[Federal Register: July 7, 2009 (Volume 74, Number 128)]
[Rules and Regulations]
[Page 32049-32059]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07jy09-2]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
RIN 0563-AC09
Common Crop Insurance Regulations; Grape Crop Insurance
Provisions and Table Grape Crop Insurance Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes
amendments to the Common Crop Insurance Regulations, Grape Crop
Insurance Provisions and Table Grape Crop Insurance Provisions. The
intended effect of this action is to provide policy changes and clarify
existing policy provisions to better meet the needs of insured
producers, and to reduce vulnerability to fraud, waste, or abuse.
DATES: Effective Date: This rule is effective August 6, 2009.
FOR FURTHER INFORMATION CONTACT: Elizabeth Lopez, Risk Management
Specialist, Product Management, Product Administration and Standards
Division, Risk Management Agency, United States Department of
Agriculture, Beacon Facility, Stop 0812,
[[Page 32050]]
Room 421, P.O. Box 419205, Kansas City, MO 64141-6205, telephone (816)
926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
rule is non-significant for the purpose of Executive Order 12866 and,
therefore, it has not been reviewed by OMB.
Paperwork Reduction Act of 1995
Pursuant to the provisions of the Paperwork Reduction Act of 1995
(44 U.S.C. chapter 35), the collections of information in this rule
have been approved by OMB under control number 0563-0053 through March
31, 2012.
E-Government Act Compliance
FCIC is committed to complying with the E-Government Act of 2002,
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 purposes.
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 UMRA.
Executive Order 13132
It has been determined under section 1(a) of Executive Order 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 that this regulation will not have a significant
economic 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 the amount of an indemnity
payment in the event of an insured cause of crop loss. Whether a
producer has 10 acres or 1,000 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 that 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 rule has been reviewed in accordance with Executive Order
12988 on civil justice reform. The provisions of this rule will not
have a retroactive effect. The provisions of this rule will preempt
State and local laws to the extent such State and local laws are
inconsistent herewith. With respect to any direct 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 must be exhausted before any
action against FCIC for judicial review may be brought.
Environmental Evaluation
This action is not expected to have a significant economic impact
on the quality of the human environment, health, or safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
Background
On February 29, 2008, FCIC published a notice of proposed
rulemaking in the Federal Register at 73 FR 11054-11060 to revise 7 CFR
457.138 Grape crop insurance provisions and 7 CFR 457.149 Table grape
crop insurance provisions. Following publication of the proposed rule,
the public was afforded 60 days to submit written comments and
opinions.
A total of 29 comments were received from 8 commenters. The
commenters were reinsured companies, trade associations and an
insurance service organization. The comments received and FCIC's
responses are as follows:
Grape Crop Provisions
Some of the comments received pertained to both the Grape Crop
Provisions and Table Grape Crop Provisions. In those cases, the
responses will be provided under the Grape Crop Provisions with a note
indicating when the Table Grape Crop Provisions are also impacted.
Comment: A few commenters expressed concern regarding insurable
grape and table grape varieties in Arizona and California and the
possible impact of changing the term ``varietal group'' to ``type''
throughout the policy. In California, there is a type for ``Other
Varieties''. This type is for all varieties not listed individually in
the Special Provisions. The provisions allow the insured the option to
insure one or more varieties under this type. The varieties insured
under this type qualify for a separate basic unit. All varieties under
this type must have the same coverage level and price election
percentage, but would qualify for one single administrative fee as
type, ``Other Varieties'', are not recognized as a separate crop in
regards to administrative fees. The commenters further stated that in
light of the increasing number of varieties being insured under this
type, a separate administrative fee should be charged for ``Other
Varieties''. In addition, changing ``variety'' to ``type'' could impact
varieties currently being insured under this type. Any change in
terminology needs to take into consideration the impacts involved in
insuring different varieties under type 095 in California.
Response: Provisions that allow insurance to be selected by variety
have been retained for Arizona and California. Producers will still be
able to select insurance coverage levels by variety except for those
varieties that fall under type 095 (other varieties). All varieties
listed under type 095 must have the same price election and coverage
level percentage. For example,
[[Page 32051]]
if a producer selects to insure three varieties under type 095, and
selected 80 percent of the maximum price election and 75 percent of the
coverage level for the first variety under type 095, the remaining two
varieties under type 095 must have the same price election and coverage
level percentage as the first. RMA reviewed the California 2007 crop
year to determine the number of policies that included multiple
varieties under type 095 and found approximately 53 grape policies with
multiple varieties under type 095. This is only 1 percent of the total
grape policies (4,439). Because such a small percentage of policies are
impacted and there is only an average of 15 acres of each variety under
type 095 in each policy, RMA determined it is not cost effective to
make all the computer system changes necessary to charge a separate
administrative fee for each grape variety that falls under type 095. In
addition, a definition of ``variety'' has been included in both the
Crop Provisions to clarify the term.
Comment: A few commenters stated that in states other than Arizona
and California, it is common for different varieties/types of grapes to
be grouped into different varietal groups, which are now being
eliminated and being referred to as different types. Since there are
many different new varieties/types that are always being developed, the
commenter would like to recommend that the Special Provisions be clear
and specific in defining the different types so that it is easy to
determine the proper category for these new varieties.
Response: The Special Provisions will be clear and specific in
defining the types. The Special Provisions will clearly indicate that
for California and Arizona a ``type'' will consist of a variety, with
the exception of type 095 (other varieties). For all other states, a
``type'' will consist of one or more varieties identified as a type on
the Special Provisions, (i.e., type 083 may include the Merlot variety
and all other varieties not specifically named on the Special
Provisions).
Comment: A few commenters questioned whether the replacement of
``varietal group'' with ``type'' was one of terminology or whether
there other differences as well. There are no references to what a
``type'' will consist of within a given state or region. The new term
``type'' is used to identify the varieties grouped together in the
actuarial documents for all states except Arizona and California for
rating and optional unit purposes. The commenters ask if it is similar
to the current varietal group in these states/regions. The terminology
for Arizona and California throughout the Crop Provisions is
``variety'' or ``grape variety'', however, section 1(g) if the Proposed
Rule Background on page 11055 states that ``* * * (each variety in
California constitutes a type) * * *'' and the 2008 actuarial documents
for California use the term ``type''. The commenters ask if it would be
possible to use the term ``type'' for all states rather than having to
distinguish between ``variety'' (Arizona and California) and ``type''
(all other states) throughout. This also would help avoid confusion
with the use ``variety'' instead of ``type'' along with ``practice'' in
the actuarial documents. If Arizona and California continue to use
``variety'' instead of ``type'', presumably the terminology in the
actuarial documents for Arizona and California will be changed from
``types'' to ``varieties'', while terminology in other states will be
changed from ``varietal group'' to ``type''.
