This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

42647

Vol. 62, No. 153

Friday, August 8, 1997

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 401 and 457

RIN 0563–AA79

General Crop Insurance Regulations,

Safflower Seed Crop Insurance

Endorsement; and Common Crop

Insurance Regulations, Safflower Crop

Insurance Provisions

AGENCY: Federal Crop Insurance

Corporation, USDA.

ACTION: Final rule.

SUMMARY: The Federal Crop Insurance

Corporation (FCIC) finalizes specific

crop provisions for the insurance of

safflower. The provisions will be used

in conjunction with the Common Crop

Insurance Policy Basic Provisions,

which contain standard terms and

conditions common to most crops. The

intended effect of this action is to

provide policy changes to better meet

the needs of the insured, include the

current safflower seed crop

endorsement under the Common Crop

Insurance Policy for ease of use and

consistency of terms, and to restrict the

effect of the current safflower seed crop

endorsement to the 1997 and prior crop

years.

EFFECTIVE DATE: August 8, 1997.

FOR FURTHER INFORMATION CONTACT: Ron

Nesheim, Insurance Management

Specialist, Research and Development,

Product Development Division, Federal

Crop Insurance Corporation, United

States Department of Agriculture, 9435

Holmes Road, Kansas City, MO, 64131,

telephone (816) 926–7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

The Office of Management and Budget

(OMB) has determined this rule to be

exempt for the purposes of Executive

Order No. 12866, and therefore, has not

been reviewed by OMB.

Paperwork Reduction Act of 1995

Following publication of the proposed

rule, the public was afforded 60 days to

submit comments and opinions on

information collection requirements

currently being reviewed by OMB under

OMB control number 0563–0053

through September 30, 1998. No public

comments were received.

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) of

State, local, and tribal governments or

the private sector. Thus, this rule is not

subject to the requirements of sections

202 and 205 of the UMRA.

Executive Order No. 12612

It has been determined under section

6(a) of Executive Order No. 12612,

Federalism, that this rule does not have

sufficient federalism implications to

warrant the preparation of a Federalism

Assessment. The provisions contained

in this rule will not have a substantial

direct effect on States or their political

subdivisions, or on the distribution of

power and responsibilities among the

various levels of government.

Regulatory Flexibility Act

This regulation will not have a

significant economic impact on a

substantial number of small entities.

The amount of work required of

insurance companies should not

increase because the information used

to determine eligibility is already

maintained at their office. The amount

of work required of insurance

companies may actually be reduced

because verification with FCIC of a

producer’s compliance with the

controlled substance regulations,

currently done manually, will be

automated. Therefore, this action is

determined to be exempt from the

provisions of the Regulatory Flexibility

Act (5 U.S.C. 605), and no Regulatory

Flexibility Analysis was prepared.

Federal Assistance Program

This program is listed in the Catalog

of Federal Domestic Assistance under

No. 10.450.

Executive Order No. 12372

This program is not subject to the

provisions of Executive Order No.

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 No. 12988

This rule has been reviewed in

accordance with Executive Order No.

12988 on civil justice reforms. The

provisions of this rule will not have a

retroactive effect prior to the effective

date. The provisions of this rule will

preempt State and local laws to the

extent such State and local laws are

inconsistent herewith. The

administrative appeal provisions

published at 7 CFR part 11 must be

exhausted before any action 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.

National Performance Review

This regulatory action is being taken

as part of the National Performance

Review Initiative to eliminate

unnecessary or duplicative regulations

and improve those that remain in force.

Background

On Friday, April 11, 1997, FCIC

published a proposed rule in the

Federal Register at 62 FR 17758 to add

to the Common Crop Insurance

Regulations (7 CFR part 457) a new

section, 7 CFR 457.125, Safflower Crop

Insurance Provisions. The new

provisions will be effective for the 1998

and succeeding crop years. These

provisions will replace and supersede

the current provisions for insuring

safflower found at 7 CFR 401.123

(Safflower Seed Crop Endorsement).

FCIC also amends 7 CFR 401.123 to

limit its effect to the 1997 and prior crop

years.

Following publication of the proposed

rule, the public was afforded 30 days to
42648 Federal Register / Vol. 62, No. 153 / Friday, August 8, 1997 / Rules and Regulations

submit written comments, data, and

opinions. A total of 13 comments were

received from the reinsured companies

and an insurance service organization.

