section 15.

2. Unit Division

(a) Unless limited by the Special Provisions, a unit as defined

in section 1 (Definitions) of the Basic Provisions (Sec. 457.8),

(basic unit) may be divided into optional units if, for each

optional unit you meet all the conditions of this section or if a

written agreement to such division exists.

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

basis other than as described in this section.

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

combine all optional units that are not in compliance with these

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

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

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

these provisions is determined to be inadvertent, and the optional

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

premium paid for the optional units that have been combined will be

refunded to you.

(d) All optional units you selected for the crop year must be

identified on the acreage report for that crop year.

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

unit:

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

of planted acreage and production for each optional unit for at

least the last crop year used to determine your production

guarantee;

(2) You must plant the crop in a manner that results in a clear

and discernable break in the planting pattern at the boundaries of

each optional unit;

(3) 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

after loss adjustment is completed by us; and

(4) Optional units meet one or more of the following, as

applicable:

(i) Optional Units Based on Irrigated Acreage or Non-Irrigated

Acreage To qualify as separate irrigated and non-irrigated optional

units, the non-irrigated acreage may not continue into the irrigated

acreage in the same rows or planting pattern. The irrigated acreage

may not extend beyond the point at which the irrigation system can

deliver the quantity of water needed to produce the yield on which

your guarantee is based, except the corners of a field in which a

center-pivot irrigation system is used will be considered as

irrigated acreage if separate acceptable records of production from

the corners are not provided. If the corners of a field in which the

center pivot irrigation system is used do not qualify as a separate

non-irrigated optional unit, they will be a part of the unit

containing the irrigated acreage. However, non-irrigated acreage

that is not a part of a field in which a center pivot irrigation

system is used may qualify as a separate optional unit provided all

requirements of this section are met; or

(ii) Optional Units Based on Onion Type To qualify for a

separate optional unit by type, the onions must be designated by

type in the Special Provisions.

[[Page 6743]]

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

Indemnities

(a) In addition to the requirements of section 3 (Insurance

Guarantees, Coverage Levels, and Prices for Determining Indemnities)

of the Basic Provisions (Sec. 457.8), you may select only one price

election for all the onions in the county insured under this policy

unless the Special Provisions provide different price elections by

type, in which case you may select one price election for each onion

type designated in the Special Provisions. The price elections you

choose for each type must have the same percentage relationship to

the maximum price offered by us for each type. For example, if you

choose 100 percent of the maximum price election for one type, you

must also choose 100 percent of the maximum price election for all

other types.

(b) The production guarantees in the actuarial table are the

third stage guarantees. The stages are:

(1) First stage extends from planting until the emergence of the

third leaf for direct seeded onions.

(2) Second stage extends from emergence of the fourth leaf for

direct seeded onions, or from transplanting of onion plants, until

25 percent of the acreage in the unit has been subjected to topping

and lifting or digging.

(3) Third stage extends from the completion of topping and

lifting or digging on more than 25 percent of the applicable acreage

in the unit until the end of the insurance period.

(c) The production guarantee will be expressed in hundredweight.

(d) Any acreage of onions damaged in the first or second stage,

to the extent that producers in the area would not normally further

care for the onions, will be deemed to have been destroyed even

though you may continue to care for the onions. The production

guarantee for such acreage will not exceed the production guarantee

for the stage in which the damage occurred.

4. Contract Changes

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

Provisions (Sec. 457.8)), the contract change date is June 30

preceding the cancellation date for counties with an August 31

cancellation date and November 30 preceding the cancellation date

for all other counties.

5. Cancellation and Termination Dates

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

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

cancellation and termination dates are:

------------------------------------------------------------------------

Cancellation and termination

State and county date

------------------------------------------------------------------------

All Georgia Counties; Umatilla County, August 31.

Oregon; Kinney, Uvalde, Medina, Bexar,

Wilson, Karnes, Bee, and San Patricio,

Counties, Texas, and all Texas

Counties lying south thereof; Walla

Walla County, Washington.

All other states and counties.......... February 1.