Response: The actuarial document will still use the term ``type''.
Type is defined in the Crop Provisions as, ``A category of grapes (one
or more varieties) identified as a type in the Special Provisions''. In
California and Arizona each variety is a separate type except for type
095 as explained above. In these two states the term ``variety'' must
still be used to allow producers to select the varieties they wish to
insure within type 095. For all other states covered under the Grape
Crop Provisions, the term ``type'' is simply a replacement for the term
``varietal group''. The Table Grape Crop Provisions will now also
include the term ``type''.
Comment: A few commenters asked that FCIC consider including a
definition of ``variety'' to clarify the difference between ``types''
and ``varieties''. Otherwise, the reference to ``each variety'' in
section 2(a)(1) [for Arizona and California] could lead to confusion as
to whether or not it is the same as ``type'' as defined.
Response: FCIC has included in both Grape Crop Provisions and Table
Grape Crop Provisions a definition of ``variety.''
Comment: A few comments were received regarding unit division. In
the states of Arizona and California, basic units are divided into
additional basic units by each variety insured. The commenters state
that since section 7 states the insured crop will be any insurable
variety that the producer elects to insure in these states, section
2(a)(1) may not be necessary. If each variety is insured as a separate
crop, it is already a separate basic unit even before establishing any
basic units for different share arrangements. However, it may be
helpful to include some reference in section 2 to the different basic
unit qualifications in Arizona and California. The following is
suggested language, ``Basic units are established for each variety that
you choose to insure, and also defined in section 1 of the Basic
Provisions.''
Response: Unit structure and insurability are two different things
and should be treated separately. Therefore, while section 2(a)(1) may
not be strictly necessary, it is provided to clarify that while each
variety is treated as a separate crop to allow producers to elect which
variety they want to insure, all insured varieties are still covered
under one grape policy with separate basic units provided. No change
has been made.
Comment: A few commenters stated there is no mention of acreage
insured under organic farming practices in provisions dealing with unit
division. Clarification is needed to determine whether optional units
are allowed for organic practices.
Response: In Arizona and California, optional units may be
established if each optional unit is located on non-contiguous land. In
addition, optional units may be provided for acreage grown and insured
under an organic farming practice. In all other states, optional units
may be established in accordance with section 34 of the Basic
Provisions, which includes optional units for organic acreage, and as
provided for in the Grape Crop Provisions. Both the Grape Crop
Provisions and the Table Grape Crop Provisions have been clarified
accordingly.
Comment: A few comments were received regarding the phrase in
section 2(b)(2) ``* * * when separate types are specified in the
Special Provisions''. The commenters ask if ``separate type'' is
different from a ``type'' and does it need to be defined in section 1.
Response: ``Separate type'' does not to be defined. In this case,
``separate'' is given its common meaning, which means that optional
units can be established by each different (or individual) type listed
in the Special Provisions.
Comment: A few comments were received regarding clarification of
sections 3(a) and (b). In Arizona and California, addition of the
phrase ``* * * you elect to insure'' in 3(a) would clarify that each
variety is considered a separate crop, and it may not be necessary to
mention ``in the county'', though it is for 3(b), which is further
clarified as having the same level and price percentage for all grapes
in the county, regardless of variety.
[[Page 32052]]
Response: The phrase ``you elect to insure'' should be added in
section 3(a). The language regarding ``in the county'' should be
consistent in both 3(a) and (b) and therefore, will be added to section
3. These same changes have also been made in the Table Grape Crop
Provisions to maintain consistency between the policies.
Comment: A few commenters expressed concern with the removal of the
language currently in section 3(c) that would allow insureds in all
states (not just Arizona and California) to select different price
election percentages by type, though this was not identified as a
change in the Proposed Rule.
Response: The proposed provision in section 3(b) allows insureds in
all states to choose a different price election percentage for each
type. This proposal was described in the Proposed Rule on page 11055.
In addition, FCIC has also removed section 3(c) (in the current
policy), which required the same percentage relationship to the maximum
price offered for each varietal group, so that different price election
percentage could be selected by type.
Comment: A few commenters questioned the removal of section 3(c),
stating it would result in a significant change, allowing grape
insureds in all states (not just Arizona and California) to choose
different price election percentages by type. They further stated this
would be problematic in the other states since different types are not
treated as separate crops, but are potentially separate optional units
that could end up being combined if the optional unit requirements are
not met. Also, new types could be added on the acreage report (because
all grapes in the county must be insured), when it is after the sales
closing date deadline to select a price percentage. If this is the
intent, the language needs clarification. The commenters also stated
they do not agree with the intended effect of the revised provision.
They suggested that the policyholder continue to be allowed to choose a
single price election percentage and coverage level on a county basis
and all insurable types in the county would be insured on this basis.
Response: It should not be a problem if there are different
coverage levels and price election percentages for separate types
provided the application contains the selected coverage levels and
price election percentages. Further, clarification has been added to
section 3(b) of the Grape Crop Provisions and Table Grape Crop
Provisions regarding percentage relationship to the maximum price
election. Additionally, FCIC has added a new section 3(c) to both Grape
Crop Provisions and Table Grape Crop Provisions (and redesignated the
following sections) to account for cases where a new type is added
after the application is received. This provision states that if the
producer acquires a share in any grape acreage after the application is
submitted, provided such acreage is insurable under the terms of the
policy and the producer did not include the grape type on the
application, the insurance provider will assign a coverage level and
price election percentage. The assigned coverage level will be the
lowest coverage level selected for any other grape type along with the
corresponding price election percentage.
Comment: A few of the commenters expressed concerns regarding the
possible use of a contract price. This is already allowed by the
Special Provisions in California, but would be new in the Crop
Provisions, which would allow for the possibility for this to be
extended to other states as well. Care must be taken to make sure that
all necessary information is included in the Crop Provisions, while not
over-complicating it.
