General Crop Insurance Regulations, Stonefruit Endorsement; and Common Crop Insurance Regulations, Stonefruit Crop Insurance Provisions

Proposed Rules

Federal Register

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Proposed Rules

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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 401 and 457

General Crop Insurance Regulations, Stonefruit Endorsement; and

Common Crop Insurance Regulations, Stonefruit 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 stonefruit. 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 stonefruit endorsement with the Common Crop Insurance Policy

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

the current stonefruit endorsement to the 1998 and prior crop years.

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

excepted until close of business September 22, 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, Product Development Division,

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

listed above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

sion, 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, 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, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

The information collection requirements contained in these

regulations are being reviewed by OMB pursuant to the Paperwork

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

0563-0053.

The title of this information collection is ``Multiple Peril Crop

Insurance.''

The burden associated with stonefruit is estimated at 14 minutes

per response from approximately 3,392 respondents each year for a total

number of 1,196 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, DC 20503

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, DC 20503.

OMB is required to make a decision concerning the collection 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), Pub.

L. 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

ve 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.

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

This proposed rule has been reviewed under Executive Order No.

12988 on civil justice reform. 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

trative appeal

provisions published at 7 CFR part 11 must be exhausted before any

action for judicial review may be brought.

Environmental Evaluation

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

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

neither an Environmental Assessment nor an Environmental Impact

Statement is needed.

National Performance Review

This regulatory action is being taken as part of the National

Performance Review Initiative to eliminate unnecessary or duplicative

regulations and improve those that remain in force.

Background

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

CFR part 457), a new section, 7 CFR 457.159, Stonefruit Crop Insurance

Provisions. The new provisions will be effective for the 1999 and

succeeding crop years. These provisions will replace and supersede the

current provisions for insuring stonefruit found at 7 CFR 401.122 (

Stonefruit Endorsement). FCIC also proposes to amend 401.122 to limit

its effect to the 1998 and prior crop years.

This rule makes minor editorial and format changes to improve the

Stonefruit Endorsement compatibility with the Common Crop Insurance

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

provisions for insuring stonefruit as follows:

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

marketing,'' ``FSA,'' ``good farming practices,'' ``interplanted,''

``irrigated practice,'' ``marketable,'' ``non-contiguous,''

``processor,'' ``production guarantee (per acre),'' ``stonefruit,''

``type,'' ``USDA,'' ``varietal group,'' and ``written agreement'' for

clarification. The definition of ``stonefruit'' removes current policy

type references I through VI for each stonefruit, though the same types

remain insurable. Also, change the definition of ``ton'' for

clarification. The definition is applicable to each stonefruit that can

be measured in tons. Also, remove definitions of ``appraisal'' and

``crop year'' as unnecessary.

2

en agreement'' for

clarification. The definition of ``stonefruit'' removes current policy

type references I through VI for each stonefruit, though the same types

remain insurable. Also, change the definition of ``ton'' for

clarification. The definition is applicable to each stonefruit that can

be measured in tons. Also, remove definitions of ``appraisal'' and

``crop year'' as unnecessary.

2. Section 2--Provide that stonefruit will be divided into

additional basic units by each Stonefruit crop designated in the

Special Provisions that the producer elects to insure. Basic units may

be further divided into optional units based on non-contiguous land and

by type or varietal group, if provided for in the Special Provisions.

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

election for each crop in the county insured under this policy, unless

the Special Provisions provide different price elections by type or

varietal group, in which case the insured may select one price election

for each type or varietal group. The price election the insured selects

must have the same percentage relationship to the maximum price

offered. This will help to protect against adverse selection and

simplifies administration of the program.

4. Section 3(b)--Specify that the insured must report damage,

removal of trees, and any change in practice that could reduce yields.

The insured must also report, for the first year of insurance for

acreage interplanted with another perennial crop and anytime the

planting pattern of such acreage is changed, the age and varietal

group, if applicable, of any interplanted crop, its planting pattern,

and any other information that the insurance provider requests in order

to establish the approved yield

at could reduce yields.

