65338 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations

production to count will be allocated to the

unit contributing 500 hundredweight and

750 hundredweight to the unit contributing

1500 hundredweight to the stored

production. This provision does not

eliminate or change any other requirement

contained in this policy to provide or

maintain separate records of acreage or

production by unit.

5. The extended coverage provided by this

endorsement will be applicable only if:

(a) Insured potatoes are damaged within

the insurance period by an insured cause

other than freeze that later results in:

(1) Tuber rot as defined in the Northern

Potato Crop Provisions, to the extent that 5.1

percent (by weight) or more of the insured

production is affected;

(2) Internal defects to the extent that such

defects are in excess of the amount allowed

for the U.S. grade standard you elected for

purposes of coverage under the Northern

Potato Crop Insurance Quality Endorsement.

Such defects must not be separable from

undamaged production using methods used

by the packers or processors to which you

normally deliver your potato production.

This coverage is applicable only to

production covered under the Northern

Potato Crop Insurance Quality Endorsement;

or

(3) A specific gravity lower than the lesser

of 1.074 or the minimum acceptable amount

specified in the processor contract, or a fry

color of No. 3 or darker due to either sugar

exceeding 10 percent or sugar ends exceeding

19 percent. This coverage is applicable only

to production covered under the Northern

Potato Crop Insurance Processing Quality

Endorsement.

(b) You notify us within 72 hours of your

initial discovery of any damage that has or

that may later result in the quality

deficiencies specified in section 5(a);

(c) The percentage of production that has

any of the quality deficiencies specified in

section 5(a) is determined no later than 60

days after the end of the insurance period;

and

(d) The potatoes are evaluated and quality

(grade) determinations are made by us, a

laboratory approved by us, or a potato grader

licensed or certified by the applicable State

or the United States Department of

Agriculture, in accordance with the United

States Standards for Grades of Potatoes.

Samples of damaged production must be

obtained by us or party approved by us prior

to the sale or disposal of any lot of potatoes.

Or, if production is not sold or disposed of

within 60 days of the end of the insurance

period, samples must be obtained within 60

days of the end of the insurance period.

Signed in Washington, D.C., on December

5, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance

Corporation.

[FR Doc. 97–32491 Filed 12–11–97; 8:45 am]

BILLING CODE 3410–08–P

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 437 and 457

Sweet Corn Insurance Regulations;

and Common Crop Insurance

Regulations, Processing Sweet Corn

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

processing sweet corn. 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 sweet corn crop insurance

regulations with the Common Crop

Insurance Policy for ease of use and

consistency of terms, and to restrict the

effect of the current sweet corn crop

insurance regulations to the 1997 and

prior crop years.

DATES: Effective December 12, 1997.

FOR FURTHER INFORMATION CONTACT:

Stephen Hoy, 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, this

rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

Pursuant to the Paperwork Reduction

Act of 1995 (44 U.S.C. 3507), those

collections of information have been

approved by the Office of Management

and Budget (OMB) under control

number 0563–0053.

Unfunded Mandates Reform Act of

1995

Title II of the Unfunded Mandates

Reform Act of 1995 (UMRA), Pub. L.

104–4, establishes requirements for

Federal agencies to assess the effects of

their regulatory actions on State, local,

and tribal governments and the private

sector. This rule contains no Federal

mandates (under the regulatory

provisions of title II of the UMRA) for

State, local, and tribal governments or

the private sector. Therefore, this rule is

not subject to the requirements of

sections 202 and 205 of the UMRA.

Executive Order 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 will not increase

because the information used to

determine eligibility is already

maintained at their office and the other

information required is already being

gathered as a result of the present

policy. No additional actions are

required as a result of this action on the

part of either the producer or the

reinsured company. Additionally, the

regulation does not require any action

on the part of the small entities than is

required on the part of the large entities.

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 final rule has been reviewed in

accordance with Executive Order No.

12988 on civil justice reform. The

provisions of this rule will not have a

retroactive effect. The provisions of this

rule will preempt State and local laws

to the extent such State and local laws

are inconsistent herewith. The

administrative appeal provisions

published at 7 CFR part 11 must be
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations 65339

exhausted before action against FCIC for

judicial review may be brought.

Environmental Evaluation

This action is not expected to have a

significant impact on the quality of the

human environment, health, and safety.

Therefore, neither an Environmental

Assessment nor an Environmental

Impact Statement is needed.

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 Thursday, May 1, 1997, FCIC

published a proposed rule in the

Federal Register at 62 FR 23690–23695

to add to the Common Crop Insurance

Regulations (7 CFR part 457), a new

section, 7 CFR 457.154, Processing

Sweet Corn 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 sweet corn found at 7 CFR part

437 (Sweet Corn Crop Insurance

Regulations). FCIC also amends 7 CFR

part 437 to limit its effect to the 1997

and prior crop years.

