[Federal Register Volume 62, Number 239 (Friday, December 12, 1997)]
[Rules and Regulations]
[Pages 65344-65352]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32498]


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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.

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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

[[Page 65345]]

Insurance Policy for ease of use and consistency of terms, and to 
restrict the effect of the current hybrid seed crop insurance 
regulations to the 1997 and prior crop years.

DATES: Effective December 12, 1997.

FOR FURTHER INFORMATION CONTACT: Ron Nesheim, Insurance Management 
Specialist, Research and Development, Product Development Division, 
Federal Crop Insurance Corporation, United States Department of 
Agriculture, 9435 Holmes Road, Kansas City, MO 64131, telephone (816) 
926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

    The Office of Management and Budget (OMB) has determined this rule 
to be exempt for the purposes of Executive Order No. 12866 and, 
therefore, 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), 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. 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 effect of this regulation on 
small entities will be no greater than on larger entities. Under the 
current regulations, 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. This regulation does not alter those 
requirements.
    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. This rule does not have any greater 
or lesser impact on the producer. 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 exhausted before any 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, January 2, 1997, FCIC published a proposed rule in the 
Federal Register at 62 FR 48 to add to the Common Crop Insurance 
Regulations (7 CFR part 457), a new section, 7 CFR 457.152 (Hybrid Seed 
Corn Crop Insurance Provisions). These provisions will replace and 
supersede the current provisions for insuring hybrid seed corn found at 
7 CFR part 443 and will be effective for the 1998 and succeeding crop 
years. This rule also amends 7 CFR part 443 to restrict its effect to 
the 1997 and prior crop years.
    Following publication of the proposed rule, the public was afforded 
60 days to submit written comments. A total of 37 comments were 
received from reinsured companies and an insurance service 
organization. The comments received, and FCIC's responses, follow:
    Comment: A reinsured company and an insurance service organization 
stated that the current hybrid seed policy limits the amount of other 
insurance which can be carried on hybrid seed corn to one and a half 
times the maximum amount of insurance available. Since no such 
restriction appears in this 1998 proposal, the commenter assumes that 
this is no longer applicable and supports not having this restriction 
in the policy.
    Response: The policy provision that limited the amount of other 
insurance to one and a half times the highest price election has been 
deleted. This deletion will be identified in the Summary of Changes 
when the new policy is issued.
    Comment: A reinsured company and an insurance service organization 
suggested that the name of the Crop Provisions be changed to ``hybrid 
seed corn'' rather than ``hybrid corn seed''. Everyone in the seed corn 
industry refers to it as hybrid seed corn.
    Response: FCIC has made the change accordingly.
    Comment: A reinsured company and an insurance service organization 
suggested that the definition of ``Amount of insurance per acre'' be 
revised to match how this coverage is shown and defined in the Special 
Provisions, although the commenter stated that the Special Provisions 
definition should be multiplied by the price election before 
subtracting the minimum guaranteed payment. The county yield is 
multiplied by the factor for the coverage level selected, which is 
multiplied by the price election selected by the producer less any 
minimum guaranteed payment.
    Response: FCIC has revised and clarified the definition to show the 
proper calculation. Since the calculation is in the Crop Provisions, it 
will be removed from the Special Provisions.
    Comment: A reinsured company and an insurance service organization 
were concerned about the definition of ``bushel'' and the provisions in 
section 12(g)(3) (redesignated section 12(f)(3))

[[Page 65346]]