The comments received, and FCIC’s

responses, are as follows:

Comment: A reinsured company

asked why no late planting period or

prevented planting language was put in

the policy. The reinsured company

asked whether the old Late Planting

Agreement Option must still be signed.

Response: The Late Planting

Agreement Option, found under 7 CFR

§ 401.123 that is currently applicable to

safflower provisions, will no longer

apply. FCIC intends to revise the Late

and Prevented Planting provisions for

the 1998 crop year. Until the revised

rule is published, FCIC will add the Late

and Prevented Planting provisions, in

effect for other crops, to safflower.

Comment: An insurance service

organization suggested that in the

definitions of ‘‘final planting date’’ and

‘‘good farming practices,’’ the term

‘‘production guarantee’’ be replaced by

‘‘average yield,’’ or ‘‘insured’s average

yield’’ (also in provision 2(e)(1)).

Response: The terms ‘‘average yield’’

or ‘‘insured’s average yield’’ would not

be accurate because the insured’s

approved yield is multiplied by the

coverage level selected to determine the

production guarantee. Good farming

practices and final planting date require

that the crop be able to produce the

yield, not the production guarantee.

Therefore, no change has been made.

Comment: A reinsured company and

an insurance service organization

expressed a concern that the provision

in the definition of ‘‘good farming

practices’’ stating that, ‘‘recognized by

the Cooperative State Research,

Education and Extension Service as

compatible * * *’’ there may be

accepted practices not so recognized.

They also asked that if this cannot be

dropped, it would at least help to say

‘‘generally recognized * * *’’.

Response: FCIC believes that the

Cooperative State Research, Education,

and Extension Service (CSREES)

recognizes farming practices that are

considered acceptable for producing

safflower. If a producer is following

practices currently not recognized as

acceptable by the CSREES, there is no

reason why such recognition cannot be

sought by interested parties. CSREES

pertains only to specific areas within a

county. No change has been made.

Comment: A reinsured company

suggested that in the definition of

‘‘irrigated practice,’’ the words ‘‘and

quality’’ be added after the words

‘‘* * * providing the quantity.’’

Response: FCIC disagrees. There are

no clear criteria regarding the quality of

water necessary to produce a crop. The

highly variable factors involved would

make such criteria difficult to develop

and administer. The provisions

regarding good farming practices can be

applied in situations in which the

insured person failed to exercise due

care and diligence. Therefore, no change

has been made.

Comment: An insurance service

organization stated that in the definition

of ‘‘practical to replant,’’ the addition of

marketing window in several recent

proposed rules seems to be applicable to

processor and fresh market crops. It

does not appear to be a consideration for

replanting crops like safflower.

Response: FCIC agrees that the

concept is most applicable to processor

and fresh market crops. However, the

Federal Crop Insurance Act has

mandated that insurance providers

consider marketing window, when

determining whether it is practical to

replant. Therefore, no change has been

made.

Comment: An insurance service

organization suggested that ‘‘value per

pound of damaged safflower’’ be

changed to read ‘‘value per pound’’

since the definition refers to ‘‘damaged

safflower.’’

Response: FCIC agrees and has made

the change.

Comment: An insurance service

organization questioned if it is

necessary to include all the language in

section 3 (Insurance Guarantees,

Coverage Levels, and Prices) if there are

no prices by type. Since this appears to

be standard language for most of the

recent proposed rule crop provisions,

perhaps it should be in the Basic

Provisions instead.

Response: While many crops allow

separate prices, by type, not all require

the same percentage relationship. The

provision is included in safflower to

provide correct coverage as different

types are developed. Therefore, no

change has been made.

Comment: An insurance service

organization stated that some policies

allow the entire replanting payment to

be paid to the person incurring the

entire expense (usually the tenant)

when the landlord and tenant are

insured with the same company, but no

such language is in this proposed rule.

Response: It is true that a few Crop

Provisions allow the entire replanting

payment to be paid to the person

incurring the entire expense (usually the

tenant) when the landlord and tenant

are insured with the same company.

However, because of the difficulties of

administering this provision, it is being

discontinued as Crop Provisions are

revised. Therefore, no change has been

made.

