Common Crop Insurance Regulations, Dry Bean Crop Insurance Provisions; and Dry Bean Crop Insurance Regulations

Proposed Rules

Federal Register

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Proposed Rules

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 433 and 457

RIN 0563-AB02

Common Crop Insurance Regulations, Dry Bean Crop Insurance

Provisions; and Dry Bean Crop Insurance Regulations

AGENCY: Federal Crop Insurance Corporation.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes

specific crop provisions for the insurance of dry beans, including dry

beans produced under seed bean processor contracts. 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, to include the current Dry

Bean Crop Insurance Regulations with the Common Crop Insurance Policy

for ease of use and consistency of terms, and to restrict the

application to the current Dry Bean Crop Insurance Regulations

effective for the 1997 and succeeding crop years.

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

be accepted until close of business December 26, 1996, will be

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

information collections under the Paperwork Reduction Act of 1995

continues through January 24, 1997.

ADDRESSES: Interested persons are invited to submit written comments to

the Chief, Product Development Branch, Federal Crop Insurance

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

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

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

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

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

except holidays.

FOR FURTHER INFORMATION CONTACT: Arden Routh, Program Analyst, Research

and Development Division, Product Development Branch, FCIC, at the

Kansas City, MO address listed above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

This action has been reviewed under United States Department of

Agriculture (USDA) procedures established by Executive Order No. 12866.

This action constitutes a review as to the need, currency, clarity, and

effectiveness of these regulations under those procedures. The sunset

review date established for these regulations is March 1, 2001.

This rule has been determined to be not significant for the

purposes of Executive Order No. 12866 and, therefore, has not been

reviewed by the Office of Management and Budget (OMB).

Paperwork Reduction Act of 1995

The information collection requirements contained in these

regulations were previously approved by OMB pursuant to the Paperwork

Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB control number

0563-0003 through September 30, 1998.

The amendments set forth in this proposed rule do not contain

additional information collections that require clearance by OMB under

the provisions of 44 U.S.C. chapter 35.

The title of this information collection is ``Catastrophic Risk

Protection Plan and Related Requirements including, Common Crop

Insurance Regulations; Dry Bean Crop Insurance Provisions.'' The

information to be collected includes a crop insurance application, an

acreage report, and a continuous contract. Information collected from

the application and acreage report is electronically submitted to FCIC

by reinsured companies. Potential respondents to this information

collection are producers of dry beans that are eligible for Federal

crop insurance.

The information requested is necessary for the reinsured companies

and FCIC to provide insurance and reinsurance, determine eligibility,

determine the correct parties to the agreement or contract, determine

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

All information is reported annually. The reporting burden for this

collection of information is estimated to average 16.9 minutes per

response for each of the 3.6 responses from approximately 1,755,015

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

collection is 2,676,932 hours.

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

proposed collection of information is necessary for the proper

performance of the functions of the agency, including whether the

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

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

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

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

the collection of information on respondents, including through the use

of automated collection techniques or other forms of information

gathering technology.

Comments regarding paperwork reduction should be submitted to the

Desk Officer for Agriculture, Office of Information and Regulatory

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

Bonnie Hart, Farm Service Agency, United States Department of

Agriculture, Advisory and Corporate Operations Staff, Regulatory Review

Group, P.O. Box 2415, STOP 0572, Washington, D.C. 20013-2415, telephone

(202) 690-2857. Copies of the information collection may be obtained

from Bonnie Hart at the above address.

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 Mandate 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

implication 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 years production if adequate

records are available to support the certification, or receive an

assigned 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. 12778

The Office of the General Counsel has determined that these

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

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

not have a retroactive effect prior to the effective date. The

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

such State and local laws are inconsistent herewith. The administrative

appeal provisions published at 7 CFR parts 11 and 780 must be exhausted

before any action for judicial review may be brought.

Environmental Evaluation

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

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

neither an Environmental Assessment nor an Environmental Impact

Statement is needed.

National Performance Review

This regulatory action is being taken as part of the National

Performance Review Initiative to eliminate unnecessary or duplicative

regulations and improve those that remain in force.

