This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

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

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

65991

Vol. 62, No. 242

Wednesday, December 17, 1997

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

Common Crop Insurance Regulations;

Canola and Rapeseed 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

canola and rapeseed. The provisions

will be used in conjunction with the

Common Crop Insurance Policy, Basic

Provisions, which contain standard

terms and conditions common to most

crops. The intended effect of this action

is to convert the canola and rapeseed

pilot insurance program to a permanent

insurance program.

EFFECTIVE DATE: This rule is effective

December 17, 1997.

FOR FURTHER INFORMATION CONTACT: Gary

Johnson, 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) 926–3826.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

The Office of Management and Budget

(OMB) has determined this rule to be

not significant for the purposes of

Executive Order 12866 and, therefore,

this rule has not been reviewed by

OMB.

Paperwork Reduction Act of 1995

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 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 regulation does not impose any

burden on small entities than is

required on the part of large entities.

The amount of work required of

insurance companies will not increase

because the information to determine

eligibility is already maintained in their

office and the other required

information is already being collected

under the pilot program. No additional

actions are required as a result of this

rule on the part of the producer or the

insurance companies. All producers

must provide the same information

regardless of size, including an

application, acreage report, and notice

of loss, if applicable. Therefore, this

action is determined to be exempt from

the provisions of the Regulatory

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

Regulatory Flexibility Analysis was

prepared.

Federal Assistance Program

This program is listed in the Catalog

of Federal Domestic Assistance under

No. 10.450.

Executive Order 12372

This program is not subject to the

provisions of Executive Order 12372,

which require intergovernmental

consultation with State and local

officials. See the Notice related to 7 CFR

part 3015, subpart V, published at 48 FR

29115, June 24, 1983.

Executive Order 12988

This final rule has been reviewed in

accordance with Executive Order No.

12988 on civil justice reform. The

provisions of this rule will not have

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 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, September 18, 1997,

FCIC published a proposed rule in the

Federal Register at 62 FR 48956 to add

to the Common Crop Insurance

Regulations (7 CFR part 457), a new

section, 7 CFR 457.161, Canola and

Rapeseed Crop Provisions. The new

provisions will be effective for the 1998

and succeeding crop years for canola

and rapeseed with a November 30

contract change date and 1999 and

succeeding crop years for canola and

rapeseed with a June 30 contract change

date. These provisions will replace and

supersede the current unpublished pilot

provisions for insuring canola and

rapeseed.

Following publication of the proposed

rule, the public was afforded 30 days to

submit written comments and opinions.

A total of 80 comments were received

from an insurance service organization,

reinsured companies, a national
65992 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Rules and Regulations

commodity group, a regional

commodity group, state commodity

groups, a state extension service, a seed

company, a State Department of

Agriculture director and producers. The

comments received and FCIC’s

responses are as follows:

Comment: An insurance company

commented that it is impossible to

comment on the accuracy of differences

in the late planted period and associated

guarantee reduction from location to

location as mentioned in the

Background section, because the Special

Provisions are not available for review.

Response: It is difficult to comment

on the potential differences in the late

planting period and associated

guarantee reduction when the

commenter does not have the Special

Provisions. FCIC has determined that

the variance for dates and guarantee

reductions is needed to address the

normal variability of planting

conditions, weather influences, and

crop response to late planting on a

county-by-county basis. The dates and

guarantee reduction percentages are

subject to change by the contract change

date each year. Any inaccuracies can be

addressed at that time. No change has

been made.

Comment: A regional commodity

group requested specific counties and

states to be covered by the canola and

rapeseed insurance program. These

counties were not a part of the original

pilot area.

Response: When the canola and

rapeseed Crop Provisions are published

as final rule, insurance will be available

when counties are added through the

expansion process used for other

permanent crop insurance programs.

This process is outlined in the

procedure ‘‘General Guidelines and

Criteria for Submitting Multiple and

Individual County Crop Program

Expansion Requests,’’ dated May 9,

1996. A copy can be obtained by

contacting the Deputy Administrator,

Insurance Services Division, Risk

Management Agency, 1400

Independence Avenue S.W.,

Washington, D.C. 20250–0801,

telephone (202) 690–4494.

Comment: Grower associations,

Extension specialists, a State

Agriculture Department, a seed

company, and producers submitted

comments requesting that the pilot

program be converted to a permanent

program as soon as possible to allow for

canola expansion into counties where

canola and rapeseed insurance

protection is not available.

Response: This rule converts the pilot

program to a permanent program.

Comment: An insurance service

organization recommended that the

conversion of the canola and rapeseed

pilot program to a permanent crop

insurance program be deferred until the

1999 crop year since it is preferable for

changes to be effective the same year for

fall and spring.

Response: Many requests and

comments have been received to expand

the canola and rapeseed insurance

program. Deferring the canola and

rapeseed pilot program conversion until

the 1999 crop year would delay the

expansion of the canola and rapeseed

insurance coverage to additional

counties. Since the majority of canola

and rapeseed producers are in counties

with a March 15 sales closing date,

converting the pilot program for 1998

spring crops will allow FCIC to meet its

goal of converting the pilot program to

a permanent program for most

producing areas for the 1998 crop year.

Comment: A reinsured company

suggested that the definition and

references to ‘‘FSA’’ be deleted since

there is no need for reliance on FSA

information in the crop insurance

program.

Response: FSA farm serial numbers

are required to qualify for optional unit

division in certain crop policies. In

certain situations, FSA information may

be used in the crop insurance program

whether required or not. FCIC does not

believe that such definitions ‘‘mandate’’

such use. No change has been made.

Comment: A reinsured company and

an insurance service organization

commented on the definition of ‘‘good

farming practices.’’ The commenters

questioned whether cultural practices

exist that are not necessarily recognized

or known by the Cooperative State

Research, Education and Extension

Service (CSREES). In addition it was

suggested that the term ‘‘county’’ in the

definition of ‘‘good farming practices’’

should be changed to ‘‘area.’’

Response: FCIC believes that the

CSREES recognizes farming practices

that are considered acceptable for

canola and rapeseed. If a producer is

following practices currently not

recognized as acceptable by CSREES,

there is no reason why such recognition

cannot be sought by any interested

party. The term ‘‘area’’ is less clear than

the term ‘‘county’’ and would tend to

make determinations more subjective in

nature. Further, the actuarial documents

are on a county basis. No change has

been made.

Comment: A reinsured company

recommended that in the definition of

‘‘irrigated practice’’ the words ‘‘and

quality’’ be inserted after the word

‘‘quantity.’’

