[Federal Register Volume 75, Number 60 (Tuesday, March 30, 2010)]
[Rules and Regulations]
[Pages 15603-15609]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-6975]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
RIN 0563-AC22
Common Crop Insurance Regulations; Florida Avocado Crop Insurance
Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the
Common Crop Insurance Regulations; Florida Avocado Crop Insurance
Provisions to convert the Florida avocado pilot crop insurance program
to a permanent insurance program for the 2011 and succeeding crop
years.
DATES: Effective Date: April 29, 2010.
FOR FURTHER INFORMATION CONTACT: Claire White, Economist, Product
Management, Product Administration and Standards Division, Risk
Management Agency, United States Department of Agriculture, Beacon
Facility, Stop 0812, 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
The Risk Management Agency 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), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. This rule contains no Federal
mandates (under the regulatory provisions of title II of the UMRA) for
State, local, and tribal governments or the private sector. 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 13132,
[[Page 15604]]
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 small entities are given the same
opportunities 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 and 7 CFR part 400, subpart J,
for the informal administrative review process of good farming
practices, as applicable, 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
On Wednesday, May 20, 2009, FCIC published a notice of proposed
rulemaking in the Federal Register at 74 FR 23660-23664 to add 7 CFR
457.173 Florida avocado crop insurance provisions effective for the
2011 and succeeding crop years. 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 three commenters. The
commenters were two reinsured companies and one insurance service
organization. The comments received and FCIC's responses are as
follows:
General Comments
Comment: One commenter supports the proposed changes along with the
conversion of the Florida Avocado Pilot Crop Insurance Provisions to a
permanent program for 2011.
Response: FCIC thanks the commenter for their support.
Comment: One commenter agrees with the proposed deletion of the
``order of priority'' statement since the order of priority is covered
in the Basic Provisions.
Response: FCIC agrees with the commenter that the ``order of
priority'' statement is no longer needed.
Comment: One commenter states an underwriting guide was not
developed for the Florida Avocado program during the pilot period as it
was for other pilot programs. Underwriting guidelines are useful to
ensure consistency among approved insurance providers (AIPs) and to
provide guidance to AIPs throughout all aspects of the policy
lifecycle.
Response: FCIC will provide underwriting guidelines for the Florida
Avocado program in the Crop Insurance Handbook.
Section 1--Definitions
Comment: Two commenters state the defined term ``direct marketing''
is referenced in section 10 and section 11(c)(1)(B) as ``direct
marketed.'' Therefore, the commenters recommend changing the defined
term from ``direct marketing'' to ``direct marketed'' to be consistent
with how it is referenced in sections 10 and 11(c)(1)(B).
Response: FCIC agrees the defined term ``direct marketing'' should
be consistent with the terms used in sections 10 and 11(c)(1)(B).
However, FCIC does not agree with the recommendation to change the
defined term from ``direct marketing'' to ``direct marketed.'' Instead,
FCIC has changed the term ``direct marketed'' in sections 10 and
11(c)(1)(B) to ``direct marketing'' to be consistent with the defined
term since this is the term used in all other Crop Provisions. FCIC has
also revised sections 10 and 11(c)(1)(B) by adding the phrase ``sold
by'' before the term ``direct marketing'' so the provision reads
clearly.
Comment: Two commenters suggest revising the definition of
``type.'' One commenter suggests revising the definition to be more
consistent with other Crop Provisions to include, at the end of the
definition, the phrase ``as specified in the Special Provisions.''
Another commenter suggests rearranging the definition so it reads
``Either early varieties or late varieties of avocados,'' unless it is
done otherwise in the Crop Provisions for other tree fruit crops.
Response: FCIC agrees with both commenters and has revised the
definition accordingly.
Comment: One commenter questions if the definition of ``type''
means all early varieties will be one type and all late varieties will
be a second type, or whether there will be more than two types.
Response: There will only be two insurable types. All early
varieties will be one type and all late varieties will be another type.