Following publication of the proposed

rule, the public was afforded 30 days to

submit written comments, data, and

opinions. A total of 30 comments were

received from an insurance service

organization, a reinsured company, and

a crop insurance agent. The comments

received and FCIC’s responses are as

follows:

Comment: An insurance service

organization recommended that several

definitions common to most crops be

put into the Basic Provisions.

Response: The Basic Provisions

include definitions of commonly used

terms, and we have revised this rule to

remove the definitions of ‘‘approved

yield,’’ ‘‘days,’’ ‘‘FSA,’’ ‘‘final planting

date,’’ ‘‘interplanted,’’ ‘‘irrigated

practice,’’ ‘‘production guarantee (per

acre),’’ ‘‘replanting,’’ ‘‘timely planted,’’

and ‘‘written agreement.’’ The definition

of ‘‘planted acreage’’ is amended to

remove language that is contained in the

Basic Provisions.

Comment: An insurance service

organization recommended that the

sentence in the definition of ‘‘bypassed

acreage’’ that states ‘‘Bypassed acreage

on which an indemnity is payable will

be considered to have a zero yield for

Actual Production History (APH)

purposes’’ be deleted since it is

addressed elsewhere and does not

belong in the definition.

Response: FCIC has deleted, as

unnecessary, the second sentence of the

definition of bypassed acreage. A

provision addressing when acreage will

be considered to have a zero yield for

APH purposes is included in section 3

(Insurance Guarantees, Coverage Levels,

and Prices for Determining

Indemnities).

Comment: An insurance service

organization and a reinsured company

expressed concern with the definition of

‘‘good farming practices’’ which makes

reference to ‘‘cultural practices

generally in use in the county * * *

recognized by the Cooperative State

Research, Education, and Extension

Service as compatible with agronomic

and weather conditions in the county.’’

The commenters questioned whether

cultural practices that are not explicitly

recognized (or possibly known) by the

Cooperative State Research, Education,

and Extension Service might exist. The

commenters indicated that the term

‘‘county’’ in the definition of ‘‘good

farming practice’’ should be changed to

‘‘area.’’ The insurance service

organization also recommended adding

the word ‘‘generally’’ before ‘‘recognized

by the Cooperative State Research,

Education, and Extension Service

* * *’’

Response: The Cooperative State

Research, Education, and Extension

Service (CSREES) recognizes farming

practices that are considered acceptable

for producing sweet corn. If a producer

is following practices currently not

recognized as acceptable by CSREES,

such recognition can be sought by

interested parties. Use of the term

‘‘generally’’ will only create an

ambiguity and make the definition more

difficult to administer. Although the

cultural practices recognized by

CSREES may only pertain to specific

areas within a county, the actuarial

documents are on a county basis.

Therefore, no change has been made.

Comment: An insurance service

organization recommended that the

definition of ‘‘replanting’’ be clarified by

inserting ‘‘sweet corn’’ between the last

two words (‘‘successful’’ and ‘‘crop’’) of

the sentence.

Response: This definition is contained

in the Basic Provisions, and is,

therefore, removed from these crop

provisions.

Comment: An insurance service

organization recommended that section

2(b) of the proposed rule clarify whether

optional units are available if the

processor contract stipulates the number

of contracted acres, or only if the

contract does not specify an amount of

production.

Response: FCIC agrees and has

amended section 2 to specify that for

processor contracts that stipulate a

specific amount of production to be

delivered, the basic unit will consist of

all the acreage planted to the insured

crop in the county that will be used to

fulfill contracts with each processor,

and optional units will not be

established for production based

processor contracts. The language in

section 2 has also been revised and

reformatted to clearly state the

requirements for both the acreage-based

and production-based processor

contracts. In addition, language in this

section that is common with other crop

provisions has been removed since it is

contained in the Basic Provisions.

Comment: An insurance service

organization questioned whether

verification of production from an

optional unit using ‘‘measurement of

stored production,’’ as specified in

section 2(e)(3) of the proposed rule

applies to processing sweet corn.

Response: Sweet corn is not put into

storage before processing. Therefore,

FCIC has removed this provision.

Comment: An insurance service

organization recommended removal of

the opening phrase in section 2(e)(4)(ii)

of the proposed rule that states ‘‘In

addition to, or instead of, establishing

optional units by section, section

equivalent, or FSA Farm Serial Number,

* * *’’ since section 2(e)(4) of the

proposed rule specifies that ‘‘Each

optional unit must meet one or more of

the following criteria, * * *’’

Response: The unit division

provisions for any processor contract

that stipulates the number of acres to be

planted have been removed from these

provisions, since the provisions are

contained in the Basic Provisions.

Comment: An insurance service

organization stated that the language in

section 3(a), which provides guidelines

for selection of price elections, should

be moved to the Basic Provisions.

Response: The requirement that the

price election (for each type, varietal

group, etc.) have the same percentage

relationship to the maximum price does

not apply to all crop policies. Therefore,

section 3 should not be part of the Basic

Provisions.