Response: FCIC agrees that water

quality is an important issue. However,

since no standards or procedures have

been developed to measure water

quality for insurance purposes, quality

cannot be included in the definition. No

change has been made.

Comment: An insurance service

organization suggested various editorial

changes, including the updating of

certain definitions which the

commenter indicated were generic and

would be updated in the Basic

Provisions. In addition, it was suggested

that the definition of ‘‘FSA’’ be changed

either by including the phrase ‘‘an

agency of the USDA’’ in parentheses, or

by inserting a comma before that phrase.

The commenter also suggested revising

the definition of ‘‘practical to replant,’’

by deleting the phrase ‘‘of ‘Practical to

replant’.’’

Response: All generic terms have been

moved to the Basic Provisions, and any

changes will be made in that rule.

Comment: A reinsured company

recommended that in the definition of

‘‘late planted’’ the word ‘‘initially’’ be

added between the words ‘‘acreage’’ and

‘‘planted.’’

Response: FCIC has revised the

definition of ‘‘late planted’’ in the Basic

Provisions to include the word

‘‘initially.’’

Comment: A reinsured company and

an insurance service organization

commented on the definition of

‘‘practical to replant.’’ A question was

raised whether ‘‘marketing window’’ is

appropriate for this crop. In addition,

comments were made whether such

items as ‘‘moisture availability,

condition of the field, marketing

window and time to crop maturity’’ are

subjective and add unnecessary

complexity to the program.

Response: The concept of a

‘‘marketing window’’ is most applicable

to processor and fresh market crops and

recognizes that canola and rapeseed are

unlike these crops. However, the

Federal Crop Insurance Act mandates

that marketing windows be considered

in determining if it is practical to

replant the insured crop. Factors such as

moisture availability and condition of

the field are necessary to determine

whether the conditions are acceptable

for the producer to produce and harvest

the crop before the end of the insurance

period. No change has been made.

Comment: An insurance service

organization questioned the use of the

term ‘‘price of damaged production.’’

The commenter indicated the term is

used several times in section 12, and

questioned whether this definition adds

anything beyond the ‘‘local market

price’’ definition.
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Rules and Regulations 65993

Response: The term price of damaged

production is different from the local

market price. The price of damaged

production is used for quality

adjustment if the canola production

does not meet the U.S. No. 2 grade

canola. No change has been made.

Comment: An insurance service

organization suggested that clarification

needs to be made to the current

definition of ‘‘replanting’’ to ensure that

the crop is replanted to the same crop

as originally planted.

Response: FCIC has revised the

definition of ‘‘replanting’’ in the Basic

Provisions to specify replacing the seed

or plants of the same crop in the insured

acreage.

Comment: An insurance service

organization suggested to remove the

language describing when a crop must

be replanted from section 7(a) for

simplification.

Response: It is necessary to retain the

language in section 7(a) of these Crop

Provisions since acreage not replanted

when it is practical to replant is

uninsurable. FCIC has revised the

condition when the crop must be

replanted.

Comment: An insurance service

organization questioned language

regarding differences in conditions for

replanting. Section 7(a) refers to

insurable acreage ‘‘damaged before the

final planting date, to the extent that the

majority of growers in the area would

normally not further care for the crop,’’

while the replanting payment section

10(a) says ‘‘damaged by an insurable

cause of loss to the extent that the

remaining stand will not produce at

least 90 percent of the production

guarantee.’’

Response: FCIC has made the two

provisions consistent.

Comment: An insurance service

organization suggested deleting ‘‘if’’ at

the beginning of the last phrase in

section 10(a).

Response: FCIC has simplified the

provision and made it consistent with

other practical to replant provisions.

Comment: An insurance service

organization recommended the

reference in section 11 to the 10-footwide strip in each field should be more

specific. One sample would not be

adequate in large fields. The number of

strips needed will depend on the size of

the field.

Response: The Basic Provisions and

Crop Provisions use the plural term

‘‘samples’’ to allow the insurance

provider the discretion to require more

than one 10-foot-wide strip if it is

necessary to obtain a more accurate

appraisal of production. No change has

been made.

Comment: An insurance service

organization recommended a chart be

developed and used for quality

adjustment for industrial oil types and

non-industrial types (similar to those in

the coarse grains loss adjustment

handbook) instead of settling claims

based on prices obtained from buyers as

stated in section 12(4)(ii)(D)(3).

Response: This section has been

redesignated as section 12(d)(5)(ii)(C) in

these crop provisions. FCIC agrees that

there may be an alternative method to

determine quality adjustment. However,

the information needed to develop a

chart for quality adjustment is presently

not available. No change has been made.

Comment: An insurance company

stated that section 12(d) of these Crop

Provisions should be corrected from

‘‘Mature canola and rapeseed may be

adjusted for excess moisture and

quality’’ to ‘‘mature canola may be

adjusted for excess moisture and quality

deficiencies. Mature rapeseed may be

adjusted for excess moisture only.’’

Rapeseed will not be adjusted for

quality.

Response: FCIC has revised the Crop

Provisions accordingly.

Comment: An insurance service

organization commented that the

calculation sequence in section 12 is

difficult to follow because it is so wordy

and it seems unnecessary to refer to the

previous item by number as if it were on

another page.

Response: Since some of the

calculations involved are not performed

in sequential order, it is necessary to

refer to specific section numbers.

Removal of the references would make

the provisions less clear. No change has

been made.

Comment: An insurance service

organization received one comment

stating that the policy should not allow

the insured to defer settlement and wait

for a later, generally lower appraisal.

Response: The provision in section

12(c)(1)(iv) allows deferment of a claim

only if the insurance provider agrees

that representative samples are

necessary to more accurately determine

the appraised amount of production and

the insured agrees to care for the

sample. If the insured does not provide

sufficient care for the sample, the

insurance provider may use the original

appraisal. No change has been made.

Comment: A reinsured company

commented that it appears that sections

13 and 14 are copied verbatim, except

for one cited item addressing the

percentage reduction for late planting,

and that these sections were left out of

other recently published Crop

Provisions in anticipation of approval of

the new Basic Provisions. The

commenter questioned the difference

with canola and rapeseed and how the

subsequent removal of the sections

would be accomplished. The

commenter also questioned whether the

comments made to the proposed Basic

Provisions will be incorporated into the

Basic Provisions Final Rule.

Response: The new Basic Provisions

will be effective for the 1998 crop year

for crops with a contract change date of

November 30 or December 31 or later.

Therefore, FCIC removed all common

late planting and prevented planting

provisions from these Crop Provisions.

