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: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes

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.

EFFECTIVE DATE: March 28, 1997.

FOR FURTHER INFORMATION CONTACT: Linda Williams, Insurance Management

Specialist, Research and Development, Product Development Division,

Federal Crop Insurance Corporation, United States Department of

Agriculture, 9435 Holmes Road, Kansas City, MO 64131, telephone (816)

926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

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

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

therefore, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

Following publication of the proposed rule, the public was afforded

60 days to submit written comments on information collection

requirements previously approved by OMB under OMB control number 563-

0003 through September 30, 1998. No public comments were received.

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

[[Page 14787]]

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. 12988

The provisions of this rule will not have a retroactive effect

prior to the effective date. The provisions of this rule will preempt

state and local laws to the extent such state and local laws are

inconsistent herewith. The administrative appeal provisions published

at 7 CFR part 11 must be exhausted before any action for judicial

review may be brought.

Environmental Evaluation

This action is not expected to have a significant impact on the

quality of the human environment, health, and safety. Therefore,

neither an Environmental Assessment nor an Environmental Impact

Statement is needed.

National Performance Review

This regulatory action is being taken as part of the National

Performance Review Initiative to eliminate unnecessary or duplicative

regulations and improve those that remain in force.

Background

On Friday, January 3, 1997, FCIC published a proposed rule in the

Federal Register at 61 FR 338-343 to add to the Common Crop Insurance

Regulations (7 CFR part 457), a new section, 7 CFR 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).

This rule also amends 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.

Following publication of the proposed rule, the public was afforded

30 days to submit written comments, data and opinions. A total of 21

comments were received from the crop insurance industry and FCIC

Regional Service Offices (RSO). The comments received and FCIC's

responses, are as follows:

Comment: The crop insurance industry questioned removing the term

``marketable'' from the definition of harvest. The commenter questioned

the affect when the final stage of insurance on a unit can be triggered

by the beginning of harvest, even if none of the crop is marketable.

Response: The current regulation created confusion since it

suggested that if the peppers were not marketable, they would not be

considered as harvested for the purposes of determining the insurance

period, calculation of any claim, etc. The picking of peppers on the

unit, whether marketable or not, is considered harvested. The final

stage of insurance on the unit begins when any peppers are harvested,

whether marketable or not. Requirements of good farming practices will

prevent harvest of the peppers before they are ready. Section 14

contains provisions to determine the amount of production to be counted

for harvested and unharvested, including peppers that are not

marketable. Therefore, no change will be made to the definition.

Comment: One comment from the crop insurance industry recommended

clarifying the language in section 2(a) by stating ``Basic units, as

defined in section 1 (Definitions) of the Basic Provisions, will be

established by planting period.''

Response: FCIC agrees with the comment and has amended section 2(a)

to indicate a basic unit ``will be established by planting period.''

However, the definition of ``unit'' is contained in the Basic

Provisions and no change will be made in that portion of the provision.

Comment: One comment from the crop insurance industry stated that

references to land measurements such as leagues and labors contained in

section 2, Unit Division, was unnecessary. These types of land

measurement were not applicable in Florida and fresh market pepper crop

insurance is only available in Florida.

Response: Fresh market pepper insurance may be expanded into other

areas where such measurements are applicable. Therefore, no changes

will be made.

Comment: The crop insurance industry questioned if it was necessary

to specify in section 3(c) that the CAT amount of insurance will be in

the Actuarial Table when all available amounts of insurance are

specified section 3(a).

Response: FCIC agrees section 3(a) states the coverage levels and

amounts of insurance are contained in the Actuarial Table. As section

3(c) provides no additional statements or requirements, FCIC has

deleted this provision and renumbered the remaining provisions.

Comment: One comment from the crop insurance industry stated

section 3 of the crop provisions contained a heading in the stage chart

that was misleading. The chart heading suggested the percentages

represented coverage levels that the insured would select rather than

the amount of insurance that is selected by the insured. The commenter

suggested the chart heading should state, ``Percent in effect of your

amount of insurance.''

Response: FCIC believes the heading of the stage chart is clearly

stated. Therefore, no change will be made.

Comment: One comment received from an FCIC RSO recommended

clarifying the Basic Provisions, by adding a provision in section 6 to

state that the insured must report the dates the insured acreage was

planted within each planting period.

Response: FCIC concurs with the comment and had added a provision

accordingly.

Comment: The crop insurance industry recommended a grammatical

change in section 7, to add a comma and hyphen in ``e.g., fall direct-

seeded irrigated.''

