[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: 7CFR457.144]

[Page 282-284]
 
                          TITLE 7--AGRICULTURE
 
     CHAPTER IV--FEDERAL CROP INSURANCE CORPORATION, DEPARTMENT OF 
                               AGRICULTURE
 
PART 457_COMMON CROP INSURANCE REGULATIONS--Table of Contents
 
Sec. 457.144  Northern potato crop insurance--processing quality endorsement.

    The Northern Potato Crop Insurance Processing Quality Endorsement 
Provisions for the 2008 and succeeding crop years are as follows:

                             1. Definitions

    Broker. Any business enterprise regularly engaged in the buying and 
selling of processing potatoes, that possesses all licenses and permits 
as required by the state in which it operates, and when required, has 
the necessary facilities or the contractual access to such facilities, 
with enough equipment to accept and transfer processing potatoes to the 
broker within a reasonable amount of time after harvest or the typical 
storage period.
    Percentage factor. The term as defined in the Northern Potato 
Quality Endorsement.
    Processor. Any business enterprise regularly engaged in processing 
potatoes for human consumption, that possesses all licenses and permits 
for processing potatoes required by the state in which it operates, and 
that possesses facilities, or has contractual access to such facilities, 
with enough equipment to accept and process processing potatoes grown 
under a processing contract within a reasonable amount of time after 
harvest or the typical storage period.
    Processor contract. A written agreement between the producer and 
processor, or between a producer and a broker, containing at a minimum:
    (a) The producer's commitment to plant and grow processing potatoes, 
and to deliver the potato production to the processor or broker;
    (b) The processor's or broker's commitment to purchase all the 
production stated in the processing contract; and
    (c) A price or pricing mechanism to determine the value of delivered 
production.
    2. To be eligible for coverage under this endorsement, you must have 
a:
    (a) Northern Potato Quality Endorsement in place and elect this 
endorsement on or before the sales closing date for the initial crop 
year in which you wish to insure your potatoes under this endorsement:
    (1) Cancellation of your Northern Potato Quality Endorsement will 
automatically result in cancellation of this endorsement;
    (2) This endorsement may be canceled by either you or us for any 
succeeding crop year by giving written notice to the other party on or 
before the cancellation date: and
    (b) Processor contract executed with a processor or broker for the 
potato types insured under this endorsement that is applicable for the 
crop year:
    (1) A copy of the processor contract must be submitted to us on or 
before the acreage reporting date for potatoes; and
    (2) Failure to timely provide the processor contract will result in 
no coverage under this endorsement and coverage will be provided only 
under the terms of the Northern Potato Crop Provisions and Northern 
Potato Quality Endorsement.

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    3. In return for payment of the additional premium designated in the 
actuarial documents, this endorsement is attached to and made part of 
your Northern Potato Crop Provisions and Northern Potato Quality 
Endorsement subject to the terms and conditions described herein. In the 
event of a conflict between the Northern Potato Crop Provisions or 
Northern Potato Quality Endorsement and this endorsement, this 
endorsement will control.
    4. All terms of the Northern Potato Quality Endorsement not modified 
by this endorsement will be applicable to acreage covered under this 
endorsement.
    5. If you elect this endorsement, all insurable acreage of 
production under contract with the processor or broker must be insured 
under this endorsement; however:
    (a) When the processor contract requires the processor or broker to 
purchase a stated amount of production, rather than all of the 
production from a stated number of acres, the insurable acres will be 
determined by dividing the stated amount of production by the approved 
yield for the acreage; and
    (b) The number of acres insured under this endorsement will not 
exceed the actual number of acres planted to the potato types needed to 
fulfill the contract.
    6. Potato lots may be adjusted in accordance with section 8 if such 
potatoes:
    (a) Fail to meet the standards in section 7(a), (b), (c), or (d), or 
a standard contained in the processor contract, for the same quality 
factors specified in section 7(a), (b), (c), or (d), if such standard is 
less stringent;
    (b) Have a value less than the maximum price election; and
    (c) Fail to meet the applicable standards and are not separable from 
undamaged production using methods used by processors to whom you 
normally deliver your potato production.
    7. To qualify for a quality reduction under this endorsement, the 
potatoes must:
    (a) Fail to meet the applicable U.S. No. 2 grade requirements due to 
internal defects as long as the number of potatoes with such defects are 
in excess of the tolerance allowed for U.S. No. 2 grade potatoes;
    (b) Have a specific gravity lower than 1.074;
    (c) Have a fry color of No. 3 or darker due to either sugar 
exceeding 10 percent or sugar ends exceeding 19 percent; or
    (d) Have an Agtron rating lower than 58.
    8. In lieu of the provisions contained in section 5 of the Northern 
Potato Quality Endorsement, production to count determined in accordance 
with section 15 of the Basic Provisions and section 11 of the Northern 
Potato Crop Provisions, from unharvested acreage or harvested acreage 
that is stored or is marketed after a grade inspection determined in 
section 10, will be adjusted in accordance with sections 8(a) or 8(b), 
whichever is applicable, (adjustment under section 8(a) or 8(b)(1) will 
not be performed if it already has been performed under the terms of 
section 11(g) of the Northern Potato Crop Provisions):
    (a) If a price is agreed upon between you and a buyer within 21 days 
(60 days if the Northern Potato Storage Coverage Endorsement is 
applicable) after the end of the insurance period, or the production is 
delivered to a buyer within 21 days (60 days if the Northern Potato 
Storage Coverage Endorsement is applicable), after the end of the 
insurance period, the amount of production will be determined by:
    (1) Dividing the price per hundredweight received or that will be 
received by the highest price election designated in the Special 
Provisions or addendum thereto for the insured potato type (If the 
production is sold for a price lower than the value appropriate to and 
representative of the local market, we will determine the value of the 
production based on the price you could have received in the local 
market); and
    (2) Multiplying the result of section 8(a)(1) (not to exceed 1.0) by 
the number of hundredweight of sold or to be sold production (We may 
verify this after the production has actually been sold); or
    (b) If a price is not agreed upon between you and a buyer and the 
production is not delivered within 21 days (60

