[Federal Register: November 16, 2006 (Volume 71, Number 221)]
[Proposed Rules]
[Page 66698-66702]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16no06-22]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
RIN 0563-AC04
Common Crop Insurance Regulations; Mustard Crop Insurance
Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Proposed rule with request for comments.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to add
to 7 CFR part 457 a new Sec. 457.168 that provides insurance for
mustard. 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 convert the mustard pilot crop insurance program to a permanent
insurance program effective for the 2008 and succeeding crop years.
DATES: Written comments and opinions on this proposed rule will be
accepted until close of business January 16, 2007 and will be
considered when the rule is to be made final. The comment period for
information collections under the Paperwork Reduction Act of 1995 must
be received on or before January 16, 2007.
ADDRESSES: Interested persons are invited to submit written comments,
titled ``Mustard Crop Provisions'', by any of the following methods:
By Mail to: Director, Product Administration and Standards
Division, Risk Management Agency, United States Department of
Agriculture, 6501 Beacon Drive, Stop 0812, Room 421, Kansas City, MO
64133-4676.
E-mail: DirectorPDD@rma.usda.gov.
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
A copy of each response will be available for public inspection and
copying from 7:00 a.m. to 4:30 p.m., c.s.t., Monday through Friday,
except holidays, at the above address.
FOR FURTHER INFORMATION CONTACT: John McDonald, Risk Management
Specialist, Deputy Administrator for Product
[[Page 66699]]
Management, Product Administration and Standards Division, Risk
Management Agency, at the Kansas City, MO, address listed above,
telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
rule is not significant for the purpose of Executive Order 12866 and,
therefore, has not been reviewed by OMB.
Paperwork Reduction Act of 1995
Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. chapter
35), the collections of information in this proposed rule have been
approved by OMB under control number 0563-0057 through June 30, 2006.
E-Government Act Compliance
FCIC is committed to complying with the E-Government Act to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other puposes.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
establishes requirements for Federal agencies to assess the effects of
their regulatory actions on State, local, and tribal governments and
the private sector. This rule contains no Federal mandates (under the
regulatory provisions of title II of the UMRA) for State, local, and
tribal governments or the private sector. Therefore, this rule is not
subject to the requirements of sections 202 and 205 of the UMRA.
Executive Order 13132
It has been determined under section 1(a) of Executive Order No.
13132, Federalism, that this rule does not have sufficient implications
to warrant consultation with the States. The provisions contained in
this rule will not have a substantial direct effect on States, or on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government.
Regulatory Flexibility Act
FCIC certifies this regulation will not have a significant
economical impact on a substantial number of small entities. Program
requirements for the Federal crop insurance program are the same for
all producers regardless of the size of their farming operation. For
instance, all producers are required to submit an application and
acreage report to establish their insurance guarantees and compute
premium amounts, and all producers are required to submit a notice of
loss and production information to determine an indemnity payment in
the event of an insured cause of crop loss. Whether a producer has 10
acres or 1000 acres, there is no difference in the kind of information
collected. To ensure crop insurance is available to small entities, the
Federal Crop Insurance Act authorizes FCIC to waive collection of
administrative fees from limited resource farmers. FCIC believes this
waiver helps to ensure small entities are given the same opportunities
as large entities to manage their risks through the use of crop
insurance. A Regulatory Flexibility Analysis has not been prepared
since this regulation does not have an impact on small entities and
therefore, this regulation is exempt from the provisions of the
Regulatory Flexibility Act (5 U.S.C. 605).
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order 12372
This program is not subject to the provisions of Executive Order
12372, which require intergovernmental consultation with State and
local officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
Executive Order 12988
This proposed rule has been reviewed in accordance with Executive
Order No. 12988 on civil justice reform. The provisions of this rule
will not have a retroactive effect. The provisions of this rule will
preempt State and local laws to the extent such State and local laws
are inconsistent herewith. With respect to any action taken by FCIC or
to require the insurance provider to take specific action under the
terms of the crop insurance policy, the administrative appeal
provisions published at 7 CFR part 11 or 7 CFR part 400, subpart J, for
the informal administrative review process of good farming practices,
must be exhausted before any action against FCIC for judicial review
may be brought.
