[Federal Register Volume 62, Number 181 (Thursday, September 18, 1997)]
[Proposed Rules]
[Pages 48956-48961]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24769]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 62, No. 181 / Thursday, September 18, 1997 / 
Proposed Rules

[[Page 48956]]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457


General Crop Insurance Regulations, Canola and Rapeseed 
Endorsement; and Common Crop Insurance Regulations, Canola and Rapeseed 
Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes 
specific crop provisions for the insurance of canola and rapeseed. 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 convert 
the canola and rapeseed pilot insurance program to a permanent 
insurance program for the 1998 and succeeding crop years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business October 20, 1997 and will be 
considered when the rule is to be made final.

ADDRESSES: Interested persons are invited to submit written comments to 
the Director, Product Development Division, Federal Crop Insurance 
Corporation, United States Department of Agriculture, 9435 Holmes Road, 
Kansas City, MO 64131.

FOR FURTHER INFORMATION CONTACT: Gary Johnson, Insurance Management 
Specialist, Product Development Division, Research and Development, 
Federal Crop Insurance Corporation, at the Kansas City, MO, address 
listed above, telephone (816) 926-3826.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The Office of Management and Budget (OMB) has determined this rule 
to be not significant for the purposes of Executive Order 12866, and, 
therefore, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    The information collection requirements contained in these 
regulations are being reviewed by OMB pursuant to the Paperwork 
Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB control number 
0563-0053. The canola and rapeseed crop insurance provisions are 
described in the ``Background'' section of this document.
    The title of this information collection is ``Multiple Peril Crop 
Insurance.''
    The burden associated with the canola and rapeseed crop insurance 
provisions is estimated at 18 minutes per response from approximately 
8,060 respondents each year for a total number of 2,574 hours. The 
information to be collected includes a crop insurance application and 
an acreage report. Information collected from the application and 
acreage report is electronically submitted to FCIC by the reinsured 
companies. Potential respondents to this information collection are 
producers of canola and rapeseed that are eligible for Federal crop 
insurance.
    The information requested is necessary for the reinsured companies 
and FCIC to provide insurance and reinsurance, determine eligibility, 
determine the correct parties to the agreement or contract, determine 
and collect premiums or other monetary amounts, and pay benefits.
    FCIC is requesting comments on the following: (a) whether the 
proposed collection of information is necessary for the proper 
performance of the functions of the agency, including whether the 
information shall have practical utility; (b) the accuracy of the 
agency's estimate of the burden of the proposed collection of 
information; (c) ways to enhance the quality, utility, and clarity of 
the information to be collected; and (d) ways to minimize the burden of 
the collection of information on respondents, including through the use 
of automated collection techniques or other forms of information 
gathering technology.
    Comments regarding paperwork reduction should be submitted to the 
Desk Officer for Agriculture, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, D.C. 20503.
    OMB is required to make a decision concerning the collections of 
information contained in these proposed regulations between 30 and 60 
days after submission to OMB. Therefore, a comment to OMB is best 
assured of having full effect if OMB receives it within 30 days of 
publication. This does not affect the deadline for the public to 
comment on the proposed regulation.

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. Thus, this 
rule is not subject to the requirements of sections 202 and 205 of the 
UMRA.

Executive Order 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 availability of insurance for 
the current population of canola and rapeseed entities is limited to 
the six pilot states that have the majority of the canola and rapeseed 
production. Under the current pilot program a producer is required to 
complete an application and acreage report. If the crop is damaged or 
destroyed, the insured is required to give notice of loss and provide 
the necessary information to complete a claim for indemnity. The 
insured must also annually certify to the previous years production if 
adequate records are available to support the certification. The 
producer must maintain the production records to support the certified 
information for at least three

[[Page 48957]]

years. This regulation does not alter those requirements but extends it 
to the national population of canola and rapeseed producers. New 
provisions included in this rule will not impact small entities to a 
greater extent than large entities. The amount of work required of the 
insurance companies delivering and servicing these policies will not 
increase significantly from the amount of work currently required 
because the information used to determine eligibility is already 
maintained in their office. 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 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 proposed rule has been reviewed in accordance with Executive 
Order No. 12988 Civil Justice Reform. 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.