Comment: An insurance service

organization questioned whether the

sentence ‘‘Any other measured

production will be converted to an

unhusked ear weight equivalent’’ is

needed in section 3(b) since it is stated

in section 12(c)(2).

Response: Section 3(b) addresses the

insurance guarantee while section
65340 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations

12(c)(2) addresses production to count.

The provisions clarify that both are

expressed as unhusked ear weight, and

any other measured production will be

converted to unhusked ear weight.

Therefore, no change has been made.

Comment: An insurance service

organization stated that requiring the

producer to provide a copy of the

processor contract no later than the

acreage reporting date could provide a

loophole by allowing producers to wait

until acreage reporting time to decide if

they want coverage.

Response: There is no evidence that

allowing the producer to provide a copy

of the processor contract as late as the

acreage reporting date has resulted in

producers waiting to decide until the

acreage reporting date if they want

coverage. Sweet corn producers usually

have a processor contract in-force by the

final planting date. The requirement to

provide a copy of the processor contract

with the acreage report is convenient for

the producer. Therefore, no change has

been made.

Comment: An insurance service

organization questioned whether any

processor contract would allow

interplanted sweet corn or sweet corn

planted into an established grass or

legume. The commenter further

indicated that consideration should be

given to inserting the language in

section 7(a)(4) of the proposed rule into

the Basic Provisions.

Response: FCIC agrees that processing

sweet corn has seldom, if ever, been

interplanted with another crop or

planted into an established grass or

legume. However, production practices

are constantly evolving. FCIC chooses to

retain the provisions of section 7(a)(3) of

the final rule to accommodate such

developments if they should occur. In

addition, the interplanted language is

not consistent among the crop policies

and, therefore, will be retained in the

crop provisions.

Comment: An insurance service

organization indicated that language in

section 7(b) that states ‘‘You will be

considered to have a share in the

insured crop if, under the processor

contract, you retain possession of the

acreage on which the sweet corn is

grown * * *’’ suggests that only a

landlord would have a share in the

insured crop. The commenter

questioned whether the provision in

section 7(b) is already covered in

sections 7(a)(1) and (3) of the proposed

rule.

Response: The language in section

7(b) was intended to cover producers

who have a crop share agreement, rent,

or own acreage. The word ‘‘possession’’

has been changed to ‘‘control’’ for

clarification. Section 7(a) specifies

requirements for insurance coverage on

the crop, while section 7(b) specifies

requirements for an insurable share in

the crop. Therefore, both provisions are

necessary.

Comment: An insurance service

organization and a reinsured company

questioned whether the provision in

section 9(b), which states that the

insurance period ceases on the date

sufficient production is harvested to

fulfill the producer’s processor contract,

conflicts with the provision in section

12(a) that states ‘‘We will determine

your loss on a unit basis.’’ The

commenters questioned whether

production to count from an appraisal

prior to harvest would be included

when determining fulfillment of the

processor contract. The insurance

service organization questioned whether

the insured would know when enough

production is harvested to fulfill the

processor contract. This commenter

asked if production exceeding the

contracted amount is considered

production to count for APH or loss

adjustment or whether the processor

settlement sheet is the only acceptable

record. The insurance service

organization suggested that the

provisions in section 9(b) state ‘‘* * *

the insurance period ends when the

production delivered to the processor

equals the amount of production stated

in the sweet corn contract.’’ However,

the commenter also questioned whether

‘‘delivered to’’ is the same as ‘‘accepted

by’’ the processor.

Response: Section 9(b) does not

conflict with section 12(a). For

processor contracts based on a stated

amount of production, FCIC is only

insuring the contract amount, and the

producer can only obtain a basic unit by

processor contract. Therefore, once the

contract is fulfilled, insurance ceases on

the unit and there is no payable loss. If

the contract is not fulfilled and there is

still unharvested production, any

insurable cause of loss is covered. With

respect to the issue of production from

appraised acreage, such production will

not count toward fulfillment of the

processor contract, although it will be

used to determine production to count

for the unit or the producer’s approved

yield if the acreage is not bypassed due

to an insurable cause of loss that renders

such production unacceptable to the

processor. With respect to whether the

producer will know when the processor

contract is fulfilled, records are kept as

production is delivered to the processor.

Therefore, the producer can determine

when the contract is fulfilled. All

production from the unit, including any

excess of the amount stated in the

contract, will be considered as

production to count when determining

the producer’s approved yield. For the

purposes of loss adjustment, the amount

shown on the settlement sheet, plus any

appraised production that was not

bypassed due to an insurable cause that

rendered the production unacceptable

to the processor, will be included as

production to count. FCIC has revised

section 9(b) to clarify that insurance

ceases when the contract is fulfilled if

the processor contract stipulates a

specific amount of production.

Comment: An insurance service

organization questioned the provision in

section 10(a)(4), which states that

insurance is provided against ‘‘Plant

disease on acreage not planted to sweet

corn the previous crop year * * *.’’ The

commenter assumed this would apply

even if a rotation requirement was not

specified in the Special Provisions.

