General Crop Insurance Regulations, Safflower Seed Crop Insurance Endorsement; and Common Crop Insurance Regulations, Safflower Crop Insurance Provisions

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 401 and 457

RIN 0563-AA79

General Crop Insurance Regulations, Safflower Seed Crop Insurance

Endorsement; and Common Crop Insurance Regulations, Safflower 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 safflower. 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 safflower

seed crop endorsement in the Common Crop Insurance Policy for ease of

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

Safflower Seed Crop Insurance 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 May 12, 1997 and will be considered

when the rule is to be made final.

ADDRESSES: Interested persons are invited to submit written comments to

the Director, Product Development Division, Federal Crop Insurance

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

Kansas City, MO 64131.

FOR FURTHER INFORMATION CONTACT: Ron Nesheim, Insurance Management

Specialist, Research and Development Division, Product Development

Division, 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; Safflower 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 safflower 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 2,669,970 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

Desk Officer for Agriculture, Office of Information and Regulatory

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

[[Page 17759]]

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 certified information

for at least 3 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. 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 duplicate

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 457.125, Safflower 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 safflower found at 7 CFR 401.123

(Safflower Seed Crop Endorsement). FCIC also proposes to amend 7 CFR

401.123 to limit its effect to the 1997 and prior crop years. FCIC will

later publish a regulation to remove and reserve Sec. 401.123.

This rule makes minor editorial and format changes to improve the

Safflower Seed Crop Endorsement's compatibility with the Common Crop

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

the provisions for insuring safflower as follows:

1. The name of the crop provision was shortened from ``Safflower

Seed'' to ``Safflower''. Safflower can be used in either a singular or

plural context. Changing the name of the crop provisions from

``safflower seed'' to ``safflower'' removes any confusion with policies

that use the word ``seed'' in their title and insure the production of

seed for planting in a future year. Also, the Late Planting Agreement

Option, that is applicable to Safflower provisions found at 7 CFR

401.123, no longer applies. Both Late Planting and Prevented Planting

provisions for safflower will be proposed in a separate rule.

2. Section 1--Add definitions for the terms ``days,'' ``FSA,''

``final planting date,'' ``good farming practices,'' ``interplanted,''

``irrigated practice,'' ``local market price,'' ``nurse crop (companion

crop),'' ``planted acreage,'' ``pounds,'' ``practical to replant,''

``production guarantee (per acre),'' ``replanting,'' and ``written

agreement'' for clarification. Also, amend the definition of ``value

per pound of damaged safflower''. It now reads, ``The price per pound

for damaged safflower offered by buyers in the area in which you

normally market safflower''. A floor of 50 percent of the average

market price was previously used for computing safflower losses because

of limited market outlets. There are now sufficient markets available

to provide a valid price for damaged safflower production, so the 50

percent floor has been removed.

3. Section 2--Expand unit division provisions to include insured

reporting responsibilities to qualify for optional units. Section

2(e)(4)(ii) clarifies unit division for non-irrigated corners of center

pivot irrigation systems.

4. Section 3--Clarify that an insured may select only one price

election for all the safflower in the county as designated in the

Special Provisions.

5. Section 5--Change the cancellation and termination dates to be

30 days earlier than in the previous safflower crop insurance

endorsement for states other than California. This change is intended

to reduce program vulnerabilities that may exist under current program

dates by reducing the opportunity for insureds to anticipate below-

normal yields. The change also corresponds with the change to the sales

closing date which has been moved back 30 days to comply with the

Federal Crop Insurance Reform Act of 1994.

6. Section 6--Prohibit interplanting safflower with another crop,

or planting safflower into an established grass or legume, unless

allowed by Special Provisions or by written agreement.

7. Section 9--Clarify that any losses caused by insufficient or

improper application of pest control or disease control measures are

not an insured cause of loss.

8. Section 10--Allow producers to receive a replant payment. This

is consistent with many other annual crops converted to the Common

Policy and provides additional incentives to insured to make every

effort to produce a crop.

9. Section 11--The representative samples of unharvested safflower

must not be harvested or destroyed until the earlier of inspection or

15 days after harvest of the balance of the unit is completed.

10. Section 12(a)--Clarify determining loss on a unit basis and

requirements of production records.

11. Section 12(c)--Clarify how to determine total production to

count from all insurable acreage.

12. Section 12(d)--Clarify when production qualifies for quality

adjustment by adding a provision that clarifies when quality will be a

factor in determining the loss.

13. Section 12(d)(4)--Remove the language that limited quality

adjustment to not less than 50 percent of the market price.