The insured must also report, for the first year of insurance for

acreage interplanted with another perennial crop and anytime the

planting pattern of such acreage is changed, the age and varietal

group, if applicable, of any interplanted crop, its planting pattern,

and any other information that the insurance provider requests in order

to establish the approved yield. If the insured fails to notify the

insurance provider of factors that may reduce yields from previous

levels, the insurance provider will reduce the production guarantee at

any time the insurance provider becomes aware of damage, removal of

trees, or changes in practices. This change will standardize these

provisions with those in other perennial crop policies.

5. Section 6--Remove the provision that requires production records

to be provided for at least the previous crop year. Transitional yields

are now available to producers who do not have production records for

the previous crop year.

6. Section 6(d)--Specify that at least 200 lugs per acre of fresh

market production or at least 2.2 tons per acre of processing types

production must have been produced in at least one of the three most

recent crop years of the actual production history base period for the

crop to be insured, unless the insurer inspects such acreage and gives

approval in writing. This requirement requires the orchard to produce

the minimum production in the most recent years which indicates the

orchard is productive and is a feasible insurance risk. Previous

regulations required a minimum 200 lugs fresh market production per

acre (at least 2.2 tons per acre for processing types) but did not

clearly state that the minimum must have been produced in one of the

three most recent crop years.

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s the orchard to produce

the minimum production in the most recent years which indicates the

orchard is productive and is a feasible insurance risk. Previous

regulations required a minimum 200 lugs fresh market production per

acre (at least 2.2 tons per acre for processing types) but did not

clearly state that the minimum must have been produced in one of the

three most recent crop years.

7. Section 7--Allow insurance for stonefruit interplanted with

another perennial crop in order to make insurance available on more

acreage and reduce the reliance on noninsured crop disaster assistance

(NAP) for protection against crop losses.

8. Section 8(a)(1)--Specify that the insurance period begins on

February 1 of each crop year, except that for the year of application,

if the producers's application is received after January 22 but prior

to February 1, insurance will attach on the 10th day after the

producer's application is received in the insurance provider's local

office unless the insurance provider inspects the acreage and

determines that it does not meet insurability requirements. These

provisions were modified to avoid interpretation that late-filed

applications are allowed. Ten days is sufficient to prevent adverse

selection and avoid unnecessary exposure to uninsured losses during the

waiting period.

9. Section 8(b)--Provide policy guidelines for attachment of

insurance when insurable acreage is acquired or relinquished after

coverage begins but on or before the acreage reporting date and if the

acreage was insured by you the previous crop year, insurance will not

be considered to have attached to, and no premium or indemnity will be

due. Under the current endorsement for acreage relinquished on or

before the acreage reporting date, the premium would still be due from

the producer even if the producer no longer had an insurable interest

or before the acreage reporting date and if the

acreage was insured by you the previous crop year, insurance will not

be considered to have attached to, and no premium or indemnity will be

due. Under the current endorsement for acreage relinquished on or

before the acreage reporting date, the premium would still be due from

the producer even if the producer no longer had an insurable interest.

In the same situation under these new provisions, insurance will not be

considered to have attached, so the premium will not be due unless a

transfer of right to an indemnity was in effect.

10. Section 9(a)--Remove insufficient chilling hours as a specified

insurable cause of loss because not enough actuarial data is available

to demonstrate that a lack of chilling hours adversely affects

stonefruit production. If damage or loss was due to an insufficient

number of chilling hours, such loss would be covered under adverse

weather. This change is consistent with other perennial crop policies.

11. Section 9(b)(1) (i) and (ii)--Clarify that damage or loss of

production due to disease or insect infestation will not be an insured

cause of loss, unless adverse weather prevents the proper application

of control measures, causes properly applied control measures to be

ineffective, or causes disease or insect infestation for which no

effective control mechanism is available. This change also will be made

to be consistent with other crop policies.