Section 3--Insurance Guarantees, Coverage Levels, and Prices for
Determining Indemnities
Comment: Two commenters state section 3(a) allows the producer to
elect different coverage levels for each separate type being insured
under these provisions, if the Special Provisions provide that the
producer may elect different coverage levels for each avocado type
listed in the Special Provisions. If this is the intent, one commenter
states language needs to be clarified to read something like ``* * *
[[Page 15605]]
you may select a different coverage level for each separate type * *
*.'' This revised language states a different coverage level can be
elected for each type. When the language states one coverage level may
be selected for each type, it is not clear if it must be the same or if
it can vary by type. The language needs to be clarified so it is clear
as to what is being intended. Another commenter states the language
should be changed to something like ``* * * you may select a different
coverage level for each avocado type * * *'' or ``* * * you may select
one coverage level by type * * *'' to be clear that all types do not
have to have the same (one) level except when Catastrophic Risk
Protection (CAT) level of coverage is elected.
Response: FCIC agrees with the commenters. The provision has been
revised to clarify that different coverage may be selected for each
type if permitted by the Special Provisions.
Comment: One commenter states the added language in section 3(a)
regarding CAT level of coverage states it ``* * * will be applicable to
all insured types of avocados in the county.'' This not only suggests
there are more than two types, but also the insured might be able to
choose to insure some but not all of the types, which does not appear
to match the language in section 6(a). Perhaps the word ``insured''
should be deleted.
Response: FCIC agrees the word ``insured'' may cause confusion. All
types of avocados in which the producer has a share must be insured.
The producer cannot choose which types to insure. FCIC has revised
section 3(a) by removing the word ``insured.'' The provision has also
been clarified to state that the CAT level of coverage applies to all
types grown by the producer.
Comment: One commenter states language has been added to section
3(a) to clarify if the producer elects the CAT level of coverage on any
type, it must apply to all types in the county. The commenter suggests
FCIC consider if similar language should be added in section 3(b)
regarding the price election.
Response: FCIC agrees and has revised section 3(b) to include
language similar to that in section 3(a) regarding the CAT level of
coverage.
Comment: One commenter states the last sentence in section 3(b)
refers to using the same price election percentage on ``* * * all other
types.'' This appears to be standard language, but see earlier comments
about whether or not there are more than two types of avocados.
Response: FCIC agrees and has reworded the provision to specify
that the 55 percent CAT coverage will apply to each type the producer
grows in the county.
Comment: Two commenters state section 3(d) allows the AIP to reduce
the yield used to establish the production guarantee if certain things
as specified in this section occur. The proposed provisions state the
procedures for reducing the production guarantee are in accordance with
the Special Provisions. The commenters say it is difficult to provide
any comments since the proposed Special Provisions language is not
provided, as this has been difficult to administer in the past. It
would be helpful if FCIC would provide a copy of the proposed Special
Provisions language so the commenters could offer input on how this is
proposed to be implemented.
Response: FCIC realizes it is not necessary to provide the
procedures for reducing the yield used to establish the production
guarantee in the Special Provisions. After further review, FCIC
determined providing a Special Provisions statement to cover all
conditions listed in section 3(d) would be difficult. The effects of
interplanting a perennial crop; removal of trees; trees that have been
buckhorned; damage; or a change in practices on yield potential of the
insured crop could provide a wide range of possible problems that may
need to be evaluated on an individual basis. Therefore, FCIC has
retained the provision as it was stated in the pilot Florida Avocado
Crop Provisions. This provision is consistent with provisions in other
perennial Crop Provisions, such as Texas citrus fruit, peaches and
pears, regarding reducing the yield used to establish the production
guarantee.
Section 6--Insured Crop
Comment: One commenter suggests removing the hyphen in the term
``commercially grown'' in section 6(a).
Response: FCIC agrees and has removed the hyphen.
Comment: One commenter asks for clarification in section 6(a). When
this section refers to ``* * * types in the county listed in the
Special Provisions for which a premium rate is provided * * *'' the
commenter questioned whether it means the types listed in the SPOI or
the county listed in the SPOI.
