Pepper Crop Insurance Regulations; and Common Crop Insurance Regulations, Fresh Market Pepper Crop Insurance Provisions

DEPARTMENT OF AGRICULTURE

7 CFR Parts 445 and 457

Pepper Crop Insurance Regulations; and Common Crop Insurance

Regulations, Fresh Market Pepper Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes

specific crop provisions for the insurance of fresh market peppers. 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 Pepper Crop Insurance Regulations under the Common Crop

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

restrict the effect of the current Pepper Crop Insurance Regulations to

the 1997 and prior crop years.

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

be accepted until close of business February 3, 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 March 3, 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, S.W.,

Washington, D.C., 8:15 a.m. to 4:45 p.m., est, Monday through Friday,

except holidays.

FOR FURTHER INFORMATION CONTACT: Linda Williams, 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, this rule 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; Fresh Market Pepper 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 fresh market peppers that are eligible for Federal crop

insurance.

The information requested is necessary for the reinsured companies

and FCIC to provide insurance and reinsurance, determine eligibility,

determine the correct parties to the agreement or contract, determine

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

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 1,755,015

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

collection is 2,676,932 hours.

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

proposed collection of information is necessary for the proper

performance of the functions of the agency, including whether the

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

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

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

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

the collection of information on respondents, including through the use

of automated collection techniques or other forms of information

gathering technology.

Comments regarding paperwork reduction should be submitted to the

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Desk Officer for Agriculture, Office of Information and Regulatory

Affairs, Office of Management and Budget, Washington, D.C. 20503.

OMB is required to make a decision concerning the collections of

information contained in these proposed regulations between 30 and 60

days after submission to OMB. Therefore, a comment to OMB is best

assured of having full effect if OMB receives it within 30 days of

publication. This does not affect the deadline for the public to

comment on the proposed regulation.

Unfunded Mandates Reform Act of 1995

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

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

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

governments and the private sector. This rule contains no Federal

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

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

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

UMRA.

Executive Order No. 12612

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

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

implications to warrant the preparation of a Federalism Assessment. The

provisions contained in this rule will not have a substantial direct

effect on states or their political subdivisions, or on the

distribution of 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. 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 a retroactive effect prior to the effective date. The

provisions of this rule will preempt state and local laws to the extent

such state and local laws are inconsistent herewith. The administrative

appeal provisions published at 7 CFR parts 11 and 780 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 Sec. 457.148, Fresh Market Pepper

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 fresh market peppers

found at 7 CFR part 445 (Pepper Crop Insurance Regulations). FCIC also

proposes to amend 7 CFR part 445 to limit its effect to the 1997 and

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

reserve part 445.

This rule makes minor editorial and format changes to improve the

Fresh Market Pepper Crop Insurance Regulations compatibility with the

Common Crop Insurance Policy. In addition, FCIC is proposing

substantive changes in the provisions for insuring peppers as follows:

1. Section 1--Add definitions for the terms ``bell pepper,''

``box,'' ``days,'' ``FSA,'' ``good farming practices,''

``interplanted,'' ``irrigated practice,'' ``mature bell pepper,''

``planted acreage,'' ``practical to replant,'' ``row width,'' and

``written agreement'' for clarification.

The definition of ``county'' contained in the Common Crop Insurance

Policy (Sec. 457.8), will be used to conform with other fresh market

crop policies. This change will require acreage located in a local

producing area bordering the county to be insured using the actuarial

materials for the county where the land is physically located.

Clarify the definition of crop year to specify that the crop year

begins on the first day of the earliest planting period for fall-

planted peppers and continues through the end of the insurance period

for spring-planted peppers.

Clarify the definition of excess rain to specify that it is an

amount of precipitation that is sufficient to directly damage the crop.

Previous regulations defined excessive rain as a minimum of 10 inches

of rain within a 24-hour period. This change will provide coverage for

crop damage that occurs when a lesser amount of precipitation is

received.