------------------------------------------------------------------------

6. Annual Premium

In lieu of the provisions of section 7(c) (Annual Premium) of

the Basic Provisions (Sec. 457.8), the annual premium amount is

computed by multiplying the third stage production guarantee by the

price election, times the premium rate, times the insured acreage,

times your share at the time of planting, and times any applicable

premium adjustment factors contained in the Actuarial Table.

7. Insured Crop

In accordance with section 8 (Insured Crop of the Basic

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

(excluding green (bunch) or seed onions, chives, garlic, leeks, and

scallions) in the county for which a premium rate is provided by the

actuarial table:

(a) In which you have a share;

(b) That are either of a storage type onion planted for harvest

as dry onions (bulb onions) or of a non-storage type onion planted

for harvest as partially dried fresh market bulb onions;

(c) That are not (unless allowed by the Special Provisions or by

written agreement):

(1) Interplanted with another crop unless the onions are

interplanted with a windbreak crop and the windbreak crop is

destroyed within 70 days after completion of seeding or

transplanting; or

(2) Planted into an established grass or legume.

8. Insurable Acreage

In addition to the provisions of section 9 (Insurable Acreage)

of the Basic Provisions (Sec. 457.8), we will not insure any acreage

of the insured crop that:

(a) Was planted to storage or non-storage bulb onions, green

(bunch) onions, seed onions, chives, garlic, leeks, shallots, or

scallions the previous year unless different rotation requirements

are specified in the Special Provisions or we agree in writing to

insure such acreage; or

(b) 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 and is not replanted, unless we agree that it is

not practical to replant.

9. Insurance Period

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

Period) of the Basic Provisions (Sec. 457.8), the acreage must be

planted on or before the final planting date designated in the

Special Provisions except as allowed in section 14(c).

(b) The insurance period ends at the earliest of:

(1) The calendar date for the end of the insurance period as

follows:

(i) June 15 for Vidalia and any other fall planted, non-storage

type onions planted in the State of Georgia;

(ii) July 15 for 1015 Super Sweets, and any other fall planted

non-storage type onions in the State of Texas;

(iii) July 31 for Walla Walla Sweets, and any other fall planted

non-storage type onions in the states of Oregon and Washington;

(iv) August 31 for all spring planted non-storage type onions;

and

(v) October 15 for all other insurable onions; or

(2) The following event for each unit or portion of a unit:

(i) Two days after lifting or digging of non-storage type

onions;

(ii) Fourteen days after lifting or digging of storage type

onions; or

(iii) Removal of the onions from the unit.

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 within the

insurance period:

(1) Adverse weather conditions;

(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;

(5) Wildlife;

(6) Earthquake;

(7) Volcanic eruption; or

(8) Failure of the irrigation water supply, if caused by an

insured peril that occurs during the insurance period.

(b) In addition to the causes of loss not insured against as

listed in section 12 (Causes of Loss) of the Basic Provisions

(Sec. 457,8), we will not insure against any loss of production due

to damage that occurs or becomes evident after the end of the

insurance period, including, but not limited to, damage that occurs

after onions have been placed in storage.

11. Replanting Payment

(a) In accordance with section 13 (Replanting Payment) of the

Basic Provisions (Sec. 457.8), a replanting payment is allowed if

the crop is damaged by an insurable cause of loss to the extent that

the remaining stand will not produce at least 90 percent of the

third stage production guarantee for the acreage and we determine

that it is practical to replant.

(b) The maximum amount of the replanting payment per acre will

be the lesser of 7 percent of the third stage production guarantee

or 18 hundredweight, multiplied by your price election, multiplied

by your insured share.

(c) When onions are replanted using a practice that is

uninsurable as an original planting, the liability for the unit will

be reduced by the amount of the replanting payment. The premium

amount will not be reduced.

12. Duties in the Event of Damage or Loss

(a) In accordance with the requirements of section 14 (Duties in

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

the representative samples of the unharvested

[[Page 6744]]

crop must be at least 10 feet wide and extend the entire length of

each field in the unit. The samples must not be harvested or

destroyed until the earlier of our inspection or 15 days after

harvest of the balance of the unit is completed.

(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 that is not less than the

production guarantee per acre if such failure results in our

inability to make the required appraisal.