Response: FCIC agrees this language may be confusing. The language
is intended to say the insured crop will be all commercially grown
avocado types for which a premium rate is provided by the actuarial
documents for the county. The provision has been revised accordingly.
Comment: One commenter suggests FCIC consider changing ``* * *
actuarial table'' to ``* * * actuarial documents'' in section 6(a) as
has been done in other policies and procedures.
Response: FCIC agrees and has revised the provision accordingly.
Comment: Two commenters state section 6(b) provides that any
avocados produced on trees that have not reached the fourth growing
season after set out and have not produced the minimum production per
acre as specified in the Special Provisions in at least one of the
previous three crop years are not insurable. The commenter says since
the proposed Special Provisions language is not provided, it is
difficult to provide any comments. It would be helpful if FCIC would
provide a copy of the proposed Special Provisions language so the
commenters could know if a change from the current 50 bushels per acre
is being considered and therefore know what, if any, comments might be
made. One commenter asks if changes to more or less than 50 bushels are
being considered.
Response: The Special Provisions allow changes in policy provisions
by geographical area when appropriate based on agronomic conditions.
When this policy is expanded, it is possible that the 50 bushels
currently in the policy may not be appropriate to an area. Providing
the minimum production per acre requirement in the Special Provisions
will allow flexibility to change the minimum production per acre
requirement, which will eliminate the administrative burden of revising
the regulation when a simple numerical change is necessary. FCIC is not
expecting the minimum production per acre to be more than 50 bushels.
Comment: One commenter notes section 6(b) is revised to state
coverage is not provided ``* * * on trees that have not reached the
fourth growing season after setout and have not produced the minimum
production per acre as specified in the Special Provisions in at least
one of the previous three crop years.'' The explanation in the Proposed
Rule is this provides flexibility for productive groves, compared to
the current language, which states coverage is not provided ``* * * on
trees that have not reached the fifth growing season after setout.
However, we may agree in writing to insure avocados on acreage that has
not reached this age if the acreage has produced at least 50 bushels of
avocados per acre in a previous year.'' The commenter asks if this
proposed ``flexibility'' is only in relation to the possible changes
from the current 50-bushel figure, or whether it is also supposed to be
related to the change from the fifth to the fourth growing
[[Page 15606]]
season after setout. The latter flexibility appears to have already
existed since the AIP could agree in writing to insure avocados from
younger trees as long as they had produced at least 50 bushels per acre
in a previous year. The commenter asks how often were such agreements
in writing necessary, how often did avocado trees produce at least 50
bushels in the fourth growing season, and how often was that amount
produced in the third or second growing seasons, which might no longer
be insurable under the proposed language until the trees have reached
the fourth growing season. The commenter also asks whether it is
possible trees that have reached the fourth growing season (or more)
will not yet have produced 50 bushels (or whatever the minimum
production requirement per acre is as specified in the Special
Provisions), and therefore not be insurable according to the proposed
language.
Response: The explanation in the Proposed Rule states providing the
minimum production per acre on the Special Provisions allows the
flexibility to specify a different minimum production per acre for
early and for late varieties. Therefore, ``flexibility'' relates to
providing separate minimum amounts of production per acre on the
Special Provisions, if needed, for early varieties and late varieties.
Insuring avocados on trees before the trees reached the fifth
growing season after setout was allowed under the Florida Avocado Pilot
Crop Insurance Provisions if the AIP agreed in writing. However, FCIC
did not receive any written agreement requests to insure avocados grown
on trees reaching the second, third or fourth growing season. Since
FCIC did not receive any written agreements, FCIC cannot provide an
estimate of how often avocado trees produced at least 50 bushels in the
second, third or fourth growing seasons.
It is possible trees reaching the fourth growing season (or more)
will not yet have produced the minimum production per acre specified in
the Special Provisions. Avocados grown on trees not reaching the fourth
growing season and not meeting the minimum production per acre
specified in the Special Provisions will not be insurable until the
trees on which the avocados are grown have met both requirements. A
written agreement will not be available for trees not reaching the
fourth growing season and not meeting the minimum production per acre
requirement.
