Common Crop Insurance Regulations; Onion Crop Insurance Provisions

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

Common Crop Insurance Regulations; Onion Crop Insurance

Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule with request for comments.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to

amend the Onion Crop Insurance Provisions to: Modify stage guarantee

percentages, to have a separate guarantee for transplanted and direct

seeded onions, and to provide for modification of stage guarantee

percentages in the Special Provisions; allow optional units by section

or section equivalent or FSA farm serial number, unless otherwise

provided in the Special Provisions; clarify the replant payment

provisions; clarify the amount of production to count when damaged

production is sold after a previous determination that the crop was 100

percent damaged; limit prevented planting coverage to 45 percent of the

production guarantee for timely planted acreage; and change the

termination date for one county in Oregon and one county in Washington.

The intended effect of this action is to modify the existing policy so

that it is actuarially sound and better meets the needs of insureds.

DATES: Written comments and opinions on this proposed rule will be

accepted until close of business April 5, 1999, and will be considered

when the rule is to be made final. Comments on the information

collection requirements must be received on or before April 19, 1999.

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. A copy of each response will be available for

public inspection and copying from 8 a.m. to 4:30 p.m., CDT, Monday

through Friday, except holidays, at the above address.

FOR FURTHER INFORMATION CONTACT: William Klein, Insurance Management

Specialist, Research and Development, Product Development Division,

Federal Crop Insurance Corporation, at the Kansas City, MO, address

listed above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be exempt for the purposes of

Executive Order 12866, and, therefore, has not been reviewed by the

Office of Management and Budget (OMB).

Paperwork Reduction Act of 1995

In accordance with section 3507(j) of the Paperwork Reduction Act

of 1995 (44 U.S.C. 3501), the information collection or recordkeeping

requirements included in the proposed rule have been submitted for

approval to the Office of Management and Budget (OMB). Please send your

written comments to Clearance Officer, OCIO, USDA, room 404-W, 14th

Street and Independence Avenue SW., Washington, DC 20250. A comment to

OMB is best assured of having its full effect if OMB receives it within

30 days of publication of this proposed rule.

We are soliciting comments from the public comment concerning our

proposed information collection and recordkeeping requirements. We need

this outside input to help us:

(1) Evaluate whether the proposed collection of information is

necessary for the proper performance of the functions of the agency,

including whether the information has practical utility;

(2) Evaluate the accuracy of our estimate of the burden of the

proposed collection of information, including the validity of the

methodology and assumptions used;

(3) Enhance the quality, utility, and clarity of the information to

be collected; and

(4) Minimize the burden of the collection of information on those

who are to respond (such as through the use of appropriate automated,

electronic, mechanical, or other technological collection techniques or

other forms of

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information technology, e.g. permitting electronic submission

responses).

The collections of information for this rule revises the Multiple

Peril Crop Insurance Collections of Information 0563-0053 which expires

April 30, 2001.

Title: Multiple Peril Crop Insurance.

Abstract: This rule improves the existing onion policy by;

modifying stage guarantee percentages, providing a separate guarantee

for transplanted and direct seeded onions, allowing modification of

stage guarantee percentages in the Special Provisions, allowing

optional units by section or section equivalent unless otherwise

provided in the Special Provisions, clarifying the provisions on

replant payments and the amount of production to count for damaged

onion production that is sold after a previous determination that the

crop was 100 percent damaged, limiting prevented planting coverage to

45 percent of the production guarantee for timely planted acreage, and

changing the termination date for one county in Oregon and one county

in Washington. The revisions are effective for the 2000 and succeeding

crop years. It is anticipated that there will be more claims filed by

insureds because of the revised unit division option.

Purpose: The purpose of this proposed rule is to modify the

existing crop provisions for clarification, improve the method of

calculating losses, provide additional coverage benefits for insureds,

and make the policy more flexible through Special Provision statements,

so that it better meets the needs of all regions of the country, and to

provide an improved risk management tool for onion producers.

Burden Statement: The information that FCIC collects on the

specified forms will be used in offering crop insurance coverage,

determining program eligibility, establishing a production guarantee or

amount of insurance, calculating losses qualifying for a payment, etc.

FCIC assumes that by allowing optional units to be determined by

section as well as irrigated and non-irrigated and type, the number of

claims submitted by producers may increase the burden hours.

Estimate of Burden: We estimate that it will take insured

producers, a loss adjuster, and an insurance agent an average of .79 of

an hour to provide the information required by the Onion Crop Insurance

Provisions.

Respondents: Insureds, insurance agents, and loss adjusters.

Estimated annual number of respondents: 569.

Estimated annual number of responses per respondent: 2.4.

Estimated annual number of responses: 1,369.