Environmental Evaluation
This action is not expected to have a significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
Background
FCIC offered the pilot crop insurance program for mustard beginning
with the 1999 crop year in selected counties in the state of North
Dakota. For the 2005 crop year, the mustard program was expanded to
selected counties in the states of Montana, Idaho, Oregon and
Washington. For the 2005 crop year, 2,149 policies were sold with
29,674 acres insured under the pilot mustard program.
FCIC intends to convert the mustard pilot crop insurance program to
a permanent crop insurance program beginning with the 2008 crop year.
To effectuate this, FCIC proposes to amend the Common Crop Insurance
regulations (7 CFR part 457) by adding a new section Sec. 457.168,
Mustard Crop Insurance Provisions. These provisions will replace and
supersede the current unpublished pilot mustard crop provisions.
List of Subjects in 7 CFR Part 457
Crop insurance, Mustard, Reporting and recordkeeping requirements.
Proposed Rule
Accordingly, as set forth in the preamble, the Federal Crop
Insurance Corporation proposes to amend 7 CFR part 457, Common Crop
Insurance Regulations, for the 2008 and succeeding crop years as
follows:
PART 457--COMMON CROP INSURANCE REGULATIONS
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
2. Section 457.168 is added to read as follows:
Sec. 457.168 Mustard crop insurance provisions.
The Mustard Crop Insurance Provisions for the 2008 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: Mustard Crop Insurance Provisions
1. Definitions
Base contract price. The price per pound (U.S. dollars) stipulated
in the processor contract (without regard to discounts or incentives)
that will be used to determine your price election.
Harvest. Combining or threshing for seed. A crop that is swathed
prior to combining is not considered harvested.
[[Page 66700]]
Mustard. A crop of the family Cruciferae, genus and species Sinapis
alba (also called Brassica hirta or Brassica alba) or Brassica juncea.
Planted acreage. In addition to the definition contained in the
Basic Provisions, mustard seed must be planted in rows. Acreage planted
in any other manner will not be insurable unless otherwise provided by
the Special Provisions, actuarial documents, or by written agreement.
Processor. Any business enterprise regularly engaged in buying and
processing mustard, that possesses all licenses and permits for
processing mustard 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 mustard within a
reasonable amount of time after harvest.
Processor contract. A written agreement between the producer and a
processor, containing at a minimum:
(a) The producer's commitment to plant and grow mustard of the
types specified in the Special Provisions and to deliver the production
to the processor;
(b) The processor's commitment to purchase all the production
stated in the processor contract; and
(c) A base contract price.
Salvage price. The cash price per pound (U.S. dollars) for mustard
that qualifies for quality adjustment in accordance with section 13 of
these Crop Provisions.
Swathed. Severance of the stem and seed pods from the ground and
placing into windrows without removal of the seed from the pod.
Type. A category of mustard identified as a type in the Special
Provisions.
2. Unit Division
In addition to the requirements of section 34 of the Basic
Provisions, optional units may also be established by type, if
designated on the Special Provisions.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) In addition to the requirements of section 3 of the Basic
Provisions, you may select only one price election percentage for all
the mustard in the county insured under this policy unless the Special
Provisions allow different price elections by type.
(b) If price elections are allowed by type, you can select one
price election for each type designated in the Special Provisions. The
price elections you choose must have the same percentage relationship
to the base contract price (maximum price) offered for each type. For
example, if you choose 100 percent of the maximum price for a specific
type, you must also choose 100 percent of the maximum price for all
other types.