Background

    FCIC proposes to add to the Common Crop Insurance Regulations (7 
CFR part 457), a new section, 7 CFR 457.141, Canola and Rapeseed Crop 
Insurance Provisions. The canola and rapeseed pilot program is an 
Actual Production History (APH) plan of multiple peril crop insurance. 
The Canola and Rapeseed Crop Provisions are very similar to other small 
grain crop provisions. They allow for a variable late planting period 
by region, however which is different from other crop provisions.
    The pilot program for canola and rapeseed has generally worked 
well. Over 2,000 producers and approximately a quarter million acres 
from the selected pilot counties in Idaho, Minnesota, Montana, North 
Dakota, and Washington were covered by the pilot program for both the 
1995 and 1996 crop years. Prevented planting losses, however, were high 
primarily due to poor planting conditions. To address this concern, 
this proposed rule provides that the late planting period and 
associated production guarantee reduction may be varied in the Special 
Provisions. Variance will be on a county-by-county basis, and producers 
will be notified by copy of the Special Provisions. Also, final 
planting dates were changed in some counties to reduce prevented 
planting losses.
    Prevented planting provisions will be included in the Basic 
Provisions (Sec. 457.8) which are in the proposed rule process. Those 
provisions also have been adopted in this proposed rule. When the Basic 
Provisions (Sec. 457.8) become final, however, the provisions will be 
removed from the crop provisions as necessary. Prevented planting 
coverage will be provided for canola and rapeseed if the actuarial 
table contains levels of prevented planted coverage for canola and 
rapeseed.
    The proposed provisions will be effective for the 1998 and 
succeeding crop years. These provisions will replace the current 
unpublished provisions that insure canola and rapeseed under pilot 
program status.

List of Subjects in 7 CFR Part 457

    Crop insurance, Canola and rapeseed crop provisions.

Proposed Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation proposes to amend 7 CFR part 457 as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE 
1994 AND SUBSEQUENT CONTRACT YEARS

    1. The authority citation for 7 CFR part 457 continues to read as 
follows:

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

    2. Section 457.161 is added to read as follows:


Sec. 457.161  Canola and rapeseed crop insurance provisions.

    The Canola and Rapeseed Crop Insurance Provisions for the 1998 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:

Canola and Rapeseed Crop Provisions

    If a conflict exists among the Basic Provisions, (Sec. 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 and the 
Catastrophic Risk Protection Endorsement, if applicable, will 
control all provisions.

1. Definitions.

    Canola. A crop of the genus Brassica as defined in accordance 
with the Official United States Standards for Grain--Subpart C--U.S. 
Standards for Canola.
    Days. Calendar days.
    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.
    FSA. The Farm Service Agency an agency of the United States 
Department of Agriculture, or any successor agency.
    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 generally recognized by the Cooperative 
State Research, Education, and Extension Service as compatible with 
agronomic and weather conditions in the county.
    Harvest. Combining or threshing for seed. A crop that is swathed 
prior to combining is not considered harvested.
    Interplanted. Acreage on which two or more crops or types 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.
    Late planted. Acreage planted to the insured crop during the 
late planting period.
    Late planting period. The period that begins the day after the 
final planting date for the insured crop type and ends 25 days after 
the final planting date, unless otherwise provided by the Special 
Provisions.
    Local market price (Canola). The cash price per pound for U.S. 
No. 2 grade canola that reflects the maximum limits of quality

[[Page 48958]]

deficiencies allowable for the U.S. No. 2 grade canola.
    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 which has been properly prepared for the 
planting method and production practice. Land on which seed is 
initially spread onto the soil surface by any method and 
subsequently is mechanically incorporated into the soil in a timely 
manner and at the proper depth will 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 lieu of the definition of ``Practical 
to replant'' contained in section 1 of the Basic Provisions 
(Sec. 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, marketing window, and time to crop maturity, 
that replanting to 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.
    Price of damaged production. The cash price per pound for canola 
that qualifies for quality adjustment in accordance with section 12 
of these crop provisions.
    Production guarantee (per acre). The number of pounds determined 
by multiplying the approved Actual Production History (APH) yield 
per acre by the coverage level percentage you elect.
    Rapeseed. A crop of the genus Brassica that contains at least 30 
percent of an industrial type of oil as shown on the Special 
Provisions and that is measured on a basis free from foreign 
material.
    Replanting. Performing the cultural practices necessary to 
replace the insured crop and then replacing the insured crop in the 
insured acreage with the expectation of growing a successful crop.
    Swathed. Severance of the stem and seed pods from the ground and 
placing into windrows without removal of the seed from the pod.
    Timely planted. Planted on or before the final planting date 
designated in the Special Provisions for the insured crop type in 
the county.
    Written Agreement. A written document that alters designated 
terms of a policy in accordance with section 15.