Response: Provisions regarding the use of a contract price when
allowed by Special Provisions will include information on how to
determine the contract price if more than one contract exists, and a
maximum price which the contract price cannot exceed.
Comment: A few comments were submitted regarding the use of a price
election based on a contract price if allowed by the Special
Provisions. The commenters asked that FCIC consider the ramifications
of contract prices coexisting with non-contract prices. In addition,
the commenters asked that FCIC consider including a definition under
section 1 so that other references to ``price election'' would include
the possibility of a contract price basis. ``Price election'' should be
defined, and some type of limit should be placed on the price election
for grapes under contract. The commenter asked what would the price
election be (for a grape type in the county in states other than
Arizona and California) if there is a contract price on some grapes
types but not others or if there are multiple contract prices within a
unit. It is quite possible that one variety is insured under contract
while another is not. In such cases, there is a need to specify what
price election is used. Clarification is needed to specify that the
price election will be based on the contact price but the actual price
election will be limited to the terms stated in the Special Provisions.
Additionally, determination of an indemnity in section 12 needs to be
clearly illustrated in such situations.
Response: It is not necessary to redefine ``price election'' in
section 1 because the provision in redesignated section 3(d) indicates
a contract price election may be used instead of the published price
election. It is not necessary to add an example in section 12 because
the provisions already address situations in which multiple price
elections are applicable. The provisions regarding use of a contract
price, when allowed by Special Provisions, will include information
regarding calculation of a weighted average price if more than one
price election exists, and a maximum price which the contract price
cannot exceed. All of the necessary information will be included in the
Special Provisions statement.
Comment: A few commenters noted the reference to adjusting the
approved yield in redesignated section 3(d) is not relevant without
adding the reason for which production will be reduced. The preamble of
the Proposed Rule states that this was added as some contracts require
the use of cultural practices to produce fewer tons of grapes. The
commenters recommend revising the last sentence of 3(d) to clarify that
the reduction to the approved yield will be based on redesignated 3(f):
``* * * In the event any contract requires the use of a cultural
practice that will reduce the amount of production from any insured
acreage, your approved yield will be adjusted in accordance with
section 3(f).''
Response: FCIC has added the reason the yield will be reduced.
Redesignated section 3(d) will also reference redesignated section 3(g)
because these sections state yields will be reduced to reflect changes
in practices or other circumstances.
Comment: A few commenters stated that proposed section 3(f)
(redesignated 3(g)), repeats what was stated in proposed sections
3(e)(1) and (4) (redesignated 3(f)(1) and (4)), and that it may ease in
reading if those sections were referenced instead of duplicating.
Response: The provisions are duplicative and FCIC has revised the
provisions in the Grapes Crop Provisions and Table Grape Crop
Provisions accordingly.
Comment: A few commenters suggested a revision to the last sentence
in section 3(f) (redesignated section 3(g)), to include: ``* * * If you
fail to notify us of any circumstance that may reduce your yields from
previous levels, we will reduce your guarantee or assess uninsured
cause of loss against your
[[Page 32053]]
claim at any time we become aware of the circumstance.'' Growers have a
responsibility to report to the insurance provider damage, removal of
vines, etc. If they report it timely, the insurance provider can adjust
the guarantee and premium. There should be a penalty if they do not
report this information timely and it is discovered by the adjuster at
claim time. Currently there is no penalty, so there is little incentive
to report the information timely.
Response: Assessing an uninsured cause of loss against the claim
was not in the proposed rule, the public was not provided an
opportunity to comment on the recommended change, and therefore, the
recommendation cannot be incorporated in the final rule. No change has
been made.
Comment: A few commenters questioned the proposed language used in
section 3(g) (redesignated section 3(h)). The commenters were not sure
if any other Crop Provisions use the phrase ``the ratio of your price
election to the maximum price election we offer'' rather than the
phrasing that has been dropped from the current Grape Crop Provisions
section 3(c) that states ``the same percentage relationship to the
maximum price offered by us''. The commenters also questioned the
reference to ``the maximum price election we offer'' since ``we''
refers to the insurance provider while the price elections are
determined and offered by RMA [though it can be understood that the
insurance provider is offering the coverage, including the price
election, to the insured]. In addition, the commenters requested
clarification on what is meant by ``* * * if a cause of loss * * * is
evident prior to the time that you request the increase.'' A cause of
loss that occurred the previous crop year would be ``prior to the time
that you request the increase.'' The commenter asked FCIC consider
rewriting the provision similar to the following: ``Your request to
increase the coverage level or price election percentage will not be
accepted if a cause of loss that could or would reduce the yield of the
insured crop is evident when your request is made.''
Response: FCIC has changed language in redesignated 3(h). The
phrase ``the ratio of your price election to the maximum price election
we offer'' has been deleted. The provision will now include the
recommended language. This same change has been made in the Table Grape
Crop Provisions.
Comment: A few commenters questioned the language under section 6.
They commented that the phrase, ``In all other states, by each grape
type you insure,'' sounds as though insureds in the other states can
choose to insure some but not all types as in California, which is not
the case. The commenters recommended ending section (b) after the word
``type'' or to consider whether this requires a distinction between
states. Perhaps section 6 could read simply: ``* * * you must report
your acreage by grape type or variety, as applicable.''
Response: Section 6(b) needs to be clarified so FCIC changed the
provisions to state reporting is required ``by each grape type''. The
Table Grape Crop Provisions have also been revised so the provisions
will be consistent.
Comment: A few comments were received regarding Settlement of Claim
and the quality adjustment for mature marketable grapes. Due to the
increasing amount of wine grape acreage in production, wineries have
increased the sugar percent thresholds in their contracts. This has
allowed buyers to be very selective in the grapes they will purchase.
The effect of this on grape crop insurance is in determining market
prices and the values for the quality adjustment procedure in 12(e).
For example, if the market price of the wine grapes in the area is
based primarily on sugar content that the producer's wine grape
production does not normally meet, the commenters asks how is the
market price and value to be determined. In many cases, there is no
means of determining if the damage caused a drop in the sugar
percentage. If the sugar content were higher, the value of the grape
would be greater and the producer may not even feel compelled to file a
claim. In years where production is low, the buyers do not place such
emphasis on the sugar content and this is a non-issue. This fluctuation
in market demand causes many issues in determining values and adjusting
for quality for wine grapes, though it may also be an issue for juice
grapes.