(c) If there are multiple base contract prices within the same
unit, each will be considered a separate price election which will be
multiplied by the number of acres under applicable processor contract
(For processor contracts that stipulates the amount of production to be
delivered, the number of acres is determined by dividing the amount of
production to be delivered by the approved yield). These amounts will
be totaled to determine the premium, liability, and indemnity for the
unit.
4. Contract Changes
In accordance with section 4 of the Basic Provisions, the contract
change date is November 30 preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 of the Basic Provisions, the
cancellation and termination dates are March 15.
6. Report of Acreage
In addition to the provisions in section 6 of the Basic Provisions,
you must provide a copy of all processor contracts to us on or before
the acreage reporting date.
7. Insured Crop
(a) In accordance with section 8 of the Basic Provisions, the crop
insured will be all mustard in the county for which a premium rate is
provided by the actuarial table:
(1) In which you have a share;
(2) That is planted for harvest as seed;
(3) That is grown under, and in accordance with, the requirements
of a processor contract executed on or before the acreage reporting
date and is not excluded from the processor contract at any time during
the crop year; and
(4) That is not, unless allowed by the Special Provisions or by
written agreement:
(i) Interplanted with another crop;
(ii) Planted into an established grass or legume; or
(iii) Planted following the harvest of any other crop in the same
crop year.
(b) You will be considered to have a share in the insured crop if,
under the processor contract, you retain control of the acres on which
the mustard is grown, your income from the insured crop is dependent on
the amount of production delivered, and the processor contract provides
for delivery of the mustard under specified conditions and at a
stipulated base contract price.
(c) A commercial mustard producer who is also a processor may
establish an insurable interest if the following requirements are met:
(1) The producer must comply with these Crop Provisions;
(2) Prior to the sales closing date, the Board of Directors or
officers of the processor must execute and adopt a resolution that
contains the same terms as an acceptable processor contract. Such
resolution will be considered a processor contract under this policy;
and
(3) Our inspection reveals that the processing facilities comply
with the definition of a processor contained in these Crop Provisions.
8. Insurable Acreage
In addition to the provisions of section 9 of the Basic Provisions:
(a) Any acreage of the insured crop that is damaged before the
final planting date, to the extent that a majority of producers in the
area would not normally further care for the crop, must be replanted
unless we agree that it is not practical to replant.
(b) We will not insure any acreage that does not meet the rotation
requirements, if applicable, contained in the Special Provisions.
(c) The maximum insurable acreage will be determined by the acreage
amount stated in the processor contract(s), if applicable.
9. Insurance Period
In accordance with the provisions of section 11 of the Basic
Provisions, the end of the insurance period is October 31 of the
calendar year in which the crop is normally harvested unless otherwise
stated in the Special Provisions.
10. Causes of Loss
In accordance with the provisions of section 12 of the Basic
Provisions, insurance is provided only against the following causes of
loss which 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; and
(h) Failure of the irrigation water supply, if applicable, caused
by a cause
[[Page 66701]]
of loss specified in section 10(a) through (g) that occurs during the
insurance period.
11. Replanting Payment
(a) In accordance with section 13 of the Basic Provisions, a
replanting payment is allowed if the insured 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 or we require you to replant in
accordance with section 8(a).
(b) The maximum amount of the replanting payment per acre will be
the lesser of 20 percent of the production guarantee (per acre) or 175
pounds, multiplied by the price election applicable to the acreage to
be replanted, multiplied by your insured share.
(c) When the mustard is 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 that is attributable to
your share. The premium amount will not be reduced.
12. Duties in the Event of Damage or Loss
In accordance with the requirements of section 14 of the Basic
Provisions, the representative samples of the unharvested crop that we
may require 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.