Comment: An insurance service

organization suggested that section

12(c)(1)(iv)(A) of the policy should not

allow the insured to defer settlement

and wait for a later, generally lower,

appraisal, especially on crops that have

a short ‘‘shelf life.’’

Response: A later appraisal will be

necessary only if the insurance provider

agrees that such an appraisal would

result in a more accurate determination

of production to count and if the

producer continues to care for the crop.

If the producer does not care for the

crop, the original appraisal will be used.

Therefore, no change will be made to

these provisions.

Comment: An insurance service

organization stated that section

12(d)(3)(ii) refers to ‘‘net price;’’ section

12(d)(4)(ii)(A) refers to ‘‘value per

pound;’’ and section 12(d)(4)(ii)(B)

refers to ‘‘price per pound.’’ All three

seem to mean the same thing. Since

‘‘value per pound’’ is defined in the

policy, they suggested using it in each

item.

Response: FCIC agrees and has made

those changes.

Comment: An insurance service

organization suggested that in section

12(d)(4) (i) & (ii), ‘‘qualifying adjustment

factor provisions’’ be revised to read

‘‘quality adjustment factors’’ in item (i),

and ‘‘quality adjustment factor

provisions’’ to ‘‘quality adjustment

factors’’ in item (ii).

Response: FCIC agrees and has made

the changes.

Comment: An insurance service

organization suggested that in section

12(d)(4)(ii)(A), ‘‘local market price of

undamaged safflower’’ be amended to

read ‘‘local market price.’’

Response: FCIC agrees and has made

the change.

Comment: An insurance service

organization and a reinsured company

suggested that written agreements

should not be limited to one year.

Written unit agreements are continuous

unless there are significant changes in

the farming operation. Some others

should also be this way.

Response: Written agreements are

intended to change policy terms or

permit insurance in unusual or

previously unknown situations. If such

practices continue year to year, they

should be incorporated into the policy

or Special Provisions. It is important to

keep non-uniform exceptions to the

minimum and to ensure that the insured

is well aware of the specific terms of the

policy. Therefore, no change has been

made.
Federal Register / Vol. 62, No. 153 / Friday, August 8, 1997 / Rules and Regulations 42649

In addition to the changes described

above, FCIC has made minor editorial

changes and has amended the following

provisions:

1. The preamble is revised to refer to

the Catastrophic Risk Protection

Endorsement for the purpose of

clarification.

2. In section 2, the authority to vary

the unit structure has been clarified that

only the optional unit guideline,

specified in section 2(e)(4) may be

revised by written agreement.

3. Section 9(e) has been amended to

clarify that wildlife is an insured cause

of loss, unless proper measures to

control wildlife have not been taken to

be consistent with other policies.

Good cause is shown to make this rule

effective upon publication in the

Federal Register. This rule improves the

safflower crop insurance coverage and

brings it under the Common Crop

Insurance Policy Basic Provisions for

consistency among policies. The earliest

contract change date that can be met for

the 1998 crop year is August 31, 1997,

and the final rule must be published as

soon as possible. It is, therefore,

imperative that these provisions be

made final so that reinsured companies

may have sufficient time to implement

these changes. Therefore, public interest

requires the agency to make the rules

effective upon publication.

List of Subjects in 7 CFR Parts 401 and

457

Crop insurance, Safflower seed.

Final Rule

Accordingly, for the reasons set forth

in the preamble, the Federal Crop

Insurance Corporation hereby amends 7

CFR Parts 401 and 457 as follows:

PART 401—GENERAL CROP

INSURANCE REGULATIONS—

REGULATIONS FOR THE 1988 AND

SUBSEQUENT CONTRACT YEARS

1. The authority citation for 7 CFR

part 401 continues to read as follows:

Authority: 7 U.S.C. 1506(l), 1506(p).

2. In § 401.123, the introductory

paragraph is revised to read as follows:

§ 401.123 Safflower seed crop

endorsement.

The provisions of the Safflower Seed

Crop Insurance Endorsement for the

1988 through the 1997 crop year.

* * * * *

3. Section 401.8 is amended by

revising the introductory text of

paragraph (d) to read as follows:

* * * * *

§ 401.8 The application and policy.