Sections 13 and 14 contain language

that is necessary to recognize the

differences in the late and prevented

planting provisions for canola and

rapeseed (as has been done for other

crops). Those comments made to the

proposed Basic Provisions deemed

appropriate by FCIC have been

incorporated into the Basic Provisions

Final Rule.

Comment: An insurance service

organization commented that sections

13(a)(1) and (2) of the proposed rule

continue the current reductions for lateplanted acreage, and are inconsistent

with the Basic Provisions Proposed

Rule, which listed a 1 percent reduction

for each of the 25 days in the late

planting period. The commenter noted

that if the Special Provisions will vary

by county, it would be better if the Crop

Provisions matched the Basic

Provisions. The commenter stated that

different late planting periods

determined by the Special Provisions is

acceptable, if input from local people is

considered in determining the late

planting period, then the late planting

period probably should not be 25 days

for most crops in the northern states.

The commenter questioned whether the

current late planting provisions will

apply if the new Basic Provisions Final

Rule is not approved in time to be

effective for the 1998 crop year for

canola and rapeseed.

Response: FCIC has revised section 13

of these Crop Provisions to indicate that

in lieu of section 16(a) of the Basic

Provisions, the production guarantee for

each acre planted to the insured crop

during the late planting period will be

reduced by 1 percent per day for each

day planted after the final planting date

unless otherwise specified in the

Special Provisions. The new Basic

Provisions are effective beginning the

1998 crop year, in those counties with

a November 30 contract change date

listed in the revised canola and

rapeseed Crop Provisions. The current

(1997 crop year) late planting and

prevented planting provisions apply to

all other counties.
65994 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Rules and Regulations

Comment: An insurance service

organization questioned whether it is

necessary in sections 13(a) and (b) to

include ‘‘amount of insurance’’ (in

addition to ‘‘production guarantee’’) for

this APH crop. The commenter also

questioned whether section 13(a) should

read ‘‘by each day planted’’ or ‘‘for each

day planted.’’

Response: Sections 13(a) and (b) have

been moved to the Basic Provisions and,

therefore, will need to include ‘‘amount

of insurance’’ in addition to

‘‘production guarantee.’’ FCIC has

revised the phrase from ‘‘by each day

planted’’ to ‘‘for each day planted’’ in

section 16 of the Basic Provisions.

Comment: A reinsured company

commented that section 13 reinforces

that ‘‘practical to replant’’ must be

defined as the time period running

through the late planting period.

Response: While section 13, now

section 16 of the Basic Provisions,

allows the time period to run through

the late planting period, it is not

required. Factors other than time must

also be considered. Based on a

consideration of all the factors, it is

possible to determine that it is practical

to replant only before the final planting

date, during the late planting period or

after the late planting period if

replanting is generally occurring in the

area.

Comment: An insurance service

organization commented that section

13(a)(3), as written, does not flow from

the lead-in sentence in section 13(a).

Response: The Crop Provisions and

Basic Provisions have been revised to

correct any such problem.

Comment: An insurance service

organization commented that section

13(b) is confusing because it states that

acreage planted after the late planting

period will have the same guarantee as

acreage that is prevented from being

planted, and then adds that it must have

been prevented from being planted by

an insurable cause of loss occurring

within the insurance period. The

commenter pointed out that such

acreage was planted and, therefore, was

not prevented from being planted.

Rather, it was prevented from being

planted timely or within the late

planting period.

Response: This comment was also

received during the proposed rule

comment period for the Basic

Provisions. Section 16(b)(2) of the Basic

Provisions has been revised to indicate

that planting on such acreage must have

been prevented by the final planting

date or during the late planting period

by an insurable cause occurring within

the insurance period for prevented

planting coverage.

Comment: An insurance service

organization suggested changing section

13(c) to read ‘‘during the late planting

period’’ in both sentences rather than

‘‘after the final planting date’’ since this

section deals only with late-planted

acreage and not prevented planting as

well.

Response: FCIC has revised section

16(c) of the Basic Provisions to state that

the premium amount for insurable

acreage specified in sections 16 (a) or (b)

will be the same as that for timely

planted acreage.

Comment: An insurance service

organization commented that because

section 14 is in the canola and rapeseed

proposed rule Crop Provisions only

until they are incorporated into the new

Basic Provisions, the ‘‘Prevented

planting’’ definition should be included

in the Crop Provisions.

Response: Since all common

provisions, including definitions, have

been incorporated into the Basic

Provisions, there is no need to repeat

the definition in this rule. No change

has been made.

Comment: An insurance service

organization recommended that FCIC

consider reversing phrases in section

14(a)(1)(i) to match the order in (ii), or

vice versa. The commenter is

recommending that section 14(a)(1)(i)

begin with ‘‘For the crop year the

application for insurance is accepted.’’

Response: The different order in these

two sections facilitates readability and

comprehension. No change has been

made in the corresponding sections

17(a)(1)(i) and (ii) in the Basic

Provisions.

Comment: An insurance service

organization recommended that FCIC

consider changing section 14(a)(1)(ii) to

‘‘...since that date (cancellation for the

purpose of transferring the policy...will

not be considered a break in continuity

for this purpose); and.’’

Response: This change would not

significantly add to the understanding

of the statement. No changes have been

made in the corresponding section

17(a)(1)(ii) in the Basic Provisions.

Comment: An insurance service

organization commented that section

14(b) seems to suggest that insureds

who have chosen additional levels of

coverage may select a different

additional level for prevented planting.

The commenter also questioned

whether the Special Provisions will

state which prevented planting level

will apply by default if one is not

specifically elected, and asked which

level would be in the Crop Provisions.

Response: Insureds who have chosen

additional levels of coverage may, in

fact, select a different level for

prevented planting. Section 17(b) of the

Basic Provisions now specifies that the

actuarial documents may contain

additional levels of prevented planting

coverage the insured may purchase. If

the insured does not purchase one of

those additional levels by the sales

closing date, or the insured has a

Catastrophic Risk Protection

Endorsement, the insured will receive

the prevented planting coverage

specified in these Crop Provisions.

Comment: An insurance service

organization commented that section

14(d)(2) seems to suggest that insureds

may choose to claim prevented planting

on irrigated acreage instead of planting

non-irrigated acreage. The commenter

added that section 14(d)(2) seems to

contradict section 9(b) of the current

Basic Provisions, which states that

‘‘only that acreage for which you have

adequate facilities and water, at the time

coverage begins’ can be reported and

insured as irrigated. They also

questioned whether carryover insureds

could qualify for prevented planting

payments based on an irrigated

guarantee even though facilities or

sufficient water did not exist at the time

the crop should have been planted.