2. Unit Division.

    (a) Unless limited by the Special Provisions, a unit as defined 
in section 1 of the Basic Provisions (Sec. 457.8) (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 under this section.
    (c) If you do not comply fully with these provisions, we will 
combine all optional units which 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 on the optional units that have been 
combined will be refunded to you.
    (d) All optional units you selected for the crop 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 provided records by the production reporting 
date, 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 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 after loss adjustment under the policy is completed; 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 which 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: In addition to, or instead of, establishing 
optional units by section, section equivalent or FSA Farm Serial 
Number, optional units may be based on irrigated acreage or non-
irrigated acreage 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 your 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 record 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. 
Non-irrigated 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 requirements of this section are 
met.
    (iii) Optional units by type as designated by the Special 
Provisions: In addition to or instead of establishing optional units 
by section, section equivalent, FSA Farm Serial Number, or non-
irrigated and irrigated acreage, optional units may be established 
by type where authorized by the Special Provisions.

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 (Sec. 457.8), you may select only one price 
election for all the canola and rapeseed 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 canola and rapeseed 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 a specific 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 (Sec. 457.8), the contract change date is November 30 
preceding the cancellation date for counties with a March 15 
cancellation date, and June 30 preceding the cancellation date for 
all other counties.

5. Cancellation and Termination Dates.

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation 
and termination dates are:

------------------------------------------------------------------------
                                           Cancellation and termination 
            State and county                          dates             
------------------------------------------------------------------------
All counties in Georgia................  September 30.                  
All other counties without fall planted  March 15.                      
 types specified on the actuarial                                       
 table..                                                                
All other counties with fall planted     August 31.                     
 types specified on the actuarial                                       
 table..                                                                
------------------------------------------------------------------------

6. Insured Crop.

    In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all canola and 
rapeseed 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 seed; and
    (c) That is not, unless allowed by Special Provisions or by 
written agreement:
    (1) Interplanted with another crop; or

[[Page 48959]]

    (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 (Sec. 457.8):
    (a) Any acreage of the insured crop that is damaged before the 
final planting date, to the extent that the majority of growers in 
the area would normally not further care for the crop, must be 
replanted unless we agree that it is not practical to replant; and;
    (b) We will not insure any acreage that does not meet the 
rotation requirements contained in the Special Provisions.

8. Insurance Period.

    In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the end of the 
insurance period is October 31 of the calendar year in which the 
crop is normally harvested.

9. Causes of Loss.

    In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss which 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 applicable, 
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 (Sec. 457.8), a replanting payment is allowed if 
the insured 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 or if we require you to replant in accordance with section 
7(a).
    (b) The maximum amount of the replanting payment per acre will 
be the lesser of 20 percent of the production guarantee or 175 
pounds, multiplied by your price election, multiplied by your 
insured share.
    (c) When the canola and rapeseed is replanted using a practice 
or type that is uninsurable as an original planting, the liability 
for the unit will be reduced by the amount of the replanting payment 
which is attributable to your share. 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 (Sec. 457.8), the 
representative samples of the unharvested crop that we require 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 units, we will combine all optional units 
for which acceptable 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 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 for each type, if applicable;
    (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 total in section 12(b)(5) from the total in 
section 12(b)(3); and
    (7) Multiplying the result in section 12(b)(6) by your share.
    (c) The total production to count (pounds) 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 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 
you 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 canola and rapeseed 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) Canola and rapeseed production will be reduced by 0.12 
percent for each 0.1 percentage point of moisture in excess of 8.5 
percent. We must be permitted to obtain samples of the production to 
determine the moisture content.
    (2) Canola production will be eligible for quality adjustment 
if:
    (i) Deficiencies in quality, in accordance with the Official 
United States Standards for Grain, result in the canola not meeting 
the grade requirements for U.S. No. 3 or better (U.S. Sample grade) 
because of kernel damage (excluding heat damage), or has a musty, 
sour, or commercially objectionable foreign odor; 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.
    (3) Quality will be a factor in determining your loss in canola 
production 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; and
    (iv) The samples are analyzed by a grader licensed to grade 
canola under the authority of the United States Grain Standards 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.
    (4) Canola production that is eligible for quality adjustment, 
as specified in sections 12(d) (2) and (3), will be reduced:
    (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, quality adjustment factors will be determined as 
follows:
    (A) Divide the price of damaged production by the local market 
price to determine the quality adjustment factor.
    (B) The price of damaged production and the local market price 
will be determined at the earlier of the date such quality adjusted 
production is sold or the date of final inspection for the unit.
    (C) Discounts used to establish the price of damaged production 
will be limited to those that are usual, customary, and reasonable.
    (D) The price of damaged production will not be reduced for:
    (1) Moisture content;