The commenters recommend that a standard minimum sugar percentage
be included in the determination of the market price and value. Doing
so sets a limit to the amount of quality adjustment that can be made
when market prices and values are based on sugar content, and if market
prices are not based on sugar content, the quality adjustment is not
affected. Crop insurance should pay for damaged production but caution
is needed when determining values based on marketability and market
demand. Failure to add a limit can result in quality adjustments that
are not related to the insured cause of damage. The Grape Crop
Provisions must include language to control the potential for abuse.
The commenters suggested revising the section to include the following:
``Grapes produced for the production of wine or juice will only be
eligible for quality adjustment due to an insured cause of loss that
results in the grapes having a sugar level below 17 percent. Grapes
with an insurable damage that fail to meet or exceed 17 percent sugar
will be adjusted for quality based on the market value for a sugar
content of not less than 17 percent for undamaged grapes.''
Response: Quality adjustment is applicable only if the reduction in
value is due to an insurable cause of loss, such as adverse weather. If
low brix levels or other damage are due to an insurable cause of loss,
the grapes may be eligible for quality adjustment provided that they
qualify under section 12(e) of the Grape Provisions. According to AMS
standards, brix level is an indication of maturity in some table and
juice grapes, however, there are no such published standards for wine
grapes. Therefore, FCIC does not have information necessary to
establish standard brix levels for the various wine grape varieties and
growing areas. No change has been made.
Comment: A few commenters stated that language in the preamble
regarding quality adjustment (page 11056) did not match language in the
proposed Crop Provisions section 12(e)(2)(i). The preamble stated, ``*
* * FCIC is proposing that the value per ton of the damaged grapes will
be divided by the value per ton for undamaged grapes. The value of
undamaged grapes will not exceed the maximum price election for such
grapes. This will ensure that the undamaged grapes are not over-
valued.'' The Crop Provisions state, ``Dividing the value per ton of
the damaged grapes by the value per ton for undamaged grapes (the value
of undamaged grapes will be the lesser of the average market price or
the maximum price election for such grapes) * * *''
Response: The language in the preamble was not consistent with the
policy provision. The preamble was incorrect and it should have
referred to the lesser of the average market price or the maximum price
election for such grapes. This ensures the grapes are not overinsured.
Comment: A commenter stated that while in favor of the proposed
changes, the following provisions should also be added: (1) Grape crop
insurance should be available in all Texas counties covered by an
American Viticulture Area; (2) crop insurance by variety should also be
provided in Texas.
Response: Grape insurance is currently available in several Texas
[[Page 32054]]
counties, and coverage in counties without the grape insurance program
can be requested by written agreement. If the commenter has specific
counties where they would like grape insurance, the commenter may make
a request to RMA's Oklahoma City Regional Office. If there are
sufficient acres and producers in a requested county, and other
expansion criteria are met, the Regional Office can recommend
implementation of a program for the requested county. Since providing
`insurance by variety'' in Texas was not proposed and the public was
not provided opportunity to comment on the recommended change, the
recommendation cannot be incorporated in the final rule. Insurance by
type is available in Texas as it is in all states other than California
and Arizona. No other change has been made.
Comment: A commenter stated that several vitis vinifera varieties
(Riesling, Chardonnay, and Cabernet Franc for example) have a long
history in New York and warrant having separate premium rates for these
varieties. At current time, these varieties need a written agreement
annually, which is cumbersome for the growers as well as the insurer.
Response: The vinifera varieties in New York are insured by written
agreement to take into consideration the location, block by block,
susceptibility to frost, and each producers yield history by variety.
Due to the climatic conditions in the region, premium rates are
individually set by use of the written agreement.
Comment: A commenter inquired about new plantings in New York being
insurable at an earlier age than is currently available since they are
such a long term investment. Recent ``disaster'' payments have had
provisions to pay partial payments on 3 and 4 year old plantings based
on a percentage of the county average yield for the particular variety.
It would seem that some sort of plan like this could help relieve some
of the financial burden of having several thousand dollars per acre
invested in a new planting, with no eligibility for insurance for the
first 6 years.
Response: When establishing a new vineyard, a significant risk is
production loss due to freeze. New vines run a higher risk of
production loss due to freeze than older established vines. Insuring
production on younger vines would require additional rating analysis to
determine if it would be cost prohibitive to provide such coverage. In
addition, further procedures would be involved to determine appropriate
production guarantees for such young vines. FCIC can consider the
recommended changes in the future and is willing to work with any
interested parties to determine if insurance can be provided for
production from younger vines. However, no insurance is currently
available for damage to vines.
Table Grape Crop Provisions
Several comments received were the same as those received for the
Grape Crop Provisions; since the provisions are substantially similar,
those comments were addressed in the Grape Crop Provisions and noted
for Table Grape Provisions as applicable. Therefore, they will not be
repeated in the comments below.
Comment: A few comments were received regarding the definition of
``Lug''. The commenters stated that as written in the Proposed Rule,
the added phrase ``* * * or as otherwise specified in the Special
Provisions'' would allow the 21-lb lug to be changed only in ``all
other California districts'' but not to Coachella County, California,
or any other states (with a 20-lb lug). If it is intended to allow the
Special Provisions to revise the number of pounds in a lug in any
state/county, the definition needs to be rearranged, perhaps something
like: (a) 20 pounds; (b) 21 pounds; or (c) as otherwise specified.
Response: FCIC will revise the definition to read: Lug--(a) Twenty
(20) pounds of table grapes in the Coachella Valley, California
district, and all other states, (b) Twenty-one (21) pounds in all other
California districts, or (c) as otherwise specified in the Special
Provisions.
Comment: A few commenters questioned section 3(b) stating that this
subsection is being added to allow for possible expansion of the Table
Grape program beyond Arizona and California. It matches the equivalent
subsection of the proposed Grape Crop Provisions but also needs to
include the additional information that was dropped in the Proposed
Rule for Grapes so it does not allow insureds to choose different
levels/price percentages for different types.
Response: The proposed change was intended to also allow insureds
in all states to select a coverage level and price election percentage
by type. FCIC proposed the changes in coverage level and price election
percentages to allow the producer greater flexibility in managing their
production and risk. No change has been made.
