[Code of Federal Regulations] [Title 7, Volume 6] [Revised as of January 1, 2008] From the U.S. Government Printing Office via GPO Access [CITE: 7CFR457.140] [Page 268-273] TITLE 7--AGRICULTURE CHAPTER IV--FEDERAL CROP INSURANCE CORPORATION, DEPARTMENT OF AGRICULTURE PART 457_COMMON CROP INSURANCE REGULATIONS--Table of Contents Sec. 457.140 Dry pea crop insurance provisions. The dry pea crop insurance provisions for the 2003 and succeeding crop years are as follows: FCIC policies: Department of Agriculture Federal Crop Insurance Corporation Reinsured Policies (Appropriate title for insurance provider) Both FCIC and reinsured policies: Dry Pea Crop Provisions If a conflict exists among the policy provisions, the order of priority is as follows: (1) The Catastrophic Risk Protection Endorsement, if applicable; (2) the Special Provisions; (3) these Crop Provisions; and (4) the Basic Provisions with (1) controlling (2), etc. 1. Definitions. Adequate stand. A population of live plants per acre that will produce at least the yield used to establish your production guarantee. Base price. The price per pound stipulated in the processor contract without regard to discounts or incentives that may apply, and that will be paid to the producer for at least 50 percent of the total production under contract with the seed company. Combining. A mechanical process that separates the peas from the pods and other vegetative matter and place the peas into a temporary storage receptacle. Conditioning. A process that improves the quality of production by screening or any other operation commonly used in the dry pea industry to remove dry peas that are deficient in quality. Contract seed peas. Dry peas produced for seed to be planted at a future date and that: (a) Are grown on acreage enrolled in the seed certification program administered by the state in which the peas are produced; (b) Are grown on acreage planted in the spring; and (c) Are under a seed company contract. Dry peas. Peas of the following types: (a) All spring-planted smooth green and yellow varieties of commercial dry edible peas, and peas grown to produce seed to be planted at a future date that do not meet the requirements contained in the seed company contract; [[Page 269]] (b) All fall-planted varieties of Austrian Winter Peas only if provided for in the Special Provisions; (c) All spring-planted varieties of lentils; and (d) All varieties of contract seed peas. Harvest. Combining of dry peas. Local market price. The cash price per pound for the U.S. No. 1 grade of dry peas as determined by us. Such price will be the prevailing dollar amount these buyers are willing to pay for dry peas containing the maximum limits of quality deficiencies allowable for the U.S. No. 1 grade. Factors not associated with grading under the United States Standards for Whole Dry Peas, Split Peas and Lentils will not be considered. Nurse crop (companion crop). A crop planted into the same acreage as another crop, that is intended to improve the growing conditions for the crop with which it is grown and that is not intended to be harvested with the insured crop. Planted acreage. In addition to the definition contained in the Basic Provisions, dry peas must initially be planted in rows to be considered planted. Acreage planted in any other manner will not be insurable unless otherwise provided by the Special Provisions or by written agreement. Practical to replant. In addition to the definition contained in the Basic Provisions, it will not be considered practical to replant dry peas, except for seed peas, more than 25 days after the final planting date unless replanting is generally occurring in the area. For seed peas, it will not be considered practical to replant unless production from the replanted acreage can be delivered under the terms of the seed pea processor contract or the seed company agrees in writing to accept such production. Price election. In addition to the provisions of the definition contained in the Basic Provisions, the price election for contract seed peas will be a percentage (not to exceed 100 percent) of the base price that you elect. Seed company. Any business enterprise regularly engaged in the processing of contract seed peas, that possesses all licenses and permits for marketing contract seed peas required by the state in which it operates, and that owns, or has contracted, sufficient drying, screening, and bagging or packaging equipment to accept and process the contract seed peas within a reasonable amount of time after harvest. Seed company contract. A written agreement between the producer and the seed company, executed by the acreage reporting date, containing at a minimum: (a) The producer's promise to plant and grow one or more specific varieties of contract seed peas, and deliver the production from those varieties to the seed company; (b) The seed company's promise to purchase all the production stated in the contract; and (c) A fixed price, or a method to determine such price based on published information compiled by a third party, that will be paid to the producer for at least 50 percent of the production stated in the contract. 2. Unit Division (a) 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 as provided in the unit division provisions contained in the Basic Provisions, a separate optional unit may be established for each pea type listed in section 1 of these Crop Provisions. (b) Contract seed peas may qualify for optional units only if the seed company contract specifies the number of acres under contract. Contract seed peas produced under a seed company contract that specifies only an amount of production or a combination of acreage and production, are not eligible for optional units. 3. Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities In addition to the requirements of section 3 of the Basic Provisions, you may select only one price election for all the dry peas, including contract seed peas, in the county insured under this policy unless the Special Provisions provide different price elections by type, in which case you may select one price election for each dry pea type so designated in the Special Provisions. The price elections you choose for each type are not required to have the same percentage relationship to the maximum price offered by us for each type. For example, if you choose 100 percent of the maximum price election for one type, you may choose 80 percent of the maximum price election for another type. However, if you elect the Catastrophic Risk Protection level of insurance for any dry pea type, the same level of coverage will be applicable to all insured acreage in the county. 4. Contract Changes In accordance with section 4 of the Basic Provisions, the contract change date is November 30 preceding the cancellation date. 5. Cancellation and Termination Dates In accordance with section 2 of the Basic Provisions, the cancellation and termination dates are March 15. 6. Report of Acreage In addition to the provisions of section 6 of the Basic Provisions, you must submit a copy of the seed company contract to us on [[Page 270]] or before the acreage reporting date if you are insuring contract seed peas. 7. Insured Crop (a) In accordance with section 8 of the Basic Provisions, the crop insured will be all the dry pea types in the county (including Austrian Winter Peas if you request insurance for such peas in accordance with section 7(c)) for which a premium rate is provided by the actuarial documents: (1) In which you have a share; (2) That are planted for harvest as dry peas and which, if grown under a seed company contract, are not excluded from such contract during the crop year; (3) That are grown in accordance with the requirements of the seed company contract, if applicable; (4) That are not (unless allowed by the Special Provisions or by written agreement): (i) Interplanted with another crop; (ii) Planted into an established grass or legume; or (iii) Planted as a nurse crop. (b) You will be considered to have a share in the insured crop if, under the processor contract, you retain control of the acreage on which the contract seed peas are grown, you are at risk of loss, and the processor contract is in effect. (c) Austrian Winter Peas are only insurable if you request insurance in writing for such dry peas, and we agree in writing to provide coverage. Your request to insure Austrian Winter Peas must be submitted to us not later than the sales closing date. We will not agree to insure Austrian Winter Peas unless an adequate stand exists in the spring. (d) Any acreage of dry peas that is destroyed and replanted to a different insurable type of dry peas will be considered insured acreage. The guarantee and premium for acreage replanted to a different insurable type will be based on the replanted type and will be calculated in accordance with sections 3 and 7 of the Basic Provisions and section 3 of these Crop Provisions. 8. Insurable Acreage In addition to the provisions of section 9 of the Basic Provisions: (a) We will not insure any acreage that does not meet the rotation requirements, if applicable, contained in the Special Provisions; or (b) Any acreage of the insured crop damaged before the final planting date, to the extent that most producers of the crop or acreage with similar characteristics in the area would normally not further care for the crop, must be replanted unless we agree that it is not practical to replant. We will not require you to replant if it is not practical to replant the type of dry peas originally planted. 9. Insurance Period In addition to the provisions of section 11 of the Basic Provisions: (a) Coverage for Austrian Winter Peas, will begin on the earlier of March 16 or the date we agree to accept the acreage for insurance, but not before March 1; and (b) The calendar date for the end of the insurance period for all insurable types of dry peas in the county is September 30 of the crop year in which the crop normally is harvested unless otherwise specified in the Special Provisions. 10. Causes of Loss In accordance with the provisions of section 12 of the Basic Provisions, insurance is provided only against the following causes of loss that occur during the insurance period: (a) Adverse weather conditions; (b) Fire; (c) Insects, but not damage due to insufficient or improper application of pest control measures; (d) Plant disease, but not damage due to insufficient or improper application of disease control measures; (e) Wildlife; (f) Earthquake; (g) Volcanic eruption; or (h) Failure of the irrigation water supply, if due to a cause of loss contained in section 10(a) through (g) that occurs during the insurance period. 11. Duties in the Event of Damage or Loss In accordance with the requirements of section 14 of the Basic Provisions, the representative samples of the unharvested crop must be at least 10 feet wide and extend the entire length of each field in the unit. If you intend to destroy the crop prior to harvest, the samples must not be destroyed until after our inspection. 