[[Page 48960]]

    (2) Damage due to uninsured causes;
    (3) Drying, handling, processing, or any other costs associated 
with normal harvesting, handling, and marketing of the canola; 
except, if the price of damaged production can be increased by 
conditioning, we may reduce the price of damaged production after 
the production has been conditioned by the cost of conditioning but 
not lower than the price of damaged production before conditioning. 
We may obtain prices of damaged production from any buyer of our 
choice. If we obtain prices of damaged production from one or more 
buyers located outside your local market area, we will reduce such 
price of damaged production by the additional costs required to 
deliver the canola to those buyers; or
    (4) Erucic acid or glucosinolates in excess of the amount 
allowed under the definition of canola contained in the Official 
United States Standards for Grain.
    (E) Factors not associated with grading under the Official 
United States Standards for Grain including, but not limited to 
protein and oil, will not be considered; and
    (F) The number of pounds remaining after any reduction due to 
excessive moisture (the moisture-adjusted gross pounds) of the 
damaged or conditioned production will then be multiplied by the 
quality adjustment factor to determine the net production to count.
    (e) Any production harvested from plants growing in the insured 
crop may be counted as production of the insured crop on an 
unadjusted weight basis.

13. Late Planting.

    Insurance will be provided for acreage planted to the insured 
crop after the final planting date in accordance with the following:
    (a) The production guarantee or amount of insurance for each 
acre planted to the insured crop during the late planting period 
will be reduced by each day planted after the final planting date 
by:
    (1) One percent (1%) for the 1st through the 10th day; and
    (2) Two percent (2%) for the 11th through the 25th day; or
    (3) Unless otherwise provided by the Special Provisions.
    (b) The production guarantee or amount of insurance for each 
acre of the insured crop that is planted to the insured crop after 
the late planting period (or after the final planting date for crops 
that do not have a late planting period) will be the same as the 
production guarantee or amount of insurance that is provided for 
acreage of the insured crop that is prevented from being planted 
(see section 14). Such acreage must have been prevented from being 
planted by an insurable cause occurring within the insurance period 
for prevented planting coverage.
    (c) The premium amount for insurable acreage planted to the 
insured crop after the final planting date will be the same as that 
for timely planted acreage. If the amount of premium you are 
required to pay (gross premium less our subsidy) for acreage planted 
after the final planting date exceeds the liability on such acreage, 
coverage for those acres will not be provided (no premium will be 
due and no indemnity will be paid for such acreage).