Background

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

CFR part 457), a new section, 7 CFR 457.150, Dry Bean Crop Insurance

Provisions. The new provisions will be effective for the 1997 and

succeeding crop years. These provisions will replace and supersede the

current provisions for insuring dry beans found at 7 CFR part 433 (Dry

Bean Crop Insurance Regulations). FCIC also proposes to amend 7 CFR

part 433 to limit its effect to the 1997 and prior crop years. FCIC

will later publish a regulation to remove and reserve part 433.

This rule makes minor editorial and format changes to improve the

Dry Bean Crop Insurance Regulations compatibility with the Common Crop

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

the provisions for insuring dry beans as follows:

1. Section 1--Remove the definition of ``county,'' to default to

the definition contained in the Basic Provisions (Sec. 457.8). The

current definition includes land identified by an FSA farm serial

number for the county that is physically located in another county, the

new definition does not. This change will require land in another

county to be insured using the actuarial materials for the county where

the land is located. Add definitions for the terms ``actual value,''

``base price,'' ``beans,'' ``combining,'' ``contract seed beans,''

``days,'' ``dry beans,'' ``FSA,'' ``final planting date,'' ``good

farming practices,'' ``interplanted,'' ``irrigated practice,'' ``late

planted,'' ``late planting period,'' ``local market price,'' ``net

price,'' ``planted acreage,'' ``practical to replant,'' ``prevented

planting,'' ``production guarantee (per acre),'' ``seed bean processor

contract,'' ``seed company,'' ``swathing or knifing,'' ``timely

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

clarification purposes. The Definition of ``Harvest'' is clarified to

indicate that beans which are swathed or knifed and left in the field

for drying prior to combining are not considered harvested.

2. Section 2--Allow separate bean types to qualify for optional

units rather than basic units as previously allowed. Basic units will

be provided as specified in section 1 of the Basic Provisions

(Sec. 457.8). This change makes basic unit division provisions for dry

beans consistent with provisions for other crops. Contract seed beans

are only eligible for optional units if the seed company contracts on

an acreage basis and not on a contract of production basis. Clarify

unit division for non-irrigated corners of center-pivot irrigation

systems.

3. Section 3--Specify that the insured may select only one price

election for all the dry beans in the county insured under the policy,

unless the Special Provisions provide different price elections by

type, in which case the insured may select one price election for each

dry bean type designated in the Special Provisions. The price elections

selected are not required to have the same percentage relationship to

the maximum price offered for each type.

4. Section 4--The contract change date has been changed to November

30 for all counties to maintain an adequate time period between this

date and the revised cancellation dates (see item 7 below).

5. Section 5--Change the cancellation and termination dates from

March 31 to February 28 in California and from April 15 to March 15 in

all other States. These changes are made to standardize the

cancellation and termination dates with the sales closing dates. The

sales closing dates were previously amended

to comply with the requirement of the Federal Crop Insurance Reform Act

of 1994 that spring planted crop sales closing dates be moved 30 days

earlier. California dates are earlier than in other States because dry

beans are planted earlier in California than they are in other States.

6. Section 6--Add a requirement for the insured to submit a copy of

any applicable seed bean processor contract with the report of acreage.

This change is made to allow the insurance provider to verify that the

policy requirement for a contract has been met when establishing the

liability under the policy.

7. Section 7(a)(4)(ii)--Clarify that dry beans planted into an

established grass or legume are not insurable unless allowed by the

Special Provisions or by written agreement because of the adverse

impact such plants would have on the dry bean production.

8. Section 7(b)--Clarifies that any acreage of contract seed beans

produced by a seed company are not insurable, such seed beans are

usually produced for experimental purposes and experimental crops are

not insurable.

9. Section 7(c)--Clarifies the number of years that test plot

results must be provided to insure dry bean types not shown in the

Special Provisions. Previous provisions did not indicate the number of

years test results were required.