Response: To qualify for a prevented

planting claim on irrigated acreage, the

acreage must still meet all the

requirements for irrigated acreage.

Section 14(d)(2), now section 17(d)(2) of

the revised Basic Provisions, does not

contradict section 9(b) of the Basic

Provisions since all it does is specify the

date by which the acreage must qualify

as irrigated to qualify for a prevented

planting claim on irrigated acreage.

Comment: An insurance service

organization commented on the

organization of the table in section

14(e)(1). The commenter suggested

combining portions of the table and

other editorial changes which were also

suggested for the table in the Basic

Provisions.

Response: FCIC has revised portions

of the table and made other editorial

changes in section 17(e)(1) of the Basic

Provisions.

Comment: An insurance service

organization commented that there

should be no written agreements for

prevented planting acreage, and that an

insured who has not raised a crop

should not be able to have prevented

planting acres of that crop on any

ground. A reinsured company indicated

it was not interested in more written

agreements. However, it appeared that

may be the only way to provide

coverage in many cases.

Response: Based on the comments

received on both the Basic Provisions

and the Crop Provisions, FCIC has
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Rules and Regulations 65995

determined that it is appropriate to

delete references to ‘‘written

agreements’’ in section 17(e) of the Basic

Provisions, and to allow the use of an

intended acreage report in certain

instances as long as specified conditions

are met.

Comment: A reinsured company

commented that the word ‘‘base’’ should

be deleted in all instances in section

14(e).

Response: This comment was also

received on the Basic Provisions and the

word ‘‘base’’ has been deleted from

section 17 of the Basic Provisions.

Comment: A reinsured company

commented that it presumed the

determination of eligible acres in the

table in section 14(e)(1) is done on a

county basis.

Response: This comment was also

received on the Basic Provisions and

FCIC responded that eligible acres are

determined on a county and crop basis.

Comment: A reinsured company

commented on the determination of

eligible acres for prevented planting in

section 14(e)(1). The commenter stated

that using the planted and prevented

planting acres for the last four years will

not be difficult for carryover policies.

However, it will be a significant

problem for transferred policies, as the

prevented planting acres will not be a

part of the APH record that is

transferred. The commenter questioned

how FCIC proposes that this

information will be known by the

company for a policy it gains by

transfer.

Response: When policies are obtained

by transfer, reinsured companies can

obtain previous years’ records of

prevented planting acres from the

insured, the ceding company, or the

FCIC policyholder tracking system.

Comment: A reinsured company

questioned the impact and acceptability

of intended acreage reports concerning

eligible prevented planting acres in

section 14(e)(1). The commenter

questioned the guidelines for approval

of written agreements, and who has the

authority to approve or disapprove such

agreements. The company also

questioned if, since the request for

written agreement must be made on or

before the sales closing date, all land

added after the sales closing date by the

insured is ineligible for prevented

planting.

Response: The Basic Provisions have

been amended so that a written

agreement is no longer required to

establish eligible acreage. Instead,

intended acreage reports will be used.

However, the reinsured company will

be required to verify that the acreage

reported does not exceed the number of

acres of cropland in the producer’s

farming operation at the time the

intended acreage report is submitted.

The reinsured company will have the

authority to accept or reject any

intended acreage report based on

standards approved by FCIC. This

provision has also been revised to allow

the number of acres determined to be

eligible for prevented planting coverage

to be increased if after the sales closing

date specified conditions are met.

Provisions in this section also allow

producers who, in any of the four most

recent crop years, have not produced

any crop for which insurance was

available, to establish eligible acres.

Comment: An insurance service

organization commented that section

14(e)(3) says that the total number of

acres requested for all crops cannot

exceed the number of acres of cropland

in the insured’s farming operation for

the crop year, and probably needs to

allow for double-cropping, as in 14(f)(5).

Response: This provision, now

located in section 17(e)(1) of the Basic

Provisions, is revised to account for

double cropped acreage.

Comment: An insurance service

organization commented that section

14(e)(4) does not allow for land added

after the sales closing date, or for

business being conducted up to the last

day of the sales period. The commenter

also suggested that ‘‘us’’ be changed to

‘‘your agent’’ (or at least verify that ‘‘us’’

includes agents as well as the company

underwriting office).

Response: These provisions, now

included in section 17(e)(1)(i) of the

Basic Provisions, have been revised to

allow an increase in eligible prevented

planting acres if the producer submits

proof that additional acreage was

purchased, leased, or released from any

USDA program in time to plant it for the

insured crop year and no cause of loss

that will or could prevent planting is

evident at the time the acreage is

purchased, leased, or released from the

USDA program. The term ‘‘us’’ refers to

the company as provided in the section

before the ‘‘Agreement to insure’’ in the

Basic Provisions, and includes agents

representing the company. No change

has been made.

Comment: An insurance service

organization questioned if section

14(f)(1) is intended to be a change from

current language that allows prevented

planting coverage for acreage less than

20 acres or 20 percent as long as the

insured can show ‘‘inputs’’ were

available.

Response: This change in what is now

section 17(f) of the Basic Provisions, is

intentional. FCIC requires the acreage to

be contiguous to reduce prevented

planting payments for small portions of

fields that are wet in most years

although planting occasionally may be

possible.

Comment: A reinsured company

suggested that in section 14(f)(1) the

phrase ‘‘whichever is less’’ be changed

to read ‘‘whichever is larger’’ and also

suggested that the term ‘‘insurable crop

acreage in the unit’’ be defined.

Response: The phrase ‘‘whichever is

less’’ is appropriate. There is no reason

to define the phrase ‘‘insurable crop

acreage in the unit’’ since units, insured

crop, and insured acreage are defined

elsewhere in the policy. No change has

been made.

Comment: An insurance service

organization recommended that sections

14(f) (4) and (5) be revised to spell out

the numeral ‘‘4’’ in the phrases ‘‘the last

4 years.’’

Response: This change does not

significantly add to the understanding

of these sections. No change has been

made.

Comment: An insurance service

organization questioned whether

prevented planting acreage of either

crop in a double-cropping history will

maintain or break the continuity of the

double-cropping history.

Response: Prevented planting acreage

of either crop in a double-cropping

history will not break the continuity of

the double-cropping history. Sections

17(f)(4) and (5) of the Basic Provisions

specify the last 4 years in which the

insured crop was grown on the acreage.