(1) In the event you are unable to provide separate acceptable
production records:
(i) For any optional units, we will combine all optional units for
which acceptable production records were not provided; or
(ii) For any basic units, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for the units. For any processor contract that
stipulates the amount of production to be delivered, and not
withstanding the provisions of this section or any unit division
provisions contained in the Basic Provisions or these Crop Provisions:
(2) No indemnity will be paid for any loss of production on any
unit if you produce sufficient production to fulfill the processor
contracts forming the basis for the guarantee;
(i) Production in excess of the guarantee from a unit will be
included as production to count for the purposes of section 13(b)(4)
for any unit where the amount of production to count is less than the
guarantee for such unit until the production to count equals the
guarantee for the unit; and
(ii) Once all production in excess of the guarantee for a unit is
allocated to units where the amount of production to count is less than
the guarantee for such unit, an indemnity will be determined for those
units where the adjusted production to count remains is less than the
guarantee in accordance with section 13(b).
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured acreage of each mustard type, if
applicable, by its respective production guarantee (per acre);
(2) Multiplying each result in section 13(b)(1) by the respective
price election for each type, if applicable;
(3) Totaling the results in section 13(b)(2);
(4) Multiplying the production to be counted for each type, if
applicable (see section 13(c)), by its respective price election (If
you have multiple processor contracts with varying base contract prices
within the same unit, we will value your production to count by using
your highest price election first and will continue in decreasing order
to your lowest price election based on the amount of production insured
at each price election);
(5) Totaling the results in section 13(b)(4);
(6) Subtracting the total in section 13(b)(5) from the total in
section 13(b)(3); and
(7) Multiplying the result in section 13(b)(6) by your share.
Example 1 (with one price election for the unit):
You have 100 percent share in 20 acres of mustard in a unit with
a 650 pound production guarantee (per acre) and a price election of
$0.15 per pound. Due to insurable causes, you are only able to
harvest 10,000 pounds and there is no appraised production.
Your indemnity would be calculated as follows:
(1) 20 acres x 650 pounds = 13,000 pounds guarantee;
(2) 13,000 pounds x $0.15 price election = $1,950 value of
guarantee;
(3) $1,950 total value of guarantee;
(4) 10,000 pounds x $0.15 price election = $1,500 value of
production to count;
(5) $1,500 total value of production to count;
(6) $1,950 - $1,500 = $450 loss; and
(7) $450 x 100 percent = $450 indemnity payment.
Example 2 (with two price elections for the same
unit):
You have 100 percent share in 20 acres of mustard in a unit with
650 pound production guarantee (per acre), 10 acres with a price
election of $0.15 per pound, and 10 acres with a price election of
$0.10 per pound, due to insurable causes you are only able to
harvest 8500 pounds and there is no appraised production. Your
indemnity would be calculated as follows:
(1) 10 acres x 650 pounds = 6500 pounds guarantee x $0.15 price
election = $975 value guarantee;
(2) 10 acres x 650 pounds = 6500 pounds guarantee x $0.10 price
election = $650 value guarantee;
(3) $975 + $650 = $1,625 total value guarantee;
(4) 6500 pounds production x $ 0.15 price election (higher price
election) = $975 value of production to count;
(5) 2000 pounds production x $0.10 price election (lower price
election) = $200 value of production to count;
(6) $975 + $200 = $1,175 total value of production to count;
(7) $1,625 total value guarantee - $1,175 total value of
production to count = $450 loss; and
(8) $450 x 100 percent = $450 indemnity payment.
(c) The total production to count (in pounds) from all insurable
acreage in the 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 put to another use without our consent;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide acceptable production records;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (mature unharvested production may
be adjusted for quality deficiencies and excess moisture in
accordance with section 13(d)); and
(iv) Potential production on insured acreage that you intend to
put to another use or abandon, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for
that acreage will end when you put the acreage to another use or
abandon the crop. If agreement on the appraised amount of production
is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to
leave intact, and provide sufficient care for, representative
samples of the crop in locations acceptable to us (The amount of
production to count for such acreage will be based on the harvested
production or appraisals from the samples at the time harvest should
have occurred. If you do not leave the required samples intact, or
you 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
[[Page 66702]]
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.