10. Section 9--Establishes the end of the insurance period dates by

State in accordance with the latest usual harvest dates published by

National Agricultural Statistics Service. The previous policy contained

only one calendar date for the end of the insurance period and was too

late in some areas.

11. Section 10--Clarifies that insect or disease damage due to

insufficient or improper application of pest or disease control

measures are not an insurable cause of loss.

12. Section 11(b)--Change the replant payment factor from 100

pounds to the lesser of 10 percent of the production guarantee or 120

pounds for dry beans or contract seed beans. This amount will be

multiplied by the price election for the newly seeded beans and the

insured's share to determine the maximum replant payment per acre. This

change will result in replant payment amounts that more accurately

represent the costs of replanting and seeding rates in various

production areas.

13. Section 13(b)--Modify the calculations used to determine dry

bean claim amounts to allow the aggregation of production guarantees

and production to count when more than one bean type is in one unit or

the unit has both contract seed beans and other bean production.

14. Section 13(e)--Add provisions that require the value of

contract seed production to be multiplied by the elected price election

percentage. The value of production to count must also be multiplied by

the elected price election percentage to be consistent with the amount

of insurance for the insured acreage.

15. Section 13(f)--Allow adjustments in production to count

containing excessive moisture to be made separately from any

adjustments for quality deficiencies. Previous provisions combined

adjustments for moisture and quality when both were applicable. This

change is made because wide variations in charges associated with the

drying and handling of high moisture production have caused production

of equal quality and moisture content to be valued differently. Also,

quality adjustment procedures are clarified for situations in which the

pick exceeds the percentage shown on the Special Provisions or the

production does not meet the grade requirements for U.S. No. 2. Such

production to count will be adjusted using either a conversion factor

shown in the Special Provisions or, if this is not available, the

production will be multiplied by a factor that results from dividing

the value per hundredweight of the damaged production by the local

market price.

16. Section 14--Add late planting provisions that cover acreage not

planted by the final planting date but is planted within 25 days after

the final planting date to standardize the dry bean policy with all

other policies which had previously offered late planting coverage as a

separate option. This provision will also provide for reduction in the

guarantee to reflect the increased risk associated with planting the

crop late. The late planting period is also extended from 20 to 25 days

to conform the late planting period of other crop policies. New

provisions providing coverage for acreage that is prevented from being

planted by the final planting date or during the late planting period

have also been added in this section.

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

written agreement. FCIC has a long standing policy of permitting

modification of certain provisions of insurance contracts by written

agreement. Written agreements are not specifically permitted under the

current Dry Bean Crop Insurance Regulations. The new section will cover

the procedures for, and duration of, written agreements.

List of Subjects

7 CFR part 433

Crop insurance, Dry beans.

7 CFR part 457

Crop insurance, Dry beans.

Pursuant to the authority contained in the Federal Crop Insurance

Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance

Corporation hereby proposes to amend the Common Crop Insurance

Regulations (7 CFR part 457); and the Dry Bean Crop Insurance

Regulations (7 CFR part 433), effective for the 1997 and succeeding

crop years, as follows:

PART 433--[AMENDED]

1. The authority citation for 7 CFR part 433 is revised to read as

follows:

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

2. The heading of the subpart is revised to read as follows:

Subpart--Regulations for the 1986 through 1996 Crop Years.

3. Section 433.7 is amended by revising the introductory text of

paragraph (d) of the Dry Bean Crop Insurance Regulations to read as

follows:

Sec. 433.7 The application and policy.

* * * * *

(d) The application for the 1986 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 Dry Bean Insurance Policy for

the 1986 through 1996 crop years are as follows:

* * * * *

PART 457--[AMENDED]

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

follows:

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

5. 7 CFR part 457 is amended by adding a new Sec. 457.150 to read

as follows:

Sec. 457.150 Dry Bean Crop Insurance Provisions.

The Dry Bean Crop Insurance Provisions for the 1997 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:

Dry Bean 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.

Actual value--The dollar value received, or that could be received,

for contract seed beans under a seed bean processor contract if the

contract seed bean production is properly handled.