Response: FCIC agrees that if a

rotation requirement is not specified in

the Special Provisions, insurance

coverage should be provided against

plant disease if sweet corn was planted

the previous crop year. Section 10(a)(4)

has been revised accordingly.

Comment: An insurance service

organization suggested changing the

wording in section 10(a)(8) to eliminate

the reference to 10(a)(1) through (7) and

state ‘‘Failure of the irrigation water

supply, if due to an insured cause of

loss.’’

Response: Referencing 10(a)(1)

through (7) makes it clear that failure of

the irrigation water supply must be due

to these specific causes of loss.

Therefore, no change has been made.

Comment: An insurance service

organization questioned how the

provision in section 10(b)(1)(ii), which

states that insurance coverage is not

provided if acreage is bypassed based on

the availability of a crop insurance

payment, is to be enforced.

Response: The adjuster should be able

to make this determination based on

various factors such as if a harvest

pattern exists that clearly indicates the

processor is bypassing producers with

crop insurance coverage in favor of

producers without crop insurance even

though the quality of the crop is similar.

Language has been added to state that

an indemnity will be denied or have to

be repaid if it is determined that

bypassed acreage was due to the

availability of a crop insurance

payment.

Comment: An insurance service

organization questioned a discrepancy

between section 9(b) of the proposed

rule, which states that insurance ceases

on ‘‘The date you harvest sufficient

production to fulfill your processor
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations 65341

contract,’’ and section 10(b)(5) of the

proposed rule, which states that loss of

production will not be insured if ‘‘Due

to damage that occurs to unharvested

production after you deliver the

production required by the processor

contract.’’ The commenter indicated

that this provision is not necessary since

any damage occurring after delivery

would be outside the insurance period

as indicated in section 9(b).

Response: FCIC agrees and has

deleted section 10(b)(5).

Comment: An insurance service

organization stated that the language in

section 11(c) does not address timely

notice if damage is discovered less than

15 days prior to harvest.

Response: FCIC agrees and has

revised section 11(c) to clarify that an

immediate notice of loss is required if

damage is discovered within 15 days

prior to harvest or during harvest.

Comment: An insurance service

organization stated that section 12(b),

which explains how a claim is settled,

is too wordy and difficult to follow.

Response: This section has been

revised to clarify the settlement of

claims calculation, including the

addition of an example.

Comment: An insurance service

organization indicated that payments by

the processor for bypassed acreage

should be considered to have value to

count as is done with salvaged grains.

Response: There is nothing in this

policy which precludes a producer from

obtaining any other form of insurance

against losses as long as such insurance

is not under the Federal Crop Insurance

Act. Since the producer contributes to

the unharvested acreage pool, such

payment will not be considered when

determining production to count.

Comment: An insurance service

organization stated that section

12(c)(1)(iii) of the proposed rule 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 only

be necessary if the company and the

insured do not agree on the appraisal or

if the company believes that the crop

needs to be carried further. The

producer must continue to care for the

crop in accordance with recognized

good farming practices for the crop. If

the producer does not continue to care

for the crop, the original appraisal will

be used. Therefore, no change has been

made.

Comment: An insurance service

organization commented on section

12(c)(2) of the proposed rule which

includes the statement ‘‘* * *

production will be determined by

dividing the dollar amount as required

by the contract for the quality and

quantity of sweet corn delivered to the

processor by the base contract price per

ton.’’ The commenter did not oppose

this method but requested to know why

it was used to determine production to

count.

Response: FCIC has revised section

12(c)(2) to specify that production to

count of harvested sweet corn should be

determined from the usable tons

specified on the processor settlement

sheet. In addition, FCIC has amended

the language in section 12(c) to clarify

that, in the absence of a processor

settlement sheet, production to count is

determined by dividing the dollar

amount paid, payable, or which should

have been paid under the terms of the

processor contract for the quantity of

sweet corn delivered to the processor by

the base contract price per ton. Since

premiums or discounts for quality are

not normally included in processor

contracts for sweet corn, the term

‘‘quality’’ was removed from this

provision.

Comment: A crop insurance agent

stated that late planting provisions

should be available for processing sweet

corn since some sweet corn is planted

late in most years. The insurance agent

stated that late planting provisions will

not affect the processor’s ability to

timely harvest and process the sweet

corn. A reinsured company asked if

provisions will be available for late and

prevented planting. An insurance

service organization expressed support

for eliminating the late planting option

and asked if prevented planting would

be available.

Response: FCIC agrees that a late

planting period for processing sweet

corn may be appropriate for some

growing areas. Therefore, section 13 is

revised to provide a late planting period

if allowed by the Special Provisions and

if the producer provides written

approval from the processor by the

acreage reporting date that it will accept

the production from the late planted

acreage. Section 14 provides a

prevented planting coverage of 40

percent of the producers production

guarantee for timely planted acreage. If

the producer has limited or additional

coverage and pays an additional

premium, the prevented planting

coverage may be increased to the levels

specified in the actuarial documents.