that requires the insurance provider to work the claim in the same 
manner as the records provided by the seed company to establish the 
approved yield. Since the yields from the seed company are submitted to 
the FCIC Regional Service Office (RSO) for determination of the 
approved yield, the FCIC RSO needs to inform the insurance providers 
when a seed company is using its own conversion charts and what this 
chart is so that, at claim time, the production to count can be 
converted in the same manner as the approved yield was determined.
    Response: In order to ensure the accuracy of any claim, the same 
moisture and weight per bushel must be used to calculate the amount of 
insurance and the production to count. The FCIC procedure will specify 
that the seed company will provide its conversion chart with the 
production records. FCIC will provide the conversion chart to the 
insurance provider when the moisture or weight used to determine a 
bushel differs from the definition stated in the policy.
    Comment: A reinsured company and an insurance service organization 
were concerned with the definition of ``female parent plants,'' where 
there is reference to the stamens (tassles) being removed. The 
commenters indicated that some seed companies are experimenting with 
male sterile plants from which the stamens may not have to be removed.
    Response: FCIC has revised the definition to accommodate those 
instances wherein parent plants are rendered male sterile by means 
other than detassling.
    Comment: A reinsured company and an insurance service organization 
suggested that the definition of ``interplanting'' be revised to match 
its use in the Special Provisions. Interplanting is listed as a 
separate type with a different county yield than standard planting. The 
male parent plants are planted between every female parent plant row 
rather than in a planting pattern as defined in the Crop Provisions.
    Response: The Special Provisions uses the term ``interplanting'' 
and the Crop Provisions uses the term ``interplanted'', and both terms 
have different meanings. To avoid any confusion between these terms, 
FCIC will change the reference to ``interplanting'' to ``non-standard 
planting'' in the Special Provisions.
    Comment: A reinsured company suggested that in the definition of 
``irrigated practice,'' the words ``and quality'' be added after the 
words ``* * * providing the quantity.''
    Response: FCIC agrees that water quality is important. However, 
there are no clear criteria regarding the quality of water necessary to 
produce a crop. The highly variable factors involved would make such 
criteria difficult to develop and administer. The provisions regarding 
good farming practices can be applied in situations in which the 
insured failed to exercise due care and diligence in the application of 
irrigation water. Therefore, no change has been made.
    Comment: An insurance service organization suggested adding, in the 
definition of ``non-seed amount,'' the phrase ``(rejected for seed 
purposes)'' or something similar after the first reference to ``non-
seed production'' for clarification.
    Response: FCIC has revised the definitions and section 12 to 
clarify that non-seed production is production that does not qualify as 
seed production because of inadequate germination.
    Comment: A reinsured company and an insurance service organization 
suggested that the definition of ``planted acreage'' be amended to 
require that the male and female parent plants be planted in accordance 
with the production management practices of the seed company.
    Response: The definition of ``planted acreage'' is broad enough to 
permit planting in accordance with practices of the seed company. The 
requirement that parent plants be planted in accordance with the 
production management practices of the seed company is more appropriate 
in sections 7 and 10 regarding insured crop and causes of loss and 
those provisions have been revised accordingly.
    Comment: An insurance service organization suggested that a 
conflict exists between the definition of ``sample'' and ``inadequate 
germination'' because the germination rate is determined by using a 
certified seed test on clean seed, not field run seed.
    Response: There is no conflict between the terms. The sample must 
be at least 3 pounds of field run seed. The germination rate is based 
on the amount of clean seed obtained from that sample. No change has 
been made.
    Comment: An insurance service organization asked why a ``seed 
company'' must now be a corporation (previously defined as a ``business 
enterprise''), and if there are any legitimate seed companies that are 
not corporations.
    Response: A seed company need only be a corporation if the seed 
company is also the producer. To cover all other situations, FCIC has 
changed ``a corporation'' to ``a business enterprise'' in the 
definition of ``seed company.''
    Comment: An insurance service organization suggested that section 
2(a) be rearranged as follows: ``* * * a basic unit, as defined in 
section 1 of the Basic Provisions, may be divided * * *'' (instead of 
``(basic unit))'' at the end of the earlier phrase.
    Response: All definitions and those provisions common to most crops 
with respect to units have been deleted and moved to the Basic 
Provisions.
    Comment: A reinsured company and an insurance service organization 
stated that the provisions contained in section 2(e)(1), which require 
the insured to keep records by optional unit for optional units to 
apply, conflict with section 3(b) which correctly indicates that 
production reporting requirements do not apply to this crop. In most 
instances the seed corn is harvested and hauled directly to the seed 
companies' processing facilities. The seed company maintains records of 
planted acreage and harvested production and provides all of the yield 
records used by the FCIC RSO to establish the approved yields. All 
references to the insured maintaining records by optional unit should 
not be a requirement since this is maintained at the seed company 
level. The historical yield of the producer's seed corn is not used to 
establish the amount of insurance as stated in this item as this is 
based on the county yield, coverage level and price elected and any 
minimum guaranteed payment. Seed corn producers will often plant 
different varieties from year to year with different expected yields. 
Therefore, the actual yield produced from the previous year has little 
or no value for the producer in subsequent years.
    Response: The insured must have verifiable records of planted 
acreage and production for each optional unit for at least the ``* * * 
last crop year used to determine the amount of insurance''. This 
requirement should not be removed simply because the seed company 
maintains those records. In order to protect the integrity of the 
program, FCIC must be able to verify the accuracy of the guarantee for 
each unit. If the producer cannot produce the records from each 
optional unit, they will be combined into basic units. The insured can 
obtain the necessary records from the seed company. These provisions 
have been deleted and moved to the Basic Provisions.
    Comment: A reinsured company was concerned about the requirement 
that the producer must meet all the requirements in section 6. They 
stated

[[Page 65347]]