Base price--The price per pound that is stated in the seed bean

processor contract and that is paid to the grower for at least 50% of

the total production under contract with the seed company.

Beans--Means dry beans and contract seed beans.

Combining--A harvesting process that is completed using a machine

that separates the beans from the pods and other vegetative matter and

places the beans into a temporary storage receptacle.

Contract seed beans--Dry beans grown under the terms of a seed bean

processor contract for the purpose of producing seed to be used for

producing dry beans or vegetable beans in a future crop year.

Days--Calendar days.

Dry beans--The crop defined by the official United States Standards

for Beans.

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--Combining the beans. Beans which are swathed or knifed

prior to combining are not considered harvested.

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

manner that does not permit separate agronomic maintenance or harvest

of the insured crop.

Irrigated practice--A method of producing a crop by which water is

artificially applied during the growing season by appropriate systems

and at the proper times, with the intention of providing the quantity

of water needed to produce at least the yield used to establish the

irrigated production guarantee on the irrigated acreage planted to the

insured crop.

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

planting period.

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

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

final planting date.

Local market price--The cash price per hundredweight for the U.S.

No. 2 grade of dry beans offered by buyers in the area in which you

normally market the dry beans. Factors not associated with grading

under the United States Standards for Beans, such as moisture content,

will not be considered.

Net price--The dollar value of dry bean production after reductions

in value due to insurable causes of loss are considered.

Pick--The percentage, on a weight basis, of defects such as splits,

damaged (including discolored) beans, contrasting types, and foreign

material remaining in the dry beans after dockage has been removed by

the proper use of screens or sieves.

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. Beans must initially be planted in rows

far enough apart to permit cultivation to be considered planted.

Acreage planted in any other manner will not be insurable unless

otherwise provided by the Special Provisions or by written agreement.

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

replant'' contained in section 1 of the Basic Provisions (Sec. 457.8),

practical to replant is defined as our determination, after loss or

damage to the insured crop, based on factors, including but not limited

to moisture availability, condition of the field, time to crop

maturity, and marketing window, that replanting the insured crop will

allow the crop to attain maturity prior to the calendar date for the

end of the insurance period. It will not be considered practical to

replant after the end of the late planting period unless replanting is

generally occurring in the area.

Prevented planting--Inability to plant the insured crop with proper

equipment by the final planting date designated in the Special

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

planting period. You must have been unable to plant the insured crop

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

producers in the surrounding area from planting the same crop.

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

multiplying the approved yield per acre by the coverage level

percentage you elect, and multiplying the result by any applicable

adjustment factor specified in the Special Provisions.

Replanting--Performing the cultural practices necessary to replace

the bean seed and then replacing the bean seed in the insured acreage

with the expectation of growing a successful crop.

Seed bean processor contract--A written agreement between the

contract seed bean producer and the seed company, containing at a

minimum:

(a) The contract seed bean producer's promise to plant and grow one

or more specific varieties of contract seed beans, and deliver the

production from those varieties to the seed company;

(b) The seed company's promise to purchase all the production

stated in the contract; and

(c) A base price or a method to determine such price, that will be

paid to the contract seed bean producer for the production stated in

the contract.

Seed company--A corporation that possesses all licenses and permits

for marketing seed beans required by the State in which it is domiciled

or operated, and that possesses facilities, or has contractual access

to such facilities, with enough drying, screening and bagging equipment

to accept and process the seed beans within a reasonable amount of time

after harvest.

Swathing or knifing--Severance of the bean plant from the ground,

including the pods and beans, and placing them into windrows.

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

designated in the Special Provisions for the insured crop in the

county.

Type--A category of beans identified as a type in the Special

Provisions.

Variety--A kind of contract seed bean specified in the Special

Provisions and named in the seed bean processor contract.

Written agreement--A written document that alters designated terms

of this policy in accordance with section 15.

2. Unit Division.

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

section 1 (Definitions) 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

including, but not limited to, production practice, variety, and

planting period, other than as described in this section.

(c) Optional units will only be available for contract seed beans

if the seed bean processor contract specifies that it is a specified

number of acres that are under contract and not a specified amount of

production.