13. Settlement of Claim

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

you are unable to provide production records:

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

for which acceptable 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 13(b)(1) by the

respective price election, by type if applicable;

(3) Totaling the results in section 13(b)(2);

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

if applicable, (see section 13(c)) by the respective price election

you chose;

(5) Totaling the results of section 13(b)(4);

(6) Subtracting the result in section 13(b)(5) from the result

in 13(b)(3); and

(7) Multiplying the result in section 13(b)(6) by your share.

(c) The total production (in hundredweight) to count 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 direct marketed to consumers if you fail to meet the

requirements contained in section 12;

(C) Put to another use without our consent;

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

(E) For which you fail to provide production records that are

acceptable to us;

(ii) Production lost due to uninsured causes;

(iii) Unharvested onion production (mature unharvested

production may be adjusted based on the percent of damage in

accordance with section 13(d));

(iv) The appraised production that exceeds the difference

between the first or second stage (as applicable) and the third

stage production guarantee for acreage that does not qualify for the

third stage guarantee, if such acreage is not subject to section

13(c)(1) (i) and (ii); and

(v) 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 if you put the acreage to another use or

abandon the crop.

(vi) 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);

(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; or

(C) If due to the nature of the damage, any representative

sample left would be likely to deteriorate further, and no agreement

is reached, no release of the crop will be made.

(2) All harvested onion production from the insurable acreage.

(d) If the appraised percent of damage exceeds the percentage

shown by type in the Special Provisions, no production will be

counted for that unit or portion of a unit unless onions from that

acreage are subsequently harvested and sold.

(e) The extent of any damage must be determined not later than

the time onions are placed in storage if the production is stored

prior to sale, or the date they are delivered to a packer,

processor, or other handler if production is not stored.

14. Late Planting and Prevented Planting

(a) In lieu of provisions contained in the Basic Provisions

(Sec. 457.8), regarding acreage initially planted after the final

planting date and the applicability of a Late Planting Agreement

Option, insurance will be provided for acreage planted to the

insured crop during the late planting period (see section 14 (c))

and you were prevented from planting (see section 14 (d)). These

coverages provide reduced production guarantees. The premium amount

for late planted acreage and eligible prevented planting acreage

will be the same as that for timely planted acreage. If the amount

of premium you are required to pay (gross premium less our subsidy)

for late planted acreage or prevented planting acreage exceeds the

liability on such acreage, coverage for those acres will not be

provided, no premium will be due, and no indemnity will be paid for

such acreage.

(b) If you were prevented from planting, you must provide

written notice to us not later than the acreage reporting date.

(c) Late Planting

(1) For onion acreage planted during the late planting period,

the production guarantee for each acre will be reduced for each day

planted after the final planting date by:

(i) One percent (1%) per day for the 1st through the 10th day;

and

(ii) Two percent (2%) per day for the 11th through the 25th day.

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

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

dates the acreage is planted within the late planting period.

(3) If planting of onions continues after the final planting

date, or you are prevented from planting during the late planting

period, the acreage reporting date will be the later of:

(i) The acreage reporting date contained in the Special

Provisions for the insured crop; or

(ii) Five days after the end of the late planting period.

(d) Prevented Planting (Including Planting After the Late

Planting Period)

(1) If you were prevented from timely planting onions, you may

elect:

(i) To plant onions during the late planting period. The

production guarantee for such acreage will be determined in

accordance with section 14(c)(1);

(ii) Not to plant this acreage to any crop except a cover crop

not for harvest. You may also elect to plant the insured crop after

the late planting period. In either case, the production guarantee

for such acreage will be 40 percent of the production guarantee for

timely planted acres. For example, if your production guarantee for

timely planted acreage is 260 hundredweight per acre, your prevented

planting production guarantee would be 104 hundredweight per acre

(260 hundredweight multiplied by 0.40). If you elect to plant the

insured crop after the late planting period, production to count for

such acreage will be determined in accordance with section 13; or

(iii) Not to plant the intended crop but plant a substitute crop

for harvest, in which case:

(A) No prevented planting production guarantee will be provided

for such acreage if the substitute crop is planted on or before the

10th day following the final planting date for the insured crop; or

(B) A production guarantee equal to 20 percent of the production

guarantee for timely planted acres will be provided for such

acreage, if the substitute crop is planted after the 10th day

following the final planting date for the insured crop. If you

elected the Catastrophic Risk Protection Endorsement or excluded

this coverage, and plant a substitute crop, no prevented planting

coverage will be provided. For example, if your production guarantee

for timely planted acreage is 260 hundredweight per acre, your

prevented planting production guarantee would be 52 hundredweight

per acre (260 hundredweight multiplied by 0.20). You may elect to

exclude prevented planting coverage when a substitute crop is

planted for harvest and receive a reduction in the applicable

premium rate. If you wish to exclude this coverage, you must so

indicate, on or before

[[Page 6745]]

the sales closing date, on your application or on a form approved by

us. Your election to exclude this coverage will remain in effect

from year to year unless you notify us in writing on our form by the

applicable sales closing date for the crop year for which you wish

to include this coverage. All acreage of the crop insured under this

policy will be subject to this exclusion.

(2) Production guarantees for timely, late, and prevented

planting acreage within a unit will be combined to determine the

production guarantee for the unit. For example, assume you insure

one unit in which you have a 100 percent share. The unit consists of

150 acres, of which 50 acres were planted timely, 50 acres were

planted 7 days after the final planting date (late planted), and 50

acres were not planted but are eligible for a prevented planting

production guarantee. The production guarantee for the unit will be

computed as follows:

(i) For the timely planted acreage, multiply the per acre

production guarantee for timely planted acreage by the 50 acres

planted timely;

(ii) For the late planted acreage, multiply the per acre

production guarantee for timely planted acreage by 93 percent and

multiply the result by the 50 acres planted late; and

(iii) For prevented planting acreage, multiply the per acre

production guarantee for timely planted acreage by:

(A) Forty percent and multiply the result by the 50 acres you

were prevented from planting, if the acreage is eligible for

prevented planting coverage, and if the acreage is left idle for the

crop year, or if a cover crop is planted not for harvest. Prevented

planting compensation hereunder will not be denied because the cover

crop is hayed or grazed; or

(B) Twenty percent and multiply the result by the 50 acres you

were prevented from planting, if the acreage is eligible for

prevented planting coverage, and if you elect to plant a substitute

crop for harvest after the 10th day following the final planting

date for the insured crop (This paragraph (B) is not applicable, and

prevented planting coverage is not available under these crop

provisions, if you elected the Catastrophic Risk Protection

Endorsement or you elected to exclude prevented planting coverage

when a substitute crop is planted (see section 14(d)(1)(iii)).)

Your premium will be based on the result of multiplying the per

acre production guarantee for timely planted acreage by the 150

acres in the unit.

(3) You must have the inputs available to plant and produce the

intended crop with the expectation of at least producing the

production guarantee. Proof that these inputs were available may be

required.

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

Period) of the Basic Provisions (Sec. 457.8), the insurance period

for prevented planting coverage begins:

(i) On the sales closing date contained in the Special Provisions

for the insured crop in the county for the crop year the application

for insurance is accepted; or

(ii) For any subsequent crop year, on the sales closing date for

the insured crop in the county for the previous crop year, provided

continuous coverage has been in effect since that date. For example: If

you make application and purchase insurance for onions for the 1998

crop year, prevented planting coverage will begin on the 1998 sales

closing date for onions in the county. If the onion coverage remains in

effect for the 1999 crop year (is not terminated or canceled during or

after the 1998 crop year) prevented planting coverage for the 1999 crop

year began on the 1998 sales closing date. Cancellation for the

purposes of transferring the policy to a different insurance provider

when there is no lapse in coverage will not be considered terminated or

canceled coverage for the purpose of the preceding sentence.

(5) The acreage to which prevented planting coverage applies will

not exceed the total eligible acreage on all FSA Farm Serial Numbers in

which you have a share, adjusted for any reconstitution that may have

occurred on or before the sales closing date. Eligible acreage for each

FSA Farm Serial Number is determined as follows:

(i) If you participate in any program administered by the United

States Department of Agriculture that limits the number of acres that

may be planted for the crop year, the acreage eligible for prevented

planting coverage will not exceed the total acreage permitted to be

planted to the insured crop.