that these requirements should not be mandatory for every acreage 
report.
    Response: The information required by the acreage report is 
necessary to establish liability, premium, and insurability of the 
acreage. No change has been made.
    Comment: A reinsured company and an insurance service organization 
mentioned that in section 6(a), each individual producer is the named 
insured under this program and may not know the type or variety of 
hybrid. The seed companies provide the seed and the producer grows it. 
Seed companies do not want this information going any further than 
necessary while still meeting the requirements of the MPCI program. 
This information is needed only in the event of a claim and can be 
obtained from the seed company as needed at that time. The commenter 
believes collection of this information should be an option since the 
insurance provider may want to capture it in certain instances but not 
for all insureds. Therefore, this should be an option, not mandatory as 
it would be with the word ``must'' in the proposed language.
    Response: The reporting requirement by type or variety must be 
maintained for rating purposes and to determine liability and premium 
for the unit. Such information cannot be obtained only at the time of 
loss. It is the responsibility of the producer to provide the 
information which should be contained in the hybrid seed corn processor 
contract. No change has been made.
    Comment: A reinsured company and an insurance service organization 
mentioned that section 6(b) requires that acreage occupied by the male 
parent plants be reported. They realize it is common for other crops to 
obtain all insurable and uninsurable acreage of the crop. However, this 
stipulation to capture the total acreage occupied by the male parent 
plants is an unnecessary and burdensome requirement for hybrid seed 
corn. The commenter suggested that this should be determined in the 
event of a claim. A number of seed companies require that the male 
acres be destroyed after pollination.
    Response: The requirement to report any acreage occupied by male 
parent plants is necessary to determine the correct amount of insurance 
for a unit since acres with male plants are not insurable. The amount 
of insurance is determined on the Summary of Coverage so the insurance 
provider cannot wait until a loss to determine insurable acreage. The 
burden of determining the amount of acreage occupied by the male plant 
can be minimized by mathematical calculation based on the planting 
pattern of the crop. No change has been made.
    Comment: A reinsured company and an insurance service organization 
questioned section 6(c), which requires the insured to certify that 
there is a hybrid seed corn processor contract and the amount of any 
minimum guaranteed payment. The commenter questions what constitutes 
certification. It is their feeling that if the insured goes through the 
FCIC RSO to obtain an approved yield, and upon receiving copies of this 
information, this would be adequate certification as to the insured 
having a contract. The presumption is that the FCIC RSO would not go 
through this process between the producer and the seed company if there 
was not some type of contractual agreement in place. If they obtain 
some of this information directly from the seed company it would also 
constitute certification as the seed company would not provide this 
information if a contract was not in place. If this does not constitute 
certification for the purposes of having a contract then they have some 
concerns as to what additional requirements must be met.
    Response: The certification requirement is satisfied by a written 
statement on the acreage report, signed by the producer, that such a 
contract exists. In many cases, the RSO provides an approved yield for 
a variety, not specifically for individual producers. Since a contract 
is a condition of insurance, the insurance provider must have some 
assurance that a contract exists. Receipt of an approved yield from the 
RSO is not evidence of a contract between the processor and the 
producer. No change has been made.
    Comment: A reinsured company and an insurance service organization 
were concerned with section 6(c) references to the minimum guaranteed 
payment which, according to the Crop Insurance Handbook, must be 
obtained from each insured. If an insurance company happens to insure 
all producers of a seed company, there is generally only one base 
contract which is used for all the individual seed corn producers. If 
the base contract does not provide a minimum guarantee, each insured is 
still required to certify to this effect even though this information 
can be determined from the base contract.
    Response: Section 6(c) only requires the producer to report a 
minimum guaranteed payment if the hybrid seed corn processor contract 
contains such a payment. No change has been made.
    Comment: An insurance service organization asked if all the 
exceptions in section 7(a)(4)(I)-(iv) should be required by written 
agreement. For example, the commenter questions why acreage with female 
and male parent plants in the same row would ever be insurable. Perhaps 
the phrase ``unless allowed'' should be removed from item (4) and 
inserted at the specific items where it is actually possible.
    Response: Current planting practices do not allow male and female 
plants to be planted in the same row. However, acceptable planting 
practices may change and the provision must allow a certain amount of 
flexibility to cover such changes. No change has been made.
    Comment: A reinsured company questioned section 7(c) pertaining to 
a producer who is also the seed company. If a seed corn producer is 
insured as an individual, and also owns the seed corn company under a 
corporate name and the company contracts with other producers, the 
commenter questions whether this situation would fall into the 
procedure outlined.
    Response: If the other conditions in section 7(c) are met, the seed 
company could be eligible for insurance. Section 7(c) has been amended 
for clarification.
    Comment: An insurance service organization asked that since ``seed 
company,'' by definition, is required to be a corporation, whether it 
is necessary to repeat the requirement again in section 7(c)(1).
    Response: A seed company is no longer required to be a corporation 
except when the seed company is also the producer. FCIC has revised the 
definition of ``seed company'' to specify business enterprise and added 
a provision requiring a seed company that is also an insured to be a 
corporation.
    Comment: A reinsured company and an insurance service organization 
were concerned with section 7(c)(3) which states that if acceptable 
sales records are not available, the crop may only be insured under the 
Coarse Grains Crop Provisions. Since the yield potential for seed corn 
is considerably less than for commercial field corn, a normal seed corn 
crop could be harvested and still potentially have a payable loss under 
the Coarse Grains Crop Provisions. Language similar to ``* * * may only 
be insured by written agreement * * *'' is recommended.
    Response: FCIC agrees that hybrid seed corn is best suited for 
insurance under the Hybrid Seed Corn Crop Provision, but records must 
be provided to assure that the person seeking insurance is a bona-fide 
producer of hybrid seed corn. If the crop is insured under the Coarse 
Grains Crop Provisions, the approved yield would be derived from hybrid 
seed corn production records of the processor for

[[Page 65348]]