Comment; A few commenters noted that while there is general
consistency in many of the provisions of the Grape Crop Provisions and
Table Grape Crop Provisions, section 7(f) is written differently from
the equivalent section 7(e) of the Grape Crop Provisions. Among the
differences:
The phrase ``* * * unless otherwise provided in the
Special Provisions,'' is not being added for Table Grapes. The
commenter asks whether this possible flexibility is not needed as much
for Table Grapes, especially since some flexibility is being added to
the definition of ``lug.''
The last sentence states that the insurance provider ``* *
* may agree in writing to insure acreage that has not produced this
amount'' [dropping the reference in the current crop provisions to
``inspect'' as well as ``agree''], while the Grape Crop Provisions ends
with ``* * * inspect and allow insurance on such acreage.'' The
commenter asks whether there is a valid reason Grapes still would
require an inspection but Table Grapes would not.
Response: FCIC has made the changes to be consistent with language
contained in the Grape Crop Provisions.
Comment: A few comments were received regarding the proposed
changes in the calendar date for the end of insurance period. The
commenters stated that:
The proposed language no longer includes the date when ``*
* * the grapes are normally harvested * * *''. This revision broadens
coverage and potentially increases exposure. The commenter recommends
retaining the reference to the date when the grapes are normally
harvested.
By comparison, note that the actual calendar dates are
spelled out in the Grape Crop Provisions, instead of just referring to
the Special Provisions for Table Grapes (which currently are insured
only in Arizona and California). Consider if those dates could be in
the Table Grape Crop Provisions as well.
Response: The phrase when the grapes are normally harvested is not
specific with respect to the time insurance ends. Therefore, this
language was removed. However, the date that appears on the Special
Provisions is clear and defines the end of insurance.
At this time, FCIC is not considering including the end of
insurance dates for table grapes to be in the Crop Provisions because
the dates vary by variety and geographic area and the Special
Provisions are generally used for information that varies by county.
Also as new states enter the program; it is beneficial to include this
date on the Special Provisions so regulations do not have to be revised
to add new counties or types of grapes.
Comment: A comment was received regarding section 9(b)(1). The
commenter indicated the sentence,
[[Page 32055]]
``* * * Acreage acquired after the acreage reporting date will not be
insured'', is not contained in the Table Grape Crop Provisions, as it
is in the Grape Crop Provisions and questioned if this implies that
acreage acquired after the acreage reporting date can be insured based
upon an acceptable inspection. If so, the commenter recommend adding a
statement to allow insurance providers the opportunity to inspect and
insure (or deny) acreage added after the acreage reporting date if they
wish to do so. This would be similar to what is currently allowed for
acreage that is not reported in section 6(f) of the Basic Provisions.
Response: It is intended these provisions be the same for grapes
and table grapes. Therefore, the provisions indicating insurance will
not be provided for acreage obtained after the acreage reporting date
have been added to the Table Grape Crop Provisions.
Comment: Commenters asked why the phrase, ``* * * and you
previously gave notice in accordance with section 14 of the Basic
Provisions * * *'' in section 11(b) is in the Grape Crop Provisions but
not in the equivalent section of the Table Grape Crop Provisions.
Consider either removing it from the Grape Crop Provisions or adding it
for Table Grapes.
Response: The intent of both provisions is to require a notice in
addition to a notice given previously. The provisions should be the
same. Therefore, the phrase indicating, ``notice was previously
given'', has been added to section 11(c) of the Table Grape Crop
Provisions.
Comment: A few comments were received regarding section
12(c)(1)(iii) referring to ``Unharvested production that meets, or
would meet if properly handled, the state quality standards or the
appropriate USDA grade standards (if no state standard is
applicable).'' ``USDA Grade Standard'' has been added to the
definitions in section 1, but there is no definition of the ``state
quality standards'' that take precedence over the USDA standards
according to this. Recommend one of the following actions:
Adding a definition of ``state quality standards'' to the
Crop Provisions or Special Provisions;
Removing the reference in 12(c)(1)(iii) to avoid the
possibility of arbitrary determinations; or
Revising 12(c)(1)(iii) to read something like ``* * * the
state quality standards, if specified in the Special Provisions or the
appropriate USDA grade standard (if no state standard is applicable) *
* *''
Response: FCIC has revised the provisions to clarify the state
quality standards as specified in the Special Provisions will be used
or the appropriate USDA grade standard will be used if no state
standard is specified.
List of Subjects in 7 CFR Part 457
Crop insurance, Grapes, Reporting and recordkeeping requirements.
Final Rule
0
Accordingly, as set forth in the preamble, the Federal Crop Insurance
Corporation amends 7 CFR part 457 effective for the 2010 and succeeding
crop years for the Grape Crop Insurance Provisions and Table Grape Crop
Insurance Provisions.
PART 457--COMMON CROP INSURANCE REGULATIONS
0
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(1), 1506(o).
0
2. Amend Sec. 457.138 as follows:
0
a. In the introductory text, remove ``2000'' and add ``2010'' in its
place and remove the phrase ``FCIC Policies'';
0
b. Remove the paragraph immediately preceding section 1;
0
c. Amend section 1 by revising the definitions of ``harvest'' and ``set
out'', adding definitions of ``type'' and ``variety'', and removing the
definition of ``varietal group'';
0
d. Revise sections 2 through 8;
0
e. Amend section 9 by revising paragraph (a) and the introductory text
in paragraph (b);
0
f. Amend section 10 by revising the introductory text in paragraph (a);
0
g. Amend section 11 by revising the introductory text; and
0
h. Amend section 12 by revising paragraphs (b)(2) and (4), and (c)(2)
and (e)(2)(i).
The added and revised text reads as follows:
Sec. 457.138 Grape crop insurance provisions.
* * * * *
1. Definitions.
* * * * *
Harvest. Removing the mature grapes from the vines either by hand
or machine.
* * * * *
Set out. Physically planting the grape plants in the vineyard.
* * * * *
Type. A category of grapes (one or more varieties) identified as a
type in the Special Provisions.
Variety. A kind of grape that is distinguished from any other by
unique characteristics such as, but not limited to, size, color, skin
thickness, acidity, flavors and aromas. In Arizona and California each
variety is identified as a separate type in the Special Provisions
except for type 095 (other varieties). Type 095 is used to designate
varieties not listed as a separate type.