Change the definition of freeze to specify that freeze occurs when

low air temperatures cause ice to form in the cells of the plant or its

fruit to encompass conditions found in both frost and freeze.

Change the definition of harvest to clarify and remove the term

marketable. Peppers picked from the plant are considered harvested

whether marketable or not.

2. Section 3(a)--Clarify that an insured may select only one

coverage level (and the corresponding amount of insurance designated in

the Actuarial Table for the applicable planting period and practice)

for all the fresh market peppers in the county insured under the

policy.

3. Section 3(b)--Clarify that the amounts of insurance the insured

chooses for each planting period and practice must have the same

percentage relationship to the maximum amount of insurance offered by

FCIC for each planting period and practice.

4. Section 3(e)--Add language listing three stages of coverage for

direct seeded and transplanted acreage. This language was previously

contained in the actuarial documents.

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5. Section 9(a)--Add a provision that provides coverage on newly

cleared land or former pasture land that is planted to fresh market

peppers. It is a recognized practice to plant the insured crop on

tilled acreage that has been newly cleared or that has been pasture

land to eliminate some of the risk of disease and insect damage. This

change also will standardize current regulations for the fresh market

vegetable crops.

6. Section 9(b)(2)--Allow an insured to elect not to replant

damaged peppers that were initially planted within the fall or winter

planting periods, provided the final planting date for the planting

period has passed and damage occurs after 30 days of transplanting or

after 60 days of direct seeding. With this election, the insured may

collect an indemnity and that particular acreage will be uninsurable

for the next planting period. The insured may also elect to replant

such pepper acreage, collect a replanting payment under section 12, and

maintain the initial planting period coverage. This change incorporates

and standardizes procedures utilized in the fresh market vegetable

crops.

7. Section 10(f)(1)--Change the calendar date for the end of the

insurance period from 150 days to 165 days after the date of direct

seeding or replanting with seed. This change will allow expansion of

pepper crop insurance coverage into other areas.

8. Section 14(b)(2)--Modify claim for indemnity calculations by

providing calculations for catastrophic risk protection coverage and

for coverage other than catastrophic risk protection. This provision

includes the use of the catastrophic risk protection price election

equivalent to determine the total dollar of production to count for

indemnity purposes. This change is necessary to assure that producers

that are insured based on a dollar amount of insurance are indemnified

comparable to producers that are insured based on an actual production

history (APH) yield basis.

9. Section 14(c)(2)(iv)--Require the insured to continue to care

for acreage when the insured does not agree with the appraisal on that

acreage. Production to count for such acreage will be determined using

the harvested production if the crop is harvested, or our reappraisal

if the crop is not harvested.

10. Section 14(c)(3)--Change the value to count for harvested

production to the dollar amount obtained by subtracting the allowable

cost from the price received (this resulting price must not be less

than the minimum value shown in the Special Provisions), and

multiplying this result by the number of boxes harvested. Current

regulations allow the value of sold production to be as low as zero.

Also, clarify that harvested mature bell peppers that are damaged or

defective due to insurable causes and are not marketable will not be

counted as production. These changes are made to assure that the

minimum value specified in the Special Provisions will be the lowest

value considered for any marketable harvested production unless the

insured selected the minimum value option.

11. 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 the

procedures for and duration of written agreements.

12. Section 16--A minimum value option is added. The option allows

the value of each harvested box to be as low as zero. This option is

selected on the insurance application. This change will provide

consistency in regulations found in other fresh market vegetable crops.

List of Subjects in 7 CFR Parts 445 and 457

Crop insurance, Pepper crop insurance regulations, Fresh market

peppers.

Proposed Rule

Accordingly, as set forth in the preamble, the Federal Crop

Insurance Corporation hereby proposes to amend 7 CFR parts 445 and 457

as follows:

PART 445--PEPPER CROP INSURANCE REGULATIONS

1. The authority citation for 7 CFR part 445 is revised to read as

follows:

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

2. The subpart heading preceding Sec. 445.1 is revised to read as

follows:

Subpart--Regulations for the 1987 Through the 1997 Crop Years

3. Section 445.7 is amended by revising the introductory text of

paragraph (d) to read as follows:

Sec. 445.7 The application and policy.