14. Section 13--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.

List of Subjects in 7 CFR Parts 401 and 457

Crop insurance, Safflower, Safflower seed crop endorsement.

Proposed Rule

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

Insurance

[[Page 17760]]

Corporation hereby proposes to revise 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), 1506(p).

Section 401.8 is amended by revising the introductory text of

paragraph (d) to read as follows:

Sec. 401.8 The application and policy.

* * * * *

(d) The application for the 1988 and succeeding crop years is found

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

400.37 and 400.38). The provisions of the Safflower Insurance Policy

for the 1988 through 1997 crop years are as follows:

Sec. 401.123 [Amended]

3. In Sec. 401.123 the introductory paragraph is revised to read as

follows: The provisions of the Safflower Seed Crop Insurance

Endorsement for the 1988 through the 1997 crop year.

* * * * *

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(1), 1506(p).

5. Section 457.125 is added to read as follows:

Sec. 457.125 Safflower crop insurance provisions.

The Safflower 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:

SAFFLOWER CROP INSURANCE 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

Days--Calendar days.

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--Collecting the safflower seed by combining or

threshing.

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.

Local market price--The cash price per pound for undamaged

safflower (test weight of 35 pounds per bushel or higher and seed

damage less than 25 percent) offered by buyers in the area in which

you normally market the insured crop.

Nurse crop (companion crop)--A crop planted into the same

acreage as another crop, that is intended to be harvested

separately, and which is planted to improve growing conditions for

the crop with which it is grown.

Planted acreage--Land in which seed has been placed by a machine

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

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

planting method and production practice. Safflower 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.

Pound--Sixteen ounces avoirdupois.

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.

Production guarantee (per acre)--The number of pounds determined

by multiplying the approved APH yield per acre by the coverage level

percentage you elect.

Replanting--Performing the cultural practices necessary to

replace the safflower seed and then replacing the safflower seed in

the insured acreage with the expectation of growing a successful

crop.

Value per pound of damaged safflower--The cash price per pound

for damaged safflower (test weight below 35 pounds per bushel or

seed damage in excess of 25 percent) offered by buyers in the area

in which you normally market safflower.

Written agreement--A written document that alters designated

terms of this policy in accordance with section 13.

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), a

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) For each crop year, records of marketed production or

measurement of stored production from each optional unit must be

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 meet one or more of the following

criteria, as applicable:

(i) Optional Units by Section, Section Equivalent, or FSA Farm

Serial Number: Optional units may be established if each optional

unit is located in a separate legally identified section. In the

absence of sections, we may consider parcels of land legally

identified by other methods of measure 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.

(ii) Optional Units on Acreage Including Both Irrigated and Non-

irrigated Practices: In

[[Page 17761]]

addition to, or instead of, establishing optional units by section,

section equivalent, or FSA Farm Serial Number, optional units may be

based on irrigated acreage and non-irrigated acreage (in those

counties where ``non-irrigated'' practice is allowed in the

actuarial table) if both are located in the same section, section

equivalent, or FSA Farm Serial Number. 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 the 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 a 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.

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 that all other requirements of this section

are met.

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

Indemnities

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 safflower 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 safflower 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.

4. Contract Changes

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

Provisions (Sec. 457.8), the contract change date is August 31

preceding the cancellation date for California, and December 31

preceding the cancellation date for all other states.

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:

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

Cancellation and termination

State dates

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

California.............................. December 31.

All other states........................ March 15.

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6. Insured Crop

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

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

the county for which a premium rate is provided by the actuarial

table:

(a) In which you have a share;

(b) That is planted for harvest as safflower;

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

written agreement):

(1) Interplanted with another crop; or

(2) Planted into an established grass or legume.

7. Insurable Acreage

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

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

(a) Safflower planted on land on which safflower, sunflower

seed, any variety of dry beans, soybeans, mustard, rapeseed, or

lentils were grown the preceding crop year, unless other rotation

requirements are specified in the Special Provisions or we agree in

writing to insure such acreage; or

(b) Any acreage of safflower 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, unless the crop is replanted

or we agree that it is not practical to replant.

8. Insurance Period

In accordance with the provisions of section 11 (Insurance

Period) of the Basic Provisions (Sec. 457.8), the calendar date for

the end of the insurance period is October 31 immediately following

planting.

9. Causes of Loss

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:

(a) Adverse weather conditions;

(b) Fire;

(c) Insects, but not damage due to insufficient or improper

application of pest control measures;

(d) Plant disease, but not damage due to insufficient or

improper application of disease control measures;

(e) Wildlife;

(f) Earthquake;

(g) Volcanic eruption; or

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

insured cause of loss that occurs during the insurance period.