(d) 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, that portion of the premium paid for the purpose of electing

optional units will be refunded to you pro rata for the units combined.

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

identified on the acreage report for that crop year.

(f) The following requirements must be met for each optional unit:

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

planted acreage and production for each optional unit for at least the

last crop year used to determine your production guarantee;

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

discernable break in the planting pattern at the boundaries of each

optional unit;

(3) You must have records of marketed production or measurement of

stored production from each optional unit maintained in such a manner

that permits us to verify the production from each optional unit, or

the production from each unit must be kept separate until 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 bean type: A separate optional unit may be

established for each bean type shown in the Special Provisions.

(ii) 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.

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

irrigated Practices:

In 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 or non-irrigated acreage 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.

However, non-irrigated acreage that is not a part of a field in which a

center-pivot irrigation system is used may qualify as a separate

optional unit provided that all requirements of this section are met.

3. Insurance Guarantees, Coverage Levels, and Prices for

Determining Indemnities.

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

Guarantees, Coverage Levels, and Prices for Determining Indemnities) of

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

election for all the dry beans 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 dry bean

type designated in the Special Provisions. The price elections you

choose for each type are not required to 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 may also choose 75 percent of the maximum price election

for another type.

(b) For contract seed beans only, the dollar amount of insurance is

obtained by multiplying the production guarantee per acre for each

variety in the unit by the insured acreage of that variety, times the

applicable base price, and times the price election percentage you

selected. The total of these results will be the amount of insurance

for contract seed beans in the unit.

4. Contract Changes.

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

Provisions (Sec. 457.8), the contract change date is November 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:

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

Cancellation and termination

State and county dates

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

California.............................. Feb. 28.

All other States........................ Mar. 15.

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6. Report of Acreage.

For contract seed beans only, in addition to the requirements of

section 6 (Report of Acreage) of the Basic Provisions (Sec. 457.8), you

must submit a copy of the seed bean processor contract at the time you

file your report of acreage.

7. Insured Crop.

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

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

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

(1) In which you have a share;

(2) That are planted for harvest as:

(i) Dry beans; or

(ii) If applicable, contract seed beans, if the seed bean processor

contract is executed before the acreage reporting date;

(3) That are not volunteer beans; and

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

written agreement):

(i) Interplanted with another crop; or

(ii) Planted into an established grass or legume.

(b) For contract seed beans only:

(1) An instrument in the form of a ``lease'' under which you retain

control of the acreage on which the insured crop is grown and that

provides for delivery of the crop under substantially the same terms as

a seed bean processor contract may be treated as a contract

under which you have an insurable interest in the crop; and

(2) We will not insure any acreage of contract seed beans produced

by a seed company.

(c) In addition to the types of beans designated in the Special

Provisions, we will insure other types provided:

(1) The type you intend to plant has been demonstrated to be

adapted to the area. Evidence of adaptability must include:

(i) Results of test plots for 2 years and recommendations by a

university or seed company; or

(ii) Two years of production reports that indicate your experience

producing the type in your production area;

(2) You submit on or before the sales closing date your production

reports and prices received, or the test plot results and evidence of

market potential, including the price buyers are willing to pay for the

type; and

(3) We provide you a written agreement allowing insurance on the

type.

(d) Any acreage of beans that is destroyed and replanted to a

different insurable type of beans will be considered insured acreage.

8. Insurable Acreage.

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

the Basic Provisions (Sec. 457.8):

(a) We will not insure any acreage that does not meet the rotation

requirements shown in the Special Provisions; or

(b) Any acreage of the insured crop damaged before the final

planting date, to the extent that the majority of growers in the area

would normally not further care for the crop, must be replanted unless

we agree that replanting is not practical. We will not require you to

replant if it is not practical to replant to the same type of beans as

originally planted.

9. 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 the date immediately following planting as

follows:

(a) October 15 in Oklahoma, New Mexico, and Texas;

(b) November 15 in California; and

(c) October 31 in all other States.