* * * * *

(d) The application for the 1987 and succeeding crop years is found

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

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

the 1987 through 1997 crop years are as follows:

* * * * *

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

1994 AND SUBSEQUENT CONTRACT YEARS

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

follows:

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

5. 7 CFR part 457 is amended by adding a new Sec. 457.148 to read

as follows:

Sec. 457.148 Fresh Market Pepper Crop Insurance Provisions.

The Fresh Market Pepper Crop Insurance Provisions for the 1998 and

succeeding crop years are as follows:

FCIC policies:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Reinsured policies:

(Appropriate title for insurance provider)

Both FCIC and reinsured policies:

FRESH MARKET PEPPER 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.

Acre--43,560 square feet of land when row widths do not exceed

six feet, or if row widths exceed six feet, the land area on which

at least 7,260 linear feet of rows are planted.

Bell pepper--An annual pepper (of the capsicum annuum species,

grossum group), widely cultivated for its large, crisp, edible

fruit.

Box--One and one-ninth (1\1/9\) bushels of the insured crop.

Crop year--In lieu of the definition of ``crop year'' contained

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

crop year is a period of time that begins on the first day of the

earliest planting period for fall-planted peppers and continues

through the last day of the insurance period for spring-planted

peppers. The crop year is designated by the calendar year in which

spring-planted peppers are harvested.

Days--Calendar days.

Direct marketing--Sale of the insured crop directly to consumers

without the intervention of an intermediary such as a wholesaler,

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

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

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

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

Excess rain--An amount of precipitation sufficient to directly

damage the crop.

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

Department of Agriculture or a successor agency.

Freeze--The formation of ice in the cells of the plant or its

fruit, caused by low air temperatures.

Good farming practices--The cultural practices generally in use

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

and are those recognized by the Cooperative State Research,

Education, and Extension Service as compatible with agronomic and

weather conditions in the county.

Harvest--The picking of peppers on the unit.

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 for the insured crop to make normal

progress toward maturity.

Mature bell pepper--A pepper that has reached the stage of

development that will withstand normal handling and shipping.

Plant stand--The number of live plants per acre prior to the

occurrence of an insurable cause of loss.

Planted acreage--Land in which, for each planting period,

transplants or seed have been placed manually or by a machine

appropriate for the insured crop and planting method, at the correct

depth, into soil that has been properly prepared for the planting

method and production practice. For each planting period, peppers

must initially be planted in rows. Acreage planted in any other

manner will not be insurable unless otherwise provided by the

Special Provisions or by written agreement.

Planting period--The period of time designated in the Actuarial

Table in which the peppers must be planted to be considered fall,

winter or spring-planted peppers.

Potential production--The number of boxes of mature bell peppers

that the pepper plants will or would have produced per acre by the

end of the insurance period, assuming normal growing conditions and

practices.

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, marketing windows, and time to crop maturity, that replanting

to the insured crop will allow the crop to attain maturity prior to

the calendar date for the end of the insurance period (inability to

obtain plants or seed will not be considered when determining if it

is practical to replant).

Replanting--Performing the cultural practices necessary to

replace the pepper seed or transplants and then replacing the pepper

seed or transplants in the insured acreage with the expectation of

growing a successful crop.

Row width--The widest distance from the center of one row of

plants to the center of an adjacent row of plants.

Tropical depression--A system identified by the U.S. Weather

Service as a tropical depression, and for the period of time so

designated, including tropical storms, gales, and hurricanes.

Written agreement--A written document that alters designated

terms of a policy in accordance with section 15.

2. Unit Division.

(a) A unit as defined in section 1 (Definitions) of the Basic

Provisions (Sec. 457.8), (basic unit) will be divided by planting

period.

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

may be further divided into optional units if, for each optional

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

agreement for such further division exists.