Section 8--Insurance Period
Comment: One commenter suggests moving the parenthetical phrase at
the end of both sections 8(a)(i) and 8(a)(ii) to an unnumbered
paragraph following (ii) so it applies to both but is stated only once.
Response: FCIC agrees with the commenter. FCIC moved this
parenthetical to a new section 8(a)(iii) and revised sections 8(a),
8(a)(i), and 8(a)(ii) to make the provisions less redundant.
Comment: One commenter suggests adding a hyphen in ``* * * 10-day
period * * *'' in section 8(a)(1)(ii).
Response: FCIC agrees and has revised the provision accordingly.
Comment: One commenter states section 8(b)(1) only addresses
acquiring an insurable share in acreage after coverage begins but on or
before the acreage reporting date. The commenter suggests adding some
additional language to address acquiring an insurable share in acreage
after the acreage reporting date. The commenter recommends such
additional language allow AIPs the opportunity to inspect and insure
such acreage if they wish to do so. AIPs should have the opportunity to
accept or deny coverage in these types of situations. This would be
similar to what is currently allowed for acreage that is not reported
per section 6(f) of the Basic Provisions.
Response: Section 8(b)(1) is silent regarding allowing AIPs the
opportunity to inspect and insure acreage that was acquired after the
acreage reporting date. Therefore, section 6(f) of the Basic
Provisions, which allows the AIPs to determine by unit the insurable
crop acreage, share, type and practice, or to deny liability if the
producer failed to report all units, has been applied in this situation
under other Crop Provisions and would apply here. The provisions in
this final rule are consistent with provisions in other perennial Crop
Provisions, such as Texas citrus fruit, peaches and pears and to change
them here would suggest that section 6(f) of the Basic Provisions would
not be applicable to these other policies, creating an unnecessary
ambiguity. The Crop Insurance Handbook also allows for AIPs to revise
an acreage report that increases liability if the crop is inspected and
the appraisal indicates the crop will produce at least 90 percent of
the yield used to determine the guarantee or amount of insurance for
the unit. No change has been made.
Section 9--Causes of Loss
Comment: One commenter recommends the insured cause of loss in
section 9(a)(2) be clarified as ``Fire, due to natural causes, * * *''
(or ``Fire, if caused by lightning, * * *'', as in the proposed
revisions to the Tobacco Crop Provisions).
Response: Revising the insured cause of loss to read ``Fire, due to
natural causes, unless weeds and other forms of undergrowth have not
been controlled or pruning debris has not been removed from the grove''
is not necessary since section 12 of the Basic Provisions states all
insured causes of loss must be due to a naturally occurring event. To
repeat this requirement for a single cause of loss in the Crop
Provisions will only create confusion regarding whether or not the
other listed causes must be naturally occurring. FCIC also disagrees
with revising the insured cause of loss to read ``Fire, if caused by
lightning * * *'' as in the proposed revisions to the Tobacco Crop
Provisions. Due to public comments, the original provision, mirrored
here and in other Crop Provisions, was retained. No change has been
made.
Comment: One commenter notes ``Insects, but not damage due to
insufficient or improper application of pest control measures'' in
section 9(a)(7) and ``Plant disease, but not due to insufficient or
improper application of disease control measures'' in section 9(a)(8)
are at the end of the list of insured causes of loss. The commenter
states the order makes sense since they are unlikely to be the cause of
``Failure of the irrigation water supply caused by an insured peril
specified in section 9(a)(1) through (5) that occurs during the
insurance period,'' which is stated in section 9(a)(6), but this is not
the usual order of the causes of loss in other Crop Provisions.
Response: FCIC agrees this is not the usual order of the causes of
loss in other Crop Provisions. However, while this is a change, it does
not change the meaning of the provisions because failure of the
irrigation water supply cannot be caused by insects or plant disease in
this policy or any other policy.
Section 11--Settlement of Claim
Comment: One commenter suggests adding a comma in section 11(b)(2)
before the phrase ``* * * if applicable'' as in sections 11(b)(1) and
11(b)(4).
Response: FCIC agrees and has revised the provision accordingly.