12. Section 10--Specify that the insured must notify the insurance

provider: (1) Within 3 days of the date harvest should have started if

the crop will not be harvested, (2) 15 days prior to harvest if the

insured previously gave notice of loss so that an inspection can be

made, (3) at least 15 days prior to

available. This change also will be made

to be consistent with other crop policies.

12. Section 10--Specify that the insured must notify the insurance

provider: (1) Within 3 days of the date harvest should have started if

the crop will not be harvested, (2) 15 days prior to harvest if the

insured previously gave notice of loss so that an inspection can be

made, (3) at least 15 days prior to

harvest so a preharvest inspection can be made if the insured intends

to directly market the crop, and (4) must not destroy the damaged crop

which is not marketed until after we have given written consent to do

so. Failure to give timely notice that production will be sold by

direct marketing will result in an appraised amount of production to

count of not less than the production guarantee per acre if such

failure results in the insurance provider's inability to make the

required appraisal. The current endorsement requires written notice

within 72 hours of damage, immediate notice of damage if damage occurs

within 72 hours of or during harvest, notice 72 hours prior to harvest,

and prohibits the insured from selling or otherwise disposing of any

damaged production until written consent is given by the insurance

provider. These proposed changes will incorporate and standardize the

notice of loss requirements used for other perennial crops.

13. Section 11(c)(2)(i)--Specify that the total production to count

will include all harvested production from insurable acreage that is

packed and sold as fresh fruit and that meets the grade requirements of

the California Tree Fruit Agreement Marketing Order or State Department

of Food and Agriculture Code of Regulations, as amended, in effect for

the crop, or processing industry.

14. Section 11(c)(2)(ii)--Specify how production to count is

determined for fresh fruit that is marketed and meets California

Utility Grade. This change clarifies that fresh fruit that is damaged

and of poor quality is eligible for quality adjustment on a fresh fruit

basis.

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epartment

of Food and Agriculture Code of Regulations, as amended, in effect for

the crop, or processing industry.

14. Section 11(c)(2)(ii)--Specify how production to count is

determined for fresh fruit that is marketed and meets California

Utility Grade. This change clarifies that fresh fruit that is damaged

and of poor quality is eligible for quality adjustment on a fresh fruit

basis.

15. Section 11(c)(2)(iii)--Specify how production to count is

determined for fresh harvested production that does not meet the

specific grade requirements, but is used for any use other than fresh

stonefruit. This change clarifies that fresh fruit that does not meet

the specific grade requirements is eligible for quality adjustment on a

processing fruit basis.

16. Section 11(c)(2)(v)--Add procedure for determining the

production to count for mature Processing Apricots, Processing Cling

Peaches, and Processing Freestone Peaches damaged by insurable causes

within the insurance period to the extent that their value is less than

75 percent of the marketable value of the corresponding undamaged crop.

This change is added to allow quality adjustment for such processing

fruit.

17. Section 12--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, Stonefruit endorsement.

Proposed Rule

Accordingly, for the reasons set forth in the preamble, the Federal

Crop Insurance Corporation, hereby, proposes to amend 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:

Crop insurance, Stonefruit endorsement.

Proposed Rule

Accordingly, for the reasons set forth in the preamble, the Federal

Crop Insurance Corporation, hereby, proposes to amend 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(1), 1506(p).

2. The introductory text of Sec. 401.122 is revised to read as

follows:

Sec. 401.122 Stonefruit endorsement.

The provisions of the Stonefruit Crop Insurance Endorsement for the

1988 through 1998 crop years are as follows:

* * * * *

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

1994 AND SUBSEQUENT CONTRACT YEARS

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

follows:

Authority: 7 U.S.C. 1506(1), 1506(p).

4. Section 457.159 is added to read as follows:

Sec. 457.159 Stonefruit crop insurance provisions.

The Stonefruit Crop Insurance Provisions for the 1999 and

succeeding crop years are as follows:

FCIC policies:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Reinsured policies:

(Appropriate title for insurance provider)

Both FCIC and reinsured policies:

Stonefruit Crop Provisions

If a conflict exists among the Basic Provisions (Sec. 457.8),

the crop provisions, the Special Provisions; the Catastrophic Risk

Protection Endorsement, if applicable, the Special Provisions; will

control these Crop Provisions and these Basic Provisions; the Crop

Provisions will control the Basic Provisions; and the Catastrophic

Risk Protection Endorsement, if applicable, will control all

provisions.