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

combine all optional units that are not in compliance with these

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

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

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

these provisions is determined to be inadvertent, and the optional

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

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

you for the units combined.

(d) All optional units established for a crop year must be

identified on the acreage report for that crop year.

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

unit:

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

of planted acreage and production for each optional unit for at

least the last crop year in which the insured crop was planted;

(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

loss adjustment is completed by us; and

(4) Each optional unit must be located in a separate legally

identified section. In the absence of sections, we may consider

parcels of land legally identified by other methods of measure

including, but not limited to Spanish grants, railroad surveys,

leagues, labors, or Virginia Military Lands, as the equivalent of

sections for unit purposes. In areas that have not been surveyed

using the systems identified above, or another system approved by

us, or in areas where such systems exist but boundaries are not

readily discernable, each optional unit must be located in a

separate farm identified by a single FSA Farm Serial Number.

3. Amounts of Insurance and Production Stages.

(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

coverage level (and the corresponding amount of insurance designated

in the Actuarial Table for the applicable planting period and

practice) for all the peppers in the county insured under this

policy.

(b) The amount of insurance you choose for each planting period

and practice must have the same percentage relationship to the

maximum price offered by us for each planting period and practice.

For example, if you choose 100 percent of the maximum amount of

insurance for a specific planting period and practice, you must also

choose 100 percent of the maximum amount of insurance for all other

planting periods and practices.

(c) The amount of insurance available under the catastrophic

risk protection plan of insurance will be specified in the Actuarial

Table.

(d) The production reporting requirements contained in section 3

(Insurance Guarantees, Coverage Levels, and Prices for Determining

Indemnities) of the Basic Provisions (Sec. 457.8) do not apply to

fresh market peppers.

(e) The amounts of insurance per acre are progressive by stages

as follows:

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

Percent

of amount

of

Stage insurance Length of time if direct Length of time if

per acre seeded transplanted

that you

selected

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

1..... 65 From planting through the From planting through the

74th day after planting. 44th day after planting.

2..... 85 From the 75th day after From the 45th day after

planting until the planting until the

beginning of stage 3. beginning of stage 3.

3..... 100 Begins the earlier of 110 Begins the earlier of 80

days after planting, or days after planting, or

the beginning of harvest. the beginning of

harvest.

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

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(f) Any acreage of peppers damaged in the first or second stage

to the extent that the majority of producers in the area would not

normally further care for it, will be deemed to have been destroyed.

The indemnity payable for such acreage will be based on the stage

the plants had achieved when 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 April 30

preceding the cancellation date.

5. Cancellation and Termination Dates.

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

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

and termination dates are July 31.

6. Report of Acreage.

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

of the Basic Provisions (Sec. 457.8), you must report on or before

the acreage reporting date contained in the Special Provisions for

each planting period:

(a) All the acreage of peppers in the county insured under this

policy in which you have a share; and

(b) The row width.

7. Annual Premium.

In lieu of the premium amount determinations contained in

section 7 (Annual Premium) of the Basic Provisions (Sec. 457.8), the

annual premium amount for each cultural practice (e.g. fall direct

seeded irrigated) is determined by multiplying the third stage

amount of insurance per acre by the premium rate for the cultural

practice as established in the Actuarial Table, by the insured

acreage, by your share at the time coverage begins, and by any

applicable premium adjustment factors contained in the Actuarial

Table.

8. Insured Crop.

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

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

peppers in the county for which a premium rate is provided by the

Actuarial Table:

(a) In which you have a share;

(b) That are:

(1) Planted to be harvested and sold as mature fresh market bell

peppers;

(2) Planted within the planting periods designated in the

Actuarial Table;

(3) Grown under an irrigated practice;

(4) Grown on acreage covered by plastic mulch except where the

Special Provisions allow otherwise;

(5) Grown by a person who in at least one of the three previous

crop years:

(i) Grew bell peppers for commercial sale; or

(ii) Participated in managing a bell pepper farming operation;

(c) That are not:

(1) Interplanted with another crop;

(2) Planted into an established grass or legume;

(3) Pimento peppers; or

(4) Grown for direct marketing.