Response: FCIC agrees with the comment and has amended the

provision in section 7 accordingly.

Comment: The crop insurance industry questioned if the provision in

section 9(a) that states we will insure

[[Page 14788]]

newly cleared land or former pasture land planted to fresh market

peppers is new to the crop provisions and if a waiting period was

applicable before insuring fresh market peppers on newly cleared land

or former pasture land.

Response: To provide consistency among the fresh market vegetable

crops, FCIC clarified that former pasture land planted to the insured

crop is also insurable. It is a recommended practice for the fresh

market vegetable crops to be planted on newly cleared and former

pasture land so no waiting period is required prior to planting the

insured crop.

Comment: One comment from the crop insurance industry stated

section 9(b)(3) was confusing due to the ``except as allowed in section

9(b) (1) and (2)'', and they could not determine what was or was not

allowed. The commenter stated that if it was intended to allow coverage

without fumigation on peppers planted in the next planting period after

peppers were planted but not carried to harvest the previous period,

then the exception should only refer to section 9(b)(2)(ii). Provisions

contained in section 9(b) (1) and (2) refer to peppers planted and

replanted and it would seem that fumigation would be necessary before

planting peppers again the following planting period. If the exceptions

in section 9(b) applied to peppers following peppers, why wouldn't the

exceptions also apply to peppers following tomatoes, eggplants or

tobacco?

Response: Acreage previously planted to peppers, tomatoes,

eggplants or tobacco may host nematodes that will damage the insured

crop. Chemicals that are used to fumigate or treat the acreage will

last two to three months. However, in those situations where the crop

was destroyed shortly after planting and is replanted, there is little

risk from nematodes and fumigation is not required. FCIC has amended

the provisions to clarify that fumigation is required whenever the crop

was previously planted to peppers, tomatoes, eggplants or tobacco and

that it does not apply to replanted peppers.

Comment: The crop insurance industry questioned if the phrase

``coverage begins * * * the later of the date we accept your

application, or when the peppers are planted in each planting period''

means that an application could be accepted after the sales closing to

have coverage for subsequent planting periods in the crop year. If so,

what is the purpose of having one sales closing date for the crop?

Response: Section 10 of these provisions do not alter the

requirement contained in the Basic Provisions, which states the

application must be submitted by the sales closing date. The sales

closing date corresponds to the earliest planting period, so only one

application is filed for the crop year and covers all subsequent

planting periods. Since there are multiple planting periods in each

crop year, the date insurance attaches in each planting period must be

established. Provisions in section 10 simply clarify when insurance

will attach. Therefore, no change will be made.

Comment: One comment from the crop insurance industry questioned if

it was valid to extend the end of the insurance period for Florida from

150 days to 165 days after the date of direct seeding.

Response: In addition to allowing expansion of fresh market pepper

insurance coverage into other areas, FCIC's RSO obtained data from the

University of Florida Research Center that indicated direct seeded

peppers required an additional 15 days more than transplanted peppers

to reach maturity. This change provides assurance that all mature

production will be included as production to count.

Comment: Two comments from the crop insurance industry recommended

the cause of loss due to tropical depression be changed to ``excessive

winds sufficient to damage the crop.'' The change would provide

coverage for damage due to winds associated with stalled fronts, severe

thunderstorms, storms or gales. One of the commenters indicated a

stalled high and low pressure system with winds in excess of 60 mph

caused damage in November, 1996, which was not covered by the current

insurance policy.

Response: The current regulation defined a tropical depression as a

large-scale, atmospheric wind-and-pressure system characterized by low

pressure at its center and counterclockwise circular wind motion. FCIC

agrees that damage to the insured crop may occur from systems other

than a tropical depression. FCIC clarified the definition of tropical

depression to state that it is a system identified by the U.S. Weather

Service, and includes tropical depressions, hurricanes, tropical storms

and gales. Therefore, no change will be made.

Comment: Two comments from the crop insurance industry recommended

removing disease and insect infestation as uninsured causes of loss.

The commenters suggested that disease and insects should be an insured

cause of loss if a producer exhausts all reasonable means to protect

the crop. This would provide coverage for new diseases and insects that

cannot presently be controlled by the chemicals that are available.

Response: FCIC agrees that coverage should be available for damage

due to disease and insect infestation for which no effective control

measure exists. Therefore, FCIC has amended the provisions contained in

section 11(b)(1) accordingly.