Comment: An insurance service

organization and a reinsured company

recommended removal of the

requirement that written agreements be

renewed each year if there are no

significant changes to the farming

operation. The insurance service

organization stated that section 14(d)

should perhaps refer to the date

specified in the agreement instead of

limiting the agreement for one year. An

insurance service organization

recommended that section 14 be put

into the Basic Provisions.

Response: Written agreements are

intended to supplement policy terms or

permit insurance in unusual situations

that require modification of the

otherwise standard insurance

provisions. If such practices continue

year to year, they should be

incorporated into the policy or Special

Provisions. It is important to minimize

written agreement exceptions to assure

that the insured is well aware of the

specific terms of the policy. Therefore,

no change will be made to the

requirement that written agreements be

renewed each year. The written

agreement provisions are contained in

the Basic Provisions and, therefore, have

been removed from these crop

provisions.

In addition to the changes described

above, FCIC has made minor editorial

changes and has amended the following

Processing Sweet Corn Provisions:

1. Amended and clarified the

paragraph preceding section 1 to

include the Catastrophic Risk Protection

Endorsement.

2. Section 1—Amended the

definitions of ‘‘base contract price,’’

‘‘bypassed acreage,’’ and ‘‘processor’’ for

clarity. The definition of ‘‘practical to

replant’’ is amended to clarify that it

will not be considered practical to

replant unless the acreage can produce

at least 75 percent of the approved yield

and the processor agrees in writing that

it will accept the production from the

replanted acreage. The definition of

processor contract is amended to clarify

that multiple contracts with the same

processor that specify amounts of

production will be considered as a

single processor contract. This provision

guards against the situation where a loss

is claimed under one contract, but a

surplus is grown under the other

contract for the same crop. The

definition of ‘‘usable tons’’ is amended

to clarify that the amount includes the

quantity of sweet corn for which the

producer is compensated or should have

been compensated by the processor.

3. Section 3(b)—Clarified that the

insurance guarantee per acre is

expressed as tons of unhusked ear

weight.

4. Section 3(c)—Added a provision to

clarify that appraised production on

bypassed acreage that is not bypassed

due to an insurable cause of loss will be
65342 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations

considered when determining the

producer’s approved yield.

5. Section 7—Removed section 7(a)(2)

in the proposed rule. This provision is

not necessary since section 7(a)(3) of the

proposed rule stated that the sweet corn

must be grown under, and in

accordance with, the requirements of a

processor contract. If grown under a

processor contract, the sweet corn will

be canned or frozen. Section 7(c) is

amended for clarity.

6. Section 10—Amended section 10(a)

for clarity. Section 10(b) is reformatted

and amended for clarity. Also, removed

section 10(b)(3) of the proposed rule.

Assuming the acreage is not

intentionally bypassed, FCIC believes

that processors make sound harvesting

decisions based on the condition and

economic value of the crop as a whole.

Therefore, FCIC believes that section

10(b)(3) is unnecessary and adds no

value to these provisions.

7. Section 11(b)—Clarified that the

insured must give a notice of loss within

3 days after the date harvest should

have started if the acreage will not be

harvested unless the acreage was

previously released. The insured must

also provide documentation stating why

the acreage was bypassed.

8. Section 12—Deleted section

12(c)(1)(i)(E) of the proposed rule, and

inserted amended language as a new

section 12(c)(1)(iii) of the final rule to

clarify when appraised production will

include production on bypassed

acreage. A new section 12(c)(3) of the

final rule is added to clarify that

appraised production will include all

harvested production from any other

insurable units that have been used to

fill the processor contract for a unit.

Section 12(d) of the proposed rule is

deleted because of duplication with

section 12(c)(2).

Good cause is shown to make this rule

effective upon publication in the

Federal Register. This rule improves the

processing sweet corn insurance

coverage and brings it under the

Common Crop Insurance Policy Basic

Provisions for consistency among

policies. The contract change date for

the 1998 crop year is December 31,

1997. It is, therefore, imperative that

these provisions be made final before

that date so that the reinsured

companies and insureds may have

sufficient time to implement the new

provisions. Therefore, public interest

requires the agency to act immediately

to make these provisions available for

the 1998 crop year.

List of Subjects in 7 CFR Parts 437 and

457

Crop insurance, Processing sweet

corn, Sweet corn crop insurance

regulations.

Final Rule

Accordingly, for the reasons set forth

in the preamble, the Federal Crop

Insurance Corporation hereby amends 7

CFR parts 437 and 457, as follows:

PART 437—SWEET CORN CROP

INSURANCE REGULATIONS FOR THE

1985 THROUGH 1997 CROP YEARS

1. The authority citation for 7 CFR

part 437 is revised to read as follows:

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

2. The part heading is revised to read

as set forth above.