9. Insurable Acreage.

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

of the Basic Provisions (Sec. 457.8), that prohibit insurance

attaching if a crop has not been planted in at least one of the

three previous crop years, we will insure newly cleared land or

former pasture land planted to fresh market peppers.

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

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

(1) You must replant any acreage of peppers damaged during the

planting period in which initial planting took place whenever less

than 50 percent of the plant stand remains: and

(i) It is practical to replant;

(ii) If, at the time the crop was damaged, the final day of the

planting period has not passed; and

(iii) The damage occurs within 30 days of transplanting or 60

days of direct seeding.

(2) Whenever peppers initially are planted during the fall or

winter planting periods and the conditions specified in sections

9(b)(1)(ii) and (iii) are not satisfied, you may elect:

(i) To replant such acreage and collect any replant payment due

as specified in section 12. The initial planting period coverage

will continue for such replanted acreage.

(ii) Not to replant such acreage and receive an indemnity based

on the stage of growth the plants had attained at the time of

damage. However, such an election will result in the acreage being

uninsurable in the subsequent planting period.

(3) We will not insure any acreage which, in the preceding

planting period was planted to peppers (except as allowed in

sections 9(b)(1) and (2)), tomatoes, eggplants, or tobacco unless

the soil has been fumigated or otherwise properly treated.

10. Insurance Period.

In lieu of the provisions of section 11 (Insurance Period) of

the Basic Provisions

(Sec. 457.8), coverage begins on each unit or part of a unit the

later of the date we accept your application, or when the peppers

are planted in each planting period. Coverage ends at the earliest

of:

(a) Total destruction of the peppers on the unit;

(b) Abandonment of the peppers on the unit;

(c) The date harvest should have started on the unit on any

acreage which will not be harvested;

(d) Final adjustment of a loss on the unit;

(e) Final harvest; or

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

follows:

(1) 165 days after the date of direct seeding or replanting with

seed; and

(2) 150 days after the date of transplanting or replanting with

transplants.

11. Causes of Loss.

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

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

only against the following causes of loss that occur during the

insurance period:

(1) Excess rain;

(2) Fire;

(3) Freeze;

(4) Hail;

(5) Tornado;

(6) Tropical depression; or

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

insured cause of loss that occurs during the insurance period.

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

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

insure against any loss of production due to:

(1) Disease;

(2) Insect infestation; or

(3) Failure to market the peppers, unless such failure is due to

actual physical damage caused by an insured cause of loss that

occurs during the insurance period.

12. Replanting Payments.

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

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

due to an insured cause of loss, more than 50 percent of the plant

stand will not produce peppers and it is practical to replant.

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

be the result obtained by multiplying $300.00 by your insured share.

(c) In lieu of the provisions contained in section 13

(Replanting Payment) of the Basic Provisions (Sec. 457.8), limiting

a replanting payment to one each crop year, only one replanting

payment will be made for acreage planted during each planting period

within the crop year.

13. Duties In The Event of Damage or Loss.

In addition to the requirements contained in section 14 (Duties

In The Event of Damage or Loss) of the Basic Provisions

(Sec. 457.8), if you intend to claim an indemnity on any unit you

also must give us notice not later than 72 hours after the earliest

of:

(a) The time you discontinue harvest of any acreage on the unit;

(b) The date harvest normally would start if any acreage on the

unit will not be harvested; or

(c) The calendar date for the end of the insurance period.

14. Settlement of Claim.

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

you are unable to provide separate acceptable production records:

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

for which such production records were not provided; or

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

production to such units in proportion to our liability on the

harvested acreage for each unit.