2. Unit Division.
(a) In Arizona and California only:
(1) A basic unit as defined in section 1 of the Basic Provisions
will be divided into additional basic units by each variety that you
insure; and
(2) Provisions in the Basic Provisions that provide for optional
units by section, section equivalent, or FSA farm serial number and by
irrigated and non-irrigated practices are not applicable. Unless
otherwise allowed by written agreement, optional units may only be
established if each optional unit is located on non-contiguous land or
grown and insured under an organic farming practice.
(b) In all states except Arizona and California, in addition to, or
instead of, establishing optional units by section, section equivalent,
or FSA farm serial number and by irrigated and non-irrigated acreage
and for acreage grown and insured under an organic farming practice as
provided in the unit division provisions contained in the Basic
Provisions, a separate optional unit may be established if each
optional unit:
(1) Is located on non-contiguous land; or
(2) Consists of a separate type when separate types are specified
in the Special Provisions.
3. Insurance Guarantees, Coverage Levels, and Prices for
Determining Indemnities.
In addition to the requirements of section 3 of the Basic
Provisions:
(a) In Arizona and California, you may select only one coverage
level and price election for each grape variety you elect to insure in
the county.
(b) In all states except Arizona and California, you may select
only one coverage level and price election for each grape type in the
county as specified in the Special Provisions. The coverage level you
choose for each grape type is not required to have the same percentage
relationship. The price election you choose for each type is not
required to have the same percentage relationship to the maximum price
election offered by us for each type. For example, if you choose 75
percent coverage level and 100 percent of the maximum price election
for one type, you may choose 65 percent coverage level and 75 percent
of the maximum price election for another type. If you elect the
Catastrophic Risk Protection (CAT) level of insurance for any grape
type, the CAT level of coverage will be
[[Page 32056]]
applicable to all insured grape acreage in the county.
(c) In all states except Arizona and California, if you acquire a
share in any grape acreage after you submit your application, such
acreage is insurable under the terms of the policy and you did not
include the grape type on your application, we will assign the
following:
(1) A coverage level equal to the lowest coverage level you
selected for any other grape type: and
(2) A price election percentage equal to the type with the lowest
coverage level you selected, if you elected additional coverage; or 55
percent of the maximum price election, if you elected CAT.
(d) In addition to the definition of ``price election'' contained
in section 1 of the Basic Provisions, a price election based on the
price contained in your grape contract is allowed if provided by the
Special Provisions. In the event any contract requires the use of a
cultural practice that will reduce the amount of production from any
insured acreage, your approved yield will be adjusted in accordance
with section 3(f) and (g) to reflect the reduced production potential.
(e) In Arizona and California only, if the Special Provisions do
not provide a price election for a specific variety you wish to insure,
you may apply for a written agreement to establish a price election.
Your application for the written agreement must include:
(1) The number of tons sold for at least the two most recent crop
years; and
(2) The price received for all production of the grape variety in
the years for which production records are provided.
(f) You must report by the production reporting date designated in
section 3 of the Basic Provisions, by type or variety, if applicable:
(1) Any damage, removal of bearing vines, 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 vines on insurable and uninsurable
acreage;
(3) The age of the vines and the planting pattern; and
(4) For the first year of insurance for acreage interplanted with
another perennial crop, and any time the planting pattern of such
acreage is changed:
(i) The age of the interplanted crop, and the grape type or
variety, if applicable;
(ii) The planting pattern; and
(iii) Any other information that we request in order to establish
your approved yield.
(g) We will reduce the yield used to establish your production
guarantee, based on our estimate of the effect on yield potential of
any of the items listed in section 3(f)(1) through (4). If you fail to
notify us of any circumstance that may reduce your yields from previous
levels, we will reduce your production guarantee at any time we become
aware of the circumstance.
(h) Your request to increase the coverage level or price election
percentage will not be accepted if a cause of loss that could or would
reduce the yield of the insured crop is evident when your request is
made.
4. Contract Changes.
In accordance with section 4 of the Basic Provisions, the contract
change date is October 31 preceding the cancellation date for Arizona
and California and August 31 preceding the cancellation date for all
other states.
5. Cancellation and Termination Dates.
In accordance with section 2 of the Basic Provisions, the
cancellation and termination dates are January 31 in Arizona and
California, and November 20 for all other states.
6. Report of Acreage.
In addition to the requirements of section 6 of the Basic
Provisions, you must report your acreage:
(a) In Arizona and California, by each grape variety you insure; or
(b) In all other states, by each grape type.
7. Insured Crop.
In accordance with section 8 of the Basic Provisions, the crop
insured will be any insurable variety that you elect to insure in
Arizona and California, or in all other states all insurable types, in
the county for which a premium rate is provided by the actuarial
documents:
(a) In which you have a share;
(b) That are grown for wine, juice, raisins, or canning (if such
grapes are put to another use (i.e. table grapes), the production to
count will be in accordance with section 12(c)(2(ii));
(c) That are grown in a vineyard that, if inspected, is considered
acceptable by us;
(d) That, after being set out or grafted, have reached the number
of growing seasons designated by the Special Provisions; and
(e) That have produced an average of at least two tons of grapes
per acre (or as otherwise provided in the Special Provisions) in at
least one of the three crop years immediately preceding the insured
crop year, unless we inspect and allow insurance on acreage that has
not produced this amount.
8. Insurable Acreage.
In lieu of the provisions in section 9 of the Basic Provisions that
prohibit insurance attaching to a crop planted with another crop,
grapes interplanted with another perennial crop are insurable unless we
inspect the acreage and determine that it does not meet the
requirements contained in your policy.
9. Insurance Period.
(a) In accordance with the provisions of section 11 of the Basic
Provisions:
(1) For the year of application, coverage begins on February 1 in
Arizona and California, and November 21 in all other states.
Notwithstanding the previous sentence, if your application is received
by us after January 12 but prior to February 1 in Arizona or
California, or after November 1 but prior to November 21 in all other
states, insurance will attach on the 20th day after your properly
completed application is received in our local office, unless we
inspect the acreage during the 20-day period 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
vineyard.
(2) For each subsequent crop year that the policy remains
continuously in force, coverage begins on the day immediately following
the end of the insurance period for the prior crop year. Policy
cancellation that results solely from transferring to a different
insurance provider for a subsequent crop year will not be considered a
break in continuous coverage.