(ii) If you do not participate in any program administered by the

United States Department of Agriculture that limits the number of acres

that may be planted, and unless we agree in writing on or before the

sales closing date, eligible acreage will not exceed the greater of:

(A) The FSA base acreage for the insured crop, including acres that

could be flexed from another crop, if applicable;

(B) The number of acres planted to onions on the FSA Farm Serial

Number during the previous crop year; or

(C) One-hundred percent of the simple average of the number of

acres planted to onions during the crop years that you certified to

determine your yield.

(iii) Acreage intended to be planted under an irrigated practice

will be limited to the number of acres for which you had adequate

irrigation facilities prior to the insured cause of loss which

prevented you from planting.

(iv) A prevented planting production guarantee will not be provided

for any acreage:

(A) That does not constitute at least 20 acres or 20 percent of the

acreage in the unit, whichever is less (Acreage that is less than 20

acres or 20 percent of the acreage in the unit will be presumed to have

been intended to be planted to the insured crop planted in the unit,

unless you can show that you had the inputs available before the final

planting date to plant and produce another insured crop on the

acreage);

(B) For which the actuarial table does not designate a premium rate

unless a written agreement designates such premium rate;

(C) Used for conservation purposes or intended to be left unplanted

under any program administered by the United States Department of

Agriculture;

(D) On which another crop is prevented from being planted, if you

have already received a prevented planting indemnity, guarantee or

amount of insurance for the same acreage in the same crop year, unless

you provide adequate records of acreage and production showing that the

acreage has a history of double-cropping in each of the last 4 years in

which the insured crop was grown on the acreage;

(E) On which the insured crop is prevented from being planted, if

any other crop is planted and fails, or is planted and harvested, hayed

or grazed on the same acreage in the same crop year, (other than a

cover crop as specified in section 14 (d)(2)(iii)(A), or a substitute

crop allowed in section 14 (d)(2)(iii)(B)), unless you provide adequate

records of acreage and production showing that the acreage has a

history of double-cropping in each of the last 4 years in which the

insured crop was grown on the acreage;

(F) When coverage is provided under the Catastrophic Risk

Protection Endorsement if you plant another crop for harvest on any

acreage you were prevented from planting in the same crop year, even

if you have a history of double-cropping. If you have a Catastrophic

Risk Protection Endorsement and receive a prevented planting

indemnity, guarantee, or amount of insurance for a crop and are

prevented from planting another crop on the same acreage, you may

only receive the prevented planting indemnity, guarantee, or amount

of insurance for the crop on which the prevented planting indemnity,

guarantee, or amount of insurance is received; or

(G) For which planting history or conservation plans indicate

that the acreage would have remained fallow for crop rotation

purposes.

(v) For the purpose of determining eligible acreage for

prevented planting coverage, acreage for all units will be combined

and be reduced by the number of onion acres timely planted and late

planted. For example, assume you have 100 acres eligible for

prevented planting coverage in which you have a 100 percent share.

The acreage is located in a single FSA Farm Serial Number which you

insure as two separate optional units consisting of 50 acres each.

If you planted 60 acres of onions on one optional unit and 40 acres

of onions on the second

[[Page 6746]]

optional unit, your prevented planting eligible acreage would be

reduced to zero (i.e., 100 acres eligible for prevented planting

coverage minus 100 acres planted equals zero).

(6) In accordance with the provisions of section 6 (Report of

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

unit any insurable acreage that you were prevented from planting.

This report must be submitted on or before the acreage reporting

date. For the purpose of determining acreage eligible for a

prevented planting production guarantee, the total amount of

prevented planting and planted acres cannot exceed the maximum

number of acres eligible for prevented planting coverage. Any

acreage you report in excess of the number of acres eligible for

prevented planting coverage, or that exceeds the number of eligible

acres physically located in a unit, will be deleted from your

acreage report.

15. Written Agreements

Designated terms of this policy 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

15(e);

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

of the contract between the insurance provider and the insured that

will be in effect if the written agreement is not approved;

(c) If approved by us, 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 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 February 6, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 97-3328 Filed 2-12-97; 8:45 am]

BILLING CODE 3410-FA-P