10. 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

peril that occurs during the insurance period.

11. Replanting Payments.

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

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

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 10 percent of the production guarantee or 120 pounds for

dry beans or contract seed beans, times your price election for the

newly seeded type, times your insured share.

(c) When beans are replanted using a practice that is uninsurable

as an original planting, the liability for the unit will be reduced by

the amount of the replanting payment. The premium amount will not be

reduced.

12. Duties In The Event of Damage or Loss.

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.

13. 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 to your bean crop covered by

this policy, we will settle your claim on by:

(1) Multiplying the insured acreage of each dry bean type by the

respective production guarantee;

(2) Multiplying each result in section 13(b)(1) by the respective

price election for the type;

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

(4) Multiplying the insured acreage of each contract seed bean

variety by its respective production guarantee;

(5 ) Multiplying each result in section 13(b)(4) by the applicable

base price;

(6) Multiplying each result in section 13(b)(5) by your selected

price election percentage;

(7) Totaling the results in section 13(b)(6);

(8) Totaling the results in section 13(b)(3) and section 13(b)(6);

(9) Multiplying the total production to be counted of each dry bean

type if applicable, (see section 13(d)) by the respective price

election;

(10) Totaling the value of all contract seed bean production (see

section 13(c));

(11) Totaling the results in section 13(b)(9) and section

13(b)(10);

(12) Subtracting the total in section 13(b)(11) from the total in

section 13(b)(8); and

(13) Multiplying the result by your share.

(c) The value of contract seed bean production to count for each

variety in the unit will be determined as follows:

(1) For production meeting the minimum quality requirements

contained in the seed bean processor contract and for production that

does not meet such requirements due to uninsured causes:

(i) Multiplying the actual value or base price per pound, whichever

is greater, by the price election percentage you selected; and

(ii) Multiplying the result by the number of pounds of such

production.

(2) For production not meeting the minimum quality requirements

contained in the seed bean processor contract due to insurable causes:

(i) Multiplying the actual value by the price election percentage

you selected; and

(ii) Multiplying the result by the number of pounds of such

production.

(d) The total bean 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

that are acceptable to us;

(ii) Production lost due to uninsured causes;

(iii) Unharvested production (mature unharvested production of dry

beans

may be adjusted for quality deficiencies and excess moisture in

accordance with section 13(e)); 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 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.

(e) Mature dry bean production to count may be adjusted for excess

moisture and quality deficiencies. Adjustment for excess moisture and

quality deficiencies will not be applicable to contract seed beans. 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 18 percent. We may obtain

samples of the production to determine the moisture content.

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

(i) A pick is designated in the Special Provisions and the pick of

the damaged production exceeds this designation; or

(ii) A pick is not designated in the Special Provisions and

deficiencies in quality, in accordance with the United States Standards

for Beans, result in dry beans not meeting the grade requirements for

U.S. No. 2 (grades U.S. No. 3 or worse) because the beans are damaged

or badly damaged; or

(iii) Substances or conditions are present 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 within the insurance period;

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

price for the 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 dry

beans under the authority of the United States 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) Dry bean production that is eligible for quality adjustment, as

specified in sections 13(e) (2) and (3), will be reduced:

(i) If a conversion factor is designated by the Special Provisions,

by multiplying the number of pounds of eligible production by the

conversion factor designated in the Special Provisions for the

applicable grade or pick; or

(ii) If a conversion factor is not designated by the Special

Provisions as follows:

(A) The market price of the qualifying damaged production and the

local market price will be determined on the earlier of the date such

quality adjusted production is sold or the date of final inspection for

the unit. If a local market price is not available for the insured crop

year, the current years' maximum price election available for the

applicable type will be used. The price for the qualifying damaged

production will be the market price for the local area to the extent

feasible. 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 dry beans to those buyers. Discounts used to establish the

net price of the damaged production will be limited to those that are

usual, customary, and reasonable. The price of the damaged production

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 the dry beans;

except, if the price of the damaged production can be increased by

conditioning, we may reduce the price of the production after it has

been conditioned by the cost of conditioning but not lower than the

value of the production before conditioning;

(B) The value per pound of the damaged or conditioned production

will be divided by the local market price to determine the quality

adjustment factor; and

(C) The number of pounds remaining after any reduction due to

excessive moisture (the moisture-adjusted gross pounds) of the damaged

or conditioned production will then be multiplied by the quality

adjustment factor to determine the net production to count.