(3) If in accordance with the terms of the policy, your grape
policy is cancelled or terminated for any crop year after insurance
attached for that crop year, but on or before the cancellation and
termination dates, whichever is later, insurance will not be considered
to have attached for that crop year and no premium, administrative fee,
or indemnity will be due for such crop year.
(4) The calendar date for the end of the insurance period for each
crop year is as follows, unless otherwise specified in the Special
Provisions:
(i) October 10 in Mississippi and Texas;
(ii) November 10 in Arizona, California, Idaho, Oregon and
Washington; and
(iii) November 20 in all other states.
(b) In addition to the provisions of section 11 of the Basic
Provisions:
* * * * *
10. Causes of Loss.
(a) In accordance with the provisions of section 12 of the Basic
Provisions,
[[Page 32057]]
insurance is provided only against the following causes of loss that
occur during the insurance period:
* * * * *
11. Duties in the Event of Damage or Loss.
In addition to the requirements of section 14 of the Basic
Provisions, the following will apply:
* * * * *
12. Settlement of Claim.
* * * * *
(b) * * *
(2) Multiplying each result in section 12(b)(1) by the respective
price election you selected for each type or variety;
* * * * *
(4) Multiplying the total production to count of each type or
variety, if applicable, (see section 12 (c) through (e)) by the
respective price election you selected;
* * * * *
(c) * * *
(2) All harvested production from the insurable acreage:
(i) Grape production that is harvested and dried for raisins will
be converted to a fresh weight basis by multiplying the number of tons
of raisin production by 4.5.
(ii) Grapes grown for wine, juice, raisins or canning and put to
another use, will be counted as production to count on a tonnage basis.
No quality adjustment other than that specifically provided for in your
policy is available.
* * * * *
(e) * * *
(2) * * *
(i) Dividing the value per ton of the damaged grapes by the value
per ton for undamaged grapes (the value of undamaged grapes will be the
lesser of the average market price or the maximum price election for
such grapes); and
* * * * *
0
3. Amend Sec. 457.149 as follows:
0
a. In the introductory text, remove ``2001'' and add ``2010'' in its
place and remove the phrase ``FCIC Policies'';
0
b. Remove the paragraph immediately preceding section 1;
0
c. Amend section 1 by revising the definitions of ``harvest'', ``lug'',
and ``set out'', adding definitions of ``type'' ``USDA grade standard''
and ``variety'', and removing the definition of ``cluster thinning and
removal'';
0
d. Revise sections 2 through 10;
0
e. Amend section 11 by revising the introductory text and paragraph
(c); and
0
f. Amend section 12 by revising paragraphs (b)(2) and (4) and
(c)(1)(iii).
The added and revised text reads as follows:
Sec. 457.149 Table grape crop insurance provisions.
* * * * *
1. Definitions.
* * * * *
Harvest. Removing the mature grapes from the vines either by hand
or machine.
* * * * *
Lug.
(1) Twenty (20) pounds of table grapes in the Coachella Valley,
California district, and all other States.
(2) Twenty-one (21) pounds in all other California districts.
(3) Or as otherwise specified in the Special Provisions.
Set out. Physically planting the grape plants in the vineyard.
* * * * *
Type. A category of grapes (one or more varieties) identified as a
type in the Special Provisions.
USDA grade standard. (1) United States standard used to determine
the minimum quality grade will be:
(i) The United States Standards for Grades of Table Grapes
(European or Vinifera Type);
(ii) The United States Standards for Grades of American (Eastern
Type Bunch Grapes; and
(iii) The United States Standards for Grades of Muscadine (Vitis
rotundifolia) Grapes. The quantity and number of samples required will
be determined in accordance with procedure issued by FCIC or as
provided on the Special Provisions of Insurance.
Variety. A kind of grape that is distinguished from any other by
unique characteristics such as, but not limited to, size, color, skin
thickness, acidity, flavors and aromas. In Arizona and California each
variety is identified as a separate type in the Special Provisions
except for type 095 (other varieties). Type 095 is used to designate
varieties not listed as a separate type.
2. Unit Division.
(a) In Arizona and California only:
(1) A basic unit as defined in section 1 of the Basic Provisions
will be divided into additional basic units by each table grape variety
that you insure; and
(2) Provisions in the Basic Provisions that provide for optional
units by section, section equivalent, or FSA farm serial number and by
irrigated and non-irrigated practices are not applicable. Unless
otherwise allowed by written agreement, optional units may only be
established if each optional unit is located on non-contiguous land or
grown and insured under an organic farming practice.
(b) In all states except Arizona and California, in addition to, or
instead of, establishing optional units by section, section equivalent,
or FSA farm serial number and by irrigated and non-irrigated acreage
and for acreage grown and insured under an organic farming practice as
provided in the unit division provisions contained in the Basic
Provisions, a separate optional unit may be established if each
optional unit:
(1) Is located on non-contiguous land; or
(2) Consists of a separate type when separate types are specified
in the Special Provisions.
3. Insurance Guarantees, Coverage Levels, and Prices for
Determining Indemnities.
In addition to the requirements of section 3 of the Basic
Provisions:
(a) In Arizona and California, you may select only one coverage
level and price election for each table grape variety you elect to
insure in the county.
(b) In all states except Arizona and California, you may select
only one coverage level and price election for each table grape type in
the county as specified in the Special Provisions. The coverage level
you choose for each table grape type is not required to have same
percentage relationship. The price election you choose for each type is
not required to have the same percentage relationship to the maximum
price election offered by us for each type. For example, if you choose
75 percent coverage level and 100 percent of the maximum price election
for one type, you may choose 65 percent coverage level and 75 percent
of the maximum price election for another type. If you elect the
Catastrophic Risk Protection (CAT) level of insurance for any grape
type, the CAT level of coverage will be applicable to all insured grape
acreage in the county.
(c) In all states except Arizona and California, if you acquire a
share in any grape acreage after you submit your application, such
acreage is insurable under the terms of the policy and you did not
include the grape type on your application, we will assign the
following:
(1) A coverage level equal to the lowest coverage level you
selected for any other grape type: and
(2) A price election percentage equal to the type with the lowest
coverage level you selected, if you elected additional coverage; or 55
percent of the maximum price election, if you elected CAT.