3. The subpart heading ‘‘SubpartRegulations for the 1985 and

Succeeding Crop Years’’ is removed.

4. Section 437.7 is amended by

revising the introductory text of

paragraph (d) to read as follows:

§ 437.7 The application and policy.

* * * * *

(d) The application is found at

subpart D of part 400, General

Administrative Regulations (7 CFR

400.37, 400.38). The provisions of the

Sweet Corn Insurance Policy for the

1985 through 1997 crop years are as

follows:

PART 457—COMMON CROP

INSURANCE REGULATIONS;

REGULATIONS FOR THE 1994 AND

SUBSEQUENT CONTRACT YEARS

5. The authority citation for 7 CFR

part 457 continues to read as follows:

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

6. Section 457.154 is added to read as

follows:

§ 457.154 Processing sweet corn crop

insurance provisions.

The Processing Sweet Corn 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:

Processing Sweet Corn Crop Provisions

If a conflict exists among the policy

provisions, the order of priority is as follows:

(1) the Catastrophic Risk Protection

Endorsement, if applicable; (2) the Special

Provisions; (3) these Crop Provisions; and (4)

the Basic Provisions with (1) controlling (2),

etc.

1. Definitions.

Base contract price. The price stipulated

on the processor contract without regard to

discounts or incentives that may apply.

Bypassed acreage. Land on which

production is ready for harvest but the

processor elects not to accept such

production so it is not harvested.

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 required by the sweet corn

processor contract with the processing

company, and recognized by the Cooperative

State Research, Education, and Extension

Service as compatible with agronomic and

weather conditions in the county.

Harvest. The removal of the ears from the

stalks for the purpose of delivery to the

processor.

Planted acreage. In addition to the

definition contained in the Basic Provisions,

sweet corn must initially be placed in rows

far enough apart to permit mechanical

cultivation. 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, 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

unless the replanted acreage can produce at

least 75 percent of the approved yield, and

the processor agrees in writing that it will

accept the production from the replanted

acreage.

Processor. Any business enterprise

regularly engaged in canning or freezing

processing sweet corn for human

consumption, that possesses all licenses and

permits for processing sweet corn 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 contracted processing

sweet corn within a reasonable amount of

time after harvest.

Processor contract. A written agreement

between the producer and a processor,

containing at a minimum:

(a) The producer’s commitment to plant

and grow sweet corn, and to deliver the

sweet corn production to the processor;

(b) The processor’s commitment to

purchase all the production stated in the

processor contract; and

(c) A base contract price.

Multiple contracts with the same processor

that specify amounts of production will be

considered as a single processor contract.

Ton. Two thousand (2,000) pounds

avoirdupois.
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations 65343

Unhusked ear weight. Weight of the seedbearing spike of sweet corn including the

membranous or green outer envelope.

Usable tons. The quantity of sweet corn for

which the producer is compensated or

should have been compensated by the

processor.

2. Unit Division.

(a) For processor contracts that stipulate

the amount of production to be delivered:

(1) In lieu of the definition contained in the

Basic Provisions, a basic unit will consist of

all acreage planted to the insured crop in the

county that will be used to fulfill contracts

with each processor;

(i) There will be no more than one basic

unit for all production contracted with each

processor contract;

(ii) In accordance with section 12, all

production from any basic unit in excess of

the amount under contract will be included

as production to count if such production is

applied to any other basic unit for which the

contracted amount has not been fulfilled; and

(2) Provisions in the Basic Provisions that

allow optional units by section, section

equivalent, or FSA farm serial number and by

irrigated and non-irrigated practices are not

applicable.

(b) For any processor contract that

stipulates the number of acres to be planted,

the provisions contained in section 34 of the

Basic Provisions will apply.

3. Insurance Guarantees, Coverage Levels,

and Prices for Determining Indemnities.

In addition to the requirements of section

3 of the Basic Provisions:

(a) You may select only one price election

for all the processing sweet corn in the

county insured under this policy unless the

Special Provisions provide different price

elections by type. The percentage of the

maximum price elections you choose for one

type will be applicable to all other types

insured under this policy.

(b) The insurance guarantee per acre is

expressed as tons of unhusked ear weight.

Any other measured production will be

converted to an unhusked ear weight

equivalent.

(c) The appraised production from

bypassed acreage that could have been

accepted by the processor will be included

when determining your approved yield.

(d) Acreage that is bypassed because it was

damaged by an insurable cause of loss will

be considered to have a zero yield when

determining your approved yield.

4. Contract Changes.

In accordance with section 4 of the Basic

Provisions, the contract change date is

November 30 preceding the cancellation

date.

5. Cancellation and Termination Dates.

In accordance with section 2 of the Basic

Provisions, the cancellation and termination

dates are March 15.

6. Report of Acreage.

In addition to the provisions of section 6

of the Basic Provisions, you must provide a

copy of all processor contracts to us on or

before the acreage reporting date.