Comment: One commenter suggests moving the comma in section
11(b)(4) after the parenthetical phrase ``(see subsection 11(c))'' and
placing it before the parenthetical phrase.
Response: Moving the comma after the parenthetical could give a
different meaning to the provision. Instead, FCIC has revised the
provision by placing the parenthetical phrase between the words
[[Page 15607]]
``counted'' and ``by'' because the parenthetical phrase is more
appropriately placed here because section 11(c) is the provision
regarding production to count. FCIC has also removed the word
``subsection'' in the parenthetical phrase and replaced it with
``section'' to be consistent with the other references to ``section''
in section 11.
Comment: One commenter suggests changing the semicolon after the
phrase ``* * * abandon or no longer care for'' to a comma in section
11(c)(1)(iv).
Response: In the Proposed Rule, a comma comes after the phrase ``*
* * abandon or no longer care for.'' Therefore, there is no need to
change a semicolon to a comma. No change has been made.
In addition to the changes described above, FCIC has made the
following changes:
1. Added a comma after the phrase ``by type'' in the introductory
text in section 3(c) and after the phrase ``and type'' in section
3(c)(5)(i).
2. Removed the word ``setout'' in section 6(b)(1) and replaced it
with the words ``set out'' to be consistent with the defined term ``set
out.''
3. Revised the provisions in section 8(a)(ii) to remove the phrase
``, acreage and production reports are'' and add the word ``is'' in its
place. The current language states for the year of application, if the
producer applies for coverage after November 21, but prior to December
1, insurance will attach on the 10th day after the producer's properly
completed application, acreage and production reports are received. It
is not necessary for the producer to submit, at the time of
application, his acreage and production reports, as those are not due
until the acreage reporting date. Therefore, FCIC has removed the
requirement for the producer to submit acreage and production reports
at the time of application.
List of Subjects in 7 CFR Part 457
Crop insurance, Florida Avocado, Reporting and recordkeeping
requirements.
Final Rule
0
Accordingly, as set forth in the preamble, the Federal Crop Insurance
Corporation amends 7 CFR part 457, Common Crop Insurance Regulations,
for the 2011 and succeeding crop years as follows:
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(l), 1506(o).
0
2. Section 457.173 is added to read as follows:
Sec. 457.173 Florida Avocado crop insurance provisions.
The Florida Avocado Crop Insurance Provisions for the 2011 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: Florida Avocado Crop Insurance
Provisions.
1. Definitions.
Bushel. A unit of measure equal to 55 pounds of avocados, unless
otherwise specified in the Special Provisions.
Buckhorn. To prune any limb at a diameter of at least four inches.
Crop year. A period beginning with the date insurance attaches to
the avocado crop and extending through the normal harvest time. The
crop year is designated by the calendar year after insurance attaches.
Direct marketing. Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper or buyer. Examples of direct
marketing include selling through an on-farm or roadside stand,
farmer's market, and permitting the general public to enter the fields
for the purpose of picking all or a portion of the crop.
Harvest. Picking of the avocados from the trees or ground by hand
or machine.
Pound. A unit of weight equal to sixteen ounces avoirdupois.
Set out. Transplanting a tree into the grove.
Type. Either early varieties or late varieties of avocados, as
specified in the Special Provisions.
2. Unit Division.
Provisions in section 34 of the Basic Provisions that allow
optional units by section, section equivalent, or FSA farm serial
number and by irrigated and non-irrigated practices are not applicable.
Optional units may be established by type when provided for 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) You may select only one coverage level for all the avocados in
the county insured under this policy unless the Special Provisions
provide that you may select a different coverage level for each avocado
type designated in the Special Provisions. However, if you elect the
Catastrophic Risk Protection (CAT) level of coverage, the CAT level of
coverage will be applicable to all types of avocados you produce in the
county.