[[Page 284]]

days if the Northern Potato Storage Coverage Endorsement is applicable), 
after the end of the insurance period, and the production remains in 
storage 22 or more days (61 or more days if the Northern Potato Storage 
Coverage Endorsement is applicable), after the end of the insurance 
period, the amount of production will be the greater of:
    (1) The amount of production determined by:
    (i) Dividing the price per hundredweight that is received, or that 
will later be received after the end of the applicable insurance period, 
by the highest price election designated in the Special Provisions or 
addendum thereto for the insured potato type (if the production is sold 
for a price lower than the value appropriate to and representative of 
the local market, we will determine the value of the production based on 
the price you could have received in the local market); and
    (ii) Multiplying the result of section 8(b)(1)(i) (not to exceed 
1.0) by the number of hundredweight of sold or to be sold production (We 
may verify this after the production has actually been sold); or
    (2) The amount of production determined as follows:
    (i) The combined weight of sampled potatoes that grade U.S. No. 2 or 
better (the amount of potatoes grading U.S. No. 2 or better will be 
based on a grade inspection completed no later than 21 days after the 
end of the insurance period, if the Northern Potato Storage Coverage 
Endorsement is applicable; samples must be obtained within 60 days after 
the end of the insurance period and grade inspection completed within 21 
days of sampling) and are damaged by freeze or tuber rot will be divided 
by the total sample weight;
    (A) The percentage determined in section 8(b)(2)(i) will be divided 
by the applicable percentage factor; and
    (B) The result of section 8(b)(2)(i)(A) will be multiplied by the 
amount of production to count determined in accordance with section 15 
of the Basic Provisions and section 11 of the Northern Potato Crop 
Provisions.
    (c) The production to count for potatoes that have a value less than 
the maximum price election due to factors other than those specified in 
section 7 will be adjusted in accordance with section 8(b)(2).
    9. For any production that qualifies for adjustment in accordance 
with section 7 and that is discarded:
    (a) Within 21 days (60 days if the Northern Potato Storage Coverage 
Endorsement is applicable), after the end of the insurance period, the 
amount of production to count will be:
    (1) Zero if we determine the production could not have been sold; or
    (2) Determined in accordance with section 8(b)(2) if we determine 
the production could have been sold; or
    (b) Later than 21 days (60 days if the Northern Potato Storage 
Coverage Endorsement is applicable), after the end of the insurance 
period, the amount of production to count will be adjusted in accordance 
with section 8(b)(2).
    10. All quality determinations must be based upon a grade inspection 
using the United States Standards for Grades of Potatoes for Processing 
or the United States Standards for Grades of Potatoes for Chipping.
    11. The actuarial documents may provide ``U.S. No. 1 grade'' in 
place of ``U.S. No. 2 grade'' as used in this endorsement. If both U.S. 
No. 1 and 2 grades are available in the actuarial documents, you may 
elect U.S. No. 1 or 2 grade by potato type or group, if separate types 
or groups are specified in the Special Provisions.

[72 FR 61284, Oct. 30, 2007]