* * * * *

(d) The application for the 1988 and

succeeding crop years is found at

subpart D of part 400, General

Administrative Regulations (7 CFR

400.37 and 400.38). The provisions of

the Safflower Insurance Policy for the

1988 through 1997 crop years are as

follows:

* * * * *

PART 457—COMMON CROP

INSURANCE REGULATIONS;

REGULATIONS FOR THE 1994 AND

SUBSEQUENT CONTRACT YEARS

4. The authority citation for 7 CFR

part 457 continues to read as follows:

Authority: 7 U.S.C. 1506(l), 1506(p).

5. Section 457.125 is added to read as

follows:

§ 457.125 Safflower crop insurance

provisions.

The Safflower Crop Insurance

Provisions for the 1998 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:

Safflower Crop Insurance Provisions

If a conflict exists among the Basic

Provisions (§ 457.8), these Crop Provisions,

the Special Provisions, and the Catastrophic

Risk Protection Endorsement, if applicable,

the Special Provisions will control these

Crop Provisions and the Basic Provisions;

and these Crop Provisions will control the

Basic Provisions. The Catastrophic Risk

Protection Endorsement, if applicable, will

control all provisions.

1. Definitions

Days. Calendar days.

FSA. The Farm Service Agency, an agency

of the United States Department of

Agriculture, or a successor agency.

Final planting date. The date contained in

the Special Provisions for the insured crop by

which the crop must initially be planted in

order to be insured for the full production

guarantee.

Good farming practices. The cultural

practices generally in use in the county for

the crop to make normal progress toward

maturity and produce at least the yield used

to determine the production guarantee, and

are those recognized by the Cooperative State

Research, Education, and Extension Service

as compatible with agronomic and weather

conditions in the county.

Harvest. Collecting the safflower seed by

combining or threshing.

Interplanted. Acreage on which two or

more crops are planted in a manner that does

not permit separate agronomic maintenance

or harvest of the insured crop.

Irrigated practice. A method of producing

a crop by which water is artificially applied

during the growing season by appropriate

systems and at the proper times, with the

intention of providing the quantity of water

needed to produce at least the yield used to

establish the irrigated production guarantee

on the irrigated acreage planted to the

insured crop.

Local market price. The cash price per

pound for undamaged safflower (test weight

of 35 pounds per bushel or higher and seed

damage less than 25 percent) offered by

buyers.

Nurse crop (companion crop). A crop

planted into the same acreage as another

crop, that is intended to be harvested

separately, and which is planted to improve

growing conditions for the crop with which

it is grown.

Planted acreage. Land in which seed has

been placed by a machine appropriate for the

insured crop and planting method, at the

correct depth, into a seedbed that has been

properly prepared for the planting method

and production practice. Safflower must

initially be planted in rows. Acreage planted

in any other manner will not be insurable

unless otherwise provided by the Special

Provisions or by written agreement.

Pound. Sixteen ounces avoirdupois.

Practical to replant. In lieu of the

definition of ‘‘Practical to replant’’ contained

in section 1 of the Basic Provisions (§ 457.8),

practical to replant is defined as our

determination, after loss or damage to the

insured crop, based on factors, including but

not limited to moisture availability,

condition of the field, time to crop maturity,

and marketing window, that replanting the

insured crop will allow the crop to attain

maturity prior to the calendar date for the

end of the insurance period. It will not be

considered practical to replant after the end

of the late planting period unless replanting

is generally occurring in the area.

Production guarantee (per acre). The

number of pounds determined by

multiplying the approved APH yield per acre

by the coverage level percentage you elect.

Replanting. Performing the cultural

practices necessary to replace the safflower

seed, including preparing the land and then

replacing the safflower seed in the insured

acreage with the expectation of producing at

least the yield used to determine the

production guarantee.

Value per pound. The cash price per

pound for damaged safflower (test weight

below 35 pounds per bushel, seed damage in

excess of 25 percent, or both).

Written agreement. A written document

that alters designated terms of this policy in

accordance with section 13.

2. Unit Division

(a) Unless limited by the Special

Provisions, a unit as defined in section 1

(Definitions) of the Basic Provisions (§ 457.8)

(a basic unit) may be divided into optional

units if, for each optional unit you meet all

the conditions of this section.