(b) You may select only one price election for all the avocados in
the county insured under this policy unless the Special Provisions
provide different price elections by type, in which case you may select
one price election for each avocado type designated in the Special
Provisions. The price elections you choose for each type must have the
same percentage relationship to the maximum price offered by us for
each type. For example, if you choose 100 percent of the maximum price
election for one type, you must choose 100 percent of the maximum price
election for the other type. However, if you elect the CAT level of
coverage, the price election percentage will be equal to 55 percent of
the applicable price election for each type of avocado you produce in
the county.
(c) You must report, by the production reporting date designated in
section 3 of the Basic Provisions, by type, if applicable:
(1) Any damage, removal of trees, trees that have been buckhorned,
change in grove practices, or any other circumstance that may reduce
the expected yield per acre to less than the yield upon which the
production guarantee per acre is based, and the number of affected
acres;
(2) The number of trees on insurable and uninsurable acreage;
(3) The age of the trees;
(4) Any acreage that is excluded under section 6 of these Crop
Provisions; and
(5) For acreage interplanted with another crop:
(i) The age of the interplanted crop, and type, if applicable;
(ii) The planting pattern; and
(iii) Any other information that we request in order to establish
your production guarantee per acre.
(d) We will reduce the yield used to establish your production
guarantee as necessary, based on the effect of interplanting a
perennial crop; removal of trees; trees that have been buckhorned;
damage; or a change in practices on the yield potential of the insured
crop. If you fail to notify us of any circumstance as set out in
paragraph (c) of this section, we will reduce your production guarantee
as necessary at any time we become aware of the circumstance.
4. Contract Changes.
In accordance with section 4 of the Basic Provisions, the contract
change
[[Page 15608]]
date is August 31 preceding the cancellation date.
5. Cancellation and Termination Dates.
In accordance with section 2 of the Basic Provisions, the
cancellation and termination dates are the first November 30th after
insurance attaches.
6. Insured Crop.
(a) In accordance with section 8 of the Basic Provisions, the crop
insured will be all the commercially grown avocado types for which a
premium rate is provided by the actuarial documents for the county:
(1) In which you have a share;
(2) That are grown for harvest as avocados; and
(3) That are grown on trees that, if inspected, are considered
acceptable to us.
(b) In addition to the avocados not insurable in section 8 of the
Basic Provisions, we do not insure any avocados produced on trees that
have not:
(1) Reached the fourth growing season after set out; and
(2) Produced the minimum production per acre as specified in the
Special Provisions in at least one of the previous three crop years.
7. Insurable Acreage.
In lieu of the provisions in section 9 of the Basic Provisions that
prohibits insurance attaching to a crop planted with another crop,
avocados interplanted with another perennial crop are insurable unless
we inspect the acreage and determine it does not meet the requirements
of insurability contained in these Crop Provisions.
8. Insurance Period.
(a) In accordance with the provisions of section 11 of the Basic
Provisions:
(1) For the year of application:
(i) If you apply for coverage on or before November 21st, coverage
begins for the crop year on December 1 of the calendar year; or
(ii) If you apply for coverage after November 21 but prior to
December 1, insurance will attach on the 10th day after your properly
completed application is received in our local office, unless we
inspect the acreage during the 10-day period and determine that it does
not meet the requirements for insurability contained in your policy.
(iii) You must provide any information we require so we may
determine the condition of the grove to be insured.
(2) For continuous policies, coverage begins for the crop year on
December 1 of the calendar year. Policy cancellation that results
solely from transferring an existing policy to a different insurance
provider for a subsequent crop year will not be considered a break in
continuous coverage.
(3) The calendar date for the end of the insurance period, unless
otherwise specified in the Special Provisions, is:
(i) The first November 30th after insurance attaches for early
varieties of avocados.
(ii) The second March 31st after insurance attaches for late
varieties of avocados.
(b) In addition to the provisions of section 11 of the Basic
Provisions:
(1) If you acquire an insurable share in any insurable acreage of
avocados after coverage begins, but on or before the acreage reporting
date of any crop year, and if after inspection we consider the acreage
acceptable, then insurance will be considered to have attached to such
acreage on the calendar date for the beginning of the insurance period.
(2) If you relinquish your insurable share on any acreage of
avocados on or before the acreage reporting date of any crop year,
insurance will not be considered to have attached to, no premium will
be due and no 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.