Comment: A reinsured company

commented on the provisions in section

14(f)(5). Although the commenter agreed

with the concept, they questioned how

a company would know if any crop

from which a benefit is derived under

any program administered by the USDA

is planted and fails. The company also

suggested modifying the sentence from

may be hayed or grazed ‘‘* * * after

the final planting date for the insured

crop * * *’’ to ‘‘* * * 60 days after

the final planting date for the insured

crop * * *’’.

Response: Insurance providers must

question insureds to determine if any

crop was planted for the crop year on

the acreage being claimed for prevented

planting. Producers should not be

denied grazing or haying benefits for 60

days after being prevented from

planting. In many instances, cover crops

are grown until preparation for planting

occurs in the spring. If the producer was

unable to remove the cover crop and

plant a crop, such a cover crop could be

hayed or grazed soon after the final

planting date and a prevented planting

payment would still be owed.
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Comment: A reinsured company

questioned how the insurer will know if

a cash lease payment is also received for

use of the same acreage in the same crop

year as specified in section 14(f)(6),

particularly if the cash lease payment is

made after the prevented planting

payment has already been made by the

company.

Response: Insurance providers must

question insureds to determine if a cash

lease payment is, or will be, received for

the acreage being claimed for prevented

planting. Insureds who claim prevented

planting on acreage they have or will

cash lease would be misrepresenting a

material fact and could be subject to

civil and criminal false claim penalties.

Comment: A reinsured company

stated that it did not disagree with the

concept of section 14(f)(7) but that the

provision is inconsistent with freedom

to farm and is unenforceable.

Response: This section, now section

17(f)(7) of the Basic Provisions,

indicates that prevented planting

coverage will not be provided for any

acreage for which planting history or

conservation plans indicate that the

acreage would have remained fallow for

crop rotation purposes. This provision

is necessary to protect the integrity of

the program. FCIC is charged with

establishing an actuarially sound

insurance program, and relying upon

‘‘intentions,’’ without evidence to

support such intentions is not an

appropriate manner of achieving

actuarial soundness. For example, if half

the acreage in a farm has remained

fallow every other year for the past ten

years to maintain a summerfallow

rotation, this is ample evidence that this

is a normal practice. If such patterns

exist, this provision is easier to

administer than if the reinsured

companies were forced to determine

whether the producer actually intended

to plant a crop. Since coverage for

prevented planting now begins on the

previous crop year’s sales closing date

for carry-over policies, producers could

decide to claim an intent to plant

acreage where the cause occurred

months earlier in order to profit from

the insurance program when they never

intended to plant a crop. While the

denial of prevented planting coverage

may occasionally adversely affect some

producers who genuinely intended to

plant a crop, the inability to prove

intent to plant and the need to protect

the integrity of the program require

FCIC to retain the provision. No change

has been made.

Comment: An insurance service

organization commented that section

14(f)(8) is unnecessary because it has

been covered in 14(e).

Response: FCIC has separated the

provisions of section 14(f)(8) into two

separate provisions in section 17 of the

Basic Provisions, and does not feel that

either provision has been covered in

section 14(e). No change has been made.

Comment: An insurance service

organization commented that section

14(f)(9) has been added and might not

be necessary if 14(f)(1) were changed to

require ‘‘proof of inputs’’ available to

plant and produce a crop. A reinsured

company stated that they did not

disagree with the concept of section

14(f)(9) but that it is an unenforceable

provision. The company asked if capital

on hand was considered proof that

inputs were available.

Response: Since the prevented

planting period could begin on the sales

closing date for the previous crop year,

many producers could know that they

would be prevented from planting prior

to the sales closing date and planting

period. These producers would be in a

position to claim the intent to plant

higher valued crops than they normally

plant. FCIC has revised the provision to

clarify that proof of inputs is only

necessary where there is a deviation

from normal planting practices. For

example, if the producer has rotated

crops between corn and soybeans in

alternate years and this was the year the

rotational pattern showed that corn

would normally be planted, the

reinsured company does not need to

determine whether the insured had

sufficient inputs, if the producer seeks

a prevented planting payment for corn.

However, if the producer seeks a

prevented planting payment for

soybeans, the reinsured company would

be required to determine whether the

producer has sufficient inputs. Capital

on hand would not be considered proof

of inputs. If the producer could not

produce receipts for seed, fertilizer,

herbicides, etc., the lease of equipment

or labor, or specific land preparation, it

will be presumed that the crop usually

planted by the producer was the crop

that the producer intended to plant.

While this provision may preclude a

producer from receiving benefits for a

crop that he or she genuinely intended

to plant, the producer would still be

eligible for a benefit on the crop usually

planted and the need to protect program

integrity outweighs its disadvantages.

Since this situation should be rare, it

should not impose an undue burden on

the reinsured company.

Comment: A reinsured company

stated that section 14(f)(11) is contrary

to the freedom to farm concept. The

company also questioned how the

insurer would know if the crop was

planted in one of the last four years.

Response: This section is now section

17(f)(12) of the Basic Provisions. The

company should ask the insured if the

crop was planted and this information

can be verified from FCIC. This

provision is intended to protect program

integrity and avoid the problems

associated with determining producer

intent. FCIC has created an exception

for new producers that qualify for

coverage under section 17(e)(1)(i)(B).

Comment: An insurance service

organization commented that the first

sentence of section 14(f)(11) excludes

prevented planting coverage on any

crop types that have not been planted in

at least one of the four most recent

years. The commenter stated that the

second sentence specifies that this refers

to types requiring separate guarantees,

amounts of insurance or price elections,

and then says there must be an APH

database or acreage must have been

reported in one of the last four years.

The commenter feels this suggests that,

to get prevented planting coverage, the

insured can set up an APH database for

a type even if the insured has no actual

history on it, and they recommended

rewording the language if that is not the

intent.

Response: Section 14(f)(11), now

section 17(f)(12) of the Basic Provisions,

still requires that the crop be planted in

at least one of the four most recent

years. The second sentence just

specifies the conditions under which

the crops must also be included in the

APH database or reported on the acreage

report. No change has been made.