14. Prevented Planting.

    (a) A prevented planting payment may be made to you for eligible 
acreage you were prevented from planting if:
    (1) You were prevented from planting the insured crop by an 
insured cause that occurs:
    (i) On or after the sales closing date contained in the Special 
Provisions for the insured crop in the county for the crop year the 
application for insurance is accepted; or
    (ii) For any subsequent crop year, on or after the sales closing 
date for the previous crop year for the insured crop in the county, 
provided insurance has been in force continuously since that date. 
Cancellation for the purpose of transferring the policy to a 
different insurance provider for the subsequent crop year will not 
be considered a break in continuity for the purpose of the preceding 
sentence; and
    (2) You notify us within 72 hours after the final planting date 
if you are prevented from planting by such date, whether or not you 
intend to plant any acreage of the insured crop after the final 
planting date. In addition to this notice, you must include any 
acreage of the insured crop that was prevented from being planted on 
your acreage report.
    (b) The Actuarial Table contains the levels of prevented 
planting coverage that you may elect for the crop on or before the 
sales closing date. If you do not elect one of the available 
coverages by the sales closing date, you will receive the prevented 
planting coverage specified in the Crop Provisions. If you have a 
Catastrophic Risk Protection Endorsement, you will receive the 
lowest level of prevented planting coverage available for the crop.
    (c) The premium amount for acreage that is prevented from being 
planted will be the same as that for timely planted acreage. If the 
amount of premium you are required to pay (gross premium less our 
subsidy) for acreage that is prevented from being planted exceeds 
the liability on such acreage, coverage for those acres will not be 
provided (no premium will be due and no indemnity will be paid for 
such acreage).
    (d) Drought or failure of the irrigation water supply will not 
be considered to be an insurable cause of loss for the purposes of 
prevented planting unless, on the final planting date:
    (1) For non-irrigated acreage, the area that is prevented from 
being planted is classified by the Palmer Drought Severity Index as 
being in a severe or extreme drought; or
    (2) For irrigated acreage, there is not a reasonable probability 
of having adequate water to carry out an irrigated practice.
    (e) The maximum number of acres that may be eligible for a 
prevented planting payment for the crop will be determined as 
follows:
    (1) The base eligible acres for the insured crop will be 
determined in accordance with the following table.

                                                                        
------------------------------------------------------------------------
                               Base eligible acres   Base eligible acres
                                  (if you have        (if you have not  
                                produced the crop     produced the crop 
        Type of crop           for which insurance   for which insurance
                              was available in any   is available in any
                              of the 4 most recent  of the 4 most recent
                                   crop years)           crop years)    
------------------------------------------------------------------------
(i)(A) The crop's insurance   (B) The maximum       (C) The number of   
 guarantee is based on APH     number of acres       acres approved by  
 or the crop does not          certified for APH     written agreement  
 require yield certification   purposes or           in accordance with 
 and the crop is not           reported for          the provisions in  
 required to be contracted     insurance for the     this section and   
 with a processor to be        crop in any one of    section 15.        
 insured.                      the 4 most recent                        
                               crop years (not                          
                               including reported                       
                               prevented planting                       
                               acreage that was                         
                               planted to a                             
                               substitute crop                          
                               other than an                            
                               approved cover                           
                               crop).                                   
(ii)(A) The crop must be      (B) The number of     (C) The number of   
 contracted with a processor   acres of the crop     acres of the crop  
 to be insured and the         specified in the      specified in the   
 contract specifies a number   processor contract..  processor contract.
 of acres contracted for the                                            
 crop year..                                                            
(iii)(A) The crop must be     (B) The result of     (C) The result of   
 contracted with a processor   dividing the          dividing the       
 to be insured and the         quantity of           quantity of        
 processor contract            production stated     production stated  
 specifies a quantity of       in the processor      in the processor   
 production that will be       contract by your      contract by your   
 accepted..                    approved yield (For   approved yield (For
                               the purposes of       the purposes of    
                               establishing the      establishing the   
                               base number of        base number of     
                               prevented planting    prevented planting 
                               acres, any            acres, any         
                               reductions applied    reductions applied 
                               to the transitional   to the transitional
                               yield for failure     yield for failure  
                               to certify acreage    to certify acreage 
                               and production for    and production for 
                               a prior year will     a prior year will  
                               not be used.).        not be used.)      
------------------------------------------------------------------------


[[Page 48961]]