(f) Any production harvested from plants growing in the insured

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

basis.

14. Late Planting and Prevented Planting.

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

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

planting date and the applicability of a Late Planting Agreement

Option, insurance will be provided for acreage planted to the insured

crop during the late planting period (see section 14(c)), and acreage

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

provide reduced production guarantees. The premium amount for late

planted acreage and eligible prevented planting acreage will be the

same as that for timely planted. If the amount of premium you are

required to pay (gross premium less our subsidy) for late planted

acreage or prevented planting acreage exceeds the liability on such

acreage, coverage for those acres will not be provided, no premium will

be due, and no indemnity will be paid for such acreage.

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

notice to us not later than the acreage reporting date.

(c) Late Planting

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

production guarantee or amount of insurance for each acre will be

reduced for each day planted after the final planting date by:

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

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

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

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

dates the acreage is planted within the late planting period.

(3) If planting of beans continues after the final planting date,

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

acreage reporting date will be the later of:

(i) The acreage reporting date contained in the Special Provisions

for the insured crop; or

(ii) Five (5) days after the end of the late planting period.

(d) Prevented Planting (Including Planting After the Late Planting

Period)

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

elect:

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

guarantee or amount of insurance for such acreage will be determined in

accordance with section 14(c)(1);

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

for harvest. You may also elect to plant the insured crop after the

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

amount of insurance for such acreage will be 50 percent of the

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

production guarantee for timely planted acreage is 1,500 pounds per

acre, your prevented planting production guarantee would be 750 pounds

per acre (1,500 pounds multiplied by 0.50). If you elect to plant the

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

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

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

for harvest, in which case:

(A) No prevented planting production guarantee will be provided for

such acreage if the substitute crop is planted on or before the 10th

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

(B) A production guarantee equal to 25 percent of the production

guarantee for timely planted acres will be provided for such acreage,

if the substitute crop is planted after the 10th day following the

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

Catastrophic Risk Protection Endorsement or excluded this coverage, and

plant a substitute crop, no prevented planting coverage will be

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

acreage is 30 bushels per acre, your prevented planting production

guarantee would be 7.5 bushels per acre (30 bushels multiplied by

0.25). You may elect to exclude prevented planting coverage when a

substitute crop is planted for harvest and receive a reduction in the

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

so indicate, on or before the sales closing date, on your application

or on a form approved by us. Your election to exclude this coverage

will remain in effect from year to year unless you notify us in writing

on our form by the applicable sales closing date for the crop year for

which you wish to include this coverage. All acreage of the crop

insured under this policy will be subject to this exclusion.

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

acreage within a unit will be combined to determine the production

guarantee for the unit. For example, assume you insure one unit in

which you have a 100 percent share. The unit consists of 150 acres, of

which 50 acres were planted timely, 50 acres were planted 7 days after

the final planting date (late planted), and 50 acres were not planted

but are eligible for a prevented planting production guarantee or

amount of insurance. The production guarantee for the unit will be

computed as follows:

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

production guarantee or amount of insurance for timely planted acreage

by the 50 acres planted timely;

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

guarantee or amount of insurance for timely planted acreage by 93

percent and multiply the result by the 50 acres planted late; and

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

production guarantee or amount of insurance for timely planted acreage

by:

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

prevented from planting, if the acreage is eligible for prevented

planting coverage, and if the acreage is left idle for the crop year,

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

compensation hereunder will not be denied because the cover crop is

hayed or grazed; or

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

were prevented from planting, if the acreage is eligible for prevented

planting coverage, and if you elect to plant a substitute crop for

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

insured crop. (This paragraph (B) is not applicable, and prevented

planting coverage is not available under these crop provisions, if you

elected the Catastrophic Risk Protection Endorsement or you elected to

exclude prevented planting coverage when a substitute crop is planted

(see section 14(d)(1)(iii)).