(3) Any other uninsurable mustard production that is delivered
to fulfill the processor contract.
(d) Mature mustard may be adjusted for excess moisture and
quality deficiencies. If moisture adjustment is applicable, it will
be made prior to any adjustment for quality.
(1) Mustard production will be reduced by 0.12 percent for each
0.1 percentage point of moisture in excess of 10.0 percent. We may
obtain samples of the production to determine the moisture content.
(2) Mustard production will be eligible for quality adjustment
only if:
(i) Deficiencies in quality result in the mustard not meeting
the requirements for acceptance under the processor contract because
of damaged seeds (excluding heat damage), or a musty, sour, or
commercially objectionable foreign odor; or
(ii) 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 in mustard
production only if:
(i) The deficiencies, substances, or conditions specified in
section 13(d)(2) resulted from a cause of loss specified in section
10 that occurs within the insurance period;
(ii) The deficiencies, substances, or conditions specified in
section 13(d)(2) result in a salvage price less than the base
contract price;
(iii) All determinations of these deficiencies, substances, or
conditions specified in section 13(d)(2) 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 in accordance with the
Directive for Inspection of Mustard Seed, provided by the Federal
Grain Inspection Service or such other directive or standards that
may be issued by FCIC.
(4) Mustard production that is eligible for quality adjustment,
as specified in sections 13(d)(2) and (3), will be reduced by
multiplying the quality adjustment factors contained in the Special
Provisions (or the quality adjustment factors determined by dividing
the salvage price by the base contract price (not to exceed 1.000)
if the quality adjustment factors are not contained in the Special
Provisions) by the number of pounds remaining after any reduction
due to excessive moisture (the moisture-adjusted gross pounds) of
the damaged or conditioned production.
(i) The salvage price will be determined at the earlier of the
date such quality adjusted production is sold or the date of final
inspection for the unit subject to the following conditions:
(A) Discounts used to establish the salvage price will be
limited to those that are usual, customary, and reasonable.
(B) The salvage price will not include any reductions for:
(1) Moisture content;
(2) Damage due to uninsured causes;
(3) Drying, handling, processing, or any other costs associated
with normal harvesting, handling, and marketing of the mustard;
except, if the salvage price can be increased by conditioning, we
may reduce the salvage price, after the production has been
conditioned, by the cost of conditioning but not lower than the
salvage price before conditioning; and
(ii) We may obtain salvage prices from any buyer of our choice.
If we obtain salvage prices from one or more buyers located outside
your local market area, we will reduce such price by the additional
costs required to deliver the mustard to those buyers.
(iii) Factors not associated with grading under the Directive
for Inspection of Mustard Seed, provided by the Federal Grain
Inspection Service or such other directive or standards that may be
issued by FCIC including, but not limited to, protein and oil will
not be considered.
(e) Any production harvested from plants growing in the insured
crop may be counted as production of the insured crop on an
unadjusted weight basis.
14. Late Planting
In lieu of section 16(a) of the Basic Provisions, the production
guarantee (per acre) for each acre planted to the insured crop during
the late planting period will be reduced by 1 percent per day for each
day planted after the final planting date, unless otherwise specified
in the Special Provisions.
15. Prevented Planting
In addition to the provisions contained in section 17 of the Basic
Provisions, your prevented planting coverage will be 60 percent of your
production guarantee (per acre) for timely planted acreage. If you have
limited or additional levels of coverage, as specified in 7 CFR part
400, subpart T, and pay an additional premium, you may increase your
prevented planting coverage to the levels specified in the actuarial
documents.
Signed in Washington, DC, on November 7, 2006.
Eldon Gould,
Manager, Federal Crop Insurance Corporation.
[FR Doc. E6-19320 Filed 11-15-06; 8:45 am]
BILLING CODE 3410-08-P