10. 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

production guarantee for the acreage and it is practical to replant.

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

be the lesser of 20 percent of the production guarantee or 160

pounds, multiplied by your price election, multiplied by your

insured share.

(c) When safflower is replanted using a practice that is

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

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

amount will not be reduced.

11. Duties in the Event of Damage or Loss

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 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.

12. Settlement of Claim

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

you are unable to provide separate acceptable production records:

(1) For any optional 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 the unit.

(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;

(2) Multiplying each result in section 12(b)(1) by the

respective price election;

(3) Totaling the results in section 12(b)(2);

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

if applicable, (see section 12(c)) by the respective price election;

(5) Totaling the results in section 12(b)(4);

(6) Subtracting the total from the total in section 12(b)(5)

from the total in section 12(b)(3); and

(7) Multiplying the result in section 12(b)(6) by your share.

(c) The total production to count (in pounds) 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) Put to another use without our consent;

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

(D) For which you fail to provide acceptable production records;

(ii) Production lost due to uninsured causes;

(iii) Unharvested production (mature unharvested production may

be adjusted for quality deficiencies and excess moisture in

accordance with section 12(d)); 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) 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

[[Page 17762]]

harvest should have occurred. If you do not leave the required

samples intact, or fail to provide sufficient care for the samples,

our appraisal made prior to giving you consent to put the acreage to

another use will be used to determine the amount of production to

count.); or

(B) If you elect to continue to care for the crop, the amount of

production to count for the acreage will be the harvested

production, or our reappraisal if additional damage occurs and the

crop is not harvested; and

(2) All harvested production from the insurable acreage.

(d) Mature safflower may be adjusted for excess moisture and

quality deficiencies. If moisture adjustment is applicable, it will

be made prior to any adjustment for quality.

(1) Production will be reduced by 0.12 percent for each 0.1

percentage point of moisture in excess of 8 percent. We may obtain

samples of the production to determine the moisture content.

(2) Production will be eligible for quality adjustment if such

production:

(i) Has a test weight below 35 pounds per bushel;

(ii) Has seed damage in excess of 25 percent; or

(iii) Contains substances or conditions that are identified by

the Food and Drug Administration or other public health

organizations of the United States as being injurious to human or

animal health.

(3) Quality will be a factor in determining your loss only if:

(i) The deficiencies, substances, or conditions resulted from a

cause of loss against which insurance is provided under these crop

provisions and that occurred within the insurance period;

(ii) The deficiencies, substances, or conditions result in a net

price for damaged production that is less than the local market

price;

(iii) All determinations of these deficiencies, substances, or

conditions are made using samples of the production obtained by us

or by a disinterested third party approved by us; and

(iv) The samples are analyzed by a grader licensed to grade

safflower under the authority of the Agricultural Marketing Act or

the United States Warehouse Act with regard to deficiencies in

quality, or by a laboratory approved by us with regard to substances

or conditions injurious to human or animal health. Test weight for

quality adjustment purposes may be determined by our loss adjuster.

(4) Safflower production that is eligible for quality

adjustment, as specified in sections 12(d)(2) and (3), will be

reduced as follows:

(i) In accordance with the qualifying adjustment factor

provisions contained in the Special Provisions; or

(ii) If quality adjustment factor provisions are not contained

in the Special Provisions:

(A) Determine the value per pound of damaged safflower and the

local market price of undamaged safflower on the earlier of the date

such quality adjusted production is sold or the date of final

inspection for the unit. Discounts used to establish the net price

of the damaged production will be limited to those which are usual,

customary, and reasonable. The price will not be reduced for:

(1) Moisture content;

(2) Damage due to uninsured causes; or

(3) Drying, handling, processing, or any other costs associated

with normal harvesting, handling, and marketing of safflower. (We

may obtain prices from any buyer of our choice. If we obtain prices

from one or more buyers located outside your local market area, we

will reduce such prices by the additional costs required to deliver

the production to those buyers.)

(B) Divide the price per pound of damaged safflower by the local

market price per pound of undamaged safflower to determine the

quality adjustment factor; and

(C) Multiply the adjustment factor by the number of pounds of

the damaged production remaining after any reduction due to

excessive moisture to determine the net production to count.

(e) Any production harvested from other plants growing in the

insured crop may be counted as production of the insured crop on a

weight basis.

13. 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

13(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 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 a written agreement submitted after the

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

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

crop is insurable in accordance with the policy and written

agreement provisions.

Signed in Washington, D.C., on April 4, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 97-9421 Filed 4-10-97; 8:45 am]

BILLING CODE 3410-FA-P