the particular variety. The last sentence of section 7(c)(3) has been 
revised to read ``If such records are not available, the crop may be 
insured under the Coarse Grains Crop Provisions with a written 
agreement; and * * *.''
    Comment: An insurance service organization asked if it is necessary 
that the phrase ``Of the insured crop'' be specified in section 8(c) 
but not for items (a) or (b).
    Response: FCIC has clarified the provisions. Further, since damage 
to the male plant could also necessitate replanting, FCIC has modified 
section 8(c) to include both male and female parent plants.
    Comment: An insurance service organization stated that the phrase 
``insurance attaches after'' in section 9(a) creates an ambiguity with 
respect to when insurance attaches. The commenter suggested that the 
term ``after'' could be changed to ``once'' (or ``upon completion of 
planting:'') and then delete ``is completely planted'' from items (1) 
and (2).
    Response: Section 9(a) has been clarified.
    Comment: A reinsured company and an insurance service organization 
stated that the provisions in section 11(a) stipulate that any 
representative samples must consist of one complete planting pattern 
the entire length of the field if the acreage will not be harvested. 
The commenters prefer that each representative sample be one complete 
pattern which is long enough to provide a \1/100\ acre sample, and that 
these be at various representative areas of the field rather than the 
entire length of the field. This would be consistent with the appraisal 
methods specified in the loss adjustment procedures.
    Response: More than one representative sample may be required by 
the insurance provider, and such samples may be in different parts of 
the field. However, by having a strip the entire length of the field, 
the loss adjuster can choose the areas to be sampled and is not 
restricted to the crop the insured chose to leave for this purpose. 
This permits a more accurate appraisal. Further, it would be difficult 
for the person harvesting the crop to know what constitutes \1/100\ of 
an acre. No change has been made.
    Comment: An insurance service organization suggested that since the 
Basic Provisions state that the term ``representative sample'' will be 
further defined in the Crop Provisions, it should be included in 
section 1 with the other definitions (as in the 1986-CHIAA 738) so the 
term would be more easily located.
    Response: The requirements for representative samples are 
substantive and, therefore, should not be in the definition section. 
The Basic Provisions are revised to amend the definition to state ``as 
specified in the Crop Provisions''.
    Comment: A reinsured company and an insurance service organization 
disagreed that section 11(b)(2) should be a mandatory requirement for 
all producers having a loss. If all seed corn producers for a seed 
company are insured with the same insurance company, the company knows 
that all of their producers have a seed corn contract. The company will 
already have a copy of the base contract for the seed company and are 
not gaining anything by having to obtain the exact contract in effect 
for each producer. If some producers insured with an insurance company 
grow seed corn for various seed companies (not all of their producers 
are insured with them) there may be some benefit in obtaining a copy of 
the contract. The commenter does not believe this should be a mandatory 
requirement for all losses.
    Response: Since not all producers may receive the same contract 
terms, the insurance company must verify contract terms, unless it has 
been determined that the contract provided by the seed company is used 
for all its producers without any waivers or amendments. Section 
11(b)(2) has been revised accordingly.
    Comment: An insurance service organization suggested that section 
12(e)(1)(v) (redesignated section 12(d)(1)(v)) of the policy should not 
allow the insured to defer settlement and wait for a later, generally 
lower appraisal, especially on crops that have a short ``shelf life.''
    Response: A later appraisal will only be necessary if the insurance 
provider and the insured do not agree on the appraisal or the insurance 
provider believes the crop needs to be carried further. The producer 
must continue to care for the crop. If the producer does not care for 
the crop, the original appraisal will be used. No change has been made.
    Comment: An insurance service organization stated that section 
12(e)(2) (redesignated section 12(d)(2)) counts harvested production 
delivered to the seed company, whereas section 4d(1)(I) of the 1986-
CHIAA 738 counts harvested production delivered to and accepted by the 
seed company. The commenter questioned whether this is change, or 
should this provision be interpreted to mean that production is not 
considered delivered until it is accepted.
    Response: This is a change. Section 12(d)(2) provides that seed 
production to be counted includes mature harvested production that is 
delivered as commercial hybrid seed corn to the seed company stated in 
the hybrid seed corn processor contract, regardless of quality, unless 
the production has inadequate germination.
    Comment: A reinsured company and an insurance service organization 
asked that since there has been a change in amounts for moisture 
content (to 15 percent moisture content instead of 15.5 percent, and 
increased for ear corn by 1.5 pounds, instead of 2.0 pounds, for each 
percentage point of moisture in excess of 14.0 percent) in sections 
12(f) (1) and (2), whether FCIC plans any adjustments to previous 
yields that were adjusted using the previous amounts.
    Response: Previous yield information will not be affected. These 
changes will be effective for 1998 and subsequent crop years. Approved 
yields after these provisions are effective will be determined on the 
revised basis.
    Comment: An insurance service organization suggested that section 
13(d)(2) may be confusing because a sentence that states ``The unit 
consists of 185 acres * * *'' is followed immediately by a sentence 
that states ``The unit consists of 150 acres * * *.'' The example would 
be clearer if it stated ``The unit consists of 150 acres of female 
parent plants of the same type and variety (an additional 35 acres are 
occupied by the male parent plants, which are not insurable). Of the 
150 acres, 50 acres were planted * * *'' or some similar statement. At 
the least, the latter should read ``The unit consists of 150 insurable 
acres * * *.''
    Response: The late and prevented planting provisions, common to 
most crops, are deleted and moved to the Basic Provisions.
    Comment: A reinsured company and an insurance service organization 
favored the elimination of the substitute crop provisions under 
prevented planting coverage.
    Response: The late and prevented planting provisions, common to 
most crops, are deleted and moved to the Basic Provisions. FCIC has 
revised those provisions to remove the substitute crop provisions.
    Comment: A reinsured company and an insurance service organization 
stated that section 13(d)(5), which defines the maximum eligible 
acreage for prevented planting, conflicts with the current provisions, 
which correctly states that the maximum eligible acres for seed corn is 
the number of acres the producer contracted for the crop year.

[[Page 65349]]