Comment: Reinsured companies and

an insurance service organization

commented on the following provisions

of section 15: (1) There are legitimate

reasons for written agreements to be

valid for more than one year, especially

if no substantive changes occur from

one year to the next. Limiting written

agreements to one year only increases

administrative cost, complexity and

opportunity for misunderstanding and

error, and flies in the face of efforts to

simplify the program and reduce its

administrative expense; (2) Written

agreements should be effective for more

than one year because: (a) There is

already an exception since written

agreements to establish units are

continuous (unless the farming

operation changes significantly); (b)

FCIC does not often incorporate the

written agreements into the actuarial

documents within one year; and (c)

FCIC’s legal counsel objects to the

concept of written agreements, which

purportedly allows exceptions for those

‘‘in the know’’ while others may not be

aware the possibility exists; (3) The

commenters questioned whether these
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Rules and Regulations 65997

provisions will be revised to simplify

renewals; (4) The policy should require

the insured to pay the cost of

inspections necessary to obtain a

written agreement because, in many

instances there is no economic reason or

incentive for a company to pursue such

agreements; (5) Sections 15(a) and (e)

should be combined since both deal

with deadlines for written agreement

requests. (The response to this comment

in prior final rules has been that the

sales closing date is intended to be the

deadline with only limited exceptions.

However, 7 of the 13 written agreement

types listed in the 1998 Crop Insurance

Handbook allow requests at acreage

reporting time and one allows the

request after acreage reporting. Of the 6

types with a sales closing date deadline,

4 are specific cases of a practice or type

not listed in the actuarial, which is

curious since the general type of

unrated practice, type or variety can be

requested at acreage reporting time. So,

the exceptions seem to outnumber the

rule. Many of the situations calling for

written agreements do not become

apparent until the acreage report is

received. Therefore, the commenter

again suggests this provision might be

less misleading if the acreage reporting

date exception noted in (e) were

incorporated into (a)); (6) Provisions in

section 15 that specify timing and

content of the FCI–2 written agreement

should not be part of the insurance

policy. (New insureds would not have

this information until it is too late to

request a written agreement. This

should have been reviewed by the

insurance agent prior to acceptance of

the application or issuance of the crop

insurance policy.); and (7) Some of the

written agreement provisions need to be

carefully considered and compared to

current procedures and comments to the

Written Agreement proposed rule before

the deadlines and annual status of

written agreements are mandated in the

Basic Provisions.

Response: The written agreement

section was moved to section 18 of the

Basic Provisions. The following

responses address the questions by

referencing changes made to the written

agreement section of the Basic

Provisions. Written agreements are

intended to change policy terms or

permit insurance in unusual situations.

If such practices continue year to year,

they should be incorporated into the

policy or Special Provisions. It is

important to keep non-uniform

exceptions to a minimum and to ensure

that the insured is well aware of the

specific terms of the policy. There will

no longer be exceptions to the timing or

duration of written agreements except as

provided in section 18. The provisions

have been amended to indicate that

written agreements may be submitted

after the sales closing date only if the

producer demonstrates that he or she

was physically unable to apply prior to

the sales closing date or in accordance

with any regulation which may be

promulgated under 7 CFR part 400.

FCIC will be more vigilant in

incorporating changes to the policy

made by written agreement into the

actuarial documents.

FCIC does not believe that a producer

should bear the cost associated with any

inspection done for the purposes of a

written agreement. Such costs are a part

of servicing the policy and, therefore,

are already compensated by the expense

reimbursement under the Standard

Reinsurance Agreement.

In addition to the changes described

above and minor editorial changes, FCIC

has made the following changes to these

Crop Provisions:

1. Section 1—Removed alphabetic

paragraph designations and definitions

of ‘‘days,’’ ‘‘final planting date,’’ ‘‘FSA,’’

‘‘good farming practices,’’

‘‘interplanted,’’ ‘‘irrigated practice,’’

‘‘late planted,’’ ‘‘late planting period,’’

‘‘practical to replant,’’ production

guarantee,’’ ‘‘replanting,’’ ‘‘timely

planted,’’ and ‘‘written agreement,’’ and

revised the definition of ‘‘planted

acreage’’ for clarification.

2. Section 2—Revised to remove all

provisions that were moved to the Basic

Provisions.

3. Section 9(e)—Revised to add

wildlife as a cause of loss to be

consistent with other insurable crops.

Good cause is shown to make this rule

effective upon publication in the

Federal Register. This rule provides

prevented planting coverage under the

Basic Provisions. This rule must be

effective prior to the contract change

date for which these revised prevented

planting provisions are effective.

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 Part 457

Crop insurance, Canola and rapeseed

crop provisions.

Final Rule

Accordingly, as set forth in the

preamble, the Federal Crop Insurance

Corporation amends 7 CFR part 457 as

follows:

PART 457—COMMON CROP

INSURANCE REGULATIONS;

REGULATIONS FOR THE 1994 AND

SUBSEQUENT CONTRACT YEARS

1. The authority citation for 7 CFR

part 457 continues to read as follows:

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

2. Section 457.161 is added to read as

follows:

§ 457.161 Canola and rapeseed crop

insurance provisions.

The Canola and Rapeseed Crop

Insurance Provisions for the 1998 and

succeeding crop years are as follows:

FCIC policies:

Department of Agriculture

Federal Crop Insurance Corporation

Reinsured policies:

(Appropriate title for insurance provider)

Both FCIC and reinsured policies:

Canola and Rapeseed Crop Provisions

If a conflict exists among the 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.

Canola. A crop of the genus Brassica as

defined in accordance with the Official

United States Standards for Grain—Subpart

C—U.S. Standards for Canola.

Harvest. Combining or threshing for seed.

A crop that is swathed prior to combining is

not considered harvested.

Local market price (Canola). The cash

price per pound for U.S. No. 2 grade canola

that reflects the maximum limits of quality

deficiencies allowable for the U.S. No. 2

grade canola.

Planted acreage. In addition to the

definition contained in the Basic Provisions,

land on which seed is initially spread onto

the soil surface by any method and

subsequently is mechanically incorporated

into the soil in a timely manner and at the

proper depth will be considered planted.

Acreage planted in any other manner will not

be insurable unless otherwise provided by

the Special Provisions, actuarial documents,

or by written agreement.

Price of damaged production. The cash

price per pound available if the production

were sold for canola that qualifies for quality

adjustment in accordance with section 12 of

these crop provisions.

Rapeseed. A crop of the genus Brassica

that contains at least 30 percent of an

industrial type of oil as shown on the Special

Provisions and that is measured on a basis

free from foreign material.

Swathed. Severance of the stem and seed

pods from the ground and placing into

windrows without removal of the seed from

the pod.

2. Unit Division.

In addition to optional units by section,

section equivalent or FSA farm serial number

and by irrigated and non-irrigated practices,
65998 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Rules and Regulations

optional units may be by type if the type is

designated on the Special Provisions.

3. Insurance Guarantees, Coverage Levels,

and Prices for Determining Indemnities.