    (2) All requests for written agreement under this section must 
be submitted to us on or before the sales closing date and include, 
by crop, the number of acres of all crops for which insurance is 
offered under the authority of the Act that you intend to plant in 
the county.
    (3) The total number of acres requested for all crops cannot 
exceed the number of acres of cropland in your farming operation for 
the crop year.
    (4) The number of acres determined in section 14(e)(1)(i)(B) may 
be increased by multiplying it by the ratio of the total cropland 
acres that you are farming this year (if greater) to the total 
cropland acres that you farmed in the previous year, provided that 
you submit proof to us on or before the sales closing date for the 
insured crop that you have purchased or leased additional land, that 
acreage will be released from any USDA program which prohibits 
harvest of a crop, or that the additional acreage has not been 
cropped in any of the four most recent crop years. Such acreage must 
have been purchased, leased, released from the USDA program, or 
intended to be brought into production in time to plant it for the 
current crop year.
    (5) The result of section 14(e)(1) or 14(e)(4), whichever is 
applicable, will be reduced by subtracting the number of acres of 
the crop that are timely and late planted.
    (f) Regardless of the number of eligible acres determined in 
section 14(e), prevented planting coverage will not be provided for 
any acreage:
    (1) That does not constitute at least 20 acres or 20 percent of 
the insurable crop acreage in the unit, whichever is less (We will 
assume that any prevented planting acreage within a field that 
contains planted acreage would have been planted to the same crop 
that is planted in the field, unless the prevented planting acreage 
constitutes at least 20 acres or 20 percent of the insurable acreage 
in the field and you can prove that you intended to plant such 
acreage to another crop);
    (2) For which the Actuarial Table does not designate a premium 
rate unless a written agreement designates such premium rate;
    (3) Used for conservation purposes or intended to be left 
unplanted under any program administered by the USDA;
    (4) On which the insured crop is prevented from being planted, 
if you or any other person receives a prevented planting payment for 
any crop for the same acreage in the same crop year, unless you have 
coverage greater than that applicable to the Catastrophic Risk 
Protection Plan of Insurance and have records of acreage and 
production that are used to determine your approved yield that show 
the acreage was double-cropped in each of the last 4 years in which 
the insured crop was grown on the acreage;
    (5) On which the insured crop is prevented from being planted, 
if any crop from which any benefit is derived under any program 
administered by the USDA is planted and fails, or if any crop is 
planted and harvested, hayed or grazed on the same acreage in the 
same crop year (other than a cover crop which may be hayed or grazed 
after the final planting date for the insured crop), unless you have 
coverage greater than that applicable to the Catastrophic Risk 
Protection Plan of Insurance and have records of acreage and 
production that are used to determine your approved yield that show 
the acreage was double-cropped in each of the last 4 years in which 
the insured crop was grown on the acreage;
    (6) Of a crop that is prevented from being planted if a cash 
lease payment is also received for use of the same acreage in the 
same crop year (not applicable if acreage is leased for haying or 
grazing only);
    (7) For which planting history or conservation plans indicate 
that the acreage would have remained fallow for crop rotation 
purposes;
    (8) That is in excess of the number of acres eligible for a 
prevented planting payment or the number of eligible acres 
physically available for planting;
    (9) For which you cannot provide proof that you had the inputs 
available to plant and produce a crop with the expectation of at 
least producing the yield used to determine the production guarantee 
or amount of insurance;
    (10) Based on an irrigated practice production guarantee or 
amount of insurance unless adequate irrigation facilities were in 
place to carry out an irrigated practice on the acreage prior to the 
insured cause of loss that prevented you from planting; or
    (11) Based on a price election, amount of insurance or 
production guarantee for a crop type that you did not plant in at 
least one of the four most recent years. Types for which separate 
price elections, amounts of insurance, or production guarantees are 
available must be included in your APH database in at least one of 
the most recent four years, or, crops that do not require yield 
certification (crops for which the insurance guarantee is not based 
on APH) must be reported on your acreage report in at least one of 
the four most recent crop years.
    (g) The prevented planting payment for any eligible acreage 
within a unit will be determined by:
    (1) Multiplying the liability per acre for timely planted 
acreage of the insured crop (the amount of insurance per acre or the 
production guarantee per acre multiplied by the price election for 
the crop, or type if applicable) by the prevented planting coverage 
level percentage you elected, or that is contained in the Crop 
Provisions if you did not elect a prevented planting coverage level 
percentage;
    (2) Multiplying the result of section 14(g)(1) by the number of 
eligible prevented planting acres in the unit; and
    (3) Multiplying the result of section 14(g)(2) by your share.

15. Written Agreements.

    Terms of this policy which are specifically designated for the 
use of written agreements 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 
15(e);
    (b) The application for written agreement must contain all terms 
of the contract between you and us that will be in effect if the 
written agreement is not approved.
    (c) If approved, 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 crops years will be in 
accordance with printed policy); and
    (e) An application for 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 September 11, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-24769 Filed 9-17-97; 8:45 am]
BILLING CODE 3410-08-P