Estimated total annual burden on respondents: The total public

burden for this proposed rule is estimated at 448 hours.

Recordkeeping requirements: FCIC requires records to be kept for

three years, but all records required by FCIC are retained as part of

the normal business practice. Therefore, FCIC is not estimating

additional burden related to recordkeeping.

Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform of 1995 (UMRA) establishes

requirements for Federal agencies to assess the effects of their

regulatory actions on State, local, and tribal governments and the

private sector. This rule contains no Federal mandates (under the

regulatory provisions of title II of the UMRA) for State, local, and

tribal governments or the private sector. Therefore, this rule is not

subject to the requirements of sections 202 and 205 of the UMRA.

Executive Order 12612

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

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

implications to warrant the preparation of a Federalism Assessment. The

provisions contained in this rule will not have a substantial direct

effect on States or their political subdivisions or on the distribution

of power and responsibilities among the various levels of government.

Regulatory Flexibility Act

This regulation will not have a significant economic impact on a

substantial number of small entities. New provisions included in this

rule will not impact small entities to a greater extent than large

entities. Under the current regulations, every producer is required to

complete an application and an acreage report. If the crop is damaged

or destroyed, every 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. 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 12372

This program is not subject to the provisions of Executive Order

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 12988

This proposed rule has been reviewed in accordance with Executive

Order 12988 on civil justice reform. The provisions of this rule will

not have a retroactive effect. The provisions of this rule will preempt

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

inconsistent herewith. The administrative appeal provisions published

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

judicial review may be brought.

Environmental Evaluation

This action is not expected to have a significant economic impact

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

neither an Environmental Assessment nor an Environmental Impact

Statement is needed.

Background

FCIC proposes to amend the Common Crop Insurance Regulations (7 CFR

part 457) by revising 7 CFR 457.135 Onion Crop Insurance Provisions

effective for the 2000 and succeeding crop years. The principal changes

to the provisions for insuring onions are as follows:

1. Section 1--Revise the definition of ``production guarantee (per

acre)'' to include a first stage guarantee for transplanted onions. The

second stage for direct seeded storage onions is increased from 60

percent to 70 percent. These revised stage percentages reflect a more

appropriate relationship of pre-harvest input costs to harvesting costs

for both direct seeded and transplanted onions.

2. Section 2--Allow optional units by section, section equivalent,

or FSA farm serial number, unless otherwise provided in the Special

Provisions. This provides additional units for producers who generally

raise only one type of onion (typically only yellows), irrigate all

their acreage, and have onion acreage spread throughout large areas.

Such

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producers do not qualify for optional units under the existing policy,

which only allows optional units by type and by irrigated or non-

irrigated. Currently, type is defined in the Special Provisions by

color, i.e.--red, yellow, or white.

3. Section 3--Add a separate first stage for transplanted onion

plants or sets to run from transplanting through the 30th day after

transplanting. Revise the first stage for direct seeded onions to

continue until emergence of the fourth leaf instead of the third leaf.

These time frames will allow sufficient time for the onions to become

established before a higher guarantee applies. The language for the

second stage for transplanted onions is revised to have a single

standard for all onions. Based on this standard, the second stage for

transplanted onions extends from the 31st day after transplanting until

the acreage has been subjected to topping and lifting or digging. These

changes were necessary because of the different risks at different

times for direct seeded and transplanted onions.

4. Section 5--Change the termination date for one county in Oregon

and one county in Washington to allow for a 60 day period between the

billing and termination date. Currently these counties have only a 30

day period between billing and termination dates. This is too short a

period of time.

5. Section 11--Add provisions to clarify that the amount of the

replanting payment per acre will be the producer's actual cost of

replanting not to exceed the lesser of 7 percent of the final stage

production guarantee or 18 hundredweight multiplied by the producer's

price election for the type originally planted and by the insured

share. This consolidates all three criteria from the Basic Provisions

and Crop Provisions needed to make a determination on the amount of a

replanting payment in one section in the crop provisions. This will

reduce confusion about the maximum amount of replanting payment.

6. Section 13--Add provisions to clarify that when damage to onion

production exceeds the percentage shown in the Special Provisions but

the production from that unit is sold, the quantity sold will be

included as production to count on a pound-for-pound basis regardless

of the quality.

7. Section 14--Removed the provision that allowed for additional

prevented planting coverage levels. The provision had allowed producers

who selected limited or additional levels of coverage, in accordance

with the Special Provisions, and paid an additional premium, to obtain

prevented planting coverage of 50 or 55 percent.