    Response: FCIC has clarified the provision in the Basic Provisions.
    Comment: A reinsured company stated that it understands that FCIC 
is revising prevented planting for 1998 and assumes these new 
provisions would be incorporated into the crop provisions for hybrid 
seed corn.
    Response: The late and prevented planting provisions have been 
moved to the Basic Provisions and will be applicable to this policy.
    Comment: A reinsured company and an insurance service organization 
recommended deleting section 14(d). Written agreements should not be 
limited to one year. Rather, such agreements should be valid for the 
period stated in the agreement. In most cases, written agreements 
should be continuous, as is the case with the policy. Limiting written 
agreements to one year only increases administrative cost, complexity 
and opportunity for misunderstanding and error.
    Response: Written agreements are, by design, temporary and intended 
to address unusual circumstances. If the conditions that require a 
written agreement exists for multiple crop years, the policy or Special 
Provisions should be amended to accommodate the conditions. The written 
agreement provisions have been deleted and moved to the Basic 
Provisions.
    Comment: An insurance service organization suggested that section 
14(e) be combined with the provisions in section 14(a).
    Response: Section 14(e) is intended to be a limited exception, not 
the rule, affecting only those cases in which conditions discovered 
after the sales closing date make a written agreement necessary. 
Therefore, these provisions should be kept separate. No change has been 
made in the Basic Provisions.
    Comment: A reinsured company expressed a general concern about many 
of the mandatory requirements added to these provisions. In its view, 
most of these requirements are unnecessary. Failure to collect this 
information in prior years has not caused problems. The issues of 
reduced expense reimbursement and simplification should be considered 
prior to finalizing these provisions. This policy proposes to increase 
the expense of writing hybrid seed corn along with the added complexity 
involved from the additional collection requirements.
    Response: FCIC understands the concerns of this commenter. These 
Crop Provisions were revised to reduce program vulnerabilities and make 
the insuring language more precise. FCIC has attempted to minimize any 
additional requirements imposed upon the policyholder, the reinsured 
company, and the seed company. All mandatory information is required to 
fairly and properly administer the policy.
    In addition to the changes described above, FCIC has made minor 
editorial changes and has amended the following provisions:
    1. The paragraph preceding section 1 has been revised to refer to 
the Catastrophic Risk Protection Endorsement for the purpose of 
clarification.
    2. The definition of ``adjusted yield,'' ``amount of insurance per 
acre,'' ``approved yield,'' ``county yield,'' ``dollar value per 
bushel,'' ``field run,'' ``hybrid seed corn processor contract,'' and 
``insurable interest'' have been revised for clarification.
    3. A definition of ``coverage level factor'' has been added for 
clarification.
    4. The definitions of ``days,'' ``FSA,'' ``final planting date,'' 
``interplanted,'' ``irrigated practice,'' ``late planted,'' ``late 
planting period,'' and ``timely planted'' have been deleted and moved 
to the Basic Provisions.
    5. The definition of ``good farming practices,'' ``planted 
acreage,'' and ``prevented planting'' have been revised to delete the 
provisions moved to the Basic Provisions.
    6. The definition of ``practical to replant'' has been revised to 
clarify that it will not be considered practical to replant unless 
production from the replanted acreage can be delivered under the terms 
of the hybrid seed corn processor contract, or the seed company agrees 
to accept such production.
    7. Section 2 has been revised to delete those provisions that have 
been moved to the Basic Provisions, and to clarify the unit structure 
for hybrid seed corn when the hybrid seed corn processor contract 
specifies an amount of production to be delivered.
    8. Section 7(d) has been added to allow the insured crop that is 
under contract with different seed companies to be insured under 
separate policies with different insurance providers provided all 
acreage of the insured crop in the county is insured.
    9. Section 8(c) has been revised for clarification.
    10. In section 10(b)(4), the requirement that the crop be inspected 
and the loss appraised before harvest is completed has been deleted to 
be consistent with section 11(b)(1).
    11. Section 12(c) has been revised for clarification. Also, an 
example of an indemnity calculation has been added for illustration. 
Section 12(d) is deleted since it was redundant with section 12(e) and 
the following section redesignated accordingly.
    12. In section 12(e)(1)(I), as redesignated, adjusted yield has 
been changed to amount of insurance per acre.
    13. In section 12(f)(3), as redesignated, the last sentence has 
been corrected to clarify that records of the seed company will only be 
used to determine the amount of production to count if the production 
is calculated on the same basis as that used to determine the approved 
yield.
    14. Add provision specifying the prevented planting coverage 
available.
    Good cause is shown to make this rule effective upon publication in 
the Federal Register. This rule improves the hybrid seed corn insurance 
coverage and brings it under the Common Crop Insurance Policy, Basic 
Provisions for consistency among policies. The earliest contract change 
date that can be met for the 1998 crop year is December 31, 1997. It 
is, therefore, imperative that these provisions be made final before 
that date so that reinsured companies and insureds may have sufficient 
time to implement these changes. 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 443 and 457

    Crop insurance, Hybrid seed crop insurance regulations, Hybrid seed 
corn.

Final Rule

    Accordingly, for the reasons set forth in the preamble, the Federal 
Crop Insurance Corporation hereby amends 7 CFR parts 443 and 457 as 
follows:

PART 443--HYBRID SEED CROP INSURANCE REGULATIONS FOR THE 1986 
THROUGH 1997 CROP YEARS

    1. The authority citation for 7 CFR part 443 continues 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. Subpart Heading ``Subpart--Regulations for the 1986 and 
Succeeding Crop Years'' is removed.
    4. Section 443.7 is amended by revising the introductory text of 
paragraph (d) to read as follows:


Sec. 443.7  The application and policy.

* * * * *
    (d) The application for the 1986 through 1997 crop years is found 
at subpart D of part 400, General Administrative Regulations (7 CFR 
400.37 and 400.38). The provisions of the Hybrid Seed Crop Insurance

[[Page 65350]]

Regulations for the 1986 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 457.152 is added to read as follows:


Sec. 457.152  Hybrid seed corn crop insurance provisions.

    The Hybrid Seed Corn Crop Insurance Provisions for the 1998 and 
succeeding crop years are as follows:
    FCIC policies:

United States Department of Agriculture

Federal Crop Insurance Corporation

    Reinsured policies:

(Appropriate title for insurance provider)
    Both FCIC and reinsured policies:

Hybrid Seed 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, (Sec. 457.8) with (1) 
controlling (2), etc.
    1. Definitions.
    Adjusted yield. An amount determined by multiplying the county 
yield by the coverage level factor.
    Amount of insurance per acre. A dollar amount determined by 
multiplying the adjusted yield by the price election you select and 
subtracting any minimum guaranteed payment, not to exceed the total 
compensation specified in the hybrid seed corn processor contract. 
If your hybrid seed corn processor contract contains a minimum 
guaranteed payment that is stated in bushels, we will convert that 
value to dollars by multiplying it by the price election you 
selected.
    Approved yield. In lieu of the definition contained in the Basic 
Provisions, an amount FCIC determines to be representative of the 
yield that the female parent plants are expected to produce when 
grown under a specific production practice. FCIC will establish the 
approved yield based upon records provided by the seed company and 
other information it deems appropriate.
    Bushel. Fifty-six pounds avoirdupois of shelled corn, 70 pound 
avoirdupois of ear corn, or the number of pounds determined under 
the seed company's normal conversion chart when that chart is used 
to determine the approved yield and the claim for indemnity.
    Certified seed test. A warm germination test performed on clean 
seed according to specifications of the ``Rules for Testing Seeds'' 
of the Association of Official Seed Analysts.
    Commercial hybrid seed corn. The offspring produced by crossing 
a male and female parent plant, each having a different genetic 
character. This offspring is the product intended for use by an 
agricultural producer to produce a commercial field corn crop for 
grain.
    County yield. An amount contained in the actuarial documents 
that is established by FCIC to represent the yield that a producer 
of hybrid seed corn would be expected to produce if the acreage had 
been planted to commercial field corn.
    Coverage level factor. A factor contained in the Special 
Provisions to adjust the county yield for commercial field corn to 
reflect the higher value of hybrid seed corn.
    Dollar value per bushel. An amount that determines the value of 
any seed production to count. It is determined by dividing the 
amount of insurance per acre by the result of multiplying the 
approved yield by the coverage level percentage, expressed as a 
decimal.
    Female parent plants. Corn plants that are grown for the purpose 
of producing commercial hybrid seed corn and have had the stamens 
removed or are otherwise male sterile.
    Field run. Commercial hybrid seed corn production before it has 
been dried, screened, or processed.
    Good farming practices. In addition to the definition contained 
in the Basic Provisions, good farming practices include those 
practices required by the hybrid seed corn processor contract.
    Harvest. Combining, threshing or picking ears from the female 
parent plants to obtain commercial hybrid seed corn.
    Hybrid seed corn processor contract. An agreement executed 
between the hybrid seed corn crop producer and a seed company 
containing, at a minimum:
    (a) The producer's promise to plant and grow male and female 
parent plants, and to deliver all commercial hybrid seed corn 
produced from such plants to the seed company;
    (b) The seed company's promise to purchase the commercial hybrid 
seed corn produced by the producer; and
    (c) Either a fixed price per unit of measure (bushels, 
hundredweight, etc.) of the commercial hybrid seed corn or a formula 
to determine the value of such seed. Any formula for establishing 
the value must be based on data provided by a public third party 
that establishes or provides pricing information to the general 
public, based on prices paid in the open market (e.g., commodity 
futures exchanges), to be acceptable for the purpose of this policy.
    Inadequate germination. Germination of less than 80 percent of 
the commercial hybrid seed corn as determined by using a certified 
seed test.
    Insurable interest. Your share of the financial loss that occurs 
in the event seed production is damaged by a cause of loss specified 
in section 10.
    Local market price. The cash price offered by buyers for any 
production from the female parent plants that is not considered 
commercial hybrid seed corn under the terms of this policy.
    Male parent plants. Corn plants grown for the purpose of 
pollinating female parent plants.
    Minimum guaranteed payment. A minimum amount (usually stated in 
dollars or bushels) specified in your hybrid seed corn processor 
contract that will be paid or credited to you by the seed company 
regardless of the quantity of seed produced.
    Non-seed production. Production that does not qualify as seed 
production because of inadequate germination.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, the insured crop must be planted in rows wide 
enough to permit mechanical cultivation, unless otherwise provided 
by the Special Provisions or by written agreement.
    Planting pattern. The arrangement of the rows of the male and 
female parent plants in a field. An example of a planting pattern is 
four consecutive rows of female parent plants followed by two 
consecutive rows of male parent plants.
    Practical to replant. In addition to the definition contained in 
the Basic Provisions, practical to replant applies to either the 
female or male parent plant. It will not be considered practical to 
replant unless production from the replanted acreage can be 
delivered under the terms of the hybrid seed corn processor 
contract, or the seed company agrees that it will accept the 
production from the replanted acreage.
    Prevented planting. In addition to the definition contained in 
the Basic Provisions, prevented planting applies to the female and 
male parent plants. The male parent plants must be planted in 
accordance with the requirements of the hybrid seed corn processor 
contract to be considered planted.
    Sample. For the purpose of the certified seed test, at least 3 
pounds of randomly selected field run shelled corn for each variety 
of commercial hybrid seed corn grown on the unit.
    Seed company. A business enterprise that possesses all licenses 
for marketing commercial hybrid seed corn required by the state in 
which it is domiciled or operates, and which possesses facilities 
with enough storage and drying capacity to accept and process the 
insured crop within a reasonable amount of time after harvest. If 
the seed company is the insured, it must also be a corporation.
    Seed production. All seed produced by female parent plants with 
a germination rate of at least 80 percent as determined by a 
certified seed test.
    Shelled corn. Kernels that have been removed from the cob.
    Variety. The name, number or code assigned to a specific genetic 
cross by the seed company or the Special Provisions for the insured 
crop in the county.
    2. Unit Division.
    For any processor contract that stipulates the amount of 
production to be delivered:
    (a) In lieu of the definition of ``basic unit'' 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 a 
hybrid seed corn processor contract;

[[Page 65351]]