7. Insured Crop.

(a) In accordance with section 8 of the

Basic Provisions, the crop insured will be all

the processing sweet corn in the county for

which a premium rate is provided by the

actuarial documents:

(1) In which you have a share;

(2) That is grown under, and in accordance

with, the requirements of a processor

contract executed on or before the acreage

reporting date and not excluded from the

processor contract at any time during the

crop year; and

(3) That is not (unless allowed by the

Special Provisions or by written agreement):

(i) Interplanted with another crop; or

(ii) Planted into an established grass or

legume.

(b) You will be considered to have a share

in the insured crop if, under the processor

contract, you retain control of the acreage on

which the sweet corn is grown, you are at

risk of loss, and the processor contract

provides for delivery of sweet corn under

specified conditions and at a stipulated base

contract price.

(c) A commercial sweet corn producer who

is also a processor may establish an insurable

interest if the following requirements are

met:

(1) The producer must comply with these

Crop Provisions;

(2) Prior to the sales closing date, the Board

of Directors or officers of the processor must

execute and adopt a resolution that contains

the same terms as an acceptable processor

contract. Such resolution will be considered

a processor contract under this policy; and

(3) Our inspection reveals that the

processing facilities comply with the

definition of a processor contained in these

Crop Provisions.

8. Insurable Acreage.

In addition to the provisions of section 9

of the Basic Provisions:

(a) Any acreage of the insured crop that is

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, 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, if

applicable, contained in the Special

Provisions.

9. Insurance Period.

In lieu of the provisions contained in

section 11 of the Basic Provisions, regarding

the end of the insurance period, insurance

ceases at the earlier of:

(a) The date the sweet corn:

(1) Was destroyed;

(2) Should have been harvested but was

not harvested;

(3) Was abandoned; or

(4) Was harvested;

(b) The date you harvest sufficient

production to fulfill your processor contract

if the processor contract stipulates a specific

amount of production to be delivered;

(c) Final adjustment of a loss; or

(d) Unless otherwise agreed to in writing,

the calendar date for the end of the insurance

period in which the sweet corn would

normally be harvested as follows:

(1) September 30 in Malheur County,

Oregon, all Idaho counties, and all Iowa

counties;

(2) October 20 in all other Oregon counties,

and in all Washington counties; or

(3) September 20 in all other states.

10. Causes of Loss.

In accordance with the provisions of

section 12 of the Basic Provisions:

(a) Insurance is provided only against the

following causes of loss that occur during the

insurance period:

(1) Adverse weather conditions, including:

(i) Excessive moisture that prevents

harvesting equipment from entering the field

or that prevents the timely operation of

harvesting equipment; and

(ii) Abnormally hot or cold temperatures

that cause an unexpected number of acres

over a large producing area to be ready for

harvest at the same time, affecting the timely

harvest of a large number of such acres or the

processing of such production is beyond the

capacity of the processor, either of which

causes the acreage to be bypassed.

(2) Fire;

(3) Insects, but not damage due to

insufficient or improper application of pest

control measures;

(4) Plant disease, but not damage due to

insufficient or improper application of

disease control measures or as otherwise

limited by the Special Provisions;

(5) Wildlife;

(6) Earthquake;

(7) Volcanic eruption; or

(8) Failure of the irrigation water supply,

if due to a cause of loss listed in section

10(a)(1) through (7) that occurs during the

insurance period.

(b) In addition to the causes of loss

excluded in section 12 of the Basic

Provisions, we will not insure any loss of

production due to:

(1) Bypassed acreage because of:

(i) The breakdown or non-operation of

equipment or facilities; or

(ii) The availability of a crop insurance

payment. We may deny any indemnity

immediately in such circumstance or, if an

indemnity has been paid, require you to

repay it to us with interest at any time

acreage was bypassed due to the availability

of a crop insurance payment; or

(2) Your failure to follow the requirements

contained in the processor contract.

11. Duties In The Event of Damage or Loss.

In addition to the requirements of section

14 of the Basic Provisions, you must give us

notice:

(a) Not later than 48 hours after:

(1) Total destruction of the sweet corn on

the unit; or

(2) Discontinuance of harvest on a unit on

which unharvested production remains.

(b) Within 3 days after the date harvest

should have started on any acreage that will

not be harvested unless we have previously

released the acreage. You must also provide

acceptable documentation of the reason the

acreage was bypassed. Failure to provide

such documentation will result in our

determination that the acreage was bypassed

due to an uninsured cause of loss. If the crop

will not be harvested and you wish to destroy

the crop, you must leave representative

samples of the unharvested crop for our

inspection. The samples must be at least 10

feet wide and extend the entire length of each

field in each unit. The samples must not be

destroyed until the earlier of our inspection

or 15 days after notice is given to us; and
65344 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations

(c) At least 15 days prior to the beginning

of harvest if you intend to claim an

indemnity on any unit, or immediately if

damage is discovered during the 15 day

period or during harvest, so that we may

inspect any damaged production. If you fail

to notify us and such failure results in our

inability to inspect the damaged production,

we will consider all such production to be

undamaged and include it as production to

count. You are not required to delay harvest.