1. Definitions

g the Basic Provisions (Sec. 457.8),

the crop provisions, the Special Provisions; the Catastrophic Risk

Protection Endorsement, if applicable, the Special Provisions; will

control these Crop Provisions and these Basic Provisions; the Crop

Provisions will control the Basic Provisions; and the Catastrophic

Risk Protection Endorsement, if applicable, will control all

provisions.

1. Definitions

Days. Calendar days.

Direct marketing. Sale of the insured crop directly to consumers

without the intervention of an intermediary such as wholesaler,

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

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

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

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

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

Department of Agriculture, or a successor agency.

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. The picking of mature stonefruit either by hand or

machine.

Interplanted. Acreage on which two or more crops are planted in

any form of alternating or mixed pattern.

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.

Lug. A container of fresh stonefruit of specified weight. Lugs

of varying sizes will be converted to standard lug equivalents on

the basis of the following net pounds of packed fruit:

roper 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.

Lug. A container of fresh stonefruit of specified weight. Lugs

of varying sizes will be converted to standard lug equivalents on

the basis of the following net pounds of packed fruit:

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

Crop Pounds/Lug

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Fresh Apricots............................................. 24

Fresh Nectarines........................................... 25

Fresh Freestone Peaches.................................... 22

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(Weights for Processing Apricots, Processing Cling Peaches, and

Processing Freestone Peaches are specified in tons.)

Marketable. Stonefruit production acceptable for processing or

other human consumption, even if it fails to meet the state

Department of Food and Agriculture minimum grading standard.

Non-contiguous. Any two or more tracts of land whose boundaries

do not touch at any point, except that land separated only by a

public or private right-of-way, waterway, or an irrigation canal

will be considered as contiguous.

Processor. A business enterprise regularly engaged in processing

fruit for human consumption that possesses all licenses and permits

for processing fruit required by the state in which it operates, and

that possesses facilities, or has contractual access to such

facilities, with enough equipment to accept

and process contracted fruit within a reasonable amount of time

after harvest.

Production guarantee (per acre). The number of tons or lugs of

stonefruit determined by multiplying the approved APH yield per acre

by the coverage level percentage you elect.

Stonefruit. Any of the following crops grown for fresh market or

processing:

(a) Fresh Apricots,

ilities, with enough equipment to accept

and process contracted fruit within a reasonable amount of time

after harvest.

Production guarantee (per acre). The number of tons or lugs of

stonefruit determined by multiplying the approved APH yield per acre

by the coverage level percentage you elect.

Stonefruit. Any of the following crops grown for fresh market or

processing:

(a) Fresh Apricots,

(b) Fresh Freestone Peaches,

(c) Fresh Nectarines,

(d) Processing Apricots,

(e) Processing Cling Peaches, or

(f) Processing Freestone Peaches.

Ton. Two thousand (2,000) pounds avoirdupois.

Type. Classes of a stonefruit crop with similar characteristics

that are grouped for insurance purposes.

USDA. United States Department of Agriculture.

Varietal group. A subclass of type.

Written agreement. A written document that alters designated

terms of this policy in accordance with section 12.

2. Unit Division

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

Provisions (Sec. 457.8), will be divided into additional basic units

by each stonefruit crop designated in the Special Provisions that

you elect to insure.

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

divided into optional units if, for each optional unit you meet all

the conditions of this section.

(c) Basic units may not be divided into optional units on any

basis other than as described in this section.

(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 into a basic unit, that portion of the additional

premium paid for the optional units that have been combined will be

refunded to you for the units combined.

ere 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 for the units combined.