    (b) There will be no more than one basic unit for all production 
contracted with each processor contract;
    (c) 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
    (d) Optional units will not be established.
    3. Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities.
    (a) In addition to the requirements of section 3 of the Basic 
Provisions, you may select only one price election for all the 
hybrid seed corn in the county insured under this policy unless the 
Special Provisions provide different price elections by variety, in 
which case you may select one price election for each hybrid seed 
corn variety designated in the Special Provisions. The price 
election you choose for each variety must have the same percentage 
relationship to the maximum price offered by us for each variety. 
For example, if you choose 100 percent of the maximum price election 
for one specific variety, you must also choose 100 percent of the 
maximum price election for all other varieties.
    (b) The production reporting requirements contained in section 3 
of the Basic Provisions are not applicable to this contract.
    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 requirements of section 6 of the Basic 
Provisions, you must:
    (a) Report by type and variety, the location and insurable 
acreage of the insured crop;
    (b) Report any acreage that is uninsured, including that portion 
of the total acreage occupied by male parent plants; and
    (c) Certify that you have a hybrid seed corn processor contract 
and report the amount, if any, of any minimum guaranteed payment.
    7. Insured Crop.
    (a) In accordance with section 8 of the Basic Provisions, the 
crop insured will be all the female parent plants in the county for 
which a premium rate is provided by the actuarial documents:
    (1) In which you have a share;
    (2) That are grown under a hybrid seed corn processor contract 
executed before the acreage reporting date;
    (3) That are planted for harvest as commercial hybrid seed corn 
in accordance with the requirements of the hybrid seed corn 
processor contract and the production management practices of the 
seed company; and
    (4) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Planted with a mixture of female and male parent seed in the 
same row;
    (ii) Planted for any purpose other than for commercial hybrid 
seed corn;
    (iii) Interplanted with another crop; or
    (iv) Planted into an established grass or legume.
    (b) An instrument in the form of a ``lease'' under which you 
retain control of the acreage on which the insured crop is grown and 
that provides for delivery of the crop under substantially the same 
terms as a hybrid seed corn processor contract will be treated as a 
contract under which you have an insurable interest in the crop.
    (c) A commercial hybrid seed corn producer who is also a seed 
company may be able to insure the hybrid seed corn crop if the 
following requirements are met:
    (1) The seed company has an insurable interest in the hybrid 
seed corn crop;
    (2) Prior to the sales closing date, the Board of Directors of 
the seed company has executed and adopted a corporate resolution 
that contains the same terms as a hybrid seed corn processor 
contract. This corporate resolution will be considered a contract 
under this policy;
    (3) Sales records for at least the previous years' seed 
production must be provided to confirm that the seed company has 
produced and sold seed. If such records are not available, the crop 
may be insured under the Coarse Grains Crop Provisions with a 
written agreement; and
    (4) Our inspection reveals that the storage and drying 
facilities satisfy the definition of a seed company.
    (d) Any of the insured crop that is under contract with 
different seed companies may be insured under separate policies with 
different insurance providers provided all acreage of the insured 
crop in the county is insured. If you elect to insure the insured 
crop with different insurance providers, you agree to pay separate 
administrative fees for each insurance policy.
    8. Insurable Acreage.
    In addition to the provisions of section 9 of the Basic 
Provisions, we will not insure any acreage of the insured crop:
    (a) Planted and occupied exclusively by male parent plants;
    (b) Not in compliance with the rotation requirements contained 
in the Special Provisions or, if applicable, required by the hybrid 
seed corn processor contract; or
    (c) If either the female or male parent plants are damaged 
before the final planting date and we determine that the insured 
crop is practical to replant but it is not replanted.
    9. Insurance Period.
    (a) In addition to the provisions of section 11 of the Basic 
Provisions, insurance attaches upon completion of planting of:
    (1) The female parent plant seed on or before the final planting 
date designated in the Special Provisions, except as allowed in 
section 16 of the Basic Provisions; and
    (2) The male parent plant seed.
    (b) In accordance with the provisions of section 11 of the Basic 
Provisions, the calendar date for the end of the insurance period is 
the October 31 immediately following planting.
    10. Causes of Loss.
    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes 
of loss that occur within the insurance period:
    (1) Adverse weather conditions;
    (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;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if due to a cause of 
loss contained in section 10(a) (1) through (7) that occurs during 
the insurance period.
    (b) In addition to the causes of loss excluded by section 12 of 
the Basic Provisions, we will not insure against any loss of 
production due to:
    (1) The use of unadapted, incompatible, or genetically deficient 
male or female parent plant seed;
    (2) Frost or freeze after the date established by the Special 
Provisions;
    (3) Failure to follow the requirements stated in the hybrid seed 
corn processor contract and production management practices of the 
seed company;
    (4) Inadequate germination, even if resulting from an insured 
cause of loss, unless you have provided adequate notice as required 
by section 11(b)(1); or
    (5) Failure to plant the male parent plant seed at a time or in 
a manner sufficient to assure adequate pollination of the female 
parent plants, unless you are prevented from planting the male 
parent plant seed by an insured cause of loss.
    11. Duties In The Event of Damage or Loss.
    (a) In accordance with the requirements of section 14 of the 
Basic Provisions, you must leave representative samples of at least 
one complete planting pattern of the female and male parent plant 
rows and extend the entire length of each field in the unit. If you 
are going to destroy any acreage of the insured crop that will not 
be harvested, the samples must not be destroyed until after our 
inspection.
    (b) In addition to the requirements of section 14 of the Basic 
Provisions:
    (1) You must give us notice of probable loss at least 15 days 
before the beginning of harvest if you anticipate inadequate 
germination on any unit; and
    (2) You must provide a completed copy of your hybrid seed corn 
processor contract unless we have determined it has already been 
provided by the seed company, and the seed company certifies that 
such contract is used for all its growers without any waivers or 
amendments.
    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) You will not receive an indemnity payment on a unit if the 
seed company refuses to provide us with records we require to 
determine the dollar value per bushel of production for each 
variety.