Comment: Two comments from the crop insurance industry recommend

raising the maximum amount of the replanting payment per acre. Both

commenters stated the maximum amount provided in the current policy is

not sufficient to cover actual costs.

Response: FCIC agrees there may be instances when replanting costs

exceed $300.00 per acre as provided in the current regulation.

Therefore, provisions contained in section 12(b) have been revised to

state that the maximum amount of the replanting payment per acre will

be the lesser of your actual cost of replanting, or the result obtained

by multiplying the maximum amount of the replanting payment contained

in the applicable Special Provisions by your insured share.

Comment: Two comments from the crop insurance industry questioned

if the dollar amount of the allowable cost contained in the Special

Provisions has been reviewed to determine if the cost is sufficient.

One of the commenters recommended raising the allowable cost by $.50.

Response: The amount of allowable costs are provided in the Special

Provisions to allow the flexibility to set the amount at appropriate

levels. Therefore, no changes will be made.

Comment: The crop insurance industry suggested combining the

provisions contained in section 15(e) with the provisions in section

15(a).

Response: Approval of written agreements requested after the sales

closing date is the exception, not the rule. Therefore, these

provisions should be kept separate and no changes have been made.

Comment: The crop insurance industry recommended the requirement

for a written agreement to be renewed each year be removed. Terms of

the agreement should be stated in the agreement to fit the particular

situation for the policy, or if no substantive changes occur from one

year to the next, allow written agreements to be continuous.

Response: Written agreements are intended to change policy terms or

permit insurance in unusual situations where such changes will not

increase risk. If such practices continue year to year, they should be

incorporated into the policy or Special Provisions. It is

[[Page 14789]]

important to minimize exceptions to assure that the insured is well

aware of the specific terms of the policy. Therefore, no changes will

be made.

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

following change to the Fresh Market Pepper Crop Provisions:

1. Section 16(b)(1)(i)--Delete $2.75 as the specified lowest dollar

amount obtained when computing the minimum value per box of peppers

sold. The minimum value option price will now be contained in the

Special Provisions to allow FCIC to ensure that the price is correct

for the county.

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

the Federal Register. This rule improves the fresh market pepper

insurance coverage and brings it under the Common Crop Insurance Policy

Basic Provisions for consistency among policies. The earliest contract

change date that can be met for the 1998 crop year is April 30, 1997.

It is therefore imperative that these provisions be made final before

that date so that the reinsured companies and insureds may have

sufficient time to implement these changes. Therefore, public interest

requires the agency to make the rule effective upon publication.

List of Subjects in 7 CFR Parts 445 and 457

Crop insurance, Pepper crop insurance regulations, Fresh market

peppers.

Final Rule

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

Insurance Corporation hereby amends 7 CFR parts 445 and 457 effective

for the 1998 and succeeding crops, to read 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 headings 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. Section 457.148 is added 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:

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 annum 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.

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.

[[Page 14790]]

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) In addition to the requirement contained in section 1

(Definitions) of the Basic Provisions (Sec. 457.8), (basic unit), a

basic unit will also be established by planting period.

(b) Unless limited by the Special Provisions, 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 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.

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

as follows:

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

Percent of

the amount

of

Stage insurance Length of time if Length of time if

per acre direct-seeded transplanted

that you

selected

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

1................ 65 From planting From planting

through the 74th through the 44th

day after planting. day after

planting.

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

after planting after planting

until the until the

beginning of stage beginning of stage

3. 3.

3................ 100 Begins the earlier Begins the earlier

of 110 days after of 80 days after

planting, or the planting, or the

beginning of beginning of

harvest. harvest.

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

(e) 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;

(b) The dates the acreage was planted within each planting

period; and

(c) 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

[[Page 14791]]

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 on which peppers (except for

replanted peppers in accordance with sections 9(b)(1) and (2)),

tomatoes, eggplants, or tobacco have been grown and the soil was not

fumigated or otherwise properly treated before planting peppers.

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 or insect infestation, unless no effective control

measure exists for such disease or insect infestation; or

(2) 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 lesser of your actual cost of replanting or the result

obtained by multiplying the per acre replanting payment amount

contained in the Special Provisions by your insured share.

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

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

limit 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(d));

(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.

(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 by 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

[[Page 14792]]

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 the minimum value option price contained in the Special

Provisions 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, DC, on March 24, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance.

[FR Doc. 97-7941 Filed 3-27-97; 8:45 am]

BILLING CODE 3410-FA-P