12. Settlement of Claim (a) We will determine your loss on a unit basis. In the event you are unable to provide separate acceptable production records: (1) For any optional units, we will combine all optional units for which such production records were not provided; or (2) For any basic units, we will allocate any commingled production to such units in proportion to our liability on the harvested acreage for the units. (b) In the event of loss or damage to your pea crop covered by this policy, we will settle your claim by: (1) Multiplying the insured acreage of each dry pea type, if applicable, excluding contract seed peas, by its respective production guarantee; (2) Multiplying each result of section 12(b)(1) by the respective price election; (3) Totaling the results of section 12(b)(2); [[Page 271]] (4) Multiplying the insured acreage of each contract seed pea variety by its respective production guarantee; (5) Multiplying each result of section 12(b)(4) by the applicable base price; (6) Multiplying each result of section 12(b)(5) by your selected price election percentage; (7) Totaling the results of section 12(b)(6); (8) Totaling the results of section 12(b)(3) and section 12(b)(7); (9) Multiplying the total production to be counted of each dry pea type, excluding contract seed peas, if applicable (see section 12(d)), by the respective price elections; (10) Totaling the value of all contract seed pea production (see section 12(c)); (11) Totaling the results of section 12(b)(9) and section 12(b)(10); (12) Subtracting the result of section 12(b)(11) from the result in section 12(b)(8); and (13) Multiplying the result of section 12(b)12 by your share. For example: You have a 100 percent share in 100 acres of spring-planted smooth green dry edible peas in the unit, with a guarantee of 4,000 pounds per acre and a price election of $0.09 per pound. You are only able to harvest 200,000 pounds. Your indemnity would be calculated as follows: (1) 100 acres x 4,000 pounds = 400,000 pounds guarantee; (2) 400,000 pounds x $0.09 price election = $36,000.00 value of guarantee; (9) 200,000 pounds x $0.09 price election = $18,000.00 value of production to count; $36,000.00 value of guarantee - $18,000.00 value of production to count = $18,000.00 loss; and (13) $18,000.00 x 100 percent = $18,000.00 indemnity payment. You also have a 100 percent share in 100 acres of contract seed peas in the same unit, with a guarantee of 5,000 pounds per acre and a base price of $0.40 per pound. Your selected price election percentage is 75 percent. You are only able to harvest 450,000 pounds. Your total indemnity for both spring-planted smooth green dry edible peas and contract seed peas would be calculated as follows: (1) 100 acres x 4,000 pounds = 400,000 pounds guarantee for the spring-planted smooth green dry edible pea type, and (4) 100 acres x 5,000 pounds = 500,000 pounds guarantee for the contract seed pea type; (2) 400,000 pounds guarantee x $0.09 price election = $36,000.00 value of guarantee for the spring-planted smooth green dry edible pea type, and (5) 500,000 pounds guarantee x $0.40 base price = $200,000.00 gross value of guarantee for the contract seed pea type; (6) $200,000 x .75 price election percentage = $150,000 net value of guarantee for the contract seed pea type; (8) $36,000.00 + $150,000.00 = $186,000.00 total value of guarantee; (9) 200,000 pounds x $0.09 price election = $18,000.00 value of production to count for the spring-planted smooth green dry edible pea type, and (10) 450,000 pounds x $0.30 = $135,000.00 value of production to count for the contract seed pea type; (11) $18,000.00 + $135,000.00 = $153,000.00 total value of production to count; (12) $186,000.00 - $153,000.00 = $33,000.00 loss; and (13) $33,000.00 loss x 100 percent = $33,000.00 indemnity payment. (c) The value of contract seed pea production to count for each variety in the unit will be determined as follows: (1) For production meeting the minimum quality requirements contained in the seed company contract, and for production that does not meet such requirements due to uninsured causes: (i) Multiplying the local market price or base price per pound, whichever is greater, by the price election percentage you selected; and (ii) Multiplying the result by the number of pounds of such production. (2) For mature production not meeting the minimum quality requirements contained in the seed pea processor contract due to insurable causes, and immature production that is appraised: (i) Multiplying the highest local market price available for such dry peas by the price election percentage you selected; and (ii) Multiplying the result by the number of pounds of such production. (d) The total pea production to count (in pounds) from all insurable acreage on the unit will include: (1) All appraised production as follows: (i) Not less than the production guarantee per acre for acreage: (A) That is abandoned; (B) That is put to another use without our consent; (C) That is damaged solely by uninsured causes; or (D) For which you fail to provide production records that are acceptable to us; (ii) Production lost due to uninsured causes; (iii) Unharvested production (mature unharvested production of dry peas, excluding Austrian Winter Peas, may be adjusted for quality deficiencies in accordance with section 12 (c) or (e), if applicable); and (iv) Potential production on insured acreage that you intend to put to another use or abandon, if you and we agree on the appraised amount of production. Upon such agreement, the insurance period for that acreage