(e) All optional units you selected for the 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 acreage and production for each optional unit for at least the

last crop year used to determine your production guarantee;

(2) 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

(3) Each optional unit must meet one of the following criteria,

as applicable, unless otherwise specified by written agreement:

(i) Optional Units on Acreage Located on Non-contiguous Land:

Optional units may be established if each optional unit is located

on non-contiguous land; or

(ii) Optional Units by Type or Varietal Group: Optional units

may be established by type or varietal group if provided for in the

Special Provisions.

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):

ii) Optional Units by Type or Varietal Group: Optional units

may be established by type or varietal group if provided for in the

Special Provisions.

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):

(a) You may select only one price election and coverage level

for each crop grown in the county and listed in the Special

Provisions that is insured under this policy. If separate price

elections are available by type or varietal group of a crop, the

price elections you choose for each type or varietal group must have

the same percentage relationship to the maximum price offered by us

for each type or varietal group. For example, if you choose 100

percent of the maximum price election for one type of cling peaches,

you must choose 100 percent of the maximum price election for all

other types of cling peaches.

(b) You must report, by the production reporting date designated

in section 3 (Insurance Guarantees, Coverage Levels, and Prices for

Determining Indemnities) of the Basic Provisions (Sec. 457.8), by

type or varietal group, if applicable, for each stonefruit crop:

(1) Any damage, removal of trees, change in practices, or any

other circumstance that may reduce the expected yield below the

yield upon which the insurance guarantee is based, and the number of

affected acres; (2) The number of bearing trees on insurable and

uninsurable acreage; (3) The age of the trees and the planting

pattern; and

(4) For the first year of insurance for acreage interplanted

with another perennial crop, and anytime the planting pattern of

such acreage is changed:

uce the expected yield below the

yield upon which the insurance guarantee is based, and the number of

affected acres; (2) The number of bearing trees on insurable and

uninsurable acreage; (3) The age of the trees and the planting

pattern; and

(4) For the first year of insurance for acreage interplanted

with another perennial crop, and anytime the planting pattern of

such acreage is changed:

(i) The age of the interplanted crop, and type or varietal group

if applicable;

(ii) The planting pattern; and

(iii) Any other information that we request in order to

establish your approved yield.

We will reduce the yield used to establish your production

guarantee as necessary, based on our estimate of the effect of

interplanting a perennial crop, removal of trees, damage, change in

practice, and any other circumstance that could effect the yield

potential of the insured crop. If you fail to notify us of any

circumstance that may reduce your yields from previous levels, we

will reduce your production guarantee as necessary at any time we

become aware of the circumstance.

4. Contract Changes

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

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

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 January 31.

6. Insured Crop

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

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

stonefruit crop you elect to insure, that is grown in the county,

and for which premium rates are provided in the actuarial table:

(a) In which you have a share; (b) That are grown on trees that:

(1) Were commercially available when the trees were set out; (2)

Are adapted to the area; and

(3) Are grown on a root stock that is adapted to the area;

(c) That are irrigated;

will be all of each

stonefruit crop you elect to insure, that is grown in the county,

and for which premium rates are provided in the actuarial table:

(a) In which you have a share; (b) That are grown on trees that:

(1) Were commercially available when the trees were set out; (2)

Are adapted to the area; and

(3) Are grown on a root stock that is adapted to the area;

(c) That are irrigated;

(d) That have produced at least 200 lugs of fresh market

production per acre, or at least 2.2 tons per acre for processing

crops, in at least 1 of the 3 most recent actual production history

crop years, unless we inspect such acreage and give our approval in

writing;

(e) That are regulated by the California Tree Fruit Agreement or

related crop advisory board for the state (for applicable types);

(f) That are grown in an orchard that, if inspected, is

considered acceptable by us; and

(g) That have reached at least the fifth growing seasons after

set out. However, we may agree in writing to insure acreage that has

not reached this age if it has produced at least 200 lugs fresh

market production per acre or at least 2.2 tons per acre for

processing types.

7. Insurable Acreage

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

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

to a crop planted with another crop, stonefruit interplanted with

another perennial crop is insurable unless we inspect the acreage

and determine that it does not meet the requirements contained in

your policy.