Prevented planting coverage is designed to reimburse producers for

the costs incurred during the pre-plant period if the intended crop

cannot be planted. This amount is intended to cover the total fixed

cash expenses plus the variable cash costs normally associated with

completing all field operations prior to planting onions. The prevented

planting coverage level for onions is lower than other major crops

because, although pre-planting costs per acre are comparable to other

crops, such as corn, the average insurance guarantee per acre is much

higher. Therefore, FCIC considers a prevented planting coverage level

of 45 percent to be appropriate for onions and proposes that additional

prevented planting coverage levels not be made available.

Premium rates for onions will continue to reflect Multiple Peril

Crop Insurance experience for onions, and FCIC will consider any

additional risk that may result from incorporation of changes to policy

provisions contained in this proposed rule.

List of Subjects in 7 CFR Part 457

Crop insurance, Onion.

Proposed Rule

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

Insurance Corporation proposes to amend the onion crop insurance

provisions contained in 7 CFR part 457 as follows:

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

1998 AND SUBSEQUENT CONTRACT YEARS

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

follows:

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

2. Section 457.135 is amended by revising the language in the onion

crop insurance provisions as follows:

Sec. 457.135 Onion Crop Insurance Provisions [Amended]

a. Section 1 is amended to add definitions for ``direct seeded''

and ``transplanted'' and to revise the definition of ``production

guarantee (per acre)'' as follows:

1. Definitions.

* * * * *

Direct seeded--Placing onion seed by machine or by hand at the

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

the planting method and production practice.

* * * * *

Production Guarantee (per acre):

(a) First stage production guarantee--Thirty-five percent (35%)

of the final stage production guarantee for direct seeded storage

and non-storage onions and 45 percent of the final stage production

guarantee for transplanted storage and non-storage onions, unless

otherwise specified in the Special Provisions.

(b) Second stage production guarantee--Seventy percent (70%) of

the final stage production guarantee for direct seeded storage

onions and 60 percent of the final stage production guarantee for

transplanted storage onions and all non-storage onions, unless

otherwise specified in the Special Provisions.

* * * * *

Transplanted--Placing of the onion plant or bulb by machine or

by hand at the correct depth, into a seedbed that has been properly

prepared for the planting method and production practice.

* * * * *

b. Section 2 is revised to read as follows:

2. Unit Division.

In addition to, or instead of, establishing optional units as

provided in section 34 of the Basic Provisions, optional units may

be established by type, if the type is designated in the Special

Provisions.

* * * * *

c. Sections 3(b) (1) and (2) are revised to read as follows:

3. Insurance Guarantees, Coverage Levels, and Prices for

Determining Indemnities.

* * * * *

(b) * * *

(1) First stage extends:

(i) For direct seeded storage and non-storage onions, from

planting until the emergence of the fourth leaf; and

(ii) For transplanted storage and non-storage onions, from

transplanting of onion plants or sets through the 30th day after

transplanting.

(2) The second stage extends, for all onions, from the end of

the first stage until the acreage has been subjected to topping and

lifting or digging.

* * * * *

d. Section 5 is revised to read as follows:

5. Cancellation and Termination Dates.

In accordance with section 2 of the Basic Provisions, the

cancellation and termination dates are:

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State and county Cancellation date Termination date

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All Georgia Counties; August 31........... August 31.

Kinney, Uvalde, Medina,

Bexar, Wilson, Karnes, Bee,

and San Patrico Counties,

Texas, and all Texas

Counties lying south

thereof.

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Umatilla County, Oregon; and August 31........... September 30.

Walla Walla County,

Washington.

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

counties.

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* * * * *

e. Section 11(b) is revised to read as follows:

11. Replanting Payment.

* * * * *

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

be your actual cost for replanting, but will not exceed the lesser

of:

(1) 7 percent of the final stage production guarantee multiplied

by your price election for the type originally planted and by your

insured share; or

(2) 18 hundredweight multiplied by your price election for the

type originally planted and by your insured share.

* * * * *

f. Section 13(d) is revised to read as follows:

13. Settlement of Claim.

* * * * *

(d) If the damage to harvested or unharvested onion production

exceeds the percentage shown in the Special Provisions for the type,

no production will be counted for that unit or portion of a unit

unless such damaged onion production from that acreage is sold. If

sold, the damaged production will be counted on a pound-for-pound

basis regardless of the quality.

* * * * *

g. Section 14 is revised to read as follows:

14. Prevented planting.

Your prevented planting coverage will be 45 percent of your

production guarantee for timely planted acreage. Additional

prevented planting coverage levels are not available for onions.

Signed in Washington, D.C., on February 10, 1999.

Robert Prchal,

Acting Manager, Federal Crop Insurance Corporation.

[FR Doc. 99-3890 Filed 2-17-99; 8:45 am]

BILLING CODE 3410-08-P