12. Settlement of Claim.

(a) We will determine your loss on a unit

basis. In the event you are unable to provide

separate, acceptable production records:

(1) For any optional units, we will combine

all optional units for which such production

records were not provided; or

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

commingled production to such units in

proportion to our liability on the harvested

acreage for the units.

(b) In the event of loss or damage covered

by this policy, we will settle your claim by:

(1) Multiplying the insured acreage by its

respective production guarantee, by type if

applicable;

(2) Multiplying each result of section

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

type if applicable;

(3) Totaling the results of section 12(b)(2)

if there are more than one type;

(4) Multiplying the total production to

count (see section 12(c)), for each type if

applicable, by its respective price election;

(5) Totaling the results of section 12(b)(4)

if there are more than one type;

(6) Subtracting the results of section

12(b)(4) from the results of section 12(b)(2) if

there is only one type or subtracting the

results of section 12(b)(5) from the result of

section 12(b)(3) if there are more than one

type; and

(7) Multiplying the result of section

12(b)(6) by your share.

For example:

You have a 100 percent share in 100 acres

of type A processing sweet corn in the unit,

with a guarantee of 3.0 tons per acre and a

price election of $50.00 per ton. You are only

able to harvest 200 tons. Your indemnity

would be calculated as follows:

(1) 100 acres×3.0 tons=300 tons guarantee;

(2) 300 tons×$50.00 price

election=$15,000.00 value of guarantee;

(4) 200 tons×$50.00 price

election=$10,000.00 value of production

to count;

(6) $15,000.00¥$10,000.00=$5,000.00 loss;

(7) $5,000.00×100 percent=$5,000.00

indemnity payment.

You also have a 100 percent share in 100

acres of type B processing sweet corn in the

same unit, with a guarantee of 4.0 tons per

acre and a price election of $45.00 per ton.

You are only able to harvest 350 tons. Your

total indemnity for both types A and B would

be calculated as follows:

(1) 100 acres×3.0 tons=300 tons guarantee for

type A, and

100 acres×4.0 tons=400 tons guarantee for

type B;

(2) 300 tons×$50.00 price

election=$15,000.00 value of guarantee

for type A, and

400 tons×$45.00 price election=$18,000.00

value of guarantee for type B;

(3) $15,000.00 + $18,000.00=$33,000.00 total

value of guarantee;

(4) 200 tons×$50.00 price

election=$10,000.00 value of production

to count for type A, and

350 tons×$45.00 price election=$15,750.00

value of production to count for type B;

(5) $10,000.00+$15,750.00=$25,750.00 total

value of production to count;

(6) $33,000.00¥$25,750.00=$7,250.00 loss;

(7) $7,250.00 loss×100 percent=$7,250.00

indemnity payment.

(c) The total production to count, specified

in tons of unhusked ear weight, 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

production records that are acceptable to us.

(ii) Production lost due to uninsured

causes.

(iii) Production on acreage that is bypassed

unless the acreage was bypassed due to an

insured cause of loss which resulted in

production which would not be acceptable

under the terms of the processor contract.

(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.

(2) All harvested processing sweet corn

production from the insurable acreage. The

amount of such production will be:

(i) The usable tons of processing sweet

corn shown on the processor settlement

sheet, if available; or

(ii) Determined by dividing the dollar

amount paid, payable, or which should have

been paid under the terms of the processor

contract for the quantity of the sweet corn

delivered to the processor by the base

contract price per ton; and

(3) All harvested processing sweet corn

production from any other insurable units

that have been used to fulfill your processor

contract for this unit.

The total production to count will be

expressed as an unhusked ear weight. Any

other measure of production will be

converted to an unhusked ear weight

equivalent.

13. Late Planting.

A late planting period is not applicable to

processing sweet corn unless allowed by the

Special Provisions and you provide written

approval from the processor by the acreage

reporting date that it will accept the

production from the late planted acres when

it is expected to be ready for harvest.

14. Prevented Planting.

Your prevented planting coverage will be

40 percent of your production guarantee for

timely planted acreage. If you have limited or

additional levels of coverage, as specified in

7 CFR part 400, subpart T, and pay an

additional premium, you may increase your

prevented planting coverage to the levels

specified in the actuarial documents.

Signed in Washington, D.C., on December

5, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance

Corporation.

[FR Doc. 97–32493 Filed 12–11–97; 8:45 am]

BILLING CODE 3410–08–P

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 443 and 457

RIN 0563–AA78

Hybrid Seed Crop Insurance

Regulations; and Common Crop

Insurance Regulations, Hybrid Seed

Corn 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

hybrid seed corn. 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 hybrid seed crop insurance

regulations under the Common Crop