In addition to the requirements of section

3 of the Basic Provisions, you may select only

one price election for all the canola and

rapeseed in the county insured under this

policy unless the Special Provisions provide

different price elections by type, in which

case you may select one price election for

each canola and rapeseed type designated in

the Special Provisions. The price elections

you choose for each type must have the same

percentage relationship to the maximum

price offered by us for each type. For

example, if you choose 100 percent of the

maximum price election for a specific type,

you must also choose 100 percent of the

maximum price election for all other types.

4. Contract Changes.

In accordance with section 4 of the Basic

Provisions, the contract change date is

November 30 preceding the cancellation date

for counties with a March 15 cancellation

date, and June 30 preceding the cancellation

date for all other counties.

5. Cancellation and Termination Dates.

In accordance with section 2 of the Basic

Provisions, the cancellation and termination

dates are:

State and county

Cancellation and

Termination

dates

All counties in Georgia ............... Sept. 30.

All other counties without fall

planted types specified on the

actuarial table.

Mar. 15.

All other counties with fall planted types specified on the actuarial table.Aug. 31.

6. Insured Crop.

In accordance with section 8 of the Basic

Provisions, the crop insured will be all

canola and rapeseed in the county for which

a premium rate is provided by the actuarial

table:

(a) In which you have a share;

(b) That is planted for harvest as seed; and

(c) That is not, unless allowed by Special

Provisions or by written agreement:

(1) Interplanted with another crop; or

(2) Planted into an established grass or

legume.

7. 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 most producers producing crops

on similarly situated acreage in the area

would not normally further care for the crop,

must be replanted unless we agree that it is

not practical to replant; and

(b) We will not insure any acreage that

does not meet the rotation requirements

contained in the Special Provisions.

8. Insurance Period.

In accordance with the provisions of

section 11 of the Basic Provisions, the end of

the insurance period is October 31 of the

calendar year in which the crop is normally

harvested.

9. Causes of Loss.

In accordance with the provisions of

section 12 of the Basic Provisions, insurance

is provided only against the following causes

of loss which occur during the insurance

period:

(a) Adverse weather conditions;

(b) Fire;

(c) Insects, but not damage due to

insufficient or improper application of pest

control measures;

(d) Plant disease, but not damage due to

insufficient or improper application of

disease control measures;

(e) Wildlife;

(f) Earthquake;

(g) Volcanic eruption; or

(h) Failure of the irrigation water supply,

if applicable, caused by an insured cause of

loss that occurs during the insurance period.

10. Replanting Payment.

(a) In accordance with section 13 of the

Basic Provisions, a replanting payment is

allowed if the insured crop is damaged by an

insurable cause of loss to the extent that most

producers producing the crop on similarly

situated acreage in the area, would not

continue to care for the crop and it is

practical to replant.

(b) The maximum amount of the replanting

payment per acre will be the lesser of 20

percent of the production guarantee or 175

pounds, multiplied by your price election,

multiplied by your insured share.

(c) When the canola or rapeseed is

replanted using a practice or type that is

uninsurable as an original planting, the

liability for the unit will be reduced by the

amount of the replanting payment that is

attributable to your share. The premium

amount will not be reduced.

11. Duties in the Event of Damage or Loss.

In accordance with the requirements of

section 14 of the Basic Provisions, the

representative samples of the unharvested

crop that we may require must be at least 10

feet wide and extend the entire length of each

field in the unit. If you intend to put the

acreage to another use or not harvest the

acreage, the samples must not be harvested

or destroyed until our inspection.

12. Settlement of Claim.

(a) We will determine your loss on a unit

basis. In the event you are unable to provide

separate acceptable production records:

(1) For any optional units, we will combine

all optional units for which acceptable

production records were not provided; or

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

commingled production to such units in

proportion to our liability on the harvested

acreage for the units.

(b) In the event of loss or damage covered

by this policy, we will settle your claim by:

(1) Multiplying the insured acreage by its

respective production guarantee;

(2) Multiplying each result in section

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

each type, if applicable;

(3) If there are more than one type, totaling

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

(4) Multiplying the total production to be

counted of each type, if applicable, (see

section 12(c)) by the respective price

election;

(5) If there are more than one type, totaling

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

(6) If there are more than one type,

subtracting the total in section 12(b)(5) from

the total in section 12(b)(3);

(7) If there is only one type, subtracting the

total in section 12(b)(4) from the total in

section 12(b)(2); and

(8) Multiplying the result in section

12(b)(6) and 12(b)(7), as applicable, by your

share.

(c) The total production to count (pounds)

from all insurable acreage on the unit will

include:

(1) All appraised production as follows:

(i) Not less than the production guarantee

for acreage:

(A) That is abandoned;

(B) That is put to another use without our

consent;

(C) That is damaged solely by uninsured

causes; or

(D) For which you fail to provide

acceptable production records;

(ii) Production lost due to uninsured

causes;

(iii) Unharvested production (mature

unharvested production may be adjusted for

quality deficiencies and excess moisture in

accordance with section 12(d)); and

(iv) Potential production on insured

acreage that you intend to put to another use

or abandon, if you and we agree on the

appraised amount of production. Upon such

agreement, the insurance period for that

acreage will end when you put the acreage

to another use or abandon the crop. If

agreement on the appraised amount of

production is not reached:

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

for the crop, we may give you consent to put

the acreage to another use if you agree to

leave intact, and provide sufficient care for,

representative samples of the crop in

locations acceptable to us (The amount of

production to count for such acreage will be

based on the harvested production or

appraisals from the samples at the time

harvest should have occurred. If you do not

leave the required samples intact, or you fail

to provide sufficient care for the samples, our

appraisal made prior to giving you consent to

put the acreage to another use will be used

to determine the amount of production to

count); or

(B) If you elect to continue to care for the

crop, the amount of production to count for

the acreage will be the harvested production,

or our reappraisal if additional damage

occurs and the crop is not harvested; and

(2) All harvested production from the

insurable acreage.

(d) Mature canola may be adjusted for

excess moisture and quality deficiencies.

Mature rapeseed may be adjusted for excess

moisture only. If moisture adjustment is

applicable, it will be made prior to any

adjustment for quality.

(1) Canola and rapeseed production will be

reduced by 0.12 percent for each 0.1

percentage point of moisture in excess of 8.5

percent. We must be permitted to obtain

samples of the production to determine the

moisture content.

(2) Canola production will be eligible for

quality adjustment if:
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Rules and Regulations 65999

(i) Deficiencies in quality, in accordance

with the Official United States Standards for

Grain, result in the canola not meeting the

grade requirements for U.S. No. 3 or better

(U.S. Sample grade) because of kernel

damage (excluding heat damage), or a musty,

sour, or commercially objectionable foreign

odor; or

(ii) Substances or conditions are present

that are identified by the Food and Drug

Administration or other public health

organizations of the United States as being

injurious to human or animal health.