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

acre production guarantee/amount of insurance for timely planted

acreage by the 150 acres in the unit.

(3) We may require proof that you had the inputs available to plant

and produce the intended crop with the expectation of at least

producing the production guarantee or amount of insurance.

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

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

prevented planting coverage begins:

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

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

for insurance is accepted; or

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

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

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

you make application and purchase insurance for dry beans for the 1997

crop year, prevented planting coverage will begin on the 1997 sales

closing date for dry beans in the county. If the dry bean coverage

remains in effect for the 1998 crop year (is not terminated or canceled

during or after the 1997 crop year), prevented planting coverage for

the 1998 crop year began on the 1997 sales closing date. Cancellation

for the purpose of transferring the policy to a different insurance

provider when there is no lapse in coverage will not be considered

terminated or canceled coverage for the purpose of the preceding

sentence.

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

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

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

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

FSA Farm Serial Number is determined as follows:

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

States Department of Agriculture that limits the number of acres that

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

planting coverage will not exceed the total acreage permitted to be

planted to the insured crop.

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

United States Department of Agriculture that limits the number of acres

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

sales closing date,

eligible acreage will not exceed the greater of:

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

could be flexed from another crop, if applicable;

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

Number during the previous crop year; or

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

acres planted to dry beans during the crop years that you certified to

determine your yield.

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

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

irrigation facilities prior to the insured cause of loss which

prevented you from planting.

(iv) A prevented planting production guarantee or amount of

insurance will not be provided for any acreage:

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

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

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

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

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

planting date to plant and produce another insured crop on the

acreage);

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

unless a written agreement designates such premium rate;

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

under any program administered by the United States Department of

Agriculture;

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

have already received a prevented planting indemnity, guarantee or

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

you provide adequate records of acreage and production showing that the

acreage was double-cropped in each of the last 4 years;

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

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

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

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

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

records of acreage and production showing that the acreage was double-

cropped in each of the last 4 years;

(F) When coverage is provided under the Catastrophic Risk

Protection Endorsement if you plant another crop for harvest on any

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

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

Protection Endorsement and receive a prevented planting indemnity,

guarantee, or amount of insurance for a crop and are prevented from

planting another crop on the same acreage, you may only receive the

prevented planting indemnity, guarantee, or amount of insurance for the

crop on which the prevented planting indemnity, guarantee, or amount of

insurance is received; or:

(G) For which planting history or conservation plans indicate that

the acreage would have remained fallow for crop rotation purposes.

(v) For the purpose of determining eligible acreage for prevented

planting coverage, acreage for all units will be combined and be

reduced by the number of dry bean acres timely planted and late

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

planting coverage in which you have a 100 percent share. The acreage is

located in a single FSA Farm Serial Number which you insure as two

separate optional units consisting of 50 acres each. If you planted 60

acres of dry beans on one optional unit and 40 acres of dry beans on

the second optional unit, your prevented planting eligible acreage

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

planting coverage minus 100 acres planted equals zero).

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

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

any insurable acreage that you were prevented from planting. This

report must be submitted on or before the acreage reporting date. For

the purpose of determining acreage eligible for a prevented planting

production guarantee, the total amount of prevented planting and

planted acres cannot exceed the maximum number of acres eligible for

prevented planting coverage. Any acreage you report in excess of the

number of acres eligible for prevented planting coverage, or that

exceeds the number of eligible acres physically located in a unit, will

be deleted from your acreage report.

15. Written Agreements.

Designated terms of this policy may be altered by written agreement

in accordance with the following:

(a) You must apply in writing for each written agreement no later

than the sales closing date, except as provided in section 15(e);

(b) The application for 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, 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 provisions.

Done in Washington, D.C., on November 18, 1996.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 96-29864 Filed 11-25-96; 8:45 am]

BILLING CODE 3410-FA-P