(d) You must report by the production reporting date designated in
section 3 of the Basic Provisions, by type or variety if applicable:
(1) Any damage, removal of bearing vines, change in practices or
any other
[[Page 32058]]
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 vines on insurable and uninsurable
acreage;
(3) The age of the vines and the planting pattern; and
(4) For the first year of insurance for acreage interplanted with
another perennial crop, and any time the planting pattern of such
acreage is changed:
(i) The age of the interplanted crop, and the table grape type or
variety, if applicable;
(ii) The planting pattern; and
(iii) Any other information that we request in order to establish
your approved yield.
(e) We will reduce the yield used to establish your production
guarantee, based on our estimate of the effect on yield potential of
any of the items listed in section 3(d)(1) through (4). If you fail to
notify us of any circumstance that may reduce your yields from previous
levels, we will reduce your production guarantee at any time we become
aware of the circumstance.
(f) Your request to increase the coverage level or price election
percentage will not be accepted if a cause of loss that could or would
reduce the yield of the insured crop is evident when your request is
made.
4. Contract Changes.
In accordance with section 4 of the Basic Provisions, the contract
change date is October 31 preceding the cancellation date for Arizona
and California and August 31 preceding the cancellation date for all
other states.
5. Cancellation and Termination Dates.
In accordance with section 2 of the Basic Provisions, the
cancellation and termination dates are January 31 in Arizona and
California, and November 20 for all other states.
6. Report of Acreage.
In addition to the requirements of section 6 of the Basic
Provisions, you must report your acreage:
(a) In Arizona and California, by each table grape variety you
insure; or
(b) In all other states, by each table grape type.
7. Insured Crop.
In accordance with section 8 of the Basic Provisions, the crop
insured will be any insurable variety of table grapes that you elect to
insure in Arizona and California, or in all other states all insurable
types, in the county for which a premium rate is provided by the
actuarial documents:
(a) In which you have a share;
(b) That are grown for harvest as table grapes;
(c) That are adapted to the area;
(d) That are grown in a vineyard that, if inspected, is considered
acceptable by us;
(e) That, after being set out or grafted, have reached the number
of growing seasons designated by the Special Provisions; or
(f) That have produced an average of at least 150 lugs of table
grapes per acre (or as otherwise provided in the Special Provisions) in
at least one of the three crop years immediately preceding the insured
crop year, unless we inspect and allow insurance on acreage that has
not produced this amount.
8. Insurable Acreage.
In lieu of the provisions in section 9 of the Basic Provisions that
prohibit insurance attaching to a crop planted with another crop, table
grapes interplanted with another perennial crop are insurable unless we
inspect the acreage and determine that it does not meet the
requirements contained in your policy.
9. Insurance Period.
(a) In accordance with the provisions of section 11 of the Basic
Provisions
(1) For the year of application, coverage begins on February 1 in
Arizona and California, and November 21 in all other states.
Notwithstanding the previous sentence, if your application is received
by us after January 12 but prior to February 1 in Arizona or
California, or after November 1 but prior to November 21 in all other
states, insurance will attach on the 20th day after your properly
completed application is received in our local office, unless we
inspect the acreage during the 20-day period 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
vineyard.
(2) For each subsequent crop year that the policy remains
continuously in force, coverage begins on the day immediately following
the end of the insurance period for the prior crop year. Policy
cancellation that results solely from transferring to a different
insurance provider for a subsequent crop year will not be considered a
break in continuous coverage.
(3) If in accordance with the terms of the policy, your table grape
policy is cancelled or terminated for any crop year after insurance
attached for that crop year, but on or before the cancellation and
termination dates, whichever is later, insurance will not be considered
to have attached for that crop year and no premium, administrative fee,
or indemnity will be due for such crop year.
(4) The calendar date for the end of insurance period for each crop
year is the date specified in the Special Provisions.
(b) In addition to the provisions of section 11 of the Basic
Provisions:
(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.
Acreage acquired after the acreage reporting date will not be insured.
(2) If you relinquish your insurable share on any insurable acreage
of table grapes on or before the acreage reporting date for the crop
year, insurance will not be considered to have attached to, and no
premium will be due or indemnity paid 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.
10. Causes of Loss.
(a) In accordance with the provisions of section 12 of the Basic
Provisions, 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 vineyard;
(3) Insects, except as excluded in 10(b)(1), but not damage due to
insufficient or improper application of pest control measures;
(4) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(5) Wildlife;
(6) Earthquake;
(7) Volcanic eruption; or
(8) Failure of irrigation water supply, if caused by an insured
peril that occurs during the insurance period.
(b) In addition to the causes of loss excluded in section 12 of the
Basic Provisions, we will not insure against damage or loss of
production due to:
(1) Phylloxera, regardless of cause; or
(2) Inability to market the table grapes for any reason other than
the actual physical damage from an insurable cause specified in this
section. For example, we will not pay you an indemnity if you are
unable to market
[[Page 32059]]
due to quarantine, boycott, or refusal of any person to accept
production.
11. Duties in the Event of Damage or Loss.
In addition to the requirements of section 14 of the Basic
Provisions, the following will apply:
* * * * *
(c) If the crop has been damaged during the growing season and you
previously gave notice in accordance with section 14 of the Basic
Provisions, you must also provide notice at least 15 days prior to the
beginning of harvest if you intend to claim an indemnity as a result of
the damage previously reported. You must not destroy the damaged crop
until the earlier of 15 days from the date you gave notice of loss, or
our written consent to do so. If you fail to meet requirements of this
section all such production will be considered undamaged and included
as production to count.
* * * * *
12. Settlement of Claim.
* * * * *
(b) * * *
(2) Multiplying each result in section 12(b)(1) by the respective
price election you selected for each type or variety;
* * * * *
(4) Multiplying the total production to count of each type or
variety, if applicable, (see section 12(c)) by the respective price
election you selected;
* * * * *
(c) * * *
(1) * * *
(iii) Unharvested production that meets, or would meet if properly
handled, the state quality standards, if specified in the Special
Provisions, or the appropriate USDA grade standard (if no state
standard is specified); and
* * * * *
Signed in Washington, DC, on June 24, 2009.
William J. Murphy,
Acting Manager, Federal Crop Insurance Corporation.
[FR Doc. E9-15498 Filed 7-6-09; 8:45 am]
BILLING CODE 3410-08-P