(3) Quality will be a factor in determining

your loss in canola production only if:

(i) The deficiencies, substances, or

conditions resulted from a cause of loss

against which insurance is provided under

these Crop Provisions and which occurs

within the insurance period;

(ii) The deficiencies, substances, or

conditions result in a net price for the

damaged production that is less than the

local market price;

(iii) All determinations of these

deficiencies, substances, or conditions are

made using samples of the production

obtained by us or by a disinterested third

party approved by us; and

(iv) The samples are analyzed by a grader

licensed to grade canola under the authority

of the United States Grain Standards Act or

the United States Warehouse Act with regard

to deficiencies in quality, or by a laboratory

approved by us with regard to substances or

conditions injurious to human or animal

health.

(4) Canola production that is eligible for

quality adjustment, as specified in sections

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

(i) In accordance with the quality

adjustment factors contained in the Special

Provisions; or

(ii) As follows if quality adjustment factors

are not contained in the Special Provisions:

(A) Divide the price of damaged

production by the local market price to

determine the quality adjustment factor.

(B) The number of pounds remaining after

any reduction due to excessive moisture (the

moisture-adjusted gross pounds) of the

damaged or conditioned production will then

be multiplied by the quality adjustment

factor to determine the net production to

count.

(5) For canola, the price of damaged

production and the local market price will be

determined at the earlier of the date such

quality adjusted production is sold or the

date of final inspection for the unit subject

to the following conditions:

(i) Discounts used to establish the price of

damaged production will be limited to those

that are usual, customary, and reasonable.

(ii) The price of damaged production will

not be reduced for:

(A) Moisture content;

(B) Damage due to uninsured causes;

(C) Drying, handling, processing, or any

other costs associated with normal

harvesting, handling, and marketing of the

canola; except, if the price of damaged

production can be increased by conditioning,

we may reduce the price of damaged

production after the production has been

conditioned by the cost of conditioning but

not lower than the price of damaged

production before conditioning. We may

obtain prices of damaged production from

any buyer of our choice. If we obtain prices

of damaged production from one or more

buyers located outside your local market

area, we will reduce such price of damaged

production by the additional costs required

to deliver the canola to those buyers; or

(D) Erucic acid or glucosinolates in excess

of the amount allowed under the definition

of canola contained in the Official United

States Standards for Grain; and

(iii) Factors not associated with grading

under the Official United States Standards

for Grain including, but not limited to

protein and oil, will not be considered.

(e) Any production harvested from plants

growing in the insured crop may be counted

as production of the insured crop on an

unadjusted weight basis.

For example:

You have 100 percent share in 25 acres of

Fall Oleic Canola in a unit with a 650 pound

production guarantee and a price election of

$0.11 per pound. You are only able to harvest

14,700 pounds and there is no appraised

production. Your indemnity would be

calculated as follows:

(1) 25 acres x 650 pounds = 16,250 pounds

of Fall Oleic Canola;

(2) 16,250 pounds x $0.11 price election =

$1,788 value of guarantee for Fall Oleic

Canola;

(3) 14,700 pounds x $0.11 price election =

$1,617 total value of production to count

for Fall Oleic Canola;

(4) $1,788 value of guarantee¥$1,617 value

of production to count = $171 value of

loss; and

(5) $171 value of loss x 100 percent = $171

indemnity payment.

You also have a 100 percent share in 50

acres of Fall High Erucic Rapeseed in the

same unit with a production guarantee of 750

pounds per acre and a price election of $0.15

per pound. You are only able to harvest

14,000 pounds and there is no appraised

production. Your total indemnity for both

Fall Oleic Canola and Fall High Erucic

Rapeseed would be calculated as follows:

(1) 25 acres x 650 pounds = 16,250 pounds

guarantee for the Fall Oleic Canola, and

50 acres x 750 pounds = 37,500 pounds

guarantee for the Fall High Erucic

Rapeseed;

(2) 16,250 pounds guarantee x $0.11 price

election = $1,788 value of the guarantee

for the Fall Oleic Canola, and

37,500 pounds guarantee x $0.15 price

election = $5,625 value of the guarantee

for the Fall High Erucic Rapeseed;

(3) $1,788 + $5,625 = $7,413 total value of

the guarantees;

(4) 14,700 pound x $0.11 price election =

$1,617 value of production to count for

the Fall Oleic Canola, and

14,000 pounds x $0.15 price election =

$2,100 value of production to count for

the Fall High Erucic Rapeseed;

(5) $1,617 + $2,100 = $3,717 total value of

production to count;

(6) $7,413 value of guarantee¥$3,717 value

of production = $3,696 loss; and

(7) $3,696 value of loss x 100 percent =

$3,696 indemnity payment.

13. Late Planting.

In lieu of section 16(a) of the Basic

Provisions, the production guarantee for each

acre planted to the insured crop during the

late planting period will be reduced by 1

percent per day for each day planted after the

final planting date unless otherwise specified

in the Special Provisions.

14. Prevented Planting.

In addition to the provisions contained in

section 17 of the Basic Provisions, your

prevented planting coverage will be 60

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

11, 1997.

Suzette Dittrich,

Deputy Manager,

Federal Crop Insurance Corporation.

[FR Doc. 97–32848 Filed 12–16–97; 8:45 am]

BILLING CODE 3410–08–P

DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection

Service

9 CFR Part 94

[Docket No. 97–118–1]

Change in Disease Status of

Luxembourg Because of BSE

AGENCY: Animal and Plant Health

Inspection Service, USDA.

ACTION: Interim rule and request for

comments.

SUMMARY: We are amending the

regulations by adding Luxembourg to

the list of regions where bovine

spongiform encephalopathy (BSE) exists

because the disease has been detected in

a cow in that region. The effect of this

action is to prohibit or restrict the

importation of ruminants which have

been in Luxembourg and certain fresh

(chilled or frozen) meat, and certain

other animal products and animal

byproducts from ruminants which have

been in Luxembourg. This action is

necessary to reduce the risk that BSE

could be introduced into the United

States.

DATES: Interim rule effective December

2, 1997. Consideration will be given

only to comments received on or before

February 17, 1998.

ADDRESSES: Please send an original and

three copies of your comments to

Docket No. 97–118–1, Regulatory

Analysis and Development, PPD,

APHIS, Suite 3C03, 4700 River Road

Unit 118, Riverdale, MD 20737–1238.