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

will settle your claim by:

(1) Multiplying the insured acreage in each stage by the amount

of insurance per acre for the final stage;

(2) Multiplying each result in section 14(b)(1) by the

percentage for the applicable stage (see section 3(e));

(3) Total the results of section 14(b)(2);

(4) Subtracting either of the following values from the result

of section 14(b)(3):

(i) For other than catastrophic risk protection coverage, the

total value of production to be counted (see section 14(c)); or

(ii) For catastrophic risk protection coverage, the result of

multiplying the total value of production to be counted (see section

14(c)) by:

(A) Sixty percent for the 1998 crop year; or

(B) Fifty-five percent for 1999 and subsequent crop years; and

(5) Multiplying the result of section 14(b)(4) by your share.

[[Page 343]]

(c) The total value of production to count from all insurable

acreage on the unit will include:

(1) Not less than the amount of insurance per acre for the stage

for any acreage:

(i) That is abandoned;

(ii) Put to another use without our consent;

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

(iv) For which you fail to provide acceptable production

records;

(2) The value of the following appraised production will not be

less than the dollar amount obtained by multiplying the number of

boxes of appraised peppers times the minimum value per box shown in

the Special Provisions for the planting period:

(i) Potential production on any acreage that has not been

harvested the third time;

(ii) Unharvested mature bell peppers (unharvested production

that is damaged or defective due to insurable causes and is not

marketable will not be counted as production to count);

(iii) Production lost due to uninsured causes; and

(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) We may require you to continue to care for the crop so that

a subsequent appraisal may be made or the crop harvested to

determine actual production (If we require you to continue to care

for the crop and you do not do so, the original appraisal will be

used); or

(B) You may elect to continue to care for the crop, in which

case the amount of production to count for the acreage will be the

harvested production, or our reappraisal if the crop is not

harvested.

(3) The total value of all harvested production from the

insurable acreage will be the dollar amount obtained by subtracting

the allowable cost contained in the Special Provisions from the

price received for each box of peppers (this result may not be less

than the minimum value shown in the Special Provisions for any box

of peppers), and multiplying this result by the number of boxes of

peppers harvested. Harvested production that is damaged or defective

due to insurable causes and is not marketable, will not be counted

as production to count.

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 a written agreement must contain all

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

effect if the written agreement is not approved;

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

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

variety, and premium rate;

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

the written agreement is not specifically renewed the following

year, insurance coverage for subsequent crop years will be in

accordance with the printed policy); and

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

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

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

crop is insurable in accordance with the policy and written

agreement provisions.

16. Minimum Value Option.

(a) The provisions of this option are continuous and will be

attached to and made a part of your insurance policy, if:

(1) You elect either Option I or Option II of the Minimum Value

Option on your application, or on a form approved by us, on or

before the sales closing date for the initial crop year in which you

wish to insure fresh market peppers under this option, and pay the

additional premium indicated in the Actuarial Table for this

optional coverage; and

(2) You have not elected coverage under the Catastrophic Risk

Protection Endorsement.

(b) In lieu of the provisions contained in section 14(c)(3), the

total value of harvested production will be determined as follows:

(1) If you selected Option I of the Minimum Value Option, the

total value of harvested production will be as follows:

(i) For sold production, the dollar amount obtained by

subtracting the allowable cost contained in the Special Provisions

from the price received for each box of peppers (this result may not

be less than $2.75 for any box of peppers), and multiplying this

result by the number of boxes of peppers sold; and

(ii) For marketable production that is not sold, the dollar

amount obtained by multiplying the number of boxes of such peppers

on the unit by the minimum value shown in the Special Provisions for

the planting period (harvested production that is damaged or

defective due to insurable causes and is not marketable will not be

counted as production).

(2) If you selected Option II of the Minimum Value Option, the

total value of harvested production will be as provided in section

16(b)(1), except that the dollar amount specified in section

16(b)(1)(i) may not be less than zero.

(c) This option may be canceled by either you or us for any

succeeding crop year by giving written notice on or before the

cancellation date preceding the crop year for which the cancellation

of this option is to be effective.

Signed in Washington, D.C., on December 24, 1996.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance.

[FR Doc. 97-61 Filed 1-2-97; 8:45 am]

BILLING CODE 3410-FA-P