8. Insurance Period

g types.

7. Insurable Acreage

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

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

to a crop planted with another crop, stonefruit interplanted with

another perennial crop is insurable unless we inspect the acreage

and determine that it does not meet the requirements contained in

your policy.

8. Insurance Period

(a) In accordance with the provisions of section 11 (Insurance

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

(1) Coverage begins on February 1 of each crop year, except that

for the year of application, if your application is received after

January 22 but prior to February 1, insurance will attach on the

10th day after your properly completed application is received in

our local office unless we inspect the acreage and determine that it

does not meet insurability requirements. You must provide any

information that we require for the crop or to determine the

condition of the orchard.

(2) The calendar date for the end of the insurance period for

each crop year is:

(i) July 31 for all apricots, and

(ii) September 30 for all nectarines and peaches.

(b) In addition to the provisions of section 11 (Insurance

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

(1) If you acquire an insurable share in any insurable acreage

after coverage begins but on or before the acreage reporting date

for the crop year, and after an inspection we consider the acreage

acceptable, insurance will be considered to have attached to such

acreage on the calendar date for the beginning of the insurance

period.

(2) If you relinquish your insurable share on any insurable

acreage of stonefruit on or before the acreage reporting date for

the crop year and if the acreage was insured by you the previous

crop year, insurance will not be considered to have attached to, and

no premium or indemnity will be due for such acreage for that crop

year unless:

endar date for the beginning of the insurance

period.

(2) If you relinquish your insurable share on any insurable

acreage of stonefruit on or before the acreage reporting date for

the crop year and if the acreage was insured by you the previous

crop year, insurance will not be considered to have attached to, and

no premium or indemnity will be due for such acreage for that crop

year unless:

(i) A transfer of coverage and right to an indemnity, or a

similar form approved by us, is completed by all affected parties;

(ii) We are notified by you or the transferee in writing of such

transfer on or before the acreage reporting date; and

(iii) The transferee is eligible for crop insurance.

9. Causes of Loss

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

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

only against the following causes of loss that occur during the

insurance period:

(1) Adverse weather conditions;

(2) Fire, unless weeds and other forms of undergrowth have not

been controlled or pruning debris has not been removed from the

orchard;

(3) Wildlife, unless appropriate control measures have not been

taken;

(4) Earthquake;

(5) Volcanic eruption; or

(6) Failure of irrigation water supply, if caused by an insured

cause of loss that occurs during the insurance period.

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

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

insure against damage or loss of production due to:

(1) Disease or insect infestation, unless adverse weather:

rthquake;

(5) Volcanic eruption; or

(6) Failure of irrigation water supply, if caused by an insured

cause of loss that occurs during the insurance period.

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

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

insure against damage or loss of production due to:

(1) Disease or insect infestation, unless adverse weather:

(i) Prevents the proper application of control measures or

causes properly applied control measures to be ineffective; or

(ii) Causes disease or insect infestation for which no effective

control mechanism is available;

(2) Split pits regardless of cause; or

(3) Inability to market the insured crop for any reason other

than actual physical damage from an insurable cause of loss

specified in this section. For example, we will not pay you an

indemnity if you are unable to market due to quarantine, boycott, or

refusal of any person to accept production.

10. Duties in the Event of Damage or Loss

In addition to the requirements of section 14 (Duties in the

Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the

following will apply:

(a) You must notify us within 3 days of the date harvest should

have started if the insured crop will not be harvested.

(b) You must notify us at least 15 days before any production

from any unit will be sold by direct marketing. We will conduct an

appraisal that will be used to determine your production to count

for production that is sold by direct marketing. If damage occurs

after this appraisal, we will conduct an additional appraisal. These

appraisals, and any acceptable records provided by you, will be used

to determine your production to count. Failure to give timely notice

that production will be sold by direct marketing will result in an

appraised amount of production to count of not less than the

production guarantee per acre if such failure results in our

inability to make the required appraisal.

roduction guarantee;

(2) Multiplying each result in section 11(b)(1) by the

respective price election for each type or varietal group, if

applicable;

(3) Totaling the results in section 11(b)(2);

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

or varietal group, if applicable (see section 11(c)) by the

respective price election;

(5) Totaling the results in section 11(b)(4);

(6) Subtracting the result in section 11(b)(5) from the result

in section 11(b)(3); and

(7) Multiplying the result in section 11(b)(6) by your share.