will end when you put the acreage to [[Page 272]] another use or abandon the crop. If agreement on the appraised amount of production is not reached: (A) If you do not elect to continue to care for the crop, we may give you consent to put the acreage to another use if you agree to leave intact, and provide sufficient care for, representative samples of the crop in locations acceptable to us (The amount of production to count for such acreage will be based on the harvested production or appraisals from the samples at the time harvest should have occurred. If you do not leave the required samples intact, or fail to provide sufficient care for the samples, our appraisal made prior to giving you consent to put the acreage to another use will be used to determine the amount of production to count); or (B) If you elect to continue to care for the crop, the amount of production to count for the acreage will be the harvested production, or our reappraisal if the crop is not harvested; and (2) All harvested production from the insurable acreage. (e) Mature production of smooth green and yellow peas, lentils, and seed peas that do not qualify as contract seed peas under the policy terms, and that are not deliverable under the contract or are sold under the contract for less than the contract price, may be adjusted for quality deficiencies. No adjustment for quality deficiencies will be allowed for Austrian Winter Peas. (1) Production will be eligible for quality adjustment if: (i) Deficiencies in quality, in accordance with the United States Standards for Whole Dry Peas, Split Peas, and Lentils, result in production grading U.S. No. 2 or worse because of defects, color, skinned production (lentils only), odor, material weathering, or distinctly low quality; or (ii) Substances or conditions are present that are identified by the Food and Drug Administration or other public health organizations of the United States as being injurious to human or animal health. (2) Quality will be a factor in determining your loss only if: (i) The deficiencies, substances, or conditions resulted from a cause of loss against which insurance is provided under these Crop Provisions and which occurs within the insurance period; (ii) The deficiencies, substances, or conditions result in a net price for the damaged production that is less than the local market price; (iii) All determinations of these deficiencies, substances, or conditions are made using samples of the production obtained by us or by a disinterested third party approved by us; (iv) With regard to deficiencies in quality (except test weight, which may be determined by our loss adjuster), the samples are analyzed by: (A) A grader licensed under the United States Agricultural Marketing Act or the United States Warehouse Act; (B) A grader licensed under State law and employed by a warehouse operator who has a storage agreement with the Commodity Credit Corporation; or (C) A grader not licensed under State law, but who is employed by a warehouse operator who has a commodity storage agreement with the Commodity Credit Corporation and is in compliance with State law regarding warehouses; and (v) With regard to substances or conditions injurious to human or animal health, the samples are analyzed by a laboratory approved by us. (3) Dry Pea production that is eligible for quality adjustment, as specified in sections 12(e) (1) and (2), will be reduced as follows: (i) The highest local market price for the qualifying damaged production will be determined on the earlier of the date such damaged production is sold or the date of final inspection for the unit. The highest local market price for the qualifying damaged production will be determined in the local area to the extent feasible. We may obtain prices from any buyer of our choice. If we obtain prices from one or more buyers located outside your local market area, we will reduce such prices by the additional costs required to deliver the dry peas to those buyers. Discounts used to establish the net value of the damaged production will be limited to those that are usual, customary, and reasonable. The value will not be reduced for: (A) Moisture content; (B) Damage due to uninsured causes; or (C) Drying, handling, processing, or any other costs associated with normal harvesting, handling, and marketing of the dry peas; except, if the value of the damaged production can be increased by conditioning, we may reduce the value of the production after it has been conditioned by the cost of conditioning but not lower than the value of the production before conditioning; (ii) The value per pound of the damaged or conditioned production will be divided by the local market price to determine the quality adjustment factor; (iii) The number of pounds of the damaged or conditioned production will then be multiplied by the quality adjustment factor to determine the production count to be included in section 12(d); and (iv) Any production harvested from plants growing in the insured crop may be counted as production of the insured crop on a weight basis. 13. Prevented Planting Your prevented planting coverage will be 60 percent of your production guarantee for [[Page 273]] timely planted acreage. If you have limited or additional levels of coverage as specified in 7 CFR part 400, subpart T, and pay an additional premium, you may increase your prevented planting coverage to a level specified in the actuarial documents. [62 FR 65744, Dec. 16, 1997, as amended at 63 FR 36157, July 2, 1998; 67 FR 55691, Aug. 30, 2002]