[[Page 65352]]

    (c) In the event of loss or damage covered by this policy, we 
will settle your claim on any unit by:
    (1) Multiplying the insured acreage by its respective amount of 
insurance per acre, by type and variety if applicable;
    (2) Totaling the results of section 12(c)(1) if there are more 
than one type or variety;
    (3) Multiplying the total seed production to count (see section 
12(d)) for each type and variety of commercial hybrid seed corn by 
the applicable dollar value per bushel for that type or variety;
    (4) Multiplying the total non-seed production to count (see 
section 12(e)) for each type and variety by the applicable local 
market price determined on the earlier of the date the non-seed 
production is sold or the date of final inspection;
    (5) Totaling the results of sections 12(c)(3) and 12(c)(4) by 
type and variety;
    (6) Subtracting the result of section 12(c)(5) from the result 
of section 12(c)(1) if there is only one type or variety, or 
subtracting the result of 1or variety; and
    (7) Multiplying the result of section 12(c)(6) by your share. 
For example:
    You have a 100 percent share in 50 acres insured for the 
development of variety ``A'' hybrid seed corn in the unit, with an 
amount of insurance per acre guarantee of $340 (county yield of 160 
bushels times a coverage level factor of .867 for the 65 percent 
coverage level, times a price election of $2.45 per bushel, minus 
the minimum guaranteed payment of zero). Your seed production was 
1,400 bushels and the dollar value per bushel was $9.80. Your non-
seed production was 100 bushels with a local market value of $2.00 
per bushel. Your indemnity would be calculated as follows:
    (1) 50 acres x $340=$17,000 amount of insurance guarantee;
    (3) 1,400 bushels x $9.80=$13,720 value of seed production;
    (4) 100 bushel of non-seed x $2.00=$200 of non-seed production;
    (5) $13,720+$200=$13,920;
    (6) $17,000-$13,920=$3,080; and
    (7) $3,080 x 100 percent share=$3,080 indemnity payment.
    You also have a 100 percent share in 50 acres insured for the 
development of variety ``B'' hybrid seed corn in the unit, with an 
amount of insurance per acre guarantee of $297 (county yield of 140 
bushels times a coverage level factor of .867 for the 65 percent 
coverage level, times a price election of $2.45 per bushel, minus 
the minimum guaranteed payment of zero). You harvested 1,200 bushels 
and the dollar value per bushel for the harvested amount was $8.56. 
You also harvested 200 bushels of non-seed with a market value of 
$2.00 per bushel. Your indemnity would be calculated as follows:
    (1) 50 acres x $340=$17,000 amount of insurance guarantee for 
type ``A'' and 50 acres x $297=$14,850 amount of insurance guarantee 
for type ``B'';
    (2) $17,000+$14,850=$31,850 amount of insurance guarantee;
    (3) 1,400 bushels x $9.80=$13,720 value of seed production for 
type ``A'' and 1,200 bushels x $8.56=$10,272 value of seed 
production for type ``B'';
    (4) 100 bushels of non-seed x $2.00=$200 of non-seed production 
for type ``A'' and 200 bushels of non-seed x $2.00=$400 of non-seed 
production for type ``B'';
    (5) $13,720+$200+$10,272+$400=$24,592 value of production to 
count;
    (6) $31,850-$24,592=$7,258; and
    (7) $7,258 x 100 percent share=$7,258 indemnity payment.
    (d) Production to be counted as seed production will include:
    (1) All appraised production as follows:
    (i) Not less than the amount of insurance per acre for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Mature unharvested production with a germination rate of 
at least 80 percent of the commercial hybrid seed corn as determined 
by a certified seed test. Any such production may be adjusted in 
accordance with section 12(f);
    (iv) Immature appraised production;
    (v) Potential production on insured acreage that you intend to 
put to another use or abandon, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for 
that acreage will end when you put the acreage to another use or 
abandon the crop. If agreement on the appraised amount of production 
is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to 
leave intact, and provide sufficient care for, representative 
samples of the crop in locations acceptable to us (The amount of 
production to count for such acreage will be based on the harvested 
production or appraisals from the samples at the time harvest should 
have occurred. If you do not leave the required samples intact, or 
fail to provide sufficient care for the samples, our appraisal made 
prior to giving you consent to put the acreage to another use will 
be used to determine the amount of production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested 
production, or our reappraisal if additional damage occurs and the 
crop is not harvested; and
    (2) Harvested production that you deliver as commercial hybrid 
seed corn to the seed company stated in your hybrid seed corn 
processor contract, regardless of quality, unless the production has 
inadequate germination.
    (e) Production to be counted as non-seed production will include 
all harvested or mature appraised production that does not qualify 
as seed production to count as specified in section 12(d). Any such 
production may be adjusted in accordance with section 12(f).
    (f) For the purpose of determining the quantity of mature 
production:
    (1) Shelled commercial hybrid seed corn will be:
    (i) Increased 0.12 percent for each 0.1 percentage point of 
moisture below 15 percent; or
    (ii) Decreased 0.12 percent for each 0.1 percentage point of 
moisture in excess of 15 percent.
    (2) The weight of ear corn required to equal one bushel of 
shelled seed corn will be increased 1.5 pounds for each full 
percentage point of moisture in excess of 14 percent, and any 
portion of a percentage point will be disregarded. The moisture 
content of ear corn will be determined from a shelled sample of the 
ear corn.
    (3) When records of commercial hybrid seed corn production 
provided by the seed company have been adjusted to a shelled corn 
basis of 15.0 percent moisture and 56 pound avoirdupois bushels, 
sections 12(f)(1) and (2) above will not apply to harvested 
production. In such cases, records of the seed company will be used 
to determine the amount of production to count, provided that the 
moisture and weight of such production are calculated on the same 
basis as that used to determine the approved yield.
    13. Prevented Planting.
    Your prevented planting coverage will be 50 percent of your 
amount of insurance 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 a level specified in the actuarial 
documents.

    Signed in Washington, D.C., on December 5, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-32498 Filed 12-11-97; 8:45 am]
BILLING CODE 3410-08-P