(b) Basic units may not be divided into

optional units on any basis other than as

described in this section.
42650 Federal Register / Vol. 62, No. 153 / Friday, August 8, 1997 / Rules and Regulations

(c) If you do not comply fully with these

provisions, we will combine all optional

units that are not in compliance with these

provisions into the basic unit from which

they were formed. We will combine the

optional units at any time we discover that

you have failed to comply with these

provisions. If failure to comply with these

provisions is determined to be inadvertent,

and the optional units are combined into a

basic unit, that portion of the additional

premium paid for the optional units that

have been combined will be refunded to you.

(d) All optional units you selected for the

crop year must be identified on the acreage

report for that crop year.

(e) The following requirements must be

met for each optional unit:

(1) You must have records, which can be

independently verified, of planted acreage

and production for each optional unit for at

least the last crop year used to determine

your production guarantee;

(2) You must plant the crop in a manner

that results in a clear and discernable break

in the planting pattern at the boundaries of

each optional unit;

(3) For each crop year, records of marketed

production or measurement of stored

production from each optional unit must be

maintained in such a manner that permits us

to verify the production from each optional

unit, or the production from each unit must

be kept separate until loss adjustment is

completed by us; and

(4) Each optional unit must meet one or

more of the following criteria, as applicable,

unless otherwise specified by written

agreement:

(i) Optional Units by Section, Section

Equivalent, or FSA Farm Serial Number:

Optional units may be established if each

optional unit is located in a separate legally

identified section. In the absence of sections,

we may consider parcels of land legally

identified by other methods of measure

including, but not limited to Spanish grants,

railroad surveys, leagues, labors, or Virginia

Military Lands, as the equivalent of sections

for unit purposes. In areas that have not been

surveyed using the systems identified above,

or another system approved by us, or in areas

where such systems exist but boundaries are

not readily discernable, each optional unit

must be located in a separate farm identified

by a single FSA Farm Serial Number.

(ii) Optional Units on Acreage Including

Both Irrigated and Non-irrigated Practices:

Optional units may be based on irrigated

acreage and non-irrigated acreage (in those

counties where ‘‘non-irrigated’’ practice is

allowed in the actuarial table) if both are

located in the same section, section

equivalent, or FSA Farm Serial Number. To

qualify as separate irrigated and non-irrigated

optional units, the non-irrigated acreage may

not continue into the irrigated acreage in the

same rows or planting pattern. The irrigated

acreage may not extend beyond the point at

which the irrigation system can deliver the

quantity of water needed to produce the yield

on which the guarantee is based, except the

corners of a field in which a center-pivot

irrigation system is used will be considered

as irrigated acreage if separate acceptable

records of production from the corners are

not provided. If the corners of a field in

which a center-pivot irrigation system is used

do not qualify as a separate non-irrigated

optional unit, they will be a part of the unit

containing the irrigated acreage. Nonirrigated acreage that is not a part of a field

in which a center-pivot irrigation system is

used may qualify as a separate optional unit

provided that all other requirements of this

section are met.

3. Insurance Guarantees, Coverage Levels,

and Prices for Determining Indemnities

In addition to the requirements of section

3 (Insurance Guarantees, Coverage Levels,

and Prices for Determining Indemnities) of

the Basic Provisions (§ 457.8), you may select

only one price election for all the safflower

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 safflower 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 also choose 100

percent of the maximum price election for all

other types.

4. Contract Changes

In accordance with section 4 (Contract

Changes) of the Basic Provisions (§ 457.8),

the contract change date is August 31

preceding the cancellation date for

California, and December 31 preceding the

cancellation date for all other states.

5. Cancellation and Termination Dates

In accordance with section 2 (Life of

Policy, Cancellation, and Termination) of the

Basic Provisions (§ 457.8), the cancellation

and termination dates are:

State

Cancellation and

termination

dates

California ............................ December 31.

All other states ................... March 15.

6. Insured Crop

In accordance with section 8 (Insured

Crop) of the Basic Provisions (§ 457.8), the

crop insured will be all safflower in the

county for which a premium rate is provided

by the actuarial table:

(a) In which you have a share;

(b) That is planted for harvest as safflower

seed;

(c) That is not (unless allowed by the

Special Provisions or by written agreement):

(1) Interplanted with another crop; or

(2) Planted into an established grass or

legume.