(c) The total production to count (in standard lugs equivalent

or tons) from all insurable acres on a unit will include:

(1) All appraised production as follows:

(i) Not less than the production guarantee per acre for acreage:

(A) That is abandoned;

(B) That is sold by direct marketing, if you fail to meet the

requirements contained in section 10;

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

(D) For which you fail to provide production records that are

acceptable to us;

(ii) Production lost due to uninsured causes;

(iii) Unharvested production; and

(iv) Potential production on insured acreage that you intend to

abandon or no longer care for, if you and we agree on the appraised

amount of production. Upon such agreement, the insurance period for

that acreage will end. If you do not agree with our appraisal, we

may defer the claim only if you agree to continue to care for the

insured crop. We will then make another appraisal when you notify us

of further damage or that harvest is general in the area unless you

harvested the crop, in which case we will use the harvested

production. If you do not continue to care for the crop, our

appraisal made prior to deferring the claim will be used to

determine the production to count; and

(2) All harvested production from the insurable acreage:

ll then make another appraisal when you notify us

of further damage or that harvest is general in the area unless you

harvested the crop, in which case we will use the harvested

production. If you do not continue to care for the crop, our

appraisal made prior to deferring the claim will be used to

determine the production to count; and

(2) All harvested production from the insurable acreage:

(i) That is packed and sold as fresh fruit and meets the grade

requirements shown in the California Tree Fruit Agreement Marketing

Order, or State Department of Food and Agriculture Code of

Regulations, as amended, in effect for the crop, type, or varietal

group;

(ii) That is packed and sold as fresh fruit as California

Utility grade, damaged by an insurable cause, and the value of the

damaged crop is less than 75 percent of the marketable value of an

undamaged crop, such production will be adjusted by:

(A) Dividing the marketable value per lug of this production by

the highest price election available for the crop, type, or varietal

group; and

(B) Multiplying the resulting factor, if less than 1.0, by the

number of lugs of each crop, type, or varietal group;

(iii) That does not meet the applicable standards in section

11(c)(2)(i) due to insurable causes but is, or could be, used for

any use other than fresh packed stonefruit. Such production will be

determined by:

(A) Dividing the greater of the marketable value per ton, or

$50.00, by the highest price election available for the crop, type,

or varietal group; and

(B) Multiplying the resulting factor by the number of tons of

such crop, type, or varietal group;

(iv) That is mature production of Processing Apricots,

Processing Cling Peaches, or Processing Freestone Peaches which is

acceptable to the processor;

iding the greater of the marketable value per ton, or

$50.00, by the highest price election available for the crop, type,

or varietal group; and

(B) Multiplying the resulting factor by the number of tons of

such crop, type, or varietal group;

(iv) That is mature production of Processing Apricots,

Processing Cling Peaches, or Processing Freestone Peaches which is

acceptable to the processor;

(v) That is mature production of Processing Apricots, Processing

Cling Peaches, or Processing Freestone Peaches, damaged by insurable

causes, and the value of the damaged crop is less than 75 percent of

the marketable value of an undamaged crop, the production will be

determined as follows:

(A) Divide the damaged value per ton by the highest price

election available for the crop, type, or varietal group; and

(B) Multiply the resulting factor (not to exceed 1.00) by the

number of tons of such production.

12. Written Agreements.

Terms of this policy which are specifically designated for the

use of written agreements 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

12(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,

type or varietal group, 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

agreement will include all

variable terms of the contract, including, but not limited to,

type or varietal group, 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, DC, on July 16, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 97-19214 Filed 7-21-97; 8:45 am]

BILLING CODE 3410-08-P