9. 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 within 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 grove;
(3) Wildlife, unless control measures have not been taken;
(4) Earthquake;
(5) Volcanic eruption;
(6) Failure of the irrigation water supply caused by an insured
peril specified in section 9(a)(1) through (5) that occurs during the
insurance period.
(7) Insects, but not damage due to insufficient or improper
application of pest control measures; and
(8) Plant disease, but not due to insufficient or improper
application of disease control measures.
(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) Theft; or
(2) Inability to market the avocados for any reason other than
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 due to quarantine, boycott, or refusal of any person
to accept production, etc.
10. Duties in the Event of Damage or Loss.
In addition to the requirements of section 14 of the Basic
Provisions, the following will apply:
(a) You must notify us at least 15 days before any production from
any unit will be sold by direct marketing.
(1) We will conduct a preharvest appraisal that will be used to
determine your production. If damage occurs after the preharvest
appraisal, and you can provide acceptable records to us that account
for all production removed from the unit after our appraisal, we will
conduct an additional appraisal that will be used to determine your
production.
(2) Failure to give timely notice that production will be sold by
direct marketing will result in an appraised production to count of not
less than the production guarantee per acre if such failure results in
an inability to make an accurate appraisal.
(b) If you intend to claim an indemnity on any unit, you must
notify us 15 days prior to the beginning of harvest or immediately if
damage is discovered during harvest so that we may inspect the damaged
production.
(1) You must not destroy the damaged crop until after we have given
you written consent to do so.
(2) If you fail to meet the requirements of this subsection, and
such failure results in our inability to inspect the damaged
production, we may consider all such production to be undamaged and
include it as production to count.
11. Settlement of Claim.
(a) We will determine your loss on a unit basis. In the event you
are unable to provide production records:
(1) For any optional unit, we will combine all optional units for
which acceptable production records were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for each unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured acreage for each type, if applicable,
by its respective production guarantee;
(2) Multiplying each result in section 11(b)(1) by the respective
price election for each type, if applicable;
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(3) Totaling the results in section 11(b)(2);
(4) Multiplying the total production to be counted (see section
11(c)) by type, if applicable, by the respective price election;
(5) Totaling the results in section 11(b)(4);
(6) Subtracting the results in section 11(b)(5) from the results in
section 11(b)(3); and
(7) Multiplying the result in section 11(b)(6) by your share.
For example:
You have a 100 percent share in 50 acres of early variety A in the
unit, with a guarantee of 140 bushels per acre and a price election of
$16.00 per bushel. You are only able to harvest 6,000 bushels due to an
insured cause of loss. Your indemnity would be calculated as follows:
(1) 50 acres x 140 bushels = 7,000 bushel guarantee;
(2) 7,000 bushels x $16.00 price election = $112,000.00 value of
guarantee;
(4) 6,000 bushels x $16.00 price election = $96,000.00 value of
production to count;
(6) $112,000.00 - $96,000.00 = $16,000 loss; and
(7) $16,000 x 100 percent = $16,000 indemnity.
(c) The total production to count from all insurable acreage on the
unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
(A) That is abandoned;
(B) That is sold by direct marketing if you fail to meet the
requirements contained in section 10 of these Crop Provisions;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide production records that are
acceptable to us;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production;
(iv) Potential production on insured acreage that you intend to
abandon or no longer care for, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for
that acreage will end. If you do not agree with our appraisal, we may
defer the claim only if you agree to continue to care for the crop. We
will then make another appraisal when you notify us of further damage
or that harvest is general in the area unless you harvested the crop,
in which case we will use the harvested production. If you do not
continue to adequately care for the crop, our appraisal made prior to
deferring the claim will be used to determine the production to count;
and
(2) All harvested production from the insurable acreage.
12. Late and Prevented Planting.
The late and prevented planting provisions of the Basic Provisions
are not applicable.
Signed in Washington, DC, on March 24, 2010.
William J. Murphy,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2010-6975 Filed 3-29-10; 8:45 am]
BILLING CODE 3410-08-P