7. Insurable Acreage

In addition to the provisions of section 9

(Insurable Acreage) of the Basic Provisions

(§ 457.8), we will not insure:

(a) Safflower planted on land on which

safflower, sunflower seed, any variety of dry

beans, soybeans, mustard, rapeseed, or lentils

were grown the preceding crop year, unless

other rotation requirements are specified in

the Special Provisions or we agree in writing

to insure such acreage; or

(b) Any acreage of safflower damaged

before the final planting date, to the extent

that the majority of producers in the area

would normally not further care for the crop,

unless the crop is replanted or we agree that

it is not practical to replant.

8. Insurance Period

In accordance with the provisions of

section 11 (Insurance Period) of the Basic

Provisions (§ 457.8), the calendar date for the

end of the insurance period is October 31

immediately following planting.

9. Causes of Loss

In accordance with the provisions of

section 12 (Causes of Loss) of the Basic

Provisions (§ 457.8), 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, unless proper measures to

control wildlife have not been taken;

(f) Earthquake;

(g) Volcanic eruption; or

(h) Failure of the irrigation water supply,

if caused by an insured cause of loss that

occurs during the insurance period.

10. Replanting Payment

(a) In accordance with section 13

(Replanting Payment) of the Basic Provisions

(§ 457.8), a replanting payment is allowed if

the crop is damaged by an insurable cause of

loss to the extent that the remaining stand

will not produce at least 90 percent of the

production guarantee for the acreage and it

is practical to replant.

(b) The maximum amount of the replanting

payment per acre will be the lesser of 20

percent of the production guarantee or 160

pounds, multiplied by your price election,

multiplied by your insured share.

(c) When safflower is replanted using a

practice that is uninsurable as an original

planting, the liability on the unit will be

reduced by the amount of the replanting

payment. The premium amount will not be

reduced.

11. Duties In The Event of Damage or Loss

In accordance with the requirements of

section 14 (Duties in the Event of Damage or

Loss) of the Basic Provisions (§ 457.8), 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. The

samples must not be harvested or destroyed

until the earlier of our inspection or 15 days

after harvest of the balance of the unit is

completed.

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 unit, we will combine

all optional units for which such production

records were not provided; or
Federal Register / Vol. 62, No. 153 / Friday, August 8, 1997 / Rules and Regulations 42651

(2) For any basic unit, we will allocate any

commingled production to such units in

proportion to our liability on the harvested

acreage for the unit.

(b) In the event of loss or damage covered

by this policy, we will settle your claim by:

(1) Multiplying the insured acreage by its

respective production guarantee;

(2) Multiplying each result in section

12(b)(1) by the respective price election;

(3) Totaling the results in section 12(b)(2);

(4) Multiplying the total production to be

counted of each type if applicable, (see

section 12(c)) by the respective price

election;

(5) Totaling the results in section 12(b)(4);

(6) Subtracting the results from the total in

section 12(b)(5) from the results in section

12(b)(3); and

(7) Multiplying the result in section

12(b)(6) by your share.

(c) The total 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 the acreage:

(A) That is abandoned;

(B) Put to another use without our consent;

(C) That is damaged solely by uninsured

causes; or

(D) For which you fail to provide

acceptable production records;

(ii) Production lost due to uninsured

causes;

(iii) Unharvested production (mature

unharvested production may be adjusted for

quality deficiencies and excess moisture in

accordance with section 12(d)); and

(iv) Potential production on insured

acreage that you intend to put to another use

or abandon, if you and we agree on the

appraised amount of production. Upon such

agreement, the insurance period for that

acreage will end when you put the acreage

to another use or abandon the crop. If

agreement on the appraised amount of

production is not reached:

(A) If you do not elect to continue to care

for the crop, we may give you consent to put

the acreage to another use if you agree to

leave intact, and provide sufficient care for,

representative samples of the crop in

locations acceptable to us (The amount of

production to count for such acreage will be

based on the harvested production or

appraisals from the samples at the time

harvest should have occurred. If you do not

leave the required samples intact, or 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 additional damage

occurs and the crop is not harvested; and

(2) All harvested production from the

insurable acreage.

(d) Mature safflower may be adjusted for

excess moisture and quality deficiencies. If

moisture adjustment is applicable, it will be

made prior to any adjustment for quality.

(1) Production will be reduced by 0.12

percent for each 0.1 percentage point of

moisture in excess of 8 percent. We may

obtain samples of the production to

determine the moisture content.

(2) Production will be eligible for quality

adjustment if such production:

(i) Has a test weight below 35 pounds per

bushel;

(ii) Has seed damage in excess of 25

percent; or

(iii) Contains substances or conditions that

are identified by the Food and Drug

Administration or other public health

organizations of the United States as being

injurious to human or animal health.

(3) Quality will be a factor in determining

your loss only if:

(i) The deficiencies, substances, or

conditions resulted from a cause of loss

against which insurance is provided under

these crop provisions and that occurred

within the insurance period;

(ii) The deficiencies, substances, or

conditions result in a value per pound 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; and

(iv) The samples are analyzed by a grader

licensed to grade safflower under the

authority of the Agricultural Marketing Act

or the United States Warehouse Act with

regard to deficiencies in quality, or by a

laboratory approved by us with regard to

substances or conditions injurious to human

or animal health. Test weight for quality

adjustment purposes may be determined by

our loss adjuster.

(4) Safflower production that is eligible for

quality adjustment, as specified in sections

12(d)(2) and (3), will be reduced as follows:

(i) In accordance with the quality

adjustment factors contained in the Special

Provisions; or

(ii) If quality adjustment factors are not

contained in the Special Provisions:

(A) By determining the value per pound

and the local market price on the earlier of

the date such quality adjusted production is

sold or the date of final inspection for the

unit. Discounts used to establish the value

per pound will be limited to those which are

usual, customary, and reasonable. The value

per pound will not be reduced for:

(1) Moisture content;

(2) Damage due to uninsured causes; or

(3) Drying, handling, processing, or any

other costs associated with normal

harvesting, handling, and marketing of

safflower. We may obtain values per pound

from any buyer of our choice. If we obtain

values per pound from one or more buyers

located outside your local market area, we

will reduce such values per pound by the

additional costs required to deliver the

production to those buyers.

(B) Divide the value per pound by the local

market price to determine the quality

adjustment factor; and

(C) Multiply the adjustment factor by the

number of pounds of the damaged

production remaining after any reduction

due to excessive moisture to determine the

net production to count.

(e) Any production harvested from other

plants growing in the insured crop may be

counted as production of the insured crop on

a weight basis.

3. Written Agreement

Terms of this policy which are specifically

designated for the use of written agreement

may be altered by written agreement in

accordance with the following:

(a) You must apply in writing for each

written agreement no later than the sales

closing date, except as provided in section

13(e);

(b) The application for a written agreement

must contain all variable terms of the

contract between you and us that will be in

effect if the written agreement is not

approved;

(c) If approved by us, the written

agreement will include all variable terms of

the contract, including, but not limited to,

crop type or variety, the guarantee, premium

rate, and price election;

(d) Each written agreement will only be

valid for one year (If the written agreement

is not specifically renewed the following

year, insurance coverage for subsequent crop

years will be in accordance with the printed

policy); and

(e) An application for a written agreement

submitted after the sales closing date may be

approved if, after a physical inspection of the

acreage, it is determined that no loss has

occurred and the crop is insurable in

accordance with the policy and written

agreement provisions.

Signed in Washington, D.C., on August 4,

1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance

Corporation.

[FR Doc. 97–20914 Filed 8–7–97; 8:45 am]

BILLING CODE 3410–08–P

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1493

RIN 0551–AA35

CCC Facility Guarantee Program (FGP)

AGENCY: Commodity Credit Corporation,

USDA.

ACTION: Interim rule with request for

comment.

SUMMARY: This interim rule provides for

facility payment guarantees to be issued

by the Commodity Credit Corporation

(CCC). The guarantees are to be issued

in connection with sales of goods or

services to establish or improve

agricultural-related facilities in

emerging markets to expand exports of

U.S. agricultural commodities or

products.

DATES: Effective date: August 8, 1997.

Comment date: Comments due on or

before October 7, 1997.

ADDRESSES: Comments must